VSRA News

NORFOLK - Looking for more space, Lyon Shipyard Inc. plans to buy out neighboring Norfolk Shiprepair & Drydock Co.

The two repair yards, side by side on the Elizabeth River's Eastern Branch, have signed a sales contract but have not yet closed on the deal, said Tom Ackiss, Lyon's vice president, on Tuesday.

The purchase, he said, is pending completion of a "due diligence" review of environmental, financial, legal and other aspects of the deal.

"It appears we're going to be able to reach a mutually agreeable conclusion," Ackiss said.

The deal involves Lyon buying out Norfolk Shiprepair's assets, he said, which include two marine railway docks, a pier, machinery and a cluster of buildings on the approximately 11-acre property. The two yards front the river near the foot of the Campostella Bridge on the northwest side.

"It's a good fit for us, and a logical thing," Ackiss said. "It gives us a little more elbow room to work and more room dockside."

Clay McNutt, a principal with Norfolk Shiprepair, was traveling Tuesday and could not be reached for comment. His father, Edmund "Buddy" McNutt, the company's founder, died in 2004.

Lyon, with about 115 employees, works mainly on commercial tugs and barges but also handles smaller Navy vessels, such as berthing barges.

Norfolk Shiprepair, which employs around 60 to 70, does similar work.

Employees at both yards have been informed of the pending sale, Ackiss said. During the past two to three weeks, Lyon has hired a "handful" of Norfolk Shiprepair's workers, and would "take as many as we can" once the deal is closed, he said.

Those workers include welders, machinists, painters and electricians.

"It's just hard getting good workers in these trades anymore," he said.

Ackiss declined to discuss the price of the deal. City real estate records assess the property at $3.74 million.

Norfolk Shiprepair purchased the property in 2000 for $3.09 million, according to city records.

The work load at Lyon has been "fairly stable," Ackiss said. The yard has two floating dry docks capable of lifting barges and oceangoing tugs.

The two yards have informally discussed a sale for around two years and began serious talks last fall, he said.

NORFOLK — A plan for mass layoffs announced three weeks ago by Metro Machine Corp. won’t happen after all, officials said Wednesday.

The company told workers last month that a dispute with the Navy over ship maintenance costs was expected to idle about two-thirds of the shipyard’s 450 employees for up to 18 months.

But on Wednesday, the Navy said a disagreement with Metro over the price of dry docking the guided-missile destroyer McFaul – the subject of the dispute – has been resolved. The Norfolk-based vessel will enter Metro’s yard for maintenance later this month.

The agreement also ensures that the yard will continue to receive work as a subcontractor under a five-year contract the Navy has with BAE Systems Norfolk Ship Repair to maintain a group of Arleigh Burke-class destroyers.

“From our perspective, this is a real win for everybody,” said Steve Hanson, deputy director of fleet maintenance for the Navy’s Fleet Forces Command in Norfolk. “We get the work we want done at a fair and reasonable price, and the company can stand tall to their employees and say they’ve been able to bring the work to them and keep them gainfully employed.”

Metro’s original price estimate to dry dock the McFaul was “substantially higher” than historic costs, Hanson said. While he declined to disclose the dollars involved, he said the negotiated agreement includes near- and long-term incentives that reduced the Navy’s cost.

“We can stand tall to the taxpayer and say it’s a good price,” Hanson said.

At an all-hands meeting last month, Metro executives told workers that the dispute with the Navy could result in layoffs lasting six to 18 months. A few days later, Metro filed a notice with the Virginia Employment Commission stating that the company expected to lay off around 275 workers by the end of March.

On Wednesday, John Strem Jr., Metro’s president and chief operating officer, said the resolution with the Navy would avert the large-scale layoffs.

“We’re glad to be able to avoid them, obviously,” Strem said. “We’re very pleased.”

Doug Norris, president of the yard’s International Brotherhood of Boilermakers Local 1999, said late Wednesday afternoon that company officials had not officially notified the union that the dispute had been resolved.

“I’m all kinds of happy if that’s the case, but I really don’t want to say anything until I know for sure,” Norris said. “I’ve been told we’ve had stuff before, and it turned out not to be the case.”

So far, Norris said, no workers have been furloughed since the company gave legal notice to the union that it intended to begin laying people off over five Mondays starting Feb. 26.

The destroyer contract, held by BAE Systems, is one of the Navy’s new multi-ship, multi-option contracts, in which one yard oversees maintenance of a class of ships over five years. Metro teamed with BAE on the $458 million destroyer contract as a subcontractor.

In a statement Wednesday, Bill Clifford, president and general manager of BAE Systems Norfolk, said: “We are encouraged by the Navy’s decision to dock McFaul at Metro, so we can continue to support our No. 1 customer.”

The partnering called for under the multi-ship contracts gave the Navy flexibility to work with BAE Systems and Metro to resolve the pricing disagreement, Hanson said.

While the Navy’s bottom line was to push down its costs, a motivating factor in the negotiations was the hope of avoiding mass layoffs, Hanson said.

“We want to help the private sector maintain a stable work load and a stable work force, because it’s in our best long-term interest,” he said. “That being said, we still have a responsibility to make sure that we are good stewards of taxpayer dollars. We’re doing our best to get value for the dollar.”