U.S. to aid shipyard Northrop plans to close: lawmakers

By Andrea Shalal-Esa–WASHINGTON | Thu Sep 16, 2010 8:19pm EDT–(Reuters) – The Navy will announce steps on Friday to ensure continued work for 5,000 workers at Northrop Grumman Corp’s Avondale, Louisiana shipyard, which the company plans to close by 2013, two Louisiana lawmakers said.

shipyard, which the company plans to close by 2013, two Louisiana lawmakers said.

The Navy plans to move up construction of double-hulled tankers from 2017 to 2014, and will guarantee that two LPD amphibious transport ships currently under construction at the Avondale shipyard will be completed there, Senator Mary Landrieu and Representative Charlie Melancon said in a statement released on Thursday evening.

“That requirement will ensure thousands of jobs at Avondale through 2013,” said the two Democratic lawmakers.

Louisiana lawmakers have been urging Northrop to reverse its decision, arguing that closing the shipyard will further devastate a region already hit hard by Hurricane Katrina in 2005 and the BP oil spill this year.

Northrop spokesman Randy Belote declined comment.

Navy acquisition chief Sean Stackley plans a news conference on Friday morning.

The new timeline for constructing double-hulled tankers would give the Avondale shipyard an opportunity to compete for new contracts beginning in 2014, making the facility more attractive to prospective new shipbuilding buyers, Landrieu and Melancon said in their joint statement.

Northrop announced plans in July to shift work from the Avondale shipyard, including on the two LPD ships, and close the shipyard by 2013, as part of a consolidation of its Gulf shipbuilding work in Mississippi. [ID:nN1337570]. The company is seeking to spin off or sell the entire shipbuilding division.

The AFL-CIO Metal Trades Department, which represents the Northrop shipyard workers, said its leaders met with White House officials last week about the issue.

They were concerned that Northrop would complete work on the two LPD ships at its Mississippi shipyard, which could paved the way for closing the Louisiana yard before 2013.

Ron Ault, president of the Metal Trades Department, welcomed the Navy’s expected announcement, and said it could help keep the shipyard open past 2013.

He praised the efforts of lawmakers on the issue, and said it showed that the Obama administration was being responsive to the economic impact on the Gulf Coast region.

“This buys us some breathing space to keep Avondale open beyond Northrop Grumman’s scheduled shutdown date and we are very grateful to everyone who helped,” Ault said.

Northrop last month issued layoff notices to 205 workers at Avondale and Tallulah facilities in Louisiana, as well as 292 workers at its Pascagoula shipbuilding facility in Mississippi. Further cuts of 350 workers are planned in Mississippi.

“While today’s announcement is not a silver bullet, it is a small step in the direction of making Avondale viable years into the future,” Landrieu said in a statement.

“We will continue to press the Navy to increase the shipbuilding workload at Avondale and pursue private shipbuilding opportunities as a long-term solution to preserving these 5,000 jobs,” she added.

(Reporting by Andrea Shalal-Esa; editing by Carol Bishopric, Phil Berlowitz)

Shipyard Workes Rally to Save Jobs

There was a mix of emotions Friday outside Northrup Grumman’s Avondale Shipyard. While workers celebrated the U.S. Navy’s announcement that the shipyard could have work after the shipyard’s projected closing in 2013, layoffs are a reality. Hundreds of workers rallied for their livelihoods

Arlene Holt Baker, AFL-CIO Executive Vice President told them, “it’s time to throw the heat on Northrup Grumman. They turned the heat up on you, and decided they would throw workers and the whole community into the fire.”

There’s a lot of concern about the future despite the Navy’s announcement it would move up construction of its double hulled tankers to 2014, giving Avondale a chance to compete for a contract. “That was really good news, but still people are getting laid off like myself.. I get laid off next week and my wife works here.. She’s getting laid off too. So it’s like a double whammy for some families,”said Bruce Lightell with the boilermakers union, Local 1816.

Lightell says he wants to keep building ships, and won’t walk away without a fight. “We think that there’s a way the union can work with management to help us make a profit,” said Justin White, a member of the Seafarers International Union. Workers are counting on a buyer for the shipyard because they say 5,000 employees, their families and the community are at risk. “We had Katrina, a catastrophe.. BP.. This is another one. This is the third catastrophe. This company’s employees put in $2 billion into the local economy and nobody talks about that.. How important this is to this area,” said Lightell.

