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The strike by the largest union at Bath Iron Works, now in its sixth week, has had little impact on its parent company’s latest earnings, but workers not showing up before the strike because of the coronavirus dampened profits, an executive said Wednesday.
Revenue for the marine group of General Dynamics, to which BIW belongs, was up 6.3 percent to $2.47 billion in the April to June quarter of this year compared to the same time last year. But earnings were up only modestly due to the coronavirus, General Dynamics CEO Phebe Novakovic told Wall Street analysts on a conference call about second-quarter earnings.
Across its five groups, the company had $9.26 billion in revenue, down 3 percent compared to the same three months last year, and net income of $625 million, down 22.5 percent compared to last year.
Novakovic said the dampened earnings were partly due to “the failure of many employees to report to work at BIW, leading to operating issues.”
As the coronavirus took hold in Maine, leaders of BIW’s largest union, the International Association of Machinists and Aerospace Workers Locals S6, asked for the shipyard to close. Only 41 percent of BIW employees clocked in for their morning shift on March 24, one day after the first positive coronavirus case at the shipyard was made public. The shipyard employs about 6,800 workers, some 4,300 of which belong to Local S6.
That union began a strike on June 22, toward the end of the second quarter. Novakovic said BIW is the smallest of General Dynamics’ shipyards, generating less than 2 percent of its profits, so the impact of the strike is “negligible.” On July 7, however, BIW President Dirk Lesko blamed the strike for forcing temporary layoffs of surveyors and trades inspectors.
Novakovic told analysts that the company is working closely with a federal mediator, so she did not want to comment on the strike. But she noted that General Dynamics works with many unions across its companies and has “very strong, decades-long positive working relationships.”
“This union appears, unfortunately, to be the one exception,” she said.
Both the union and BIW negotiators have met with a federal mediator, but they have not yet returned to the negotiating table. Spokespeople from the union and company did not immediately respond to requests for comment on the status of negotiations on Wednesday.
The union, which has been posting updates via its Facebook page, in its latest post on Monday reiterated a desire to return to the table, saying it has prepared more options, plans and proposals for increased job security and schedule recuperation to assist BIW. Lesko has said the shipyard is at least six months behind on projects.
The union also has called on U.S. Navy Secretary Kenneth Braithwaite to clarify the Navy’s position on hiring contract workers, which have been a key sticking point in the union’s negotiations with the shipyard. Local S6 President Chris Wiers said the union has not yet heard back.
U.S. Rep. Jared Golden, D-Maine, and Rep. Chellie Pingree, D-Maine, followed up in a letter dated Monday to the secretary. Citing concerns about the impact of current BIW subcontracting on the workforce and potential impact on long-term recruitment, they asked him whether the Navy is pushing BIW or other private shipyards to adopt subcontracting.
They also asked him what the Navy’s policy is on providing direction or input on contract negotiations between a private employer and its workforce. They asked for a response by Aug. 7.