Graving Dock Failure at NASSCO Leads to Layoffs

Flooding at the NASSCO yard, July 11 (Chris Cavas / Twitter)

By The Maritime Executive 08-14-2018 01:53:08

Due to the recent drydock accident at its San Diego yard, General Dynamics NASSCO has warned about 1,500 employees that they could be laid off within the next month. The firm told local media that it is working to minimize the disruption and expects the final number to be in the range of 350 workers. 

“We are pursuing all available options to avoid or lessen the impact of these reductions and hope to increase our workforce as soon as possible to support work expected in 2019,” NASSCO president Kevin Graney wrote in a notice filed with California's Employment Development Department. 

On July 11, a graving dock at the NASSCO yard accidentally flooded, sending water into the unfinished hull of the future USNS Miguel Keith, a new expeditionary sea base under construction for the U.S. Navy. No injuries were reported but the incident caused an unspecified degree of damage to the vessel. In a statement, the Navy said that "the ship floated off the docking blocks and took on water through hull cuts that were made to support the ship’s construction and outfitting."

NASSCO has other work in the pipeline while graving dock repairs are under way. The Navy recently announced an $89 million award for the yard for drydock maintenance on the destroyer USS Higgins, to be completed by September 2019. NASSCO is also building two new LNG-fueled Panamax containerships for Matson Navigation for the U.S. mainland-to-Hawaii route. Overall, its business unit's fiscal performance is doing well: according to General Dynamics' Q2 results, the marine systems division has an enviable backlog worth $27 billion (including contracts for Bath Iron Works and General Dynamics Electric Boat). Revenue has been steady at about $2 billion per quarter, with a profit margin of about nine percent.