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San Diego Shipyard Braces for 300 Layoffs

Friday, July 14, 2017

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Another round of layoffs is coming at a major American shipyard owned by BAE Systems, this time on the West Coast.

The U.K.-based BAE’s San Diego shipyard, which currently employs just over 1,500 workers, will likely see a round of layoffs totaling 300 by September, according to reports. The company told local media that the layoffs were necessary due to “recent contract losses and a change in Navy contracting methods.”

BAE drydock
BAE Systems

In December, BAE installed a new dry dock at its San Diego shipyard, but now the shipyard faces a round of 300 layoffs because it has received fewer Navy contracts than anticipated.

According to NBC San Diego, BAE said the Navy’s current system of contractors competing for contracts ship-by-ship, rather than in batch contracts, has led to fewer jobs than expected for the shipyard. The shipyard had been competing for a contract for the maintenance of the USS Makin Island, but that job went to General Dynamics-NASSCO, also in San Diego.

Other Recent Layoffs

The newly announced layoffs come on the heels of 130 layoffs announced at BAE’s Norfolk, Virginia, shipyard in June. And more than 200 shipyard workers in San Francisco lost their jobs in May when that city’s Pier 70 shipyard closed amid a contested sale. BAE had sold Pier 70 to Puglia Engineering in February, but Puglia later sued, saying BAE had not disclosed millions in shipyard repairs and pension liability that would come along with the 150-year-old facility.

Earlier this week, the Port of San Francisco came to a $4.9 million settlement with BAE in an effort to get Pier 70, the largest shipyard on the West Coast, back in operation, but BAE and Puglia are still tied up in litigation. The Port is expected to put millions into repairs to the shipyard.

Recent Expansion

The San Diego layoffs come after a buildup of capacity at the BAE shipyard. In 2015, the company announced it would be adding 500 jobs at the facility in order to keep up with increased demand from the Navy.

And just last December, BAE Systems added a new 950-foot-long, 55,000-ton dry dock to the San Diego shipyard. The $100 million investment was made “to service the anticipated increase of U.S. Navy ships on the West Coast,” the company said at the time.

USS Makin Island
U.S. Navy photo by Chief Mass Communication Specialist John Lill

The BAE San Diego Shipyard competed for a contract for work on the USS Makin Island, but that job was ultimately awarded to General Dynamics-NASSCO.

President Donald J. Trump has proposed increasing the Naval fleet from its current 276 vessels to more than 350, and before his departure, former Secretary of the Navy Ray Mabus proposed a 355-ship fleet. Trump’s nominee for Navy secretary, Richard V. Spencer, this week backed off a hard commitment to the 355-ship requirement, but called the number “a great goal to have.”

About BAE

BAE Systems, a global corporation headquartered in Farnborough, England, reported 17.8 billion pounds ($21.9 billion) in revenue in 2016. The company had 29,500 U.S. employees last year, and 36 percent of its sales were in the United States. In addition to shipbuilding and repair, BAE makes and maintains military aircraft and other military equipment and systems.

   

Tagged categories: Jobs; Labor; Layoffs; Ships and vessels; Shipyards; U.S. Navy

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