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President of US Shipbuilder Resigns Following Investigation

Austal USA has delivered 13 Independence-class littoral combat ships.

Military Ship I Stock 166285619
iStock

MOBILE, Ala. (AP) — The head of Austal USA, which constructs ships for the U.S. Navy on the Gulf Coast, has resigned following an investigation by federal and Australian authorities into practices dating back more than four years, the company said Tuesday.

Craig Perciavalle, chief executive of the Mobile-based company, submitted his resignation and will be replaced by an interim leader, according to a statement by Austal Limited, the Australia-based parent company of Austal USA, which builds littoral combat ships for the Navy and is a major employer in Mobile.

The Justice Department, Securities and Exchange Commission and Australian securities regulators have been investigating financial and procurement practices involved in the construction program dating back to before July 2016, the statement said.

The aluminum-hulled ships cost more to build than anticipated, the company said, and some valves installed on ships did not meet government standards. The company said it also had identified misallocation of some labor hours in the program.

Perciavalle's resignation was announced about two years after a law enforcement raid at the offices of Austal USA. No charges were announced and the company said it was still working with U.S. regulators.

Austal USA has delivered 13 Independence-class littoral combat ships, which are designed to operate in shallow coastal waters, and it said its work with the Defense Department included a $100 million project that will allow it to build ships from steel as well as aluminum in Mobile, where it has a workforce of around 4,000 people.

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