COVER STORY : With Defense Cutbacks Threatening to Torpedo a Mainstay of the Region’s Economy . . . : Shipyard Fights to Stay Afloat

This is a story about a big hole in the ground--a concrete-lined one, 150 feet wide and more than a fifth of a mile long.

It’s big enough to hold any ship in the Navy. That includes the Navy’s 13 behemoths, the aircraft carriers, which stretch more than 1,000 feet from bow to stern. Dry Dock No. 1, as it’s called, is the only one of its kind within almost 1,600 miles of the Pacific fleet’s home port in San Diego, whose smaller, privately owned dry docks can’t handle the big platform ships.

Workers at the Long Beach Naval Shipyard can fill Dry Dock No. 1 with seawater--up to 56 million gallons--then open it up at one end and let one of those big flattops inch its way in. Then, after the water is pumped out, they can get at the ship’s hull, attacking blistering paint and barnacles and making bottom-side repairs.

But Dry Dock No. 1’s days may be numbered. In fact, the whole shipyard may be on the federal chopping block, as the independent Defense Base Closure and Realignment Commission (widely known as BRAC) works implacably toward another round of cuts--the last step in a five-year process to scale back the post-Cold War military.

The closure process, which so far has taken place in the secrecy of the Pentagon, goes public Wednesday, when the Department of Defense is scheduled to release its recommended base closures.

So the hot topic in Long Beach is the big, hard-to-replace hole in the ground, as well as the facility’s two other smaller dry docks, its 3,100 skilled mechanics and shipyard workers, thousands of support workers and hundreds of local businesses as well as, some say, the long-term health of the region’s economy.

You can almost hear the clink of armor as local elected officials, union and community leaders and employees get ready to do battle to keep the shipyard going.

About 700 shipyard workers gathered at the front entrance at lunchtime last week, shouting, “Hell, no, we won’t go!” as a string of elected officials and others excoriated the prospect that the shipyard could be closed and praised the work that it has done. Workers, many wearing hard hats and welders’ protective hoods, carried signs saying: “If It Ain’t Broke Don’t Fix It” and “Close the Shipyard--Are You Out of Your Mind?”

“We will not be moved until we’re sure we’re not on the closure list,” said Assemblywoman Juanita M. McDonald (D-Carson). “And if it means we get on buses to go to Washington, we will.”

Mayor Beverly O’Neill added: “I have not heard one good reason to close the Long Beach Naval Shipyard.”

The 339-acre facility, which juts into Long Beach Harbor along the south edge of Terminal Island, has long been one of the economic mainstays of Long Beach and adjacent cities.

It pumps $757 million a year into the regional economy, a study by an independent analyst showed last year. That includes the spillover effects of companies doing business with shipyard workers and contractors--from hotels and restaurants to parts manufacturers and suppliers.

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The Long Beach yard opened in 1943 in the middle of World War II. It has been busy ever since, although recent downsizing of the Pacific fleet has cut into the workload and the staff. During the 1980s it employed more than 8,000 people, more than double its current staff.

“The impact of closure will have a more devastating effect than all the money lost in Orange County by bad investments,” said Ray Grabinski, a former Long Beach city councilman who is working with the Southern California Committee to Save Our Shipyard. Recent estimates of Orange County’s losses from bond investments are $1.69 billion.

Department of Defense officials are keeping quiet about their recommendations, but the betting around Long Beach is that the shipyard will be on the list, the first step in the complicated process of further shrinking the nation’s military structure.

The eight-member Base Closure and Realignment Commission will hold a series of public hearings in March on the secretary of defense’s recommendations, and commission members will visit each of the facilities targeted for closure. Then, on July 1, the closure panel will make its recommendations to the President.

Although Secretary of Defense William Perry suggested recently that this round of closures won’t be as Draconian as he had anticipated, there are signs that the Navy may be forced to reduce its three current shipyards in the Pacific to two. The other Pacific shipyards are in Bremerton, Wash., and Pearl Harbor, Hawaii.

The Navy is cutting its fleet, which consisted of 545 ships in 1990, to 346 this year. In previous rounds of cuts, the Department of Defense moved to cut the Navy’s complement of East Coast shipyards from four to two, ordering the closure of shipyards in Philadelphia and Charleston, S.C.

