From staff and wire reports

BATH – The mood at Bath Iron Works was cautiously upbeat Wednesday at the news that shipbuilding jobs would be safe for a while longer.

The Pentagon put on hold the Navy’s proposal for a winner-take-all contract for the next generation of Navy destroyers, giving hope to shipbuilders in Maine and Mississippi who oppose the plan.

“It’s good news and it’s going in the right direction,” said Mike Keenan, president of the local machinists union. “But we would have preferred assurances that the sole-source strategy won’t happen. That’s the way to lift morale.”

The Navy’s plan to let a single shipyard build all of the stealth DD(X) warships is “premature,” according to a memo signed Wednesday by Michael Wynne, defense undersecretary for acquisition, technology and logistics.

But Wynne also authorized the Navy to seek more information on a single-source strategy before a final conclusion is reached.

“Unfortunately, we are not in the clear yet and we have a great deal more work to do to ensure the long-term viability of BIW,” said U.S. Rep. Michael Michaud, who joined with the other members of Maine’s congressional delegation in welcoming Wynne’s decision.

Critics contend the Navy’s winner-take-all strategy could ultimately drive either Maine’s Bath Iron Works or Mississippi’s Northrop Grumman Ingalls shipyard out of business, leaving the Navy with only one builder of destroyers.

Navy Secretary Gordon England contends that awarding the contracts to a single shipyard instead of divvying up the work would save $300 million per ship.

While it’s not the final word, the memo was welcome news at BIW on a day in which another 32 workers with 16 years of experience each were laid off, said Keenan.

“It’s something to give hope to the thousands of shipbuilders that have vested many years at Bath Iron Works,” he said. “It’ll also keep our craftsmen within the shipyard instead of looking for opportunities outside the shipyard.”

“General Dynamics considers this positive news,” said Dirk Lesko, BIW spokesman. “Undersecretary of Defense Wynne’s approach is a very thoughtful response to a complex issue. We look forward to working with Mr. Wynne’s office and the Navy to provide additional input on this strategy.”

The stakes are high because both shipyards are big employers: BIW is Maine’s No. 3 private employer with about 6,000 workers, and Ingalls is No. 1 in Mississippi with more than 12,000 workers.

The Navy proposal has met with stiff opposition from congressional delegations in Maine, Mississippi and other shipbuilding states.

Lawmakers contend that both shipyards must continue to receive work to maintain the nation’s shipbuilding base. They also argue that competition could be eliminated altogether if one of the shipyards goes out of business.

Mississippi Sen. Thad Cochran, chairman of the Senate Appropriations Committee, has added a provision written by Maine senators to the supplemental budget being debated this week that would strip funding from the Navy to move forward with a new acquisition strategy.

Maine Sen. Susan Collins, a member of the Armed Services Committee, said she was encouraged by the latest news on Wednesday, but she said she and other senators were not abandoning their attempts to stymie the Navy’s single-source efforts.

“I’m tempted to be jubilant about this news, but I don’t dare,” said Collins, who vowed to continue fighting for the shipyard.

She noted that England, a winner-take-all proponent, has been nominated to replace Paul Wolfowitz as deputy defense secretary. Wynne, meanwhile, is due to be replaced. Bush has nominated Pentagon official Kenneth Krieg to fill the job.

Jay Korman, a naval analyst at DFI International, said the Navy is unlikely to give up because it’s committed to a winner-take-all approach.

“It’s hard to imagine that they’ll drop it, but they might realize that it’s not worth the fight at this point. So it gives a bit of a reprieve to the shipyards, but it doesn’t mean they’re in the clear,” Korman said from Washington.

The Defense Department was expected to release a report next week that would have included its acquisition strategy, said Jen Burita, Collins’ press secretary. But it decided that a final decision would best be left to the Defense Acquisition Board, which is due to meet in July.

The Navy once envisioned building as many as two dozen of the ships, but the number has dwindled. The Navy adopted the winner-take-all approach when the number dropped to five under the latest budget proposal by President Bush.

In Bath, the proposed cuts would exacerbate a workload gap already anticipated as the shipyard transitions from the current Arleigh Burke destroyer program to the next-generation DD(X) destroyer four years down the road.

Unlike Ingalls, Bath has no other work to fall back on. Ingalls, a larger shipyard, builds amphibious ships in addition to destroyers.