US REJECTED VIRGINIA YARD'S REQUEST FOR LOAN TO BUY RIVAL, REPORT SAYS

US REJECTED VIRGINIA YARD'S REQUEST FOR LOAN TO BUY RIVAL, REPORT SAYS

Newport News Shipbuilding & Drydock Co. earlier this year asked the Pentagon for millions of dollars to help buy its biggest competitor, but the government refused, the Washington Post reported.

Defense industry officials told the newspaper that the shipyard's request was for help to buy General Dynamics Corp.'s Electric Boat submarine yard in Groton, Conn.Newport News Shipbuilding did not pursue the deal after Pentagon officials refused the aid request. The Virginia yard never told General Dynamics, based in Falls Church, Va., of its new interest in Electric Boat, the newspaper reported Saturday. The two have held merger talks in the past.

General Dynamics recently announced that it is buying Bath Iron Works in Maine.

The Navy wants two shipyards doing nuclear work, namely Electric Boat building submarines and Newport News Shipbuilding building aircraft carriers.

The aid, if given, would have been hard to explain in this political season, a government official who asked to remain unidentified told The Post.

"Newport News wanted the government to finance one company's acquisition of another," he said. "This would have been about as interventionist an industrial policy as you could have," and might have been opposed by congressional Republicans, he said.

The Pentagon has agreed to such an up-front payment to encourage a merger once before - last year when it paid $30 million to the then-Martin Marietta Corp. (now Lockheed-Martin Corp.) in its $208 million acquisition of General Dynamics' rocket division.