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ON a crisp fall day around noon, a group of Electric Boat employees cluster near a company parking lot to chat in the sunshine. Soon, more workers stream out of buildings to grab a bite at the many street food stands. The lighthearted atmosphere outside may only temporarily ease an anxious environment inside.
This Connecticut defense contractor - the nation's premier builder of nuclear-powered submarines - faces an uncertain future, as do other state contractors that have been making cutbacks and laying off employees in recent years.
The cold war's end has taken a heavy toll, especially for employees of defense-related companies in a state hit hard by recession.
This year, Electric Boat, a division of General Dynamics Corporation, laid off 2,500 workers and plans to slice its 19,000 work force by more than half by 1995. Jet-engine builder Pratt & Whitney, a United Technologies Corporation division, will lay off 4,800 by next June. United Nuclear Components, of Uncasville, a small manufacturer of naval propulsion units, had a work force of 2,000. Now it has 50; it will shut its doors in January.
"The recession that is affecting this region of the country goes far beyond the gates of Electric Boat," says Neil Ruenzel, an Electric Boat spokesman.
Today, Connecticut is the nation's second most defense-dependent state per capita behind Massachusetts. It fell from the top slot it held prior to September 1991. Coupled with the regional downturn, the state is enduring more than its share of hard times. "In a sense, you can say that Connecticut gets a triple whammy: a manufacturing recession, a slowdown in commercial aviation, and cutbacks in defense," says Gordon Adams, director of the Defense Budget Project.
The United States defense buildup that began in 1979 provided the area with a strong economic base throughout most of the early 1980s. But once Connecticut defense firms were forced to start downsizing in 1989, a ripple effect led subcontractors, suppliers, and other defense-related businesses to also cut back.
Electric Boat is the state's second-largest employer behind United Technologies, whose Connecticut work force numbered 47,000 in 1991. Some economists estimate that for every job lost at the shipyard, two more will be cut in the area. This year, President Bush proposed canceling Electric Boat's Seawolf submarine program. The Groton facility later announced a major layoff plan.
Although lobbying by Connecticut's congressional delegation helped win a contract for a second submarine and partial funding for a third, this General Dynamics division still wrestles with a falling workload. The original 29-submarine Seawolf program has been incrementally scaled back since 1989.
MR. RUENZEL says Electric Boat has plans to build 12 submarines, but that is far less than the 40-submarine schedule of the 1980s. So, the shipyard has embarked on what it calls "market extension" projects. One includes building massive digester and storage tanks for Boston's new Deer Island sewage-treatment plant. But such projects typically run in the $20 million range, Ruenzel says - a drop in the bucket compared to one $2 billion Seawolf project.
Electric Boat officials say they plan to stay primarily in the business of making submarines, even though a state government official says they are working privately on larger efforts to diversify. Joseph Cohen, spokesman for Connecticut's Department of Economic Development, says Electric Boat is working with the state on a significant diversification effort to be announced later this year.
Electric Boat's troubles are mirrored elsewhere in the state.
Pratt & Whitney has been hurt by cutbacks in the United States military's F-15 and F-16 fighter aircraft programs. "The big impact at Pratt has been the combination of cutbacks in the military's product lines and the severely depressed state of the global commercial-airline industry," says Martin Moore, United Technologies spokesman. Only 19 percent of United Technologies's annual sales come from defense.
But many firms have yet to venture into new fields. Although diversification is talked about, success stories are few. High-tech firms seem to have fared better than manufacturers. Mr. Adams says it is easier to transfer technology and software than heavy machinery.
"Diversification is a minimum two- to three-year process," Mr. Cohen says. "It is a process that is extremely painful and costly and which many government contractors are ill-equipped to tackle on their own."
State and local governments have tried to help. In 1991, Connecticut Gov. Lowell Weicker Jr. (Ind.) created a program including a $22.5 million fund for diversification efforts and a networking information service. Local cooperatives are studying ways to broaden the state's economic base, possibly through chemical manufacturing, biotechnology, and electric cars.
Another sign of hope is tourism. This region, which offers six leading tourist sites, has a new Indian gambling casino that has hired up to 3,300 people, many laid-off defense workers. "A second casino is expected to open next year with plans for a third casino shortly thereafter. In addition, they'll have hotels out there, a championship golf course, and a museum of Native American history," says William Moore, president of the Chamber of Commerce of Southeastern Connecticut.
Efforts to replace the area's industrial base will take time, and progress has been slow, says Capt. Earl Potter of the US Coast Guard Academy in New London. "All these things ... are in business lines that don't necessarily use the skills of people who are being laid off."