Trades Jobs At Electric Boat Likely To Remain Unstable For Four More Years
By Jennifer McDermott
September 19, 2011
September 19, 2011
GROTON - Electric Boat is now building two submarines a year, but it will be four more years before the extra work helps put an end to the cycle of layoffs and recalls at the shipyard.
And while the shipyard will hire hundreds at its Quonset Point, R.I., facility, the headcount for the trades workers in Groton is not expected to increase significantly from its peak this year.
Earlier this month, EB began working on the 13th Virginia-class submarine, the unnamed SSN787. It is the first time in 22 years that construction has begun on two submarines of the same class in the same year, according to the Navy.
It will take four years for jobs to increase in Groton because EB shares responsibility for building the submarines with Newport News Shipbuilding in Virginia. The manufacturers take turns delivering the boats to the Navy, and Newport News is responsible for the SSN787 after the modules are built at Quonset Point.
John Holmander, EB's vice president who manages the Virginia-class program, said the shipyard in Groton will see a "valley" in its workload from 2012 to 2013, after it finishes the ninth Virginia-class submarine, the Mississippi (SSN782).
And he expects less work at the shipyard again from 2014 to 2015, since it takes three years to build the submarine modules at Quonset Point before they can be shipped to Groton or Virginia.
From late 2015 or early 2016 forward, EB will have a steady amount of work as long as the Navy buys two submarines a year, Holmander said. The Navy's shipbuilding plan calls for two submarines annually through 2017, but only one in 2018 because of budget constraints.
Thus far this year, as submarine construction and repair work rose and fell, EB notified roughly 250 employees that they would be laid off. Some notices were later rescinded or delayed because more work became available.
EB plans to hire 300 to 400 people at Quonset Point over the next two to three years as production ramps up, Holmander said. But the numbers in the trades won't change in Groton because EB quickened the pace at which it builds the submarines, creating work for employees who otherwise may have been laid off, he added. Those employees will now work on the new submarines.
The benefit for Groton, Holmander said, is that "we avoid those layoffs and those valleys."
Almost half of the workforce at EB - about 5,000 employees - work on the Virginia-class program. It took EB 87 months to build the first ship of the class. The goal is to deliver the Mississippi in March, at 61 months, and then build future submarines in five years.
Even with new submarines entering the fleet, the total number will fall below the required 48 in the late 2020s because many of the older Los Angeles-class submarines are retiring.
"Building two submarines a year and delivering them ahead of schedule is the best way to reduce that shortfall," said the Navy's Virginia-class program manager, Michael Jabaley, who has been selected for promotion to rear admiral.
Building a second submarine in 2018 also would help address the problem because that submarine would be in service for every year during the shortfall, Jabaley said. But, he added, the country and the Navy are facing significant financial troubles.
Progress on the second submarine, the SSN787, was in jeopardy when Congress didn't pass a budget last fall. It took until April for the Navy to award EB the money for the work.
Both Holmander and Jabaley said the Virginia-class program should be fine this year even if Congress passes another continuing resolution, because now the level of funding is set for two submarines.
Jabaley said that he and his staff felt "undeniably a great sense of satisfaction" when construction on the SSN787 began Sept. 2, but they didn't stop to celebrate.
"We just delivered the California (SSN781) last month and we're only six or so months away from delivering the Mississippi," he said. "It is full steam ahead."
The Navy and EB are starting work on the contract for the next group of Virginia-class submarines. The Navy plans to buy 30 in total. Seven have been commissioned so far.
Both sides are also trying to figure out how to modify the Virginia-class design to accommodate women, as well as bring down the cost of each submarine.
Virginia-class submarines are smaller than the ballistic-missile and guided-missile submarines to which the first female submariners will report later this year. Jabaley said the Navy told EB to study design possibilities and constraints for a mixed-gender crew and report back with cost estimates in the spring.
The long-stated goal for both EB and the Navy is to get the price of each submarine down to $2 billion each, in fiscal 2005 dollars, by next year - about $2.6 billion in 2012 dollars. The Navy will save about 10 percent of the cost of each submarine by buying two at a time because the manufacturers can buy parts in bulk at a cheaper price, Jabaley said.
Mississippi is currently $52 million under budget, Holmander said, and EB employees have thought of ways to reduce the cost of each submarine by another $30 million. EB already has redesigned the submarines, sped up construction and invested in more efficient equipment to save money.
And the company spent $125 million to get its facilities ready to build two submarines a year, Holmander said. Executives from EB and Newport News meet monthly at a "two per year readiness breakfast club" to review their efforts.
"The two per year milestone is very, very important to the Groton facility," Holmander said. It means the shipyard will have the "stability that hasn't really been seen here for quite some years."