EB predicts stable employment at Quonset in 2009

John P. Casey president of General Dynamics’ Electric Boat, predicted “level” employment of about 2,000 employees at the company’s Quonset Point facility next year, with a likely rise to more than 2,500 employees over the next five years as annual submarine production jumps from one to two vessels.
However, companies and employees are in high demand in much of the country and the business atmosphere in Rhode Island is consistently ranked as one of the worst in the United States, Casey said during his Dec. 9 annual address on business and legislative issues.
“I’m here to tell you that we can be successful today with the legislative agenda that exists – the state of the tax structure and the health care structure,” he said last week. “All I’m asking the elected officials to do is: Please, please don’t put us at a competitive disadvantage, don’t push us to a place where we don’t want to be.
“Because there are other states that would do anything to get this type of work. Absolutely anything. There’s another state – and I’m not going to mention any details – but they’ll do anything to get this work.”
The number of employees at the company’s Groton, Conn., facility also should increase over the next five years, he added.
“We have every expectation for 2009 to be a very, very successful year in terms of employment here,” Casey told a crowd at the Quonset facility last week. “We expect stable employment – in fact, on the engineering side of the house we probably have to hire hundreds of people, as many as 300 people in the engineering side of the house, as many as 400 on the waterfront in Groton and to be flat and stable here in Quonset.”
The stability in employees would be an early result of a five-year, eight-submarine Virginia-class contract that the company expects to ink with the U.S. Navy within the next few weeks, Casey said. Preliminary talks are completed and he expected the deal to close by the end of December. He said the company’s bid, which puts the submarines at less than $2 billion each, will allow the federal government to boost production to two each year by 2011.
He added that the company will likely face some “challenges” after 2009, in the lull between current contracts and to-be-signed contracts for 2011. He said the company will be delivering one ship per year from Groton until 2012.
For Quonset, that means management will have to create a level workload, bringing in parts of the to-be-built boats earlier than 2012, to bridge the expected gap in work. “And I suspect we’ll be able to do that,” he said.
“We have about a year to get ourselves squared away,” Casey said. “We’ve been able to avoid these cycles in the last five years, as we’ve predicted them, and certainly there won’t be one in this coming year.”
For 2009, Casey pointed to a few facets of Electric Boat’s business that he expects to grow. He’s expecting the maintenance and modernization work – a “very profitable part of the business” – to remain steady. In Groton, about 800 engineers have worked on the new DDG 1000, a new destroyer ship to replace the DDG51.
The company also has been beefing up its “corporate responsibility” in the last few years. That includes partnerships that allow Quonset employees to earn associate’s degrees at the Community College of Rhode Island – this year there were eight graduates – along with an on-site gym, biometric screenings and physical-examination incentives.
Employees in Quonset this year raised about $200,000 for charities, including the United Way of Rhode Island. That’s going to be matched by a $45,000 contribution from the company. Company wide, it has contributed about $2 million to charities this year.
Casey also touted the in-house pharmacy program started this year in Quonset. By giving employees on-site access to drugs, including some free generic medicines, Electric Boat was able to cut annual medical costs by almost $500,000, he said. Employees need about 500 prescriptions a week, he said.
“We find the biggest challenge in the cost of drugs is the cost that occurs when you don’t take them,” Casey said. “Oftentimes people are focused on … costs. Well, [it’s] a lot less than the cost of not taking it, because if you don’t take a prescription you get a lot sicker.”
Casey also praised Rhode Island’s congressional delegation, including U.S. Sen. Sheldon Whitehouse and U.S. Rep. James R. Langevin, who both sit on intelligence committees.
“It’s great to have an asset like that in a place that can make a difference for programs for Electric Boat,” Casey said. “That support has led to about $80 million advanced on the Virginia [submarine contract] that allows us to accelerate production of those vessels.” •