Bethlehem Steel gets Navy dry dock contract

November 23, 1991|By John H. Gormley Jr.

Bethlehem Steel Corp.'s struggling Sparrows Point shipyard has landed its second big contract in as many months, the company announced yesterday.

The Navy has awarded the yard a contract worth more than $25 million for the overhaul of the Sustain, a floating dry dock based at the Norfolk Naval Base. The work is expected to provide work for 650 workers for about five months.

In September, Bethlehem secured a $60 million contract to build tunnel sections for an interstate highway under Boston Harbor. That project is expected to take 18 months to complete and employ several hundred people.

BethShip President David Watson said in a statement released yesterday, "This represents another significant step for the yard in its emergence from a very difficult period in the industry."

Sparrows Point was equipped primarily for the building of new ships. But in recent years, U.S. yards have been unable to compete with foreign yards. With the collapse of the commercial market for new ship construction in the United States, Bethlehem has been forced to rely on repair work.

The short-term nature of such work left Sparrows Point's workers under constant threat of layoffs. The two new contracts, because of their longer term, should help to provide workers with more job security, while giving Bethlehem a more more stable base from which to bid for additional short-term repair work.

In a letter to employees, Mr. Watson said that the dry dock contract should help to make the yard more competitive in bidding for additional work, since the contract will help to cover the yard's overhead costs. "We already have a good order book for 1992, and I am very confident that it will only get better," he wrote.

This year, employment at the yard has averaged about 350. The dry dock contract will bring average employment next year to about 800, Mr. Watson said.

He credited Local 33 of the Industrial Union of Marine & Shipbuilding Workers of America with playing a "valuable role . . . in bringing this work to the yard."

Lonnie Vick, the union's executive secretary, said the union had agreed to some changes in work rules that give the company more flexibility in assigning workers.

In August, the company and the union reached agreement on a new labor contract a year before the expiration of the old one in order to improve the chance of winning the tunnel contract. The new labor contract eliminates the possibility of a strike during the term of the tunnel project.

Mr. Vick said this newest contract will allow all 1,000 of the active members of his local to go back to work. While the company is predicting average employment of 800 people next year, Mr. Vick expects the peak figure during the year to exceed 1,000. And if the yard can keep a steady stream of repair work coming into the yard, employment could well be above the 1,000 figure for much of the year, he said.

Mr. Watson also credited Representative Helen Delich Bentley, R-Md.-2nd, with helping the yard win the work. Mrs. Bentley was instrumental in getting the Navy in 1985 to designate Baltimore as a part of the home port area for ships stationed in Norfolk, Va.

That made Bethlehem eligible to do repair work on Navy vessels based in Norfolk..

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