THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, May 18, 1996 TAG: 9605180294
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 52 lines
Norshipco will have to temporarily furlough up to 350 workers as a result of a pay dispute with the Military Sealift Command.
Norfolk's biggest shipyard announced Friday that it has stopped work on a $26 million conversion of the ammunition ship Flint for the Sealift Command, the Pentagon agency that operates military cargo vessels.
Norshipco has more than 2,000 workers, making it one of the region's larger employers.
The shipyard announced in mid-April that it would have to lay off 500 workers over the next two months due to a decline in ship repair work.
Those layoffs are unrelated to Friday's announcement, said John L. ``Jack'' Roper IV, Norshipco's executive vice president.
Some of those 500 layoffs have already occurred, and the rest are pending.
The temporary furloughs caused by Friday's action include a number of salaried supervisors and superintendents from the shipyard. Roper said fewer than 50 management personnel will be affected.
Roper said it is the first time since the 1960s that Norshipco has been forced to stop work on a ship because of a funding dispute with a customer.
Norshipco stopped work on the Flint because of a dispute over costs the shipyard said it has absorbed for additions, changes and delayed work on three military cargo ships.
The shipyard has already delivered the first of the three ships, the combat stores ship Niagara Falls. It expects to complete the Niagara Falls' sister ship, the Concord, next week. The Flint was due to be completed by August.
All three are former Navy ships being overhauled and converted for operation by civilian crews.
``We have exhausted all the funding we have available to complete all three vessels,'' Roper said.
Norshipco sued the Military Sealift Command in March, seeking up to $14 million for extra work it said it was required to do on the conversion of the Niagara Falls.
That project, originally a $22.5 million contract, cost the shipyard nearly twice that amount, according to the suit. The Sealift Command gave the shipyard an extra $6.5 million toward the Niagara Falls project in December.
Sealift Command officials declined to comment on that suit and were unavailable late Friday to comment on Norshipco's latest action.
``It's fair to say we have been keeping a dialogue'' with the Sealift Command, Roper said. ``But we have, unfortunately, been unable to come to a solution.'' by CNB