Bath Iron Works could be violating the conditions surrounding a $60 million tax incentive it got from the state to expand in the late 1990s if it decides to eliminate 24 union jobs and instead contract the work to an out-of-state firm.
Sen. Ethan Strimling, D-Cumberland, has asked legislative leadership for permission to hold a public hearing on the proposed outsourcing at BIW when the Legislature comes back in to vote for bonds at the end of this month.
“They’re supposed to keep those jobs with Maine workers,” Strimling said Monday. “They made an agreement with the state. If we were ever to not pay that money, they would cry foul.”
BIW got a tax increment financing (TIF) deal with the state when they expanded their operations in Bath in the late 1990s that awards the company $3 million a year in tax incentives for 20 years.
Strimling, who is Senate chairman of the Legislature’s Labor Committee, said state statute requires that in return for certain economic incentives BIW “agrees when awarding contracts, purchasing supplies or subcontracting work…to give, to the greatest extent possible, preference to Maine workers, companies and bidders.”
Management at BIW is considering outsourcing 24 union jobs in the maintenance and janitorial department to a Massachusetts contractor to save an estimated $700,000.
Union workers rallied against that plan last week – and were joined by Gov. John Baldacci and House Speaker John Richardson of Brunswick.
The issue is not just the 24 jobs currently at stake, but the fear the company, which is owned by General Dynamics of Falls Church, Virginia, would outsource more work to get around paying high union wages.
Management has said it is considering the move to stay competitive in light of a Navy proposal to award its next shipbuilding contract to just one yard, pitting BIW against Mississippi-based Ingalls Shipyard.
If BIW were to close, in combination with the downsizing of the Brunswick Naval Air Station, the loss of jobs could be devastating to the Midcoast and the state as a whole.
According to the Maine Department of Labor, BIW already has lost 1,100 workers in the last four years, with 5,600 remaining. They earn, on average, $50,715 annually as compared to the statewide average of $30,940.
Stimling dismissed the notion that BIW needed to get rid of the union jobs to save money.
“General Dynamics made a 20 percent profit last year. I expect General Dynamics probably could find a way to keep those jobs in Maine,” he said.
Union representatives and management currently are negotiating over the proposed outsourcing and looking for other ways to find $700,000. A spokesman for BIW could not be reached for comment.
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