Electric Boat to lay off nearly 500 employees

Groton — Electric Boat plans to lay off up to 500 employees in the coming months, in part due to the Navy's decision to scrap rather than repair the submarine USS Miami, according to the union that represents the workers.

EB also was expecting to repair the USS Springfield. That submarine will stay at the Naval Submarine Base in Groton, but workers from the Portsmouth Navy Shipyard in Kittery, Maine, will travel to Groton to do the job. Editor's note: This corrects an earlier version of this paragraph.

The Groton shipyard notified the state Department of Labor last week that 94 employees would be laid off Oct. 18 because of "a decline in contracted work." Last month EB management told 55 carpenters that they will be laid off Sept. 27.

Robert H. Nardone, EB's vice president of human resources, said the company has to align the employment levels with the workload "to ensure the future of Electric Boat."

"The projected workload is not expected to sustain current employment for the foreseeable future," Nardone said in a statement. "This notification is due in part to recent decisions, particularly regarding the USS Miami and USS Springfield, which have reduced the volume of work that Electric Boat can anticipate in the area of overhaul and repair."

Kenneth J. DelaCruz, president of the Metal Trades Council, said Friday he was told by the company recently that the shipyard plans to deliver layoff notices to between 450 and 500 people over the next few months because the repair side of the business is slowing. The total includes the 149 workers who have already received notices.

When asked about the future projections, company spokesman Robert Hamilton said EB is continuing to review its workload, and if any adjustments are necessary, the employees will be notified first.

The Navy announced earlier this month that the cost estimate for the Miami repairs had increased from $450 million to $700 million and, given the current fiscal constraints, top Navy leaders had decided to change course.

"We were hopeful that at least in the sub world, things would continue along on schedule," DelaCruz said. "But I think with the spending cuts and sequestration, everyone has just slammed the breaks on.

"When that happens, if there isn't any funding and there are no contracts, we get the blunt end of it."

The 94 workers who received layoff notices are electronics mechanics, electricians, shipfitters, temporary service technicians and welders.

More than 350 people were hired at EB late last year and early this year to work on the Miami (SSN 755) and to perform maintenance work on other submarines. The Groton-based submarine was severely damaged at the Portsmouth Naval Shipyard in May 2012 when a civilian worker set a fire on board during a planned 20-month overhaul.

Rear Adm. Richard Breckenridge, director of undersea warfare, said after the decision was announced that the Navy was looking for other projects that could be provided to EB to dampen the impact to the workforce. He said Wednesday he did not have anything specific to report yet, but the commander of the Naval Sea Systems Command is working out the details "to make sure that we do right by Electric Boat and distribute that work as best as we can."

Breckenridge said Vice Adm. William H. Hilarides needs more time to come up with a solution.

Breckenridge added that he will continue to emphasize that even in this fiscal climate, maintaining the production rate of two Virginia-class submarines per year is "the most important thing we can do for Electric Boat" and the industrial base.

"That's what I'm striving day in and day out to do," Breckenridge said in an interview. "That's not to say I'm going to succeed, but I'm going to try."

EB and Newport News Shipbuilding in Virginia jointly build two attack submarines per year.

In September, EB won a $94 million contract to plan for the Miami repairs. The repair contract also was expected to go to EB. Restoring the Miami would require 1.5 million labor hours, EB President Kevin J. Poitras told local legislators in January.

Casey James Fury was sentenced to more than 17 years in federal prison in March after he pleaded guilty to setting fire to rags aboard the Miami. Casey, a civilian painter and sandblaster, told authorities he suffered from anxiety and wanted to leave work. Seven people were injured fighting the blaze, which burned for 12 hours.

EB expects to start repairs in December on the USS Providence, a submarine that initially was scheduled to go to Kittery. But that $45 million job represents far fewer labor hours — about 240,000.

The Navy could use some EB employees in Kittery to help remove the Miami from the fleet. About $50 million has been spent on repairs so far.

DelaCruz said the union has asked the company whether any of the work being performed at EB's Quonset Point facility could be done in Groton instead to avoid some of the layoffs. "The problem that we see also is, you lose a lot of skill sets," he said. "People aren't going to wait forever. They'll move on. We have some very highly skilled people here and we just want to get going."

Groton Town Mayor Heather Bond Somers said EB has always conceded that its work is cyclical and subject to ramp-ups and downturns. She said Groton tries to promote the company so it can maintain a stable workforce, and she hopes EB will be able to increase business elsewhere and potentially hire people back.

Groton City Mayor Marian Galbraith said EB notified the city that it was laying off 94 employees and she was sorry to hear that more were on the way.

"It's very unfortunate for the region, but more so for the employees and their families who are affected," Galbraith said in an email.

Groton is already suffering an economic loss from Pfizer's recent decision to tear down its former research headquarters on Eastern Point Road. The decision will translate into a $2 million loss in annual tax revenue for the town.

"It will hurt. It will definitely hurt," Jackie Massett, a member of Representative Town Meeting, said of the latest news of EB layoffs.

Massett said she argued 20 years ago that the community had put "all of its eggs in three baskets" — the Navy, Electric Boat and Pfizer.

Layoffs at EB will have a trickle-down effect in Groton because employees eat lunch in the city and stop at local businesses, Massett said. "We need to plan. And we haven't," she said. "It's not going to get any better at all. And I don't know how, but we need to look at what our options are."

j.mcdermott@theday.com

Day staff writer Deborah Straszheim contributed to this report.

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