Buyout May Help Nassco

A chart of National Steel & Shipbuilding Co.’s recent history in San Diego would have many more valleys than peaks. Strikes, major wage concessions, fatal accidents and lost contracts have plagued the shipyard, which has shrunk from a high of 7,600 employees in 1980 to about 2,500 today.

Perhaps the most optimistic comment one could make about the West Coast’s only remaining major shipbuilder is that it is still alive, since foreign competition has defeated many other U. S. shipyards.

So it was not surprising that reaction to the news last week of a management-led buyout was somewhat subdued.

Employees, who saw their wages cut by 17% to 50% seven months ago, could hardly be expected to be enthusiastic about another management plan, even though it will eventually give employees at least 45% of the shipyard’s stock.

But the buyout does give Nassco a reprieve from its expected death sentence. And it could help prevent the loss of another major firm in San Diego, which has lost several in recent years because of mergers or moves. Nassco may not be the major employer it used to be, but it is still one of the largest in the county.

Whether ownership by employees and managers will be enough to give Nassco a competitive edge, however, remains to be seen.

Both labor and management say that will depend, in part, on whether a real “sense of ownership” develops among employees.

For starters, that will mean getting past the bitterness of last summer’s strike and the drastic wage cuts, which will take time.

Several recently initiated programs to give employees a greater say in the company’s operation are steps in the right direction. More of that is possible if employees come to see themselves as owners who stand to gain financially from more efficiency.

One of Nassco’s chief competitors for Navy contracts, the Avondale shipyard in Louisiana, has seemed to thrive under employee ownership.

We hope that Nassco will, too.