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Budget shortfall, rising costs pinch shipyard hiring

Feb. 6, 2013 - 11:27AM   |  
By SEAN REILLY   |   Comments
Chief of Naval Operations Adm. Jonathan Greenert speaks with Puget Sound Naval Shipyard engineers, project managers and the commanding officer of the aircraft carrier Ronald Reagan last year about maintenance being performed on the ship. The Navy's four public shipyards, which collectively employ some 31,000 civilians, could face hiring restrictions for the rest of the fiscal year, regardless of whether sequestration becomes a reality.
Chief of Naval Operations Adm. Jonathan Greenert speaks with Puget Sound Naval Shipyard engineers, project managers and the commanding officer of the aircraft carrier Ronald Reagan last year about maintenance being performed on the ship. The Navy's four public shipyards, which collectively employ some 31,000 civilians, could face hiring restrictions for the rest of the fiscal year, regardless of whether sequestration becomes a reality. (MC1 Peter D. Lawlor / Navy)

The Navy’s four public shipyards, which collectively employ some 31,000 civilians, could face hiring restrictions for the rest of the fiscal year, regardless of whether sequestration becomes a reality.

One reason: The current continuing resolution, which generally funds agencies at fiscal 2012 levels, leaves the Navy about $3.2 billion short of its fiscal 2013 request for operations and maintenance, said David Berteau, senior vice president at the Center for Strategic and International Studies, a Washington think tank. Another reason is that operations and maintenance costs are running $1.4 billion higher than expected this year, pushing the total shortfall up to $4.6 billion.

“What choice does the Navy have” except to cut back, Berteau asked.

The CR, which expires March 27, also limits the Navy’s ability to shift money from other accounts to operations and maintenance. Late last month, on the assumption that Congress might extend the resolution through the rest of the fiscal year, Adm. Jonathan Greenert, chief of naval operations, announced a host of cost-cutting moves, including a shipyard hiring freeze, cuts to information technology spending and the cancellation of most pier and runway modernization projects.

The four shipyards are in Pearl Harbor, Hawaii; Puget Sound, Wash.; Kittery, Maine; and Norfolk, Va.

Last month, for example, the Puget Sound yard scuttled plans to hire an additional 600 people. While yard managers eventually still hope to bring those people onboard, the uncertainty has also led them to postpone a career fair, the installation’s commander, Capt. Steve Williamson, wrote in an official Web post.

The Navy will continue contracts for which money has been committed, but future contract decisions will depend on workload, Williamson wrote in the post.

But the impact of tight budgets on total shipyard employment may not be as dire as Greenert indicated in the Jan. 24 memo. There, he said the hiring freeze and layoffs of temporary employees would cut the workforce by more than 3,000, or almost 10 percent.

But a Navy official, who insisted on anonymity, later said Greenert was referring to not the current workforce, but the projected number of employees who would have been needed to handle ship maintenance that may now be postponed.

And Greenert did not rule out exceptions to the hiring freeze. At the Pearl Harbor yard, Executive Director Randy Sawyer said late last week that he had received tentative approval to hire 100 apprentices as planned this month and was hopeful that he could eventually bring on as many as 40 new employees in engineering and other disciplines.

In the meantime, Sawyer said, shipyard workers “are just kind of watchful to what’s happening, and of course everybody’s hopeful that a budget can be agreed upon.”

“The other thing we’ve really stressed here is keeping focused on the mission at hand and staying safe and not letting budget issues distract from our daily work at the shipyard.”

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