June 17, 2019
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Bath Iron Works’ pain will be felt all over Maine

Troy R. Bennett | BDN
Troy R. Bennett | BDN
Bath Iron Works' largest crane towers over the shipyard in Bath.

PORTLAND, Maine — Bath Iron Works’ failure to win an $11 billion U.S. Coast Guard contract could deliver a big blow to jobs at the General Dynamics company and to the regional economy.

One big number helps tells that story, showing that Maine’s economy depends more heavily on ship and boat building employment than any other in the country.

Jobs at Bath Iron Works — with about 6,000 employees total — are a big part of that. That’s about 82 percent of all private-sector shipbuilding jobs in the state last year, according to federal data. That total does not include employment at Portsmouth Naval Shipyard in Kittery.

After the announcement, Bath Iron Works officials declined to update earlier projections that they could lay off as many as 1,200 manufacturing employees, or 35 percent of their workforce, as a result of losing that contract.

That’s a big number, but the bigger number is 12. Really. In 2015, the concentration of ship and boat building jobs in Maine was 12 times higher than in the country as a whole.

And Maine’s roughly 12,500 jobs in that industry look really good, compared to other jobs, with an annual average wage of $64,340 (before taxes or deductions). That’s compared with an average wage of $41,548 for all payroll workers in Maine.

Only in Mississippi and Louisiana did that comparison, based on annual pay, look better for shipbuilding.

The comparisons, called location quotients, summarize a somewhat complicated question: How do you compare the relative importance of jobs or wages in a specific industry across states or counties?

The number is the result of comparing the difference between shipbuilding’s share of all jobs in Maine, with shipbuilding’s share of all jobs nationally. The same goes for annual pay, comparing the difference between shipbuilding and all other industries.

Within that, there may be a clue about Maine’s loss and Florida’s gain. The Maine shipyard competed against southern and non-union shipyards for the Coast Guard contract, prompting management to push hard for changes it thought could bring down costs.

One competitor, Bollinger Shipyard, was based in Louisiana and had previously beaten BIW in 2008 for a $1.5 billion Coast Guard cutter contract. The winner of the nine-ship deal announced Thursday was the Florida-based Eastern Shipbuilding.

Federal data block disclosure of wage and employment information for individual shipyards, but the average weekly pay (before any deductions or taxes) was higher in Louisiana and Maine than in Florida.

In Louisiana, the average annual wage in shipbuilding was about $59,000. Florida’s average wage (with about as many industry workers as Maine) was lower than both, at about $50,000.

Compared with the national average for shipbuilding pay, that annual wage in Florida doesn’t look so great, based on the location quotient for average annual pay. In Maine and Louisiana, pay in shipbuilding looks more attractive than at the national level.

If those jobs and pay are to go away, it would be a big hit for the regional employer that has hired in recent years, softening some of the blow from other losses in Maine’s manufacturing sector.

 



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