Todd Shipyards in San Pedro, which has cut its work force by 70% in the last four years, could face another round of layoffs this spring if it does not find more work.
Union officials predict that 750 workers--half of the current work force--will be laid off by mid-March and say that if no new Navy contracts are awarded to Todd by the end of the year, the shipyard will be forced to close.
Todd officials say the union's estimates are exaggerated and dispute the union's claim that the yard is in danger of closing. But they agree that if new contracts are not soon forthcoming, layoffs will be inevitable.
"There's no question--and the union is absolutely right--that unless we're going to acquire new contracts there are going to be layoffs," said John B. O'Hara, vice president and assistant general manager of the shipyard. He said it was too soon to provide estimates.
Filed Chapter 11
Todd, which is based in New Jersey, last year filed for protection from its creditors under Chapter 11 of the federal Bankruptcy Code and has shut down four of its seven U. S. shipyards in the last several years. Operations remain in Seattle, Galveston, Texas, and San Pedro.
The San Pedro yard is on the verge of finishing three Navy repair jobs and is bidding for three more and a ship-conversion contract. O'Hara said he hopes to have word on some of the bids in the next few weeks.
If none comes through, the shipyard will have only one major job remaining, construction of a Navy frigate, the FFG 61, which will be completed by mid-1989, according to Todd officials. However, the union says the work on that ship will only last through 1988.
"People are worried," said George Samanc, executive secretary of Local 9 of the Industrial Union of Marine Ship Building Workers of America. "Even the company has told us on numerous occasions that if nothing comes out, then the yard will close."
Todd's predicament mirrors a crisis in the America's shipbuilding industry, a crisis that, Samanc said, is particularly acute on the West Coast. Due to foreign competition, no new commercial ships are being built in this country, leaving shipbuilders dependent on Navy contracts, which must, by law, be built in the United States.
Four years ago, Todd was flourishing under the Reagan Administration's buildup of the Navy from 450 to 600 ships. However, now that the Navy is maintaining that 600-ship level, the lucrative shipbuilding contracts are fewer and farther between. Those that are available have gone largely to East Coast firms, and as a result, Todd is competing for smaller jobs repairing and overhauling ships.
The union and Todd see different reasons for, and are seeking different solutions to, the problem of East Coast competition.
Todd says that union members, who earn a maximum of $13.48 an hour, must accept a lower rate of pay if the company is to compete successfully against East Coast shipbuilders, who can bid less because they pay less.
The union, which represents the machinists, sheet metal workers, electricians, painters and other workers, already has made some concessions on this front, including agreeing to a three-year wage freeze.
The union alleges the East Coast companies "low ball" their bids--that is, they bid unreasonably low amounts and then later submit bills for cost overruns. Samanc said the union is embarking on a lobbying effort to pressure the Navy into considering factors other than the lowest bid in awarding contracts.
Support From Supervisors
The first step in that lobbying effort came Tuesday, when the Los Angeles County Board of Supervisors voted to urge the Navy to award Todd the four contracts on which it is bidding.
The resolution, introduced by Supervisor Deane Dana at the union's request, also asked that the Navy revise its criteria for awarding contracts to include "proven capability, low pricing and geographic distribution."
The second step will come next week, when union officials meet with representatives of U. S. Rep. Glenn M. Anderson (D-Harbor City). Anderson recently sent a letter to the Navy on behalf of the Long Beach Naval Shipyard, asking that the Navy yard be assured of four contracts that are to be awarded in 1988 for the overhaul of three guided missile cruisers and one guided missile destroyer.
Officials at the Naval Shipyard, who expected to get the contracts, are concerned that a provision in the most recent federal appropriations act will force them to compete for the work.
The provision permits private shipyards like Todd to bid on overhaul contracts that used to go exclusively to Navy yards. Such overhaul involved the outfitting of warships with the latest electronic and battle gear.
Will Seek More Work
Although Todd has not bid on the jobs that the Naval Shipyard is seeking, O'Hara said his company is looking to become more active in the overhaul market. He also said the company is bidding on foreign work.
But in the immediate future, Todd needs work from the Navy.
It is bidding to repair three ships, each under a short-term contract that could take anywhere from three to nine months. Work on one of the ships is to begin in March, with major work commencing in April. "That's the fastest possibility that we have right now," O'Hara said.
Todd also intends to bid on a fourth job, the so-called "AO 177 conversion," which involves cutting a ship in half and adding a section to it. As many as five ships would be rebuilt under the program over a period of several years, beginning this spring.
O'Hara said the AO 177 job "would be perfect. . . . If we were successful that would answer a lot of our problems because it's a long-range program and it starts relatively quickly."
O'Hara said this is the first time that he can recall not knowing whether work was coming in the future.
"Right now," he said, "we're just in a position of going out and bidding for work and not really knowing."