Steady as she goes | Portsmouth Naval Shipyard prepares for a new class of submarine and a decade of work while local officials refuse to breathe a sigh of relief
Photo/Courtesy General Dynamics
Photo/Robert M. Cook
Paul O'Connor, president of the shipyard's Metal Trades Council, says the shipyard could hire 360 people this year
Creative, innovative and cutting edge are the watchwords at Portsmouth Naval Shipyard in Kittery these days after winning a contract to service a new fleet of submarines and ensuring work for the next decade. But throughout York County, the watchword “diversity” isn’t far behind, as local officials attempt to broaden their economic underpinnings, having learned the lessons of the past 20 years about relying too much on one employer.
“I think it’s in the back of people’s minds,” says Les Stevens, director of the Sanford Economic Development Office. “You always want to have as much diversity as you can and not have all your eggs in one basket.”
Since being on the brink of closure just five years ago, the shipyard is now an integral part of the Navy’s plan to service the new Virginia Class submarines and the current Los Angeles Class subs along with shipyards in Norfolk, Va., Puget Sound, Wash., and Pearl Harbor, Hawaii. Paul O’Connor, president of the 2,400-member Portsmouth Naval Shipyard Metal Trades Council, says the facility could hire as many as 360 people this year, bringing the work force total to well above 5,000 civilian and military employees — more than 2,800 of whom live in York County. Combined, they earn more than $377 million in wages. With enough work to last through this decade, the shipyard remains York County’s most powerful economic engine.
“There are 5,000 of us here working for the government doing a hell of a job getting those submarines back in the ocean,” says O’Connor.
While prospects are rosy for the shipyard, it wasn’t too long ago that it and its good-paying jobs were on the chopping block — four times in the past 20 years. At its peak in 1989, the shipyard employed 8,700.
Paul Schumacher, executive director of the Southern Maine Regional Planning Commission in Springvale, says it’s important for communities like Saco and Sanford to continue redeveloping their long-vacant mill buildings to house new businesses that will generate more 21st-century jobs while the shipyard is still around. Any sudden loss of shipyard jobs would send shock waves through the county’s housing market, car dealerships, contractors, retailers, restaurants and other businesses.
According to the Seacoast Shipyard Association in Portsmouth, a nonprofit advocacy group, nearly all of the 2,844 jobs and the $216.3 million in civilian payroll listed in Maine in 2009 are in York County’s 29 cities and towns. The shipyard purchased more than $3 million in goods and services from Maine businesses in 2009 out of the more than $51million in goods and services purchased from all six New England states.
“I think the numbers speak for themselves, really,” says Schumacher. “It has always been the backbone of the regional economy.”
Charles Colgan, an economist at the Muskie School of Public Service at the University of Southern Maine in Portland, published a study in 2005 for the Southern Maine Regional Planning Commission titled, “Looking Beyond the Shipyard,” that documents some of the possible negative ripple effects. Besides the 2,844 York County shipyard jobs that would be lost, Colgan projected another 3,312 indirect jobs in fields such as retail, finance and insurance, education, transportation and warehousing would be eliminated. Colgan also wrote more than 12%, or more than $7.39 million, of York County’s $616.1 million gross domestic product is directly tied to the shipyard.
Stevens says the 406 shipyard jobs held by Sanford residents represent tremendous buying power within his community. “There’s no greater multiplier than a manufacturing job,” he says.
According to O’Connor, shipyard workers earn wages of $35,000 at the apprentice level to as much as $70,000 per year as top level trade supervisors; the average annual base pay is about $60,000. Stevens says these wages, which tend to be much higher than those paid by other employers in York County, give shipyard workers disposable income to purchase furniture, computers, snowmobiles and other goods and services from Sanford area businesses.
But he, too, is wary that the local economy’s anchor could be snatched away by a federal closure commission. To up its economic diversity, Sanford has renewed a push to redevelop the former Stenton Trust Mill and Sanford Mills. Boston Commons Investments LLC purchased the Stenton Trust Mill in December and plans to renovate it into several commercial spaces to accommodate new businesses and condominiums.
Meanwhile, Northland Enterprises in Portland is doing the same with the Sanford Mills. Stevens says those two properties have been vacant for years, but it wasn’t until recently that Sanford officials reached a consensus on how they wanted those properties redeveloped. He says the goal is to create new jobs and revitalize the downtown so it will attract people who want to live and work there.
