The sudden and unexplained resignation of Bath Iron Works’ president on Thursday followed union strife and production delays the shipyard has been working to move past in recent years.
But that tension is unlikely the reason behind Dirk Lesko’s abrupt departure as the head of Maine’s fourth largest private-sector employer, according to defense industry analysts who closely follow BIW and its parent company, defense contracting giant General Dynamics.
Lesko had served as president of the Navy shipbuilder, which has about 7,000 employees, since 2016.
The company said in a brief note to employees that Robert Smith, General Dynamics’ executive vice president for Marine Systems, would lead the shipyard until a permanent replacement is appointed.
BIW spokesperson David Hench and General Dynamics spokesperson Jeff Davis declined to comment on the reason behind Lesko’s resignation.
The change in command is the latest in a series of disruptions the shipyard has experienced in recent years. Notable challenges have included a nine-week strike in 2020 of Local S6, the shipyard’s largest union; significant production delays; and an active hiring effort to grow the shipyard’s workforce and replace retiring shipbuilders.
“The shipyard was performing well, but what we may be seeing with this leadership spill is the result of rapid cost increases in both materials and labor across the entire General Dynamics corporation,” said Craig Hooper, CEO of Themistocles Advisory Group, a Maryland-based national security advisory firm. “What might look good at the shipyard level may not work at the corporate level, and that pressure to reconcile those differences may just be too much for some executives to fight out.”
Loren Thompson, chief operating officer of the Virginia-based Lexington Institute, said he’s confident the Bath shipyard will recover from the sudden loss of its leader.
“I have great faith in BIW,” he said. “It has been around for a long time and will probably be around for many more decades.”
Lesko’s resignation came on the heels of a wage dispute between Local S6 and shipyard management.
Just days before Lesko’s resignation, on April 4, the union said on its website that the company had backed out of an agreement to address what the union characterized as wage discrepancies.
In response, the union said it would withdraw from a committee formed to help management and employees work together to improve production speeds, and file an “unfair labor practice charge for bad faith bargaining” against BIW.
That dispute, however, appeared to have been resolved on Thursday in advance of Lesko’s resignation that same day after a meeting with Commissioner Martin Callaghan from the Federal Mediation and Conciliation Service about the dispute.
Union leaders wrote on their website and Facebook page that the joint labor-management group on production delays would continue, but didn’t mention whether they still planned to or had already filed a grievance and unfair labor practice charge.
“The company has proven they are committed to working collectively with the union to address all aspects of shipbuilding so our members can continue to have increased wages and job security,” the April 7 letter to members reads.
Local S6 spokesperson Tim Suitter declined to comment on Lesko’s resignation.
Thompson said there wasn’t much to read into Lesko’s departure.
“This isn’t about how the shipyard is performing, it’s not about the strike, and it’s not about the Navy,” he said. “It simply has to do with a violation of corporate policy. It’s a fairly straightforward issue.”
Thompson said he was given the information from “industry sources,” but would not elaborate.