BATH, Maine — Bath Iron Works notified leaders of its largest union on Friday that in order for the company to bid competitively for a new class of U.S. Coast Guard cutters, review of the union’s new four-year contract will start this year, more than six months before the current contract expires.
In a letter Friday to Jay Wadleigh, president of Local S6 of the Machinists Union, Gerald Stergio, the shipyard’s head of human resources, wrote that the company will invoke a clause in the existing contract that allows a contractual review period — but not formal negotiations — to begin early, Wadleigh said.
“The timing of the upcoming [Coast Guard cutter] bid does not allow us to wait until May of 2016 to negotiate a new agreement,” Stergio wrote. “The company’s intent, therefore, is to negotiate changes to our collective bargaining agreement before the end of 2015.”
In competition with two other shipyards, BIW will bid in March to build the Coast Guard cutters, which are scheduled to begin construction in 2017. Among the company’s competitors for the contract is Bollinger Shipyard in Lockport, Louisiana, which in late 2008 edged out BIW in a competition for new Coast Guard cutter contracts worth up to $1.5 billion.
But to win the Coast Guard contract, as well as be successful in the next multi-year procurement of U.S. Navy destroyers, BIW must reduce costs, according to defense industry analysts and management.
Wadleigh and other union leaders met in Washington, D.C., on Oct. 16 with Navy leaders and “were able to confirm the Navy is very concerned with BIW’s cost,” a union newsletter states. “It was clear that there is a great amount of respect for the workforce but in the end, with fewer Navy dollars available, cost appears to be the primary concern.”
“Quality used to be weighted in the formula,” Wadleigh said Friday by phone. “It’s become less and less of a factor. A ship needs to be able to meet the required specs, but anything above and beyond, [the Navy] isn’t paying for it.”
Review of the contract is not the same as contract negotiations, according to the union president, most importantly because if membership votes down a proposal, the vote would not authorize a strike, but would suspend negotiations until January with an eye to a vote in May.
The contract review will likely begin in early November, Wadleigh said — about two months after BIW hired a national labor relations strategy company, the Gephardt Group, led by former U.S. Rep. Dick Gephardt, to work with management and the union to ease tensions that have at times boiled over in the last year.
In March, nearly 1,000 union members marched the length of the shipyard at midday to protest a variety of changes proposed by shipyard President Fred Harris, who assumed the helm at Bath Iron Works, a subsidiary of General Dynamics, in 2013 and continues to oversee the National Steel and Shipbuilding Company in San Diego.
The Local S6 negotiating committee and district union representatives will meet with a team from BIW management at a neutral, offsite location to begin discussing the 400-page contract, according to Wadleigh. They’ll meet every day, all day, and depending on their progress, discussions could last into the night and over weekends.
The union has reserved the Augusta Civic Center for Dec. 13 as a tentative date to vote on a new contract proposal. The same building is reserved for May 22, 2016, when the contract vote would otherwise take place, according to a union newsletter.
The current four-year contract provided for pay increases of 8.25 percent over four years, Wadleigh said. Although the company is looking to cut costs, Wadleigh hopes the new proposal would include similar increases.
“If we’re going to be asked to do a whole lot more with a whole lot less people, there should be room for fair equity,” he said.
“Our hope is that the company and union leadership can work together in these negotiations to come up with different ways to make the company more competitive so we can win future work and secure our future,” BIW spokesman Matt Wickenheiser said Friday.