San Diego shipbuilder General Dynamics NASSCO is warning 700 employees that they may be laid off in January, a company spokesman said Oct. 25.
The business has 3,500 employees, split among its yard in Barrio Logan on San Diego Bay, and outlying areas.
NASSCO did not give a reason for the layoffs. In the past, the size of NASSCO’s order book has driven the number of employees at the Barrio Logan shipyard.
“We are working diligently so not all employees who were notified will be affected,” the business said in a statement.
NASSCO has plans to build more ships, but appears to be heading toward a lull in its shipyard work.
In October, the Pentagon released money to NASSCO so it could buy components for a fifth Expeditionary Mobile Base ship for the U.S. Navy. NASSCO laid the keel for a similar ship in August.
The Navy also recently told NASSCO to go ahead with a project to build up to six oilers — supply ships that rendezvous in mid-ocean with fighting ships to replenish their marine and aviation fuel. Funding for the first ship was approved with the 2016 defense bill and the Navy awarded a $640 million contract on June 30. Congress must OK funds for oilers every year. The total deal could add up to $3.16 billion.
In August, NASSCO received a $511 million contract from Matson Navigation Co. Inc. to build two 870-foot-long ships to haul containers to and from Hawaii. NASSCO said it plans to begin construction of the first ship in early 2018 and plans to deliver the ships in 2019 and mid-2020.
In September, NASSCO laid the keel for its eighth and final ECO-class tanker for private companies. The yard is finishing up two other tankers in the series.
“We regret the impact this will have on employees and their families,” the shipyard said in a statement about the layoffs. “The company has arranged a variety of programs to assist these workers, to include working with the mayor’s office, the San Diego Workforce Partnership, San Diego Regional Chamber of Commerce and San Diego Regional Economic Development Corporation, to provide resources and assistance to those who will be affected in January 2017.”
Stock in NASSCO’s parent, defense contractor General Dynamics, trades on the New York Stock Exchange under the symbol GD.