Shipbuilder Warns of Layoffs if Biden Doesn’t Buy More Destroyers
Bath Iron Works told Deputy Defense Secretary Kathleen Hicks it will need to cut its workforce by 2,500 if more ships aren’t ordered soon.
BATH, MAINE—Bath Iron Works said it might cut 2,500 workers if the Biden administration does not place a multiyear order for more Arleigh Burke-class destroyers within the next two years.
That warning was given to Deputy Defense Secretary Kathleen Hicks when she met with General Dynamics executives during a visit to the shipyard on Wednesday. The company is urging the Pentagon to place an order for at least 15 ships beginning in 2023 so that Bath Iron Works can retain enough seasoned workers to build the DDG(X)—the Navy’s next class of destroyer.
“The punchline you'll see is there's no overlap between the current projected end of the [Arleigh Burke] program and the start of DDG(X),” said Jon Mason, the shipyard’s vice president for human resources. “And the challenges that that will create from an industrial base standpoint is what we really wanted to convey in these discussions here today.”
Executives fear a decline in orders will create a gap between the current class of destroyers and the new class of ships that is at least a decade away.
Ordering at least three destroyers per year is “critical to sustain [the] industrial base and bring needed capability to the fleet,” read one of the briefing slides presented to a reporter during Hicks’ visit.
Bath Iron Works and Huntington Ingalls Industries in Mississippi each build Arleigh Burke-class destroyers. The orders are roughly split evenly between the two shipyards. But Bath has routinely experienced setbacks, putting it more than six months behind schedule buding the ships. Right now, there are six Arleigh Burke destroyers in Bath, and one Zumwalt-class destroyer.
“At the request of our Navy customer, we are building capacity to both deliver our current ships on or ahead of schedule and maintain a rate of two ships per year for future construction as well,” Mason said.
In its fiscal 2022 budget request sent to Congress in May, the Navy asked lawmakers to approve a single destroyer, one fewer than planned a year earlier. A House panel has already added the ship back into the budget and other panels are expected to follow suit.
Since 2018, the shipyard has been on a hiring spree, hiring 4,000 workers as it attempts to get back on schedule and meet the Navy’s ship demand. It’s hired 1,300 workers already this year and plans to hire a total of 2,000 employees in 2021.
But without an order for more destroyers soon, the shipyard says it would have to cut its workforce by about 2,500. Executives predict some of those would come through attrition, as about 1,000 of its most seasoned shipbuilders are expected to retire. The remaining cuts would be through layoffs.
The Biden administration has put an emphasis on American job creation. In May, when the Pentagon sent its fiscal 2022 budget request to Congress, Hicks said that spending plan would focus “investment in American manufacturing and innovation, especially in underrepresented populations and small businesses. Doing so means that we will not only build back better, but bolster America's national security industrial base.”