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. ###