THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, August 20, 1994 TAG: 9408200211
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 58 lines
Newport News Shipbuilding is considering reducing overtime pay for more than 5,000 salaried employees.
The shipyard, the largest private employer in Hampton Roads with 20,500 workers, raised the idea in a recent internal memo.
The lower payroll could further diminish buying power for families in a region already pressed by defense cutbacks. But the shipyard said there were no immediate plans to cut overtime.
``No decision has been made,'' said shipyard spokesman T. Michael Hatfield. ``It will not be imminent. The memo was a note to communicate to the staff about what was being considered. Even though it was put down on paper, it should not be construed as being done.''
About 5,000 of the 7,500 salaried employees in a variety of jobs at Newport News Shipbuilding are eligible for overtime pay.
The memo appears to be another sign of the cost-cutting times as the shipyard tries to reduce expenses and increase its competitive edge to win new business. In April, the shipyard said that it would reduce its labor force to 14,000 by mid-1996. That's down from a peak in the mid-1980s of about 30,000 workers.
The unsigned memo about overtime pay, dated Aug. 5, circulated through the company and came to public light in a report in the Newport News Daily Press. It says:
``These and other operating cost leadership actions are critical to our future and success in the world market of shipbuilding and repair. Therefore, I personally ask that you support these changes and seek out other unnecessary and redundant costs in our company on an ongoing and continuous basis.''
Shipyards across the country have struggled as government contracts, the mainstay of private shipbuilders in the United States, have declined. Although builders have sought more commercial work, the transition has been slowed by recessions in Europe and Japan and stiff competition from builders abroad.
Despite the industry's struggle, stock analysts who follow the business have praised the performance of the Hampton Roads shipbuilder and its owner, Tenneco Inc. of Houston.
``Newport News' business is doing just fine, especially considering the hostile environment it's in,'' said stock analyst Scott L. Soffen at Lehman Brothers. ``Tenneco is very focused on increasing productivity and lowering cost. It can be difficult when you're increasing productivity and not increasing sales.''
Tenneco stock closed at 46 3/4 Friday, up 1/4 from its previous closing price.
Among the big projects under way in the huge shipyard are the construction of two nuclear-powered aircraft carriers. A contract seems likely for another carrier, though work on it apparently would start after one of the carriers now in the yard is completed. by CNB