Submarine builder Electric Boat will cut up to 2,400 jobs next year and warned that it could eliminate half of its work force in coming years as it faces a dwindling submarine market and a Navy policy directing repair work to its own shipyards.
President John Casey said the decision to cut up to 20 percent of his work force next year was a “despicable task” but said the future of the company is at stake.
Most jobs will be cut at the Connecticut shipyard in Groton, but between 500 and 600 will be eliminated from its Rhode Island facility.
Electric Boat, a division of General Dynamics Corp., employs 11,800 people.
After 2006, company spokesman Bob Hamilton said, the numbers get murky, but he said company projections include a 50 percent reduction if new contracts aren’t awarded. That would mean a work force of about 6,000 in a region where submarine building is a way of life.
Although Electric Boat has contracts to build nine submarines by 2014, the future of the Navy’s submarine fleet is unclear. Maintenance work is dwindling and, for the first time, the next generation of submarines is not being designed, Casey said.
Submarine advocates have been pressing the Navy to boost production from about one to two ships a year. Projections show the nation’s submarine fleet dwindling from the mid 50s to as low as the 30s, but the Pentagon isn’t expected to release its official numbers until this spring.
“One boat every year, it’s just not enough to sustain the work force,” said John Levangie, a 38-year employee who delivers mail and is the shop steward for office employees.
The company survived a scare when the Base Closure and Realignment Commission voted this summer not to close the nearby submarine base in Groton. The Navy’s sub base and the private shipyard work together on many projects.
Casey said the Navy recently informed him that it would direct future submarine repair work to its own shipyards. The Pentagon tried unsuccessfully to close the shipyard in Kittery, Maine, leaving the Navy with more shipbuilding and repair capacity than it expected.
“They feel they can adequately accomplish all the repair work that’s available and they will no longer require or desire the services of Electric Boat,” Casey said.
There are four publicly run shipyards in the country. Kittery is the closest and commanders there were already talking about hiring hundreds of new workers.
The Navy’s decision means Electric Boat, which frequently repairs and upgrades the ships it builds, will not be able to bid on that work. The last two repair projects the company is bidding on are the USS Miami and the USS Toledo.
“It’s important for us all to bear in mind that these reductions are the result of pressure on the Navy’s shipbuilding budget,” Casey said in a memo to company employees. “Everyone affected by the layoffs deserves to be treated with dignity and respect through their last day at Electric Boat.”
Electric Boat has seen dark times before. After the end of the Cold War, the company’s work force fell to about 8,000 people.
“I’ve been through it before,” said John Lucy, a welder at EB who was laid off for five years and kept a side job driving a beer truck, just in case. “I’m not going to say I’m not nervous.”
Casey said this round of layoffs is different. In the early 1990s, EB engineers were designing the Virginia class submarine, the ship that’s in production now. That kept engineers employed.
“This time we’re not going to have that luxury. It’s going to be slightly more difficult this time,” he said.