As contentious contract vote looms, BIW, union brace for possible strike - Press Herald

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Local S6 union members gather in front of the union hall to protest the shipyard’s proposed contract changes. Union members will vote this weekend whether to accept the proposed contract as well as whether to strike for the first time in 20 years. Kathleen O’Brien / The Times Record

BATH — After weeks of turbulent contract negotiations came to a grinding halt, members of Bath Iron Works’ largest union will vote this weekend to decide whether to accept the shipyard’s proposed contract and whether to go on strike.

Over 50% of Local S6 of the Machinists Union members need to vote to accept the proposed contract for it to take effect, but two-thirds need back a strike before that can spark. The union represents 4,300 of BIW’s 6,700 employees.

BIW, a subsidiary of global aerospace and defense company General Dynamics, delivered its “best, last and final” contract offer last weekend, which includes an annual 3% pay increase, maintains current premiums on benefits including 401k and life insurance, but increases health plan co-pays.

The union’s negotiating committee recommended union members reject the offer. The union has threatened to strike over disputes about seniority privileges and whether the company should hire subcontractors, but union officials maintain going on strike is a last resort.

“Nobody wants to go on strike,” said Tim Suitter, union spokesman. “Going without pay and withholding labor can be necessary in times like these. It’s a decision members have to make for themselves, their families, and it’s not a decision to take lightly.”

The union can’t strike under its existing contract, which expires Sunday, the same day member voting ends. If workers vote to strike, it would take effect Monday.

Local S6 last went on strike in 2000. It lasted 55 days.

As the vote approaches, contract negotiations have ground to a halt. Both union and company leaders said recently they’re willing to continue contract negotiations, but point fingers, insisting the other party hasn’t approached them to make that happen.

“[When BIW approaches the union] your negotiating committee will return to the table and continue to negotiate for a fair contract,” Local S6 leaders wrote in a letter to members posted online Thursday. “That cannot happen until we vote on this garbage.”

“We could not reach an agreement by the last day of negotiations in the schedule established by both sides (June 12), so BIW put its best offer forward,” BIW Spokesman David Hench wrote in an email Tuesday. “In communicating its final offer to the union, BIW indicated that it would be available to discuss that offer at any time prior to the ratification vote scheduled for this weekend, but as of this afternoon has not heard from the Union on that topic.”

Navy analysts told The Times Record a strike would send a message to BIW executives, but also would slow production at the shipyard, potentially hurting its employees in the process. The company is already at least six months behind schedule.

“If a strike builds morale and unity in the workforce, that’s good, but it’ll put BIW in a tough position,” said Craig Hooper, a national security consultant who writes about Naval affairs for several publications. “You can win a battle, but lose the war.”

It’s unclear whether a strike at the shipyard would hurt its chances of winning future Navy contracts because there aren’t any on the horizon, but Loren Thompson, chief operating officer of the Virginia-based Lexington Institute, said a strike could erode BIW’s relationship with its Navy customer.

“When a shipyard is already running months late on work and a union goes on strike, it implies that there’s no great sense of urgency on the workers’ part to meet the customer’s demands,” he said. “If there’s a problem with the workflow, that’s going to be held against the company.”

Thompson said the shipyard is in a precarious position because “there isn’t a single thing done at BIW that couldn’t be done elsewhere, so the survival of the yard depends on turning out a superior product at a competitive price.”

Arleigh Burke-class destroyers are the primary ship type produced and serviced by BIW. This class of guided-missile destroyers is built only by BIW and Mississippi-based Ingalls Shipbuilding.

“If people in Bath think the Navy or General Dynamics can’t live without BIW, they are fooling themselves,” Thompson said.

BIW’s health hinges on whether management and workers can come together to ramp up production to improve the chances of winning future contracts over its major competitors, Hooper said.

“If the shipyard is unable to complete its already contracted labor obligations on time, it’ll show it’s a poor performer,” he said. “Everybody has to go back to the drawing board and figure out how to get BIW back on top because you can’t win contracts when you’re six months behind.”

Hooper’s message echoes a May 27 letter BIW President Dirk Lesko wrote to employees after losing out on a $5.58 billion contract to build up to 10 guided-missile frigates for the Navy last month.

“In order to win new work, we need to complete the work we have on time,” Lesko wrote. “We are not doing that today, which opens the door for our Navy customer to award work to other shipyards.”

The Bath shipyard has contracts to build 11 Arleigh Burke-class destroyers for the Navy over the next decade.

Analysts say it’s difficult to tell whether the company’s demand to continue subcontracting work would alone solve delays at the shipyard, but Hooper said speeding up production is dependent on placing workers where they’re needed in a given moment.

“There’s a lot of value in an older, experienced welder who has paid his dues,” he said. “You want to take care of those people, but you also have to conform to what’s needed to get that ship built. You need to be able to be agile in terms of moving labor around. If the union isn’t willing to do that, that’s a problem, but the shipyard has to be reasonable as well.”

Union officials said BIW made similar demands for more freedom to hire subcontractors during negotiations for its current contract five years ago. The union yielded to that request because it could allow the shipyard to remain flexible while competing for shipbuilding contracts.

In 2015, BIW was focused on winning a $10.5 billion contract to build Coast Guard cutters. The shipyard warned losing out on the contract could lead to the elimination of 1,000 jobs. BIW ultimately lost the cutter contract.

The polls open Friday and close Sunday at noon. Union members will vote online or by phone this year, rather than gathering at the Augusta Civic Center, due to COVID-19 gathering restrictions.

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