Nassco Wins $290.9-Million Contract for New Navy Ship

SAN DIEGO —  National Steel & Shipbuilding Co., in the midst of drastically trimming its work force after losing out on four major contracts in the past three years, Thursday received a $290.9-million contract to build a high-speed combat support ship for the Navy.

Nassco, once far and away the West Coast’s largest shipyard, also received options to build three additional ships--called AOE, which receives fuel, ammunition, refrigerated and general cargo.

The total value of the initial contract and the options is about $1 billion, Nassco officials said Thursday.

The contract will mean between 400 and 500 new engineering and planning jobs this year and an average of 1,500 new production jobs through 1994, if the options are ordered.

The contract announcement was made Thursday by Sen. Pete Wilson (R-Calif.). Nassco officials credited Wilson and the four-member San Diego congressional delegation for lobbying to include the 753-foot-long AOE in this year’s defense budget.

“This ship was in real danger of not being funded because of budget cuts,” according to Fred Hallet, Nassco vice president of finance and corporate relations.

Nassco beat out Pennsylvania Shipbuilding, Avondale Shipbuilding and Bethlehem Shipbuilding to win the AOE contract, Hallet said.

Nassco has failed to win four major contracts in the past three years and, as a result, has steadily trimmed its work force.

Nassco employed 3,800 workers in September when it lost its bid to win a $1.2-billion contract to build three Navy helicopter landing ships.

Since then, the work force has been cut to 2,300, with further layoffs expected to bring that number down to 1,500 by May, when work on two ships--an Exxon tanker and a Navy hospital ship--is completed.

The work force won’t rise to 3,000 until production of the AOE is in full swing, said Hallet.

Nassco also is bidding on a Navy contract to build up to 25 guided missile destroyers (DDGs) for the Navy. Bath Shipyard in Maine is building the initial ship, and Nassco is bidding to build the follow-up vessels.

Todd Shipyards in San Pedro is also bidding on the DDG contract. With about 2,300 workers, Todd and Nassco are about equal in the race to become the West Coast’s largest shipbuilding facility.