That’s a wise tact because a stable shipyard that makes one product and has one customer does not represent economic growth, Colgan says.
Colgan’s 2005 study concluded that York County needs to align itself more with metropolitan areas such as Portland or Portsmouth, N.H., to realize growth. The existing tourism and health care industries are not enough to sustain the area if the shipyard ever closes. “They need to forge a future for themselves other than the shipyard and basically living off the coast,” he says.
If the shipyard closed, it could take 20 to 30 years to redevelop its property into other uses, but Colgan concludes the county would not be able to replace the high-paying manufacturing jobs. Once those jobs are lost, they’re gone.
Preparing for a new role
Navy Capt. Bryant Fuller III, commander of the Portsmouth Naval Shipyard, assumed the helm of the facility less than a year ago, but he knows how much effort was required to position the shipyard as the leader to service the new Virginia Class submarines.
“We are already starting with a work force that is highly skilled and trained in these areas; a lot of our folks are on the cutting edge. These (subs) add additional systems and fiber optics,” says Fuller.
Fuller says the Navy is completing its work on the $20.7 million Dry Dock No. 3 before the arrival of the USS Virginia in September. The dry dock consists of enclosures that will be placed around the submarine while it is sandblasted, painted and outfitted with new lighting.
Workers have been training at General Dynamics’ Electric Boat in Groton, Conn., — where the new class was designed — since 2007 learning how to work on the submarines.
Gary Hildreth, a shipyard spokesman, says Portsmouth designed and built a Virginia-class hull mock-up to prepare for the subs’ arrival. The mock-up is being used to train fabricators on the installation and removal of the next generation of paint and preservation systems.
Training and efficiency are key to the yard’s ability to remain competitive with the other three shipyards. U.S. Sen. Susan Collins says she and her colleagues in the Maine and New Hampshire congressional delegations try to direct federal dollars to Portsmouth so it can remain competitive with the Navy’s other three shipyards. In the battle for defense dollars, speed matters, she says.
“We have been accelerating the expenditures so the (projects) can be accomplished in a number of years instead of a decade,” Collins says, pointing to Dry Dock No. 3 as an example.
Collins, who serves on the Senate Armed Services Committee, announced in May the shipyard would receive $17.6 million in the fiscal year 2011 Defense Authorization bill to modernize the shipyard’s structural shops. That project will allow submarines to return to active duty five days sooner and save the shipyard $6 million per year and reduce its energy costs by 30%.
It’s that kind of innovation and efficiency the shipyard needs to embrace, says O’Connor, to stay competitive in a game where the stakes are high.
A 2009 Congressional Budget Office report says the Navy plans to purchase two Virginia Class submarines per year beginning in 2011 at $2.8 billion each. Replacement submarines for the current Virginia Class are scheduled to begin in 2024 at a cost of $6 billion each. Seven Virginia Class subs have been built so far, including the USS New Hampshire, which arrived in Portsmouth in October to much fanfare.
The new subs require “more electronic and less direct linkage type of stuff,” says O’Connor. “There is a different skill mix involved.”
But the work force has been able to respond, steeled by massive layoffs in the ‘90s that no one wants to see repeated. O’Connor says the shipyard experienced a real turning point following Base Realignment and Closure Commission reviews it survived in 1991, 1993 and 1995. The shipyard employed more than 8,000 people before the first of the three closure rounds took place and ended up with about 3,200 workers after the third round, he says.
Morale and performance were down. O’Connor says union leaders recognized that if they did not find a way to improve, they would probably not survive the next BRAC round. The shipyard unions in Kittery decided to come together instead of fighting one another over various Navy contracts and labor issues.
“That is what really set us up to make changes in the way we do business today,” he says.
The results produced leaner methodologies that allow the shipyard to return subs to the Navy’s fleet faster than the other three Navy shipyards, he says. By building relationships within its work force, O’Connor says the shipyard was able to leverage ideas to improve efficiency and performance.
“You will unlock potential you didn’t even know existed,” he says of the collaboration. “The folks with the tools have the ideas and the engineers can make the ideas work.”
Bob Cook, Mainebiz staff reporter, can be reached at bcook@mainebiz.biz. Jim Kozubek, a writer based in Portsmouth, contributed to this story.
Most Recent
Most Recent
Comments