Newport News Shipbuilding lays off 480 salaried workers

Another 447 took early retirement. Completion of work on 3 U.S. Navy carriers cited.

Robert McCabe, Norfolk Virginian-Pilot
15 September 2015

NEWPORT NEWS – A total of 480 salaried employees were laid off Tuesday at Newport News Shipbuilding, the first in a wave of workforce reductions expected to sweep across the shipyard through next year.
"While this is a very difficult decision, it is a necessary step to effectively control our costs and successfully manage our business during a decline in work," Matt Mulherin, president of Newport News Shipbuilding, wrote in a letter sent to employees Tuesday morning. "It is something we take very seriously and is a last step after all other options have been exhausted."
Of those laid off, about 16 percent – 77 in all – will have the opportunity to return to an hourly trade job, such as welding.
The layoffs, the only ones expected at the yard in 2015, took effect immediately. Earlier, an additional 447 employees elected to take early retirement.
Laid-off employees will be paid through Sept. 25 and will receive job-placement help as well as severance and other benefits.
Reductions had been expected before the end of the year, though until last week the immediate departure of those affected hadn't been.
In a July 20 letter, Mulherin told shipyard employees there would be layoffs this year and likely in 2016. An attachment to that letter said more than 500 workers were expected to be let go in 2015 and probably more than 1,000 next year.
"We will issue 60-day notices to all affected employees," the document stated. "Employees will be expected to work during the 60-day notice period."
Last week, however, in a letter dated Sept. 8, Mulherin told employees that the number of workers affected this year was "less than what we originally anticipated."
The reduction was attributed, in part, to cost savings, higher attrition, growth work on some contracts and additional offsite work.
"Because of these efforts, the total number of people leaving the company in 2015 will be less than 500 salaried employees, which does not require advanced notifications," Mulherin wrote. "This is an important change, as the affected employees will separate from the company on the day they are laid off, and will not work for a 60-day period as originally communicated."
After being told by their supervisors that their jobs were being eliminated, affected employees were given a few moments to gather any personal belongings – "car keys, wallet, those kinds of things" – and then escorted to the shipyard gate.
"There's no good way to do this," Mulherin said, adding that the abruptness of laid-off workers' departures was largely related to the fact that the shipyard is a secure facility. "Those just are all kind of prudent things that protect both the company and the employee."
The actions, he said, were driven by the shipyard's completion of work on three carriers over the next 18 months: construction of the Gerald R. Ford, the midlife overhaul of the Abraham Lincoln and the inactivation of the Enterprise.
Mulherin said layoffs in 2016 will include salaried and hourly/union workers, and the number may be big enough to trigger the notification requirement. It's possible that some employees could get 60-day notices before the end of the year, with their departures effective some time after Jan. 1, Mulherin said.
Asked about the federal budget, which expires at the end of this month, and whether a stop-gap funding measure or government shutdown might create the need for more layoffs at the shipyard, Mulherin said he didn't think so.
"They're more noise, and they may cause a little bit of churn," he said, adding that such developments wouldn't affect the workforce.
The problem, essentially, is that "we have more people than I have work for people today," Mulherin said, adding that the period the shipyard is entering is like a valley.
"It has a defined beginning and a defined end; the beginning, unfortunately, is today."
The end will come in 2017, when in the latter part of the year, "I'm actually out hiring."
A division of Huntington Ingalls Industries Inc., Newport News Shipbuilding has more than 23,000 employees and is the largest industrial employer in Virginia and the largest shipbuilding company in the United States, according to its website.
It's the nation's only designer, builder and refueler of Navy aircraft carriers and one of two providers of submarines.