BATH, Maine — Hundreds of Bath Iron Works employees could be affected in the next six to nine months if the U.S. Senate fails to avert automatic spending cuts set to take place March 1, BIW President Jeffrey Geiger said Thursday at a news conference with U.S. Sens. Angus King, I-Maine, and Susan Collins, R-Maine.
The $85 billion in automatic spending cuts, also known as sequestration, which will be triggered if Congress doesn’t reach an alternative agreement, also could prevent the U.S. Navy from being able to award contracts for subsequent DDG-51 ships that BIW is supposed to begin building later this year and in early 2014, Geiger said at the Bath shipyard.
Furthermore, “If those ships don’t get authorized and progressed through the system, then that number will grow significantly in 2014 and 2015 in terms of impact,” Geiger said.
Collins and King met with company officials, toured the shipyard and visited the DDG-1000 Zumwalt-class guided missile destroyer under construction before speaking to the media Thursday morning.
They then expressed their frustration with the failure of Congress to pass a defense appropriations bill and concern for the future of Bath Iron Works if the congressionally mandated cuts takes place.
“The two looming threats to the continued work and progress of Bath Iron Works are the failure of the Senate to pass a full-year funding bill for the Department of Defense and the looming threat of the … indiscriminate cuts that are known as sequestration,” Collins, a senior member of the Defense Appropriations Subcommittee, said. “Both of them could have devastating impacts on our national security and harm this shipyard as well as the Portsmouth Naval Shipyard in Kittery.”
“You’re looking at Team Maine,” King, a member of the Senate Armed Services Committee, said, reaffirming the two senators’ support of BIW. “The budget chaos in Washington … [is] shameful. It’s embarrassing that our government has put people in this position because of the inability of people to work together …”
“What’s happening is just disgraceful, and it’s a disservice to the American people,” Collins said, calling for “a constructive dialogue” between the parties to avert the budget cuts “and these indiscriminate cuts that fall disproportionately heavily on the defense budget.”
In a letter Wednesday, Collins urged Jeffrey Zients, acting director of the Office of Management and Budget, to commit the necessary funding to procure two DDG-51 destroyers from BIW instead of one during fiscal year 2014.
The funds — $1.4 billion, according to Collins spokesman Kevin Kelley — would support a 10-ship DDG-51 multiyear procurement during fiscal years 2013-2017.
“The DDG-51 program is already contributing to cost-savings,” Collins wrote. “By restoring competition into the DDG-51 program restart, the Department of the Navy saved $300 million in cost-savings across the purchase of three ships in recent years. The Navy also estimates that it will save up to $1.5 billion by exercising [multiyear procurement] authority for at least a nine-ship DDG-51 buy during FY13-FY17.”
Collins continued, “Maintaining a DDG-51 procurement rate of two ships per year is critical to preserving a robust, competitive, large surface combatant industrial base, which is a national strategic asset … We have a responsibility to exploit opportunities to reduce the unit cost of combat-capable ships while increasing combat capability. The level of per-ship savings would increase even more for a 10-ship buy as the result of more stable, efficient production.”
Correction: An earlier version of this article incorrectly stated that Sen. Susan Collins is a Democrat. She is a Republican.