UNO naval architect Chris McKesson, who’s designed advanced warships for the U.S. Navy said he believes there’s a good future for shipbuilding in general in the U.S. “I don’t think we’ll see ships moved 100-percent offshore. I think we need to seriously rethink what it is that we bring that’s special to bear on the shipbuilding process, problems, the task. For too many years we’ve tried to distinguish ourselves purely on a cost basis. Frankly, I don’t want to be the low cost leader, but the high quality leader.” He said the shipbuilding industry is viable in the U.S., but will have to change and develop new technologies. “We built ships before Grumman, and we want to build them after Grumman,” said Lightell. McKesson said UNO is conducting research to help move the industry forward. The university owns a facility in Avondale where people are studying building a titanium test section of a vessel. McKesson said titanium is a very high tech material that’s never been done in the past. Northrup Grumman issued the following statement after today’s rally for workers: “Northrop Grumman’s decision to consolidate all Gulf Coast shipbuilding activities to the Pascagoula and Gulfport facilities by 2013 is driven by a strategic business approach to reduce our industrial footprint to be more in line with the Navy’s 30-year shipbuilding plan. This will result in reduced costs and increased efficiencies, making future ships we build more affordable. We have a very talented workforce in Avondale and as we have stated previously, we will work with our customers and with local, state and federal leaders to explore alternate uses for the facility.”

Metal Trades Hails White House, Landrieu, Melancon; Shifts In Navy Plans Will Provide Breathing Space To Sustain Avondale

For Immediate Release

Contact: Amaya Tune (202) 637 5142

Greg Kenefick: 410-263-7134

Washington, DC, Sept. 17 – The Metal Trades Department of the AFL-CIO applauded work by the White House and Louisiana Sen. Mary Landrieu and Rep. Charles Melancon to convince the U.S. Navy to alter its construction plans to keep Avondale Shipyard open beyond its scheduled shutdown of 2013.

Metal Trades President Ron Ault said, “the unions of the Metal Trades and the AFL-CIO have been working on this issue since last May and we have been in touch with everyone connected with shipbuilding —members of Congress, the administration, the Navy.

“Sen. Landrieu and Rep. Melancon have been terrific— working with us every step of the way. It also shows that the Obama administration is responsive to the economic impact of any loss of employment in the Gulf Coast region. This buys us some breathing space to keep Avondale open beyond Northrop Grumman’s scheduled shutdown date and we are very grateful to everyone who helped.”

Describing the developments as a “tremendous boost” for union efforts to keep the shipyard operating, Ault said that a permanent solution to maintaining shipbuilding in the Gulf Coast will hinge on finding a qualified buyer for Northrop Grumman’s three shipyards—Avondale, Ingalls in Pascagoula and Newport News in Virginia. Northrop Grumman appears intent on shedding its shipbuilding division, regardless of the future work prospects.

The Metal Trades, ten of its affiliated unions, and the AFL-CIO launched a public campaign to harness community support for the Shipyard last month. The initiative included a mobilization effort among Avondale workers along with religious leaders and the New Orleans business community.  In addition the effort included a billboard campaign which has been running across the city of New Orleans. Those efforts will continue until Avondale’s future is permanently assured.



By Mark Gruenberg, PAI Staff Writer–NEW ORLEANS (PAI)–First, Katrina drowned New Orleans five years ago. Then Hurricane Rita followed with its sucker punch around a month later. Earlier this year, the BP offshore oil platform exploded, caught fire and sank, killing 11 area workers and costing thousands of others along the Gulf Coast — oil riggers and shrimpers among them — their livelihoods. What else could go wrong in the Crescent City?

How about their largest, best-paying employer, the Avondale Shipyard, with 12,000 workers, shutting down by 2013, a victim of corporate greed by its present owner, Northrop-Grumman? Yep, that, too. And labor is fighting it, on several fronts.

With the agreement of Avondale’s major customer, the U.S. Navy, Northrop wants to take construction of two half-built ships away from the unionized workers at Avondale by the end of the year and shift them to its unionized Ingalls Shipyard in Pascagoula, Miss. And when that work is done, Northrop will close Ingalls. There will still be other work at Avondale after the shift, but not as much, and it’ll be winding down.

Northrop says it wants to get out of the shipbuilding business. “Our decision to consolidate the Gulf Coast facilities is driven by the need for rationalization of the ship-building industrial base to better align with the projected needs of our customers. The consolidation will reduce future costs, increase efficiency, and address shipbuilding overcapacity,” Northrop CEO Wes Bush said in a statement. The U.S. Navy is the “customers” Bush referred to.

Ron Ault, head of the AFL-CIO Metal Trades Department, who led the years-long successful campaign to unionize Avondale’s workers, sees another reason. In an interview with Press Associates Union News Service, Ault says Northrop wants to reap maximum profits while getting out of shipbuilding, too. But the profits come first.

Northrop will do that, he says, by concentrating all shipbuilding in a third yard, in Newport News, Va., then spinning that yard off to a company it sets up. It’ll sell that second firm off through a tax gimmick designed to reap firms tons of money. It’s the same gimmick, the Reverse Morris Trust, Verizon used to dump landline telephone customers — and CWA members — onto smaller firms and loading them up with debt.

