Ingalls cuts 500 non-union workers

JACKSON, Miss. (AP) - Ingalls Shipbuilding says it is seeking to cut the non-union part of its Mississippi workforce by 500 employees.

The unit of Huntington Ingalls Industries said Friday it was offering a buyout package to non-union workers at its Pascagoula and Gulfport shipyards. Workers who choose to leave would get one week's pay for every year worked at Ingalls, up to 26 weeks.

In a prepared statement, company spokesman Bill Glenn said the company had to reduce "indirect budgets" because of increased cost pressures and the expectation of federal budget declines.

He called the cutbacks "unfortunate but necessary."

The company has 10,000 workers in Pascagoula and about 500 in Gulfport. About 4,250 are not covered by union contracts, including engineers, designers, bookkeepers and office workers.

Ingalls has received ship contracts worth $3.4 billion this year, Glenn said. Late Friday, Ingalls won a $46 million Navy contract to buy supplies and equipment for composite structures it is building in Gulfport for an advanced class of destroyers being built in Maine.

Observers expect that the federal government will cut its budget in coming years, meaning it will buy fewer ships for the Navy and Coast Guard. The Navy also has struggled with increasing costs for ships, meaning it can buy fewer even with the same amount of money.

Huntington Ingalls, spun off earlier this year from defense contractor Northrop Grumman Corp., has been working to increase profits at its Gulf Coast operations, which have traditionally earned less than its shipyard in Newport News, Va. The company plans to close its shipyard in Avondale, La., in 2013, and is already reducing employment there.

Union workers, including the welders, electricians, pipefitters and others who construct the ships, voted Thursday to extend their contract by three years. Under that deal, each worker will get a $1,000 bonus in place of a 2012 cost-of-living adjustment, plus raises in 2012, 2013 and 2014 worth nearly $4,000 a year to a journeyman working a full-time schedule. However, health care premiums will also increase.

Glenn said Friday's buyout offer and the Thursday contract extension were not linked.