Bath Iron Works’ president Dirk Lesko says his company lost out on a $5.6 billion U.S. Navy contract due to lengthy production delays and workforce inefficiencies that could imperil the shipbuilder’s future.
“From [the] Navy’s evaluation, they say, ‘you are six months behind or more, that is a risk for me going forward on everything you have under contract and certainly a risk for anything new you would start,’ ” Lesko told the Portland Press Herald.
Lesko was speaking of issues Bath Iron Works has been dealing with that culminated earlier this month with a heavy blow to the company: Fincantieri Marinette Marine of Italy beat BIW and another firm and secured a $795 million contract to build a new type of Navy frigate at a Wisconsin shipyard. Part of the Navy’s first new major shipbuilding program in more than a decade, the contract carries a value of $5.6 billion for Fincantieri if it builds the lead ship well enough to secure Navy permission to build nine more, the Associated Press reports.
Supplying the Navy with Arleigh Burke-class destroyers has been the mainstay of BIW’s Navy construction efforts for many years. Bath Iron Works began building the latest Burke-class ship in Bath in early March. BIW presented the lead ship of the Zumwalt-class stealth destroyer to the navy last month.
BIW also lost a big contract in 2016, when an $11 billion U.S. Coast Guard construction deal went to a Florida company. The largest contract ever to be awarded by the Coast Guard, the deal was seen as critical by management and unionized shipbuilders.
But the shipyard has had plenty of success. It has delivered over 425 ships to the world’s fleets since 1884, including more surface combatants than any other U.S. shipyard, according to its website. The company has also successfully diversified, winning a contract to make 30 packaging machines for coronavirus testing swabs last month. BOW also managed to adapt to the restrictions imposed by the coronavirus pandemic.
Many of the shipyard’s problems have to do with its inexperienced workers. About 70 percent of BIW’s manufacturing workforce, including supervisors, has been at the yard two years or less. But the company has years of work ahead of it — 12 ships to build for its contractors, the Press Herald reports.
“The thing we really need to focus on is, as we look at what comes after the work we currently have under contract, how do we do those things, meet those customer needs, quality, schedule and affordability, better than we are doing now,” Lesko told the Press Herald. “There is no simple answer but we know what to do, we know how to do it. We have to go work on that together and collaboratively with the Navy, collaboratively with the workforce.”