To try to save Avondale’s jobs, Ault said union leaders from the Gulf Coast, plus himself, sat down with Northrop-Grumman shipbuilding division chief Mike Petters when the rumors started to fly, to try to find a way to keep Avondale open. The unionists even hunted up buyers. They’ve been pulling out all the stops they could ever since.

“We spent more than $2 million” on the years-long campaign to unionize Avondale’s tens of thousands of workers, most of them — like the majority in New Orleans — African-American, Ault says. The unions are not about to let them go.

The union leaders told Petters they had located two bidders for Avondale, though Ault declined to name them because there are still some talks going on. But at that February meeting, Petters and other Northrop-Grumman brass first said Avondale wasn’t for sale, and then declared “they would decide, themselves, in early June, if shipbuilding suits them. And Avondale and Ingalls were a package deal.”

Shipbuilding didn’t. Northrop’s decision came July 13, with plant-closing notices at both yards. Avondale workers get hit first, with 110 there and 95 at its subsidiary shipyard in Tallulah, La., losing their jobs by Oct. 29 and more — an unspecified number — by the end of this year. A few of the Avondale workers are non-union. But all of the 642 Ingalls workers who will lose their jobs by the end of the year are unionists.

Like Avondale in Louisiana, Ingalls is the largest employer, with 4,800 workers, and the best-paying employer in Mississippi. Both are among the few union employers: Mississippi is 4.8% union, and Louisiana is 5.8% unionized. The unionized Avondale workers earn an average of $24 an hour, with Northrop spending another $7.50 hourly on benefits, Ault says. The salaries in Mississippi are similar.

Though the two bidders still want to buy Avondale, they want it intact, Ault adds. “If it’s shut and closed and cannibalized” to send machinery and workers first to Pascagoula and then to Newport News, “they’re not interested.” But that’s what Northrop wants to do.

“And Northrop refused to sell Avondale because it wants to have no successful bidders,” Ault says. Without bidders, Northrop can close the yard — and Ingalls, too.

Ault says unions have help from Sen. Mary Landrieu, D-La., in trying to keep Avondale open, find a buyer, or both, but not from Sen. David Vitter, R-La., who is up for re-election. In statements, Landrieu emphasized the economic harm Avondale’s closing would have. She met with Obama Navy Secretary Ray Mabus, a former Mississippi Democratic governor, to try to get the service to push Northrop for a reversal. Mabus, however, turned a deaf ear.

“They don’t have a Navy issue here, they have a Northrop Grumman issue, because Northrop Grumman has shown they not only want to close Avondale, at the same time they announced they want to get out of the shipbuilding business and want to sell or spin off Newport News and Pascagoula as well,” Mabus said, according to the New Orleans Times-Picayune.
Vitter, in a statement, blamed the Obama administration — and was silent on how he would help the workers.

And Petters had told a group of Avondale suppliers in Wisconsin in mid-July that if a “rationalization” — his word for firings — occurred, younger workers would have to be let go. He made clear his preference for laying off older unionized workers. Instead, Northrop has decided to, over several years, can everybody.

The harm Landrieu cited is significant: In a column on the Metal Trades Depart-ment web site, Ault said Avondale pumps $12 billion yearly into the Louisiana economy, three times the annual revenue of the shrimping and tourism industries combined.

In the meantime, the Metal Trades Department and Landrieu are pushing other buttons to try to keep Avondale alive. But the MTD had to appoint Boilermakers Vice President Warren Farley to head the multi-union team in bargaining on the effects of the Avondale shutdown. “He has to negotiate the worst case to get everything in the severance package,” Ault ruefully says.

MTD and Landrieu “briefed the hell out of” Obama White House staffers on the shutdown and its devastating impact on a region still reeling from prior disasters, Ault says. AFL-CIO Executive Vice President Arlene Holt Baker, President Richard Trumka and Legislative Director Bill Samuel raised it with both the White House and Congress.

They’re also trying to enlist the GOP governors of both states, Louisiana’s Bobby Jindal and Mississippi’s Haley Barbour. Barbour, a power in his party is a former Republican National Chairman.

And the Avondale workers have gone public with their drive, including appearing at the New Orleans Saints’ Volunteer Day on Sept. 7 to help feed needy families — and wearing “Save Our Shipyard” T-shirts.

“These massive heavy manufacturing facilities are capable of building anything, including new energy facilities currently being proposed,” Ault concluded in his column.
“Where will the offshore equipment be built for the wind turbines and off shore oil and gas facilities? China?” Ault said in his column.

“Avondale historically had a majority-black workforce. What effect will shutting down the largest employer in the state have on the poverty level in the black and Hispanic communities in the region? What effects will the shutdown and layoffs of thousands of skilled craft workers have on the Gulf Coast’s recession recovery efforts?”

But in the interview, Ault was even gloomier. “A place that’s going to survive Katrina and Rita and the oil spill can’t survive this,” he says. ###

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