Bath Iron Works aims to restore competitiveness, production with prospective deal

Analysts say the agreement leaves future outlook unchanged, hinging more on experience with newer ships
Published: Aug. 10, 2020 at 12:02 AM EDT
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BATH, Maine (WMTW) - In about two weeks, union members with Local S6 will vote on a tentative agreement reached with management at Bath Iron Works. This would end a workers strike that has lasted nearly 50 days.

The size and scale of the shipbuilding industry, along with the regulations involved in building for the Navy, leave little room for competition.

"Navy shipbuilding is an area where there are only a couple of companies and shipyards that can actually build what the Navy is looking for," said Matt Caris, a principal with Ava-Scent, a management consulting firm in Washington.

According to Caris, Friday's agreement leaves the shipyard's outlook for future projects largely unchanged.

“They’re not going to get any more cost-competitive with this contract, but I think that the key for them with the Navy and their future contracts really lies with performance and the ability to get back to their reputation of ‘Bath built, is best built,’” Caris said.

The Union says the deal keeps subcontracting language unchanged and continues to protect seniority, two of the main sticking points which sparked the worker's strike.

If approved, workers will see 3% raises each of the next three years. Workers consider the deal a success.

In a statement, Bath Iron Works President Dirk Lesko said, "We worked hand-in-hand with the union negotiating committee to ensure that we addressed the concerns of our valued employees."

According to Lesko, the shipyard is months behind schedule in building their next ship, the DDG-118.

Caris believes more experience on completed designs of the newer, more complex ships can help the shipyard catch up and notes the Navy's vested interest in the success of the few remaining shipyards.

“On a little bit of a competition basis for an award, but both yards will still get a ship,” Caris said. “The Navy has a vested interest in keeping the yard around; it is a national asset.”

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