A tussle between two shipyard operators may sink San Francisco’s last ship repair facility.
In a bid to save the West Coast’s largest shipyard from closing, the Port of San Francisco is scrambling to seek new operators, a move that could restore the jobs of some 230 laid-off workers, the San Francisco Examiner has learned.
The shipyard, located at Pier 70, is perhaps one of the last vestiges of San Francisco’s long-fading maritime economy.
“The Port is exploring all options for this yard,” Elaine Forbes, executive director of the Port, said in an interview with the Examiner at the recent groundbreaking of the Downtown Ferry Terminal expansion.
She added, “That includes potentially bringing to the [Port] Commission a request to do a [request for proposal] for a new operator.”
As the Examiner previously reported, the former and current operators of the shipyard — multinational defense contractor BAE Systems and Washington-based Puglia Engineering Inc. — in February each filed suit against the other in separate courts over an alleged $9 million in repairs to the shipyard.
Puglia completed its purchase of the San Francisco shipyard repair business from BAE Systems on Jan. 2, on two docks at Pier 70 owned by the Port of San Francisco.
BAE Systems sold the docks for $1.
In exchange, Puglia agreed to assume $38 million in pension liability from BAE, according to court documents, as well as the cost of shipyard repair — the extent of which Puglia alleges BAE Systems did not fully disclose. BAE denies those claims.
“We are disappointed that Puglia is attempting to walk away from its obligations, ultimately letting down the dedicated employees at the shipyard,” a spokesperson for BAE Systems wrote a statement to the Examiner.
Puglia did not respond to calls for comment.
An interim operating agreement between Puglia and the Port of San Francisco aimed to keep the shipyard operational until May 28, a measure meant to give all parties time to negotiate that was led by Mayor Ed Lee.
“The mayor is determined to have a fully operational shipyard in San Francisco that will ensure good paying union jobs for The City’s residents,” the Mayor’s Office wrote in a statement, adding, “He has advised the Port to keep the shipyard operational to protect shipyard jobs and ship repair in San Francisco.”
None of the involved parties would comment on the tenor of the negotiations.
The Port said it is conducting a “thorough review” of shipyard operations and the capital condition of the facility.
In a statement, Port officials noted they are focusing “efforts toward” obtaining Port Commission authorization to seek a new operator.
“The Port anticipates that several operators will be interested in pursuing the right to long-term operations at the Shipyard,” the Port wrote in the statement.
Most of the shipyard’s workers have been laid off since the dispute began.
About 184 shipyard workers were warned of layoffs by Puglia, according to WARN Act filings, which require the documentation of mass layoffs in California. Workers speaking on condition of anonymity told the Examiner the numbers exceeded that, and only 12 or 14 workers remain employed with the shipyard to date.
Some of the workers were told by Puglia that these layoffs were “temporary,” according to emails obtained by the Examiner.
However, Puglia “collected their keys and took their cellphones,” said one worker, who declined to be named for fear of retaliation. That’s not standard practice, the worker said.
Traditionally, the shipyard lays off about 140 or so workers between ship repair jobs, the Port confirmed, but more than 220 workers have been laid off since the dispute began between Puglia and BAE Systems.
“It’s a much more serious reduction in the workforce. Much more serious,” Forbes said. She added, “That yard and the employees are our first priority. The Port is doing everything it can.”
Even those who have kept their jobs are struggling, as Puglia missed paying its workers at least once since the dispute began, according to correspondence from Puglia to workers that was obtained by the Examiner.
Where shipping and dockyard work once dominated The City’s seafront, now the piers play host to tourist attractions like Pier 39 and the Exploratorium museum.
However, until last year, the shipyard at Pier 70 was the largest active shipyard on the West Coast, and among the last survivors of a vibrant Port economy that played host to union leader Harry Bridge’s famous 1934 shipping strike that crippled San Francisco and won rights for workers.
Those who count themselves among the waterfront’s last union workers are far more imperiled.
Even in the last few years, Pier 70’s historic docks — Eureka and Dry Dock No. 2 — were capable of tall feats, like repairing titanic ships up to 54,000 tons.
Despite the decades-long decay of San Francisco’s maritime industry, business professionals believe there’s a chance it could be vibrant again.
Adam Beck, executive vice president of ship repair at Vigor — a self-described “ship repair powerhouse” with more than 2,500 employees throughout Alaska, Oregon and Washington — described the industry positively.
“I’d say, on the West Coast, the market is stable and very healthy,” Beck said.
Vigor’s clients range from naval and U.S. Coast Guard ships to Pacific Coast trading vessels.
He added that Vigor itself may be interested in the shipyard, should Puglia and the Port part ways. For now, Beck said Vigor is “trying to keep things at arm’s length” in case Puglia continues with the Port.
Perhaps San Francisco’s seemingly vanishing dock workers may see some hope after all.