September 2, 2013
The picture seemed good earlier this year as Electric Boat hired 350 workers, many of them to rebuild the USS Miami after a fire nearly destroyed the attack submarine when it was in Maine for repairs.
The Groton sub-maker has boosted its staff of waterfront tradespeople, manufacturing employees for the upcoming boat and engineers to design the next generation of strategic submarines — a rare trifecta. With the Norwich-New London area reeling from cuts at Pfizer and the casinos, EB's rise has been a welcome salve.
And it's been part of a trend. Since a deep cutback in 2005-06, Electric Boat's overall employment — most of it in the Groton-New London complex on the Thames River — has risen from 10,000 to 12,200.
Probably not, and that's the good news. But nothing is certain at a company that basically has one customer, the U.S. Navy.
Most of the cuts would be due to the Navy's recent decision to scrap the Miami, a Los Angeles-class sub launched by Electric Boat in 1990. The estimate for its repair rose over the last year to more than $700 million, on top of scheduled upgrades. With about a decade of life left, the boat wasn't worth that cost, the Navy concluded.
Electric Boat would have devoted 1.5 million hours to that job, enough work to keep 375 workers busy full time for two years. And the Navy's shipyard in Portsmouth, Maine, would also have worked on the Miami — so, with the decision, the Navy took back a smaller repair job on the USS Springfield, which was also scheduled for Electric Boat.
Now the hope is that the domino effect stops there.
After this decline, the long-term picture remains bright as Electric Boat and Newport News in Virginia begin to turn out one submarine every year, rather than one every two years. Design work is unabated for the next-generation Ohio class (which will eventually take on a new name and, no, it can't be Connecticut).
And a trend of the past few years, in which the Navy gives more repair work to Electric Boat, should continue despite the Miami and Springfield decisions.
"I'm very bullish on it," U.S. Rep. Joe Courtney said. "I do think the Miami was a very unique case."
Courtney isn't leaving it to chance. As a member of the House Armed Services Committee, he's lobbying hard along with U.S. Sen. Richard Blumenthal. Both elected officials were key in killing President Barack Obama's plan for another base realignment and closing commission.
Courtney is also having regular, almost daily conversations with the admiral in charge of fleet maintenance, with the idea of finding more "road work" for Electric Boat workers — work at Navy bases that need extra manpower.
"If there's a shortage out at Pearl Harbor or Seattle or Norfolk … they need some electricians or welders … the EB guys will get on the road and go down there for weeks and months at a time," Courtney said.
It's not an ideal way to make a living, especially for workers with families back home, but it maintains the workforce. Courtney describes a visit to EB workers in Virginia around the time of the Super Bowl. "Guys from Connecticut wearing Patriots jerseys. …You can see it, the presence of Electric Boat workers."
For now, the projected layoffs are just that — forecast for the near future — and many of them might not happen at all. The company warned the Metal Trades Council about the possibility of the large number of cuts, but such warnings don't always lead to as many actual cuts.
In 2005, for example, Electric Boat's then-president gave a dire forecast that the staff of 12,000 could eventually be reduced by half as the Navy downsized its fleet requirements. The cuts were large, but nowhere near what he had predicted.
"If you looked back at all the major notice events that have happened, it's very common that the initial number that comes out, they don't end up laying off that many people," said Bob Ross, executive director of the state's Office of Military Affairs. But he added, "If you're one of those people that received the notice, that uncertainty is no fun to live with."
So far, Electric Boat has given 60-day layoff notices to 55 carpenters, on July 29, whose last day is Sept. 27; and 94 tradespeople on Aug. 19, whose last day is Oct. 18. All are members of the Metal Trades Council. There has been no layoff or buyout in the salaried ranks.
"We have to align our employment levels with our workload to ensure the future of Electric Boat," said Robert H. Nardone, EB's vice president of human resources, in a written release. "The projected workload is not expected to sustain current employment for the foreseeable future. This notification is due in part to recent decisions, particularly regarding the USS Miami and USS Springfield."
Beyond that, Electric Boat is not saying anything directly about its employment plans.
At the moment, the yard is hopping, with the latest new Virginia-class attack sub, the USS North Dakota, in the final stages before launch, and three other subs in for repairs. Work will start soon on the next Virginia-class boat, the USS Illinois, perhaps with first lady Michelle Obama in a ceremony.
Currently in Groton, there are 6,700 employees total, including 2,300 unionized workers. Across the river at the former Pfizer headquarters, an additional 2,500 Electric Boat engineers are working. It was an encouraging sign, Courtney said, that the company went ahead with a job fair for engineers on the Saturday after The Day of New London first reported word of the possible cuts.
Groton will need more hourly workers for the Illinois in late 2014 and 2015, although it might come from a shift of work rather than new hiring.
The hope was that Electric Boat would use the Miami project and other repair work to fill the void of the next year or so, in much the same way that Pratt & Whitney is trying to fill a void of work between now and 2015, when work accelerates on the geared turbofan commercial engines and on the F135 engine for the F-35 Joint Strike Fighter.
"The Navy is sincerely engaged in terms of trying to soften the impact of the Miami's elimination. It's in the Navy's interest to make sure that nuclear welders, shipwrights, electricians and carpenters who have skills are retained," Courtney said.
Courtney cited a comment by retired Admiral Kevin McCoy of the Sea Systems Command, who said, Courtney recalled, "the value of a nuclear welder is as great as a brain surgeon."
Ross added, "The outlook for EB is very good despite this current difficulty."
Maybe so, but the question is whether it would make more sense as a matter of national policy to keep the workforce more stable at Electric Boat. Even in the years when the company was steadily adding staff, the numbers would rise and fall by as many as 500 in a given year. This time around, if the big cuts do happen, many of the same guys who were hired less than a year ago will be the ones shown the door because of seniority rules.
That's stressful on the system and, worse, very tough for the families that have to deal with layoffs.