THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, November 2, 1995 TAG: 9511020412
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 88 lines
Job losses at Newport News Shipbuilding won't be as bad as the shipyard projected in 1994 and employment could even begin to increase in a few years, its new chief executive said Wednesday.
Prospects for new shipbuilding orders and the likelihood that the shipyard will return to Navy submarine building mean that up to 2,500 jobs could be spared.
The shipyard likely will employ 16,000 to 16,500 workers at the end of 1996, William P. Fricks said. About 18,700 people work at Newport News Shipbuilding.
Yard officials had said in April 1994 that employment would fall to between 14,000 and 15,000 by the end of 1996.
Located on the James River in Newport News, the giant shipyard is the only builder of Navy aircraft carriers.
``I see us beginning to stabilize our employment at 16,000 in 1997 and hopefully begin to grow after that,'' said Fricks, who succeeded the retiring W.R. ``Pat'' Phillips as the yard's chief executive Wednesday.
It was the first time in years that a yard official had suggested that employment at the shipyard, the state's largest private employer, might begin to grow.
``I'm not in the business of downsizing for the sake of downsizing,'' Fricks said. ``I'm in the business of downsizing to get us into the condition to grow.''
Fricks' revision means a couple of thousand jobs could be saved. But many employees still face the prospect of losing their jobs.
Work-force reductions will come from retirements, layoffs and the ordinary turnover in jobs known as attrition, Fricks said. ``I don't think we'll be able to come down 2,000 people without some selective layoffs,'' he said. ``Hopefully, they'll be small.''
An official at the union that represents more than 11,000 blue-collar laborers at the yard responded cautiously to the announcement.
``If they're going to hold on to what they got, the membership's going to be happy,'' said Theodore Howard, vice president of Local 8888 of the United Steelworkers of America.
Fricks said there are two primary reasons for Newport News Shipbuilding's brighter employment picture: the yard's success at lobbying Congress to allow it back into the submarine-building business and its success at marketing designs for a petroleum tanker to commercial buyers and a fast frigate to foreign navies.
``We now have a chance to build submarines whereas 18 months ago we were completely written off,'' Fricks said.
The Clinton administration had decided to build carriers solely at Newport News Shipbuilding and submarines exclusively at Electric Boat in Groton, Conn. Newport News has built dozens of Navy subs in the past.
Newport News Shipbuilding and its Houston-based parent, Tenneco Inc., have been lobbying Congress intensively. The result has been a defense spending bill that could provide more work for the shipyard.
That includes the construction in 1999 of a second sub in a new class known as the New Attack Submarine. The bill also would open up future sub construction contracts for competitive bidding, giving Newport News a better than even chance at winning the work.
The shipyard now has about 500 engineers working on a submarine design that it hadn't expected to, Fricks said.
It also has kept additional employees for the $800 million overhaul of the carrier Dwight D. Eisenhower, he said.
The yard had scheduled the job to take two years, but the Navy shortened the schedule to 18 months.
Other work would be added if Newport News Shipbuilding gets its first orders for its fast-frigate design and more orders for its double-hulled tanker design, Fricks said.
The shipyard recently began cutting steel for four of the tankers, which are being bought by a Greek shipping company. It also expects to hear before the end of the year whether two other potential buyers, with orders for at least seven and possibly 16 more, get the needed financing.
The United Arab Emirates is expected to select the winning bidder to build four to eight fast frigates for its navy around the end of the year. If Newport News Shipbuilding wins, it could mean $800 million to $1.5 billion in work for the yard.
``We're a better, stronger company than we were 18 months ago,'' Fricks said. ILLUSTRATION: Graphic
EMPLOYMENT AT NEWPORT NEWS SHIPBUILDING
SOURCE: Newport News Shipbuilding
[For complete graphic, please see microfilm]
by CNB