Austal USA head quits after investigation

Austal USA chief executive Craig Perciavalle (second from left) has resigned, the company says.
Austal USA chief executive Craig Perciavalle (second from left) has resigned, the company says.

The head of Austal USA, which constructs ships for the US navy, has resigned after an investigation by US and Australian authorities into practices dating back more than four years, the company says.

Craig Perciavalle, chief executive of the Alabama-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 aluminium-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 labour 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 US 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 US Defense Department included a $US100 million ($A127 million) project that will allow it to build ships from steel as well as aluminium in Mobile, where it has a workforce of about 4000 people.

Australian Associated Press