Newport News Shipbuilding lays off 480, more to come in 2016

480 laid off from Newport News Shipbuilding

Newport News Shipbuilding announced cuts Tuesday, and more are likely on a larger scale next year according to the company's president.

The shipyard announced 480 layoffs due to a temporary but significant drop in work.

The affected employees were let go Tuesday. The shipyard is a major economic driver on the Peninsula and throughout the Hampton Roads region.

It attracts workers from across the region, from the Williamsburg-James City County area, the Mid-Peninsula and as far away as portions of North Carolina.

Last month, shipyard parent Huntington Ingalls Industries reported a solid second quarter for 2015. Profit over the three-month period was up 56 percent from the same time a year ago — $156 million versus $100 million in 2014. Total revenue was up 1.5 percent, which fell in line with Wall Street analysts' expectations, as polled by the Thomson Financial Network.

HII President Mike Petters told analysts that congressional inaction and budget gridlock resulted in delays that contributed to the company's financial challenges.

Virginia's largest industrial employer is headed into a “workload valley” that will last through 2016, President Matt Mulherin said. It will finish work on three aircraft carriers next year, and while additional projects are lined up, “you can't deliver three aircraft carriers and not leave essentially a hole,” he said.

The 480 layoffs hit salaried employees and spanned “the whole gamut of the shipyard,” Mulherin said. Of those, 77 with prior experience in a trade will be offered the chance to “go back to their tools” and become hourly workers.

Mulherin said the company will put forth its best effort to find jobs for the rest of the group through job fairs, transition assistance and career counseling.

One possible landing spot is the Norfolk Naval Shipyard, which earlier this year announced plans to hire 1,500 people. Terri Davis, a yard spokeswoman, said Tuesday that job openings still exist and displaced Newport News employees represent potential hires.

“We have been working with Newport News Shipbuilding,” she said.

Looking ahead

That said, it will get worse at the Newport News shipyard before it gets better.

Earlier this year, Mulherin predicted the company would shed more than 500 jobs this year and more than 1,000 next year. This year's number ended up at 480 thanks to attrition, finding other work and more cost cutting, he said.

It's too early to pinpoint the number of layoffs for 2016, but the cuts will go beyond salaried workers to include hourly employees.

“I'm convinced next year we will find ourselves in a position where we will have significant excesses,” he said.

The shipyard is a division of Huntington Ingalls Industries. It is the sole builder of nuclear-powered aircraft carriers for the U.S. Navy and one of two shipyards that builds nuclear-powered submarines. It employs about 22,000 people.

The president of the shipyard's largest union said “we're going to always be concerned” when talk of job cuts focuses on hourly workers.

“There is no good time to have layoffs,” said Arnold Outlaw, president of United Steelworkers Local 8888.

While the cuts are painful, Mulherin said the workload shortfall has a definite starting and ending point.

“This is truly a workload valley,” he said. “We're not going out of business. The workload valley has a defined beginning — unfortunately, that beginning is today — and it has a defined end, too. In the latter part of 2017, based on everything we know, we're going to be hiring people.”

The company's stock rose 1.1 percent Tuesday.

Lessig can be reached by phone at 757-247-7821.

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