BATH, Maine — Members of Bath Iron Works’ largest union will vote Sunday at the Augusta Civic Center on a tentative four-year contract proposal that would include no pay raises over the life of the contract and concessions to management on a key issue regarding which tasks workers can be mandated to perform.
Negotiations between representatives of Local S6 of the machinists union and the shipyard’s management concluded Tuesday afternoon, about a month after they began at the request of the company.
Although the existing contract does not expire until May 22, 2016, shipyard officials said early resolution of the pact was necessary in order to allow the shipyard to bid next year for a new class of U.S. Coast Guard cutters, as well as for the next multi-year contract for Navy destroyers.
BIW will compete for the Coast Guard contract with Eastern Shipbuilding Group in Panama City, Florida, and Bollinger Shipyards in Lockport, Louisiana. In late 2008, Bollinger edged out BIW in a competition for another Coast Guard contract worth up to $1.5 billion.
Management and union leaders both have called the Coast Guard contract integral to the future of the shipyard and its workforce, which numbers about 5,700. Management has argued consistently that labor costs place BIW at a disadvantage in competitive bidding for defense contracts needed to sustain or grow workforce levels.
But union President Jay Wadleigh said Wednesday that he does not endorse the contract.
“We’re bringing it back to them,” he said of the chapter’s 3,600 members. “I’m not recommending it. It’s a personal decision. Everyone can make up their own minds. There’s a lot at stake here.”
The proposed four-year labor agreement, which was released to stewards Wednesday morning and was due to be widely circulated throughout the yard at noon, includes no pay raises, although it offers $2,500 annual bonuses — the first one to be paid on Christmas Eve 2015, according to Wadleigh.
The four-year labor contract that expires in May 2016 included pay increases of 8.25 percent over four years.
While weekly contributions to health insurance premiums would not increase, employees would be responsible for an increase in co-payments and deductibles would increase, Wadleigh said. The company’s contribution to a pension fund administered by the union would increase by small increments each year of the contract.
Although management sought to add to a list of items BIW could subcontract for fabrication out of the yard, Wadleigh said that the union fought any additions and removed all the items already proposed that have been taken to arbitration.
“They didn’t want to take them off there, but it was a deal-breaker,” he said.
Wadleigh said a compromise was reached about one of the most contentious changes proposed by shipyard President Fred Harris to cut costs, a cross-training policy known as “associated functions” that, in part, triggered a 55-day strike in 2000.
Harris, who assumed the helm at BIW, a subsidiary of General Dynamics, in 2013 and continues to oversee the National Steel and Shipbuilding Co. in San Diego, previously proposed that union members be cross-trained and required to work outside their job classification at times when work flow on Navy destroyers dictates a shift in focus.
Union officials have fought the proposal, and Wadleigh said that a clause proposed by the company that would have allowed additional tasks to be assigned to workers at will was eliminated. The list of tasks a worker can perform will be changed, Wadleigh said, but each proposed task change was negotiated “specifically and with defining language,” he said.
Nevertheless, some members of the union on Wednesday said they were shocked and angry when they learned of the concessions made by their negotiators.
“I was glad I was sitting down,” said Jason Perry, an outside machinist from Limerick. “It makes me physically sick to my stomach. We lost so much language, and I can’t see a single thing that we gained. As someone who has potentially 30 years ahead of me in this union, I don’t even know what to say.
“We got a $2,500 bonus just for signing the last contract, and we had annual raises on top of that,” Perry added.
Steve Stewart, a tin knocker from Madison, said he doesn’t believe the company’s argument that if BIW doesn’t make dramatic changes, it won’t be able to competitively bid for future contracts.
“That’s not holding water with me,” Stewart said. “The company hasn’t fixed their own issues. Since [BIW President] Fred Harris has been here, the last two years, he’s done nothing but attack this contract.”
Furthermore, Stewart argued that workers haven’t been told what percentage of work would be performed at the Bath shipyard if BIW were to win the Coast Guard contract.
Wadleigh said the percentage of work is not written into the proposed contract, but acknowledged that “a fair amount” of the vessels’ components would be produced elsewhere, although the cutters would be assembled in Bath.
But he said absent an agreement, the company would face “a significant gap” that could cost them the contract.
“Any concessionary contract is really hard to stomach, but you have to weigh that against the big picture and long-term ability to secure work,” Wadleigh said.
In an email late Wednesday afternoon, BIW spokesman Matt Wickenheiser said, “This agreement is important for the future success of every BIW employee. It continues to respect the seniority of our workforce and provides them with excellent wages and benefits. As important, this agreement increases company pension contributions and holds flat employee health care payroll contributions, in an age of disappearing pensions and increased health care contributions required of employees. Coupled with recent investments in facilities and process, this agreement provides the flexibility necessary to compete in new markets and helps stabilize our workload during a period of declining ship orders.”
Union members will vote 9:30 a.m. Sunday at the Augusta Civic Center. Doors to the civic center will open at 8 a.m., Wadleigh said.
“If it doesn’t pass, we go back to work on Monday and nothing changes,” he said. “In May, we go back to the table with a totally clean slate.”