Navy awards $736M contract for Lewis-class oiler to NASSCO as BAE struggles with layoffs
The San Diego Union-Tribune May 24, 2023
(Tribune News Service) — The Defense Department says it will give General Dynamics-NASSCO $736 million to build a ninth Lewis-class fleet oiler for the Navy, which will help the Barrio Logan shipyard maintain its workforce at roughly 3,500.
The news comes as NASSCO's neighbor, BAE Systems, is struggling to secure ship repair contracts. The company recently notified the state that it will eliminate 285 jobs at its yard on San Diego Bay, reducing its workforce to about 860. BAE had twice as many workers less than a decade ago.
NASSCO has thrived in recent years by landing a combination of ship construction and repair work. Prior to Tuesday, the yard had built, started or won contracts to build eight Lewis-class oilers. The yard is currently nearing completion on one of those ships — the Robert F. Kennedy — which will be launched this fall.
The new contract brings NASSCO's total haul in Lewis oiler program work to $5.5 billion.
"NASSCO is proud of our ongoing dedication to deliver these ships to the fleet," Dave Carver, NASSCO's president, said in a statement. "We are committed to working with our Navy partners to ensure the continued success of the John Lewis-class fleet oiler program."
The ship construction and repair business is highly cyclical. Over the years, NASSCO and BAE have each gone through expansion and cutbacks. BAE was so committed to its San Diego operation in 2015-16 it invested about $100 million to improve its facility and add a large floating dry dock.
Local shipyards have since been hurt, to varying degrees, by the Navy's decision to send some of their vessels elsewhere for repairs and modernization. Earlier this year, the Navy announced that the San Diego-based destroyers Zumwalt and Michael Monsoor will undergo upgrades in Mississippi.
The ship repair industry also is being roiled by Congress, which has decommissioned some littoral combat ships early, eliminating a lot of future repair work. Other ships face an uncertain future, including San Diego-based littoral combat ship Jackson, which only began going on deployment two years ago.
Such downturns eliminate prized jobs. Dozens of welders, sheet metal fitters, machinists and electricians are among the people who will lose positions at BAE in San Diego.
©2023 The San Diego Union-Tribune.
Distributed by Tribune Content Agency, LLC.