General Dynamics [GD] and the union representing the company’s employees at Bath Iron Works last Saturday said they have reached a tentative agreement for a new collective bargaining agreement, although a nearly two-month old strike of around 4,3000 employees at the Maine-based shipyard won’t end until union members vote to approve the deal later this month.
Members of the International Association of Machinists and Aerospace Workers Local Lodge S6 (LS6) are scheduled to vote between Aug. 21 and Aug. 23 on the new collective bargaining agreement, which would run for three years until Aug. 20, 2023. The strike began on June 22.
The shipyard builds DDG-51 Arleigh Burke-class destroyers for the U.S. Navy.
Last month, Phebe Novakovic, GD’s chairman and CEO, said on the company’s second quarter earnings call that the strike has had an “immaterial” result on the company’s earnings, pointing out that Bath Iron Works is the company’s smallest shipyard and generates less than 2 percent of profits.
Bath Iron Works was already behind on DDG-51 construction and the strike put it further behind. One of the key issues between management and the union was the use of subcontractors, which will be phased out at the end of the year and with a return to the prior agreement. Meantime, subcontractors will be used to help Bath catch up on work.
The agreement includes a 3 percent wage increase each year. That part of the deal was in Bath’s original proposal before the strike.
“This agreement, coupled with our hiring initiatives and major investments in facilities and production processes, positions BIW and LS6 to partner together to improve schedule performance, restore the yard’s competitiveness and ensure Bath Built remains Best Build for generations to come,” Dirk Lesko, president of Bath Iron Works, said in a statement.
GD and the union lauded federal mediators in helping resolve differences between the two sides.
“We greatly appreciate the assistance of [White House] Director of Trade and Manufacturing Policy Peter Navarro and AFL-CIO Metal Trades Department President Jimmy Hart for their help in bringing the parties together,” Novakovic said in a statement.
In a separate statement, LS6 said it “was very apprehensive about entering the federal mediation process” but added that President Trump’s appointed arbitrators “proved to be valuable tools in pushing both parties to move in the right direction and get our members off the picket lines and back to work.” It also said that the involvement of Lesko and Robert Smith, executive vice president of GD Marine Systems, which oversees the company’s three shipbuilding companies, “allowed Local S6 to engage in valuable dialogue.”
Bath Iron Works has 6,800 employees overall.