Portsmouth Naval Shipyard booms while Maine shipyard falters

J. Craig Anderson, Portland Press Herald
10 August 2015

Top Navy officials visited the Portsmouth Naval Shipyard in Kittery last week to boast about the sea vessel repair, maintenance and modernization facility’s bright future. The shipyard is undergoing a period of intense job growth after receiving billions of dollars in long-term federal contracts to service and retool nuclear-powered attack submarines.
But 80 miles up the coast at Bath Iron Works, company leaders are telling a different story. Officials at BIW, which is owned by General Dynamics, say they will have to reduce the workforce by as much as 1,000 in the coming years unless they can find a way to cut costs and make the operation more competitive.
Why is one Maine shipyard prospering while the other is struggling?
Analysts say the two shipyards are very different in their missions, competitive landscapes and the way they secure future business. The result is greater workforce stability at the Kittery shipyard.
“When Portsmouth survived the (Base Realignment and Closure) process nearly 10 years ago now, it emerged as the only – or at least predominant – East Coast facility for a set of vessels with a relatively long life expectancy,” said Charles Lawton, chief economist at York-based Planning Decisions Inc. “BIW is forever bidding on contracts for new vessels that may or may not be funded and that are always split between Bath and Mississippi shipyards. When that maneuvering doesn’t favor Bath, its work falls.”
Navy officials said in December that they were embarking on a hiring spree at the Kittery shipyard, with plans to add more than 700 engineers, technicians, shipfitters, fabricators and others to the operation by Sept. 30, the end of the federal fiscal year.
Shipyard spokesman Gary Hildreth said Thursday that the total number of recent and planned hires for the current fiscal year has been increased to 900.
“Taking into consideration normal attrition, Portsmouth Naval Shipyard is projected to increase its workforce (from 4,700 in 2014) to 5,350 civilian personnel by the end of fiscal year 2015,” he said.
The hiring is to accommodate an increased workload consistent with the Navy’s scheduled maintenance plan for Los Angeles Class and Virginia Class nuclear submarines. The Naval Sea Systems Command said in October that federal budget wrangling last year had contributed to significant maintenance delays for the Navy’s fleet of nuclear submarines.
Situated on Seavey Island in Kittery, the Navy shipyard has a workforce that is divided about evenly between Maine and New Hampshire residents. With an annual economic impact of roughly $684.5 million in 2014, it is one of the largest economic engines in the region.
The shipyard has been generating work for other Maine businesses, too. Pittsfield-based general contractor Cianbro Corp. recently was awarded a $9.1 million contract for repairs to one of the dry docks used for overhauling nuclear submarines.
On Aug. 3, high-ranking Navy officials visited the shipyard to deliver a message that the confirmation of then-nominee for chief of naval operations, Adm. John Richardson, would benefit the operation even further. The U.S. Senate confirmed Richardson’s appointment to the Navy’s top leadership spot on Wednesday.
Richardson is a career submariner whose most recent role was director of the Naval Nuclear Propulsion Program. His previous assignments include commander of the nuclear attack submarine USS Honolulu.
“Whenever you have somebody who truly understands your business, it’s a helpful thing,” the Navy chief of legislative affairs, Rear Adm. Craig S. Faller, told shipyard workers Monday, according to Portsmouth-based Seacoastonline.com. “He understands the challenges the shipyard faces and the opportunity it provides to the Navy.”
The sailing hasn’t been as smooth at BIW in Bath, where negotiations are underway to settle a labor dispute between BIW management and its union workforce.
The dispute started last fall, when the company began the formal process to outsource fabrication of some ship components, such as electrical panels, lockers and tables, that are currently made at the yard by union employees. Then in January, the company said it wanted to change the rules to allow workers to do tasks outside of what they’re currently permitted to do.
The shipyard has built U.S. warships for decades and currently has its hands full constructing three massive, Zumwalt-class stealth destroyers at a price of nearly $4 billion each.
But work building warships is expected to dwindle as the Navy downsizes its fleet. BIW wants to bid next year on a contract potentially worth $10 billion to build 11 offshore patrol cutters for the Coast Guard. BIW management has maintained that if the shipyard doesn’t get the Coast Guard contract in 2016, it would have to cut at least 1,000 jobs in the coming years.
BIW officials say they need more flexibility to remain competitive with the company’s chief rival, Ingalls Shipbuilding in Pascagoula, Mississippi. In April, the company initiated an arbitration process to settle the disagreement. Local S6 of the Industrial Union of Marine and Shipbuilding Workers of America, which represents about 3,400 of the company’s more than 5,700 employees, tried unsuccessfully to block the arbitration process in federal court. It also staged a protest march in May.
BIW spokesman Matt Wickenheiser said the arbitrator sent company and union representatives back to the negotiating table in July.
“Sit down together and work it out; if you can’t, these issues are ‘arbitratable,’” Wickenheiser said Friday via email. “So we are now going through the process as spelled out in the contract.”
Local 6 President Jay Wadleigh did not respond to requests for comment Thursday and Friday. Wadleigh has been reported as saying that a strike is possible if company and union officials cannot reach an agreement.