THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, July 30, 1994 TAG: 9407300195
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 73 lines
Buoyed by about $110 million worth of new ship-repair contracts over the past six weeks, Norshipco will recall about half of its roughly 1,000 laid-off workers by year's end, a company executive said Friday. The recall would boost the shipyard's employment to about 1,700.
``We're continuing to find markets and fight for business,'' said Norshipco executive vice president Carlos E. Agnese.
The biggest of the yard's new contracts was awarded Friday: a job worth up to $48.6 million over the next five years to make ``phased maintenance'' repairs to three Norfolk-based Navy oilers, the Monongahela, the Merrimack and the Platte.
``It couldn't have come at a better time,'' Agnese said of the contract. ``It gives us more and more confidence in what we are doing.''
The Navy accounts for more than 90 percent of the new contracts at Norshipco, Hampton Roads' second-largest private shipyard.
The sea service has awarded two other large jobs to Norshipco since mid-June. One, announced in June, was a $22.5 million overhaul and conversion of the combat stores ship Niagara Falls. Last week, Norshipco landed a $12.8 million contract to repair the Resolute, a Navy dry dock.
Several other contracts involve work on ships owned or leased by the Navy's Military Sealift Command.
Two Sealift Command vessels, the oilers Isherwood and Eckford, were towed to the yard this week from Tampa, Fla., where George Steinbrenner's American Ship Building Co. had almost completed them.
The Navy canceled American Ship's contract last August - $400 million into the job - after deciding that completion costs were too high. The vessels will be mothballed at the government's James River reserve fleet near Fort Eustis. Norshipco's $5 million contract is to prepare the ships for the layup.
Before the end of the year, Agnese said, Norshipco will also repair at least four privately owned cruise ships.
Although business has improved, he said prices for ship repairs are still depressed.
``Competition is fierce,'' he said, naming Newport News Shipbuilding as one of the tougher rivals. That yard has in the past few years aggressively sought repair contracts after concentrating almost exclusively on building aircraft carriers and submarines.
The Navy's dramatic shrinkage has hurt Norshipco and nearly every other yard in the United States. Since mid-1993, the Navy has canceled seven other phased-maintenance ship repair jobs slated over the next two years at Norshipco, Agnese said. That cost the yard as much as $30 million in revenue, he said.
He declined to predict the privately owned Norshipco's 1994 total revenue. Last year the company generated an estimated $170 million.
Along with the lost revenues have come layoffs. Norshipco's employment of about 1,200 is down from 3,200 in 1992. Agnese said the yard's payroll may never again reach that level.
But he insisted, ``We're going to stay here. We'll modify ourselves, and we'll survive.''
Bill Stevens, secretary-treasurer of Local 684 of the International Brotherhood of Boilermakers, welcomed the worker recalls.
``They're not really making money on some of these jobs,'' Stevens said of the latest contracts. ``But at least it's keeping people working.'' The Boilermakers union represents more than half of the current work force and virtually all of the laid-off employees. ILLUSTRATION: Staff graphic
Slumping Work Force Bolstered
Norshipco recalls 500 workers to start in 1995
For copy of graphic, please see microfilm
KEYWORDS: SHIPYARD LAYOFFS by CNB