That could spell trouble for Long Beach, assuming that the government may seek to balance cuts on both sides of the country, said local advertising executive Bill Gurzi, president of the anti-closure group, whose members include more than 300 individuals and organizations, along with officials from adjoining cities.

The naval shipyard in Bremerton, Wash., is too big and too entrenched to close, Gurzi said. “If there’s a closure, then it’s got to be either Pearl Harbor or Long Beach,” he said. “That could leave us vulnerable. There is such a thing as a sacred cow, and Pearl Harbor is one of them.”

Despite their anxieties about closure, the Long Beach shipyard workers have been taking care of business. After venting their anger last week’s rally, they went back to work in the yard on the Antietam, a guided missile cruiser in Dry Dock No. 2.

Workers swarmed through the big ship like a crew of Lilliputians attacking a giant. They knelt in the lower decks, welding seams with acetylene torches. They lugged heavy equipment through tight passageways and tinkered with new motors and electronic equipment.

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The Antietam, a sleek 567-footer that can slice through heavy seas like a knife, is undergoing a top-to-bottom overhaul. Its two cruciform masts are encased in scaffolds and wrapped in plastic sheeting as the ship’s radar system is being upgraded. Big chunks of the hull have been removed and replaced with new metal plating.

A new firefighting system with a vat holding 300 gallons of fire-snuffing foam is going in below deck. The ship’s tower sports a new tile surface to fool enemy radar systems. In the ship’s war room, a long, low-ceilinged room beneath the bridge, new weapons systems controls and radio transmitters are being installed.

All in all, it’s about a $50-million job, said Capt. Joe Lee Frank III, the commanding officer who prowls an office on a nearby barge, restlessly waiting for his ship to be refloated next month.

Frank, a graduate of the Naval Academy and 31-year service veteran, has been to the Long Beach yard four times with various ships.

“They do great work here; there are some great craftsmen,” he said, looking appreciatively toward the swaddled Antietam. “There’s as much art as science going on over there.”

That’s the point, the yard’s defenders say. Why destroy a program that has been operating so effectively?

The shipyard, which is expected to gross $266 million this year, is the only one in the Navy’s system that operates in the black. Shipyard managers have also saved taxpayers $74 million since 1988 through a series of measures to cut costs and increase efficiency, according to Pentagon figures. For example, they have installed low-energy fluorescent lights in some buildings on the yard, at a savings of $400,000 a year, and they have demolished underused buildings.

At the same time, the shipyard’s experienced work crews have helped keep costs down, Navy officials say. Shipyard mechanics, who average 16 years of experience on the job, are often flown to other yards, or even to crippled ships on the open seas, for emergency repairs.

“This is a lean, mean producing machine,” Grabinski, the former councilman, said of the shipyard.

But the shipyard’s cost-effectiveness is not high on the closure commission’s list of criteria for determining which facilities should remain open. In fact, “return on investment” is fifth, after four criteria that rate military value.

To improve the city’s military status, shipyard supporters have been pressing the Navy to adopt a plan to home port two or three nuclear aircraft carriers in Long Beach. The idea is to make Long Beach part of a home port cluster along with San Diego, where about 70% of the Pacific fleet is concentrated.

The Navy has plans to assign the three flattops, including two that are either under construction or scheduled to begin construction this year, to North Island in San Diego.

To accommodate the big ships, the government will have to pay about $400 million in construction and dredging costs, according to one engineering study. It would cost an additional $335 million to build the equivalent of Dry Dock No. 1 in San Diego, for a total of $742 million, anti-closure leaders contend.

Long Beach city officials and anti-closure committee members say they can do it all in Long Beach for a fraction of that--probably for less than $23 million, although San Diego shipyard officials question those figures.

According to an engineering study commissioned by the anti-closure group, deep-water berthing is already in place in Long Beach, there is ample housing in the area for each carrier’s 3,000-member crew, the carriers would be 10 minutes from the open sea in Long Beach and--the key to it all--that big hole in the ground is there to service them.

Here’s where San Diego and Long Beach start butting heads like a couple of football linemen.

The San Diego Ship Repair Assn., representing the city’s five private shipyards, has been circulating a position paper in Washington, disparaging the Long Beach shipyard’s ability to compete.

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The paper contends that private yards operate at about half the cost of public yards like the one in Long Beach. “Neither the U.S. taxpayers nor the U.S. Navy should be required to tolerate this excessive cost differential,” the paper says.

