THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: THURSDAY, June 16, 1994 TAG: 9406160500
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
DATELINE: 940616 LENGTH: Medium
About 1,000 of the Norfolk shipyard's 2,200 full-time employees were on layoff this week, said Gary L. Daniel, president of Local 684 of the International Brotherhood of Boilermakers, which represents many of the yard's employees.
{REST} The union has received notices that as many as 500 more could be laid off from South Hampton Roads' largest private shipyard within 60 days, he said.
The layoffs have pushed Norshipco's employment to its lowest level in years and indicate the depths of the industry's difficulties in the face of Navy cutbacks. Still, a top Norshipco official downplayed the long-term impact of the layoffs.
``This has been going on for two solid years,'' said John L. ``Jack'' Roper IV, executive vice president for operations at Norshipco. ``This is nothing new. This is our third or fourth cycle since we announced the layoffs two years ago.''
Navy repair work, which used to be available year-round, now surges in the spring and fall and lulls in the summer and winter, Roper explained.
``Now we're in the summer slump and that's all we're looking at, the summer slump,'' he said.
The situation's not unique to Norshipco. ``All shipyards are going through downsizing right now,'' Roper said. ``All shipyards are going through this cyclical ship repair thing right now.''
Roper gave no indication whether the laid-off employees may be rehired.
Norshipco won a $22.5 million contract Wednesday from the Navy to overhaul and convert the USS Niagara Falls, a combat stores ship. The job is scheduled to begin in November and will require a few hundred employees to work on it, Roper said.
``It is a real fluid and dynamic situation here,'' Roper said. ``We could get a phone call tomorrow about a job coming in the day after tomorrow and the job situation could look a lot different.''
As recently as 1992, the company employed 3,200 people full time. If Norshipco lays off the 500 more Daniel said the union has been told to expect, then the number of people actually working at the yard would fall to about 700.
Employees laid off at the yard are often recalled to work on new jobs and the number actually working yo-yos up and down depending on the workload.
For example, Norshipco had laid off about 600 of its 2,200 employees in December and January, but by March all were back to work thanks to scheduled repair jobs, Daniel said.
``That's the way our business is, we lay off and hire back,'' Roper said.
The problem is that there are fewer and fewer new jobs to work on, so the layoffs are worse, Daniel said.
``Now they're becoming larger layoffs for longer periods of time,'' he said.
While some new contracts may be awarded soon, the future doesn't look bright for now. ``We don't have much scheduled for next year,'' Daniel said.
For years, about 70 percent of Norshipco's revenue came from repairs to Navy vessels, but in the last few years Navy job orders fell off as the Defense Department budget was cut.
Consequently, Norshipco and other yards are scrambling for less work. And it hasn't helped that Newport News Shipbuilding began bidding for and winning more and more repair work two years ago as its principal business of new ship construction has been whittled down.
``There's definitely more competition and definitely fewer opportunities,'' Roper said. ``As the Defense Department continues to downsize, it's not going to get any different.''
Norshipco's newly awarded Navy contracts have fallen from about $150 million three years ago to about half that last year.
In addition to the layoffs, Norshipco has seen its permanent payroll drop from 3,500 in 1991 to 2,600 at the end of December 1992, when the layoffs were first announced, to 2,200 today. Workers who aren't recalled from a layoff for a job lasting two weeks or more are removed from the permanent roll after a year.
Roper attributes the decline in the permanent payroll to attrition.
Norshipco pays unemployment benefits and unused vacation time to laid-off employees, and also must cover their medical insurance for the rest of the month in which they are laid off, plus two months.
The layoffs can have a profound impact on the local economy. Christine Chmura, corporate economist with Crestar Bank in Richmond, estimates that for every 100 shipyard jobs lost, another 72 jobs disappear in the community - 18 due to purchases no longer made at shipyard supply companies and 54 due to various purchases no longer made by shipyard workers.
{KEYWORDS} SHIPYARD LAYOFFS
by CNB