Building Navy ships faster-and for less- Maine's Bath Iron Works
If the industry is shipbuilding, and the town contains the Bath Iron Works (BIW), the answer is "yes" -- against all odds. Stuck out on the end of the nation's supply line, facing high costs for energy and steel, BIW also faces a grim international market:Skip to next paragraph
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* In Japan, the world's leader in shipbuilding, shipyard capacity has been reduced by 35 percent in the past two years.
* In England, the nationalized British Shipbuilders is slowly sinking under high interest rates and labor costs.
* In the United States, two yards have closed recently and the rest of the industry operates at 55 to 60 percent of capacity.
But here on the Kennebec River, a shipyard with an old-fashioned name and a 97-year history refuses to slow down. BIW, in fact, is expanding -- with a $46. 7 million facility, announced July 16, which will help revitalize the ailing waterfront area in nearby Portland.
The reason: BIW simply can't keep up with the flood of orders for new ships and overhaul work.
Company spokesman Frank Kerr, his hard-hat glinting in the sunshine beneath the massive prow of a soon-to-be- launched guided missile frigate, has no trouble measuring BIW's success:
* Since delivering the prototype of this class of frigate to the US Navy in 1977, the yard has produced six more of the ships. Each was delivered early, and each was below cost. The program is now more than 80 weeks ahead of schedule, and enjoying "cost underruns" -- a rare word in this military circle -- totaling $37 million. (By contrast, another New England shipyard -- the Electric Boat Division of General Dynamics Corporation in Groton, Conn. -- has recently made news by coming in more than two years late and $280 million over budget on its Trident submarine program.)
* BIW also succeeds in commercial work. It now has a backlog of more than $ 900 million in orders -- for everything from a 643-foot sugar-barge for the California & Hawaiian Sugar company to bridge girders for highway construction and rock-crushing equipment for the mining industry.
* The largest employer in Maine (except for state government), it now has 6, 500 employees -- up from 2,500 in 1975. So popular are its jobs that the names of another 14,000 people are on file in the personnel office. The pay is low by nationwide shipyard standards, but the cost of living here is also low. So attractive is the firm, in fact, that the yard now employs forme bankers and college professors who have joined the trades.
* Figures for income, earnings, and profitability -- confidential since the company (a division of the floor- covering manufacturer Congoleum) returned to private ownership in 1978 -- show astonishing increases since the $10 million losses of 1975.
Many see in BIW the virtues of private enterprise and hard work preached by the Reagan administration. How does it do it?
In his small, comfortable office, hung with pictures of naval vessels boiling along through blue water, chairman John F. Sullivan cites several causes. Brought aboard in 1975 to turn around an ailing firm, Mr. Sullivan himself is often listed as the central reason for BIW's success. But he gives top credit to the local work force.
"It's mental," he says, trying to account for what has often been called the "Maine work ethic" that still produces, even under union conditions, an hour's work for an hour's pay. Such work, he says, is partly a matter of pride -- the kind of deep feeling for the ships that bring tears to the eyes of welders and pipe-fitters at each launching. The town has been making ships for 374 years -- since 1607, when a 50-foot pinnace built by English settlers at the mouth of the river sailed back across the Atlantic.