Long Beach officials say those estimates fail to take into account hefty cost overruns by the private yards.

Larry Blumberg, secretary-treasurer of the San Diego group and co-author of the paper, stands by estimates on operating costs. “We’re confident in our numbers,” Blumberg said.

Congress’ General Accounting Office is studying the comparative costs of accommodating the the new flattops in San Diego and Long Beach. The study, requested by Rep. Steve Horn (R-Long Beach), should be completed by the end of the month.

“If it’s true that it would cost $742 million to build facilities that already exist in Long Beach, that would be a national scandal,” Horn said.

Blumberg would not comment on the comparative costs of accommodating nuclear-powered aircraft carriers, although he said there are no plans to build major dry docks in San Diego. “We have other options,” he said, including the use of large dry docks in Pearl Harbor and Bremerton.

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This is crunch time for the cities that benefit from the Long Beach shipyard.

City officials in Long Beach and other cities, as well as local businesses and business groups, have already chipped in $289,000 in the last two years for lobbying efforts to save the shipyard. In addition, Long Beach has contributed an additional $100,000 for studies and cost analyses.

San Diego elected officials and business leaders have been doing some lobbying and maneuvering of their own, of course. The San Diego congressional delegation, including Rep. Duncan Hunter (R-Coronado), until recently the ranking Republican on the military installations subcommittee, has been pressing to make San Diego’s home-ported ships go exclusively to the San Diego shipyards.

In 1991, Hunter and four Long Beach-area congressmen offered competing amendments to the Defense Authorization Bill, with the Los Angeles and Orange County legislators proposing the expansion of the San Diego home port to include Long Beach, and Hunter proposing a ban on such a move. Both measures failed.

Long Beach supporters contend that San Diego always gets a sympathetic hearing from the Navy, although Long Beach supporters are often met with stony indifference.

“San Diego is the residence of a lot of admirals and high-ranking Navy officials,” Gurzi said. “It’s hard to argue against the place when you’re overlooking Mission Bay at sunset and sipping a mint julep.”

So solicitous were Navy officials for San Diego’s interests two years ago, anti-closure leaders say, that Adm. Robert Kelly, commander of the Pacific fleet, instituted an unusual 75-mile limit on distances Navy ships home ported in San Diego can travel for short-term repairs.

The rule effectively dealt the Long Beach yard, 83 miles by sea from San Diego, out of the running for much of the Pacific fleet’s business, Gurzi said. “It’s an arbitrary rule, without legal precedent,” he said.

A spokesman for the Pacific fleet said last week that the rule was meant to ensure “quality of life” standards for crews whose families are housed in San Diego. He said it did not apply to the nautical distance between the two cities (as understood by Long Beach officials) but to the driving distance of 101 miles between the two cities.

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A spokesman for Naval Sea Systems Command in Washington denied that San Diego gets a better-than-even break with the Navy. “The BRAC process has been designed to be as impartial and technical as possible,” said Capt. Gordon Peterson, the command’s director of congressional affairs.

Many of the Long Beach shipyard workers are glum as they face the possibility of closure.

Jim McClure, who manages a shipyard building, notes that shipyard workers are paid less than skilled mechanics in private industry. “A pipe fitter in the yard makes $17.30 an hour on the top step,” McClure says. “In private industry, he’d probably make $4 or $5 more. We traded that extra money for security, for the Civil Service job. Now they’re taking that away from us.”

But city officials, who have gone through two earlier rounds of base closures, are not ready to give up. The shipyard survived by a whisker in 1993, on a 4-3 vote by the closure commission.

Mayor O’Neill, determined to make the plight of the shipyard a regional issue, is pressing city officials and congressional representatives in four counties (Los Angeles, Orange, San Bernardino, Riverside) to get involved. “There are shipyard employees living in 18 different congressional districts,” she says.

Long Beach has been hit hard by defense cutbacks since 1990, with the closure of the Long Beach Naval Station and the loss of about 30,000 defense-related jobs at the Long Beach-based Douglas Aircraft Co. The naval station alone was said to have an annual economic impact of $1 billion.

“I’ve been thinking a lot about that recently,” O’Neill said. “The cumulative effect on the area they’re looking at for closure is just disproportionate.”