BATH — A new proposal by Bath Iron Works President Frederick Harris to cut costs by outsourcing work to other shipyards threatens to end years of relative peace between management and the defense contractor’s largest union.
Leaders of Local S6 of the Machinists union, which represents about 3,500 Bath shipyard employees, said they are considering “all options” should an agreement not be reached on how to cut costs without farming work out to other shipyards.
In a memo Nov. 21, Local S6 leaders told union members Harris informed them that in order to win a Department of Defense contract to build Coast Guard offshore patrol cutters, BIW must cut tens of millions of dollars to be competitive.
The company is one of three shipyards in the running to build the next generation of offshore patrol cutters scheduled to begin construction in fiscal year 2017.
As required by contract, shipyard management notified the union Nov. 20 that BIW would seek to subcontract out to other companies work on “destroyer power panels, berthing, lockers, dressers, powder coating of electrical boxes, cable cutting, diving, standard door hatches, scuttles and hatches with scuttles,” the memo states. That work is currently done at the Bath facility.
“We’re going through the data they’ve given us,” said Local S6 President Jay Wadleigh, who questioned whether subcontracting the work would be the best way for BIW to compete for future defense contracts.
Wadleigh said union officials, including an expert from the International Association of Machinists and Aerospace Workers, are analyzing more than 1,000 pages of company documents to see if the cost savings from outsourcing would be as significant as BIW management claims.
According to Wadleigh, the Local S6 contract requires BIW to show that outsourcing would save a significant amount of money or must prove a severe staffing shortage or inadequate facilities to perform the work at BIW.
“Although we don’t dispute that winning or losing the OPCs could have a major impact on future manning (over 1,000+ fewer jobs), we don’t believe ‘outsourcing’ work is the answer,” the memo states.
Wadleigh said this most recent proposal to outsource – the third since Harris became president of BIW just over a year ago – has reinforced union leaders’ suspicions that he is less willing to collaborate with unions than some of his recent predecessors.
When Harris took over as shipyard president in 2013, then-S6 President Dan Dowling said it was too early to guess what the implications for workers would be. But that the change in management raised questions, including how Harris “handles a bargaining unit in an organized workforce.”
Just four months later, Dowling said Harris proposed hiring electricians from National Steel and Shipbuilding Company in San Diego as BIW scurried to ramp up its own staff for new work. Harris remains president of NASSCO and holds that position at BIW.
After a week of negotiating, the union and management agreed that more than 200 current electricians at BIW would work six days per week, with eight hours on Saturdays, to make up those extra hours “and keep NASSCO and Electric Boatyard out of our yard,” Wadleigh said at the time.
As long as union members fulfill that agreement, no outside electricians will perform BIW work, Wadleigh said.
More recently, Harris proposed outsourcing pipe hangers, which hold pipes in place on a ship, to General Dynamics NASSCO in order to save “hundreds of thousands of dollars,” Wadleigh said.
“We couldn’t figure out how NASSCO could build them cheaper than us,” he said. “Then we found out NASSCO gets its material from Mexico.”
At that point, Sen. Susan Collins, R-Maine, stepped in, Wadleigh said. Collins spokesman Kevin Kelley confirmed Collins spoke to Harris when she was at BIW earlier this month with Adm. Jonathan Greenert, chief of naval operations for the U.S. Navy.
“While Sen. Collins has not been involved in negotiations between BIW workers and management, she has been assured that BIW does not have any plans to outsource any work from this shipyard to General Dynamics facilities in Mexico,” Kelley wrote in email sent Friday. “She will continue to work to secure federal funding to help ensure a steady workload and to provide as many opportunities as possible for the shipyard to win Navy and Coast Guard contracts.”
“She told (Harris) she doesn’t want work to go out of the country,” Wadleigh said. “And (Harris) did commit that he won’t ship work out of the country. But ever since then, he’s been looking for anything we currently build that we could buy cheaper somewhere else.”
“He’s living up to the expectations,” Wadleigh said. “He’s certainly not popular on the deckplates. He’s not a well-liked person by the members in general.”
“Bath Iron Works is looking at every alternative available to us to reduce costs and become more competitive, and we’ll explore those options with our unions in accordance with our labor agreement,” BIW spokesman Matt Wickenheiser wrote in an email sent Friday.
Wickenheiser said the Navy’s budget remains constrained, “and they are building DDG 51s at roughly two-thirds the rate they have been. Our share of that work is not guaranteed, and every bid will be a competition.”
According to the S6 contract, if company and union cannot come to terms during a 45-day negotiation process, they will begin “accelerated arbitration.”
If an agreement cannot be reached, “All options will be on the table!” leadership wrote to union members.
Management and the union have largely achieved detente on labor issues since a 55-day strike in 2000. The shipyard and union are working under the terms of a four-year contract ratified in 2012.