Northrop, Union Reach Tentative Shipyard Deal
Northrop Grumman Corp., the world’s largest military shipbuilder, said Monday that it had averted a strike at the only shipyard that builds nuclear-powered aircraft carriers for the U.S. Navy by reaching a tentative agreement with the local union.
Century City-based Northrop said it would raise wages of workers at the Newport News shipyard in Virginia by more than 15% over the four-year life of the contract and set up a company-matching 401(k) retirement plan for hourly workers under the accord.
For the record:
12:00 a.m. June 10, 2004 For The Record
Los Angeles Times Thursday June 10, 2004 Home Edition Main News Part A Page 2 National Desk 2 inches; 65 words Type of Material: Correction
Newport News shipyard -- A caption in Tuesday’s Business section with an article about a tentative labor agreement at Northrop Grumman’s Newport News shipyard in Virginia should have said the photo was taken in 1996. The photo showed a structure bearing the name Tenneco, which that year spun off Newport News Shipbuilding into a separate company. Newport News was acquired by Northrop Grumman in 2002.
The labor agreement with United Steelworkers of America Local 8888 is the first negotiated with the union since Northrop acquired Newport News for $2.6 billion in 2002. The failure of the last labor talks, in 1999, led to a four-month strike. The union is the largest local in the U.S., with 5,800 members, or 68% of the shipyard’s 8,500 hourly workers.
The tentative accord, which would cover all workers at the facility, is “fair, will maintain our ability to provide cost-effective products and services to our customer and is a reflection of the great shipbuilders of Newport News,” shipyard President Thomas Schievelbein said in a statement.
Members will vote on the accord Wednesday, union President Alton Glass said. He confirmed details of the agreement provided by the company but declined to comment further. The previous contract expired at midnight Sunday.
Under the agreement, Northrop would increase the monthly target pension benefit to $1,100 a month from $900 a month, the company said.
Northrop also offered lower first-year monthly premiums on medical insurance and raised its contribution for any future increases in premiums to 75% from 50%. The company also agreed to observe Martin Luther King Jr.’s birthday as a paid holiday, the company said.
The shipbuilding unit that includes Newport News accounted for $5.5 billion, or 21%, of Northrop’s total sales of $26.2 billion last year.
Northrop shares rose $1.02 to $105 on the New York Stock Exchange. They have risen 23% in the last year.
