BATH, Maine — Efforts to cut shipbuilding costs at Bath Iron Works amid continuing uncertainty about federal defense budget priorities have led to labor-management conflict that the leader of the largest union at the shipyard called the worst since a strike 15 years ago.

“People are fed up with the way we’re being treated,” said Jay Wadleigh, president of Local S6 of the machinists union. “I haven’t seen labor relations this bad since 2000.”

Nearly 1,000 members of Local S6, which represents about 3,000 shipyard workers, marched the length of the shipyard at midday Tuesday to protest proposed changes, including one that triggered a 55-day strike in 2000, according to Wadleigh.

Union leaders say instituting the changes more than a year before a new contract is negotiated would violate terms of the existing contract. But BIW officials maintain that the changes are necessary to cut costs and remain competitive for future projects.

In 2000, Local S6 workers were on strike for 55 days, fighting to eliminate a policy of cross-training workers, known as “associated functions.” The practice, in effect from 1994 until 2000, “was a disaster and a morale-breaker,” Wadleigh said.

Union officials object to the cross-training because they see it as a way for management to force employees to work out of classification, pitting one group of union members against another.

On Friday, union officials were notified that management plans to reinstitute cross-training through what are called “job function reallocations.”

The controversial proposal was announced just as the latest deadline for negotiations on another proposal by new BIW President Frederick Harris expired and was, according to Wadleigh, “the straw that broke the camel’s back.”

In addition to three Zumwalt-class DDG-1000 “stealth” destroyers in varying stages of completion, BIW is building five Arleigh Burke-class destroyers and will bid on another multi-year contract for those ships in 2016, competing against the Pascagoula, Mississippi, shipyard of Huntington Ingalls Industries, which also builds ships for the Navy.

In competition with two other shipyards, BIW also will bid next year to build the next generation of U.S. Coast Guard offshore patrol cutters scheduled to begin construction in 2017. Among the company’s competitors for the contract is Bollinger Shipyard in Lockport, Louisiana, which in late 2008 edged out BIW in a competition for new Coast Guard cutter contracts worth up to $1.5 billion.

Harris told the Bangor Daily News in January that securing the Coast Guard contract would avert laying off about 35 percent, or 1,200, of the Bath shipyard’s manufacturing employees.

BIW spokesman Matt Wickenheiser reiterated management’s emphasis on cost control in a statement issued Wednesday afternoon.

“We are working hard to be affordable for our U.S. Navy customer and to position BIW to win U.S. Coast Guard work that would offset a decline in our existing workload,” he said.

Wickenheiser said the company has already made a number of changes to improve efficiency, many of them suggested by employees, but that to be successful in future bidding competitions, BIW must find more efficiencies and “focus BIW’s world class shipbuilders on those things where we have a competitive advantage.”

“We are discussing alternatives with [Local S6] and seeking their input to ensure we have the best possible understanding of the opportunities and risks,” Wickenheiser said. “BIW has and will continue to abide by the collective bargaining agreement, and we are committed to bringing shipbuilding to Maine, and to do so, we must become more competitive.”

Costs in the crosshairs

Competition among shipyards remains foremost in the minds of Coast Guard officials, including Commandant Adm. Paul Zukunft, who told the House Appropriations Committee on Tuesday that while the latest Coast Guard budget request is $69 million short of the amount required to fund the new cutters, the three shipyards competing for the contract are “very highly incentivized” to keep costs down, USNI News reported Tuesday.

Jay Korman, senior Navy analyst with the Washington, D.C.-based consulting firm The Avascent Group, told the BDN in January that pressure to outsource starts at the Pentagon, which is trying to eliminate a “‘make-it-ourselves’ mentality.”

In March 2014, only months after becoming president of BIW, Harris proposed hiring electricians from National Steel and Shipbuilding Company (NASSCO) in San Diego as BIW scurried to ramp up its own staff for new work. The union negotiated to allow more than 200 BIW electricians to work overtime “to keep NASSCO and Electric Boatyard out of our yard,” Wadleigh said at the time.

While Wadleigh said BIW met every deadline, when the Navy announced earlier this month that delivery of the first two DDG-1000 stealth destroyers would be more than a year late, it cited as a cause a lag in electrical work at the shipyard.

Harris also proposed outsourcing pipe hangers to NASSCO, where he also remains president, but when the union discovered NASSCO bought its material from Mexico, Sen. Susan Collins stepped in to end that plan.

In November, shipyard management notified the union that BIW would seek to subcontract out to other companies work on “destroyer power panels, berthing, lockers, dressers, powder coating of electrical boxes, cable cutting, diving, standard door hatches, scuttles and hatches with scuttles” — work currently being performed in Bath.

Still, the contract with Local S6 requires BIW to show that outsourcing would save a significant amount of money or must prove a severe staffing shortage or inadequate facilities to perform the work at BIW, Wadleigh said at the time.

Since November, local and national union officials have parsed more than 1,000 pages of figures outlining the proposed cost savings, according to Wadleigh. A deadline for negotiations to cease has repeatedly been reset — by mutual agreement — in part because management came to agree with the union that some outsourcing would not save the company money, he said.

Other than acknowledging the need to cut construction costs, union and management negotiators have found little grounds for agreement, leading Wadleigh to say in January that his take on the talks was “leaning toward bad faith bargaining.”

Unhappy workers

Friday’s announcement that “job function reallocations” were being considered frustrated 56-year-old John LaPointe, a 26-year BIW employee who worked as a pipefitter for the first 17 years and now is in facilities.

LaPointe remembers the 2000 strike and the union’s efforts to eliminate what were then known as “associated functions” from the contract it was negotiating then.

“I didn’t see the sense of it,” LaPointe said Wednesday, recalling that as part of associated functions, he was told, as a first-class pipefitter, to empty trash cans in the machinery spaces.

“I’m not minimizing the people who empty trash cans, but I was paid to install pipes and piping systems. I didn’t see how it benefitted the company to pay me that wage to empty trash cans,” he said.

LaPointe echoed union statements that job “sequencing” and a lack of materials at the ready should be where management focuses cost-cutting efforts.

“They don’t have the materials,” LaPointe said. “They don’t have the blueprints. They don’t have the sequencing of work that they need to do their job in a timely manner. It hasn’t changed for the last couple of years and it seems to be getting worse.”

With unrest among union membership escalating and no resolution to the outsourcing disagreement, the union was notified Friday that “job function reallocations” or cross-training, was back on the table, more than a year before contract negotiations are set to begin.

No action has yet been taken, Wadleigh said, so the union can’t file a grievance claiming the proposal to add “job function reallocations” violates the contract.

Such significant changes would be more appropriately considered as part of new contract negotiations, set to begin in May 2016, Wadleigh said, adding that employees — many of whom remember the strike in 2000 — are already worried about another strike.

“The tone is ‘us versus them,’” Wadleigh said. “We’re thinking, ‘If they could do this now, what are we in for in 2016?’”

“Most of the people who work at Bath Iron Works, even though they sometimes mumble and grumble, want the facility to be here for another 100 years,” LaPointe said. “It has provided a good living for a lot of people, but people are scared. It’s not a good situation right now.”