[Senate Hearing 114-210]
[From the U.S. Government Publishing Office]
S. Hrg. 114-210
BEST PRACTICES AT PUBLIC AND PRIVATE SHIPYARDS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON READINESS AND MANAGEMENT SUPPORT
of the
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JULY 29, 2015
__________
Printed for the use of the Committee on Armed Services
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
99-569 PDF WASHINGTON : 2016
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON ARMED SERVICES
JOHN McCAIN, Arizona, Chairman
JAMES M. INHOFE, Oklahoma JACK REED, Rhode Island
JEFF SESSIONS, Alabama BILL NELSON, Florida
ROGER F. WICKER, Mississippi CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire JOE MANCHIN III, West Virginia
DEB FISCHER, Nebraska JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas KIRSTEN E. GILLIBRAND, New York
MIKE ROUNDS, South Dakota RICHARD BLUMENTHAL, Connecticut
JONI ERNST, Iowa JOE DONNELLY, Indiana
THOM TILLIS, North Carolina MAZIE K. HIRONO, Hawaii
DAN SULLIVAN, Alaska TIM KAINE, Virginia
MIKE LEE, Utah ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina MARTIN HEINRICH, New Mexico
TED CRUZ, Texas
Christian D. Brose, Staff Director
Elizabeth L. King, Minority Staff Director
______
Subcommittee on Readiness and Management Support
KELLY AYOTTE, New Hampshire, Chairman
JAMES M. INHOFE, Oklahoma TIM KAINE, Virginia
DEB FISCHER, Nebraska CLAIRE McCASKILL, Missouri
MIKE ROUNDS, South Dakota JEANNE SHAHEEN, New Hampshire
JONI ERNST, Iowa MAZIE K. HIRONO, Hawaii
MIKE LEE, Utah MARTIN HEINRICH, New Mexico
(ii)
C O N T E N T S
__________
july 29, 2015
Page
Best Practices at Public and Private Shipyards................... 1
Bagley, Ray, Vice President of Trades Operations for Newport News
Shipbuilding................................................... 5
O'Connor, Paul R., President of the Metal Trades Council at
Portsmouth Naval Shipyard...................................... 12
(iii)
BEST PRACTICES AT PUBLIC AND PRIVATE SHIPYARDS
----------
WEDNESDAY, JULY 29, 2015
U.S. Senate
Subcommittee on Readiness
and Management Support
Committee on Armed Services
Washington, D.C.
The subcommittee met, pursuant to notice, at 2:34 p.m. in
room SR-232A, Russell Senate Office Building, Senator Kelly
Ayotte (chairman of the subcommittee) presiding.
Committee members present: Senators Ayotte, Rounds, Ernst,
Shaheen, Hirono, Kaine, and King.
OPENING STATEMENT OF SENATOR KELLY AYOTTE
Senator Ayotte [presiding]. Good afternoon. This hearing of
the Subcommittee on Readiness and Management Support will come
to order. It's a pleasure to convene this hearing with Senator
Kaine, the Ranking Member of this Subcommittee.
I want to welcome Mr. Bagley and Mr. O'Connor, who I--whom
I will both introduce in a moment. Thank you both for being
here.
The topic of today's hearing is Best Practices at Our
Shipyards. Our Nation's private and public shipyards
manufacture and maintain the Navy's ships and submarines. While
the workers at these shipyards are largely civilians, they play
a critical role in protecting and defending our country.
Combatant commanders and the men and women of the United States
Navy look to the workers at our shipyards to provide them
technologically advanced, reliable, safe, and combat-ready
ships and submarines. To fulfill this essential function,
shipyards must constantly reassess practices to promote
efficiency, performance, and responsible stewardship of our tax
dollars. This requires identifying best practices, assessing
their impact on performance, and ensuring those best practices
are institutionalized and shared.
In addition to private shipyards, like Newport News, our
Nation has four public shipyards. Each of these public
shipyards plays an indispensable role in sustaining our
Nation's naval readiness, but I'm particularly proud of the
Portsmouth Naval Shipyard. Portsmouth Naval Shipyard is the
Navy's Center of Excellence for fast-attack nuclear-powered
submarine maintenance, modernization, and repair. That is more
than just words. The skilled and dedicated workers at
Portsmouth have proven with their performance and their
consistent track record of completing projects ahead of
schedule and under budget. Here are just a few examples:
In April of last year, the workers at Portsmouth Naval
Shipyard safely undocked the USS Topeka 20 days ahead of
schedule, following an engineered overhaul.
In June, following a maintenance availability, the workers
at Portsmouth Naval Shipyard returned the USS California to the
fleet 14 days ahead of schedule.
In September, Portsmouth Naval Shipyard delivered the USS
Springfield back to the fleet ahead of schedule and under
budget.
The excellent performance by the workers at Portsmouth
continues with their current work on the USS Alexandria, which
is on track to meet its scheduled completion date. The workers
at Portsmouth have continued to perform at this high level
while already hiring approximately 680 new workers this fiscal
year. This amazing track record of accomplishment is due, in
large part, to the labor/management collaboration at
Portsmouth, the Renewal of Shipyards Values and Pride, or RSVP
Program, and the Declaration of Excellence. At their root, as
our witnesses know well, programs like these are successful
because they promote labor/management collaboration, empower
the workforce, and create a culture that values high standards
and continuous learning. These efforts have resulted in
tangible best practices that have improved performance and
saved time and money, getting submarines back to the fleet
sooner.
The Navy has recognized this topnotch performance at
Portsmouth and the long-term need for the shipyard, as
evidenced by the Navy's strong investment in recent years in
infrastructure at the shipyard, including its continued
commitment to project P-266, the Structural Workshops
Consolidation.
In order to understand and share best practices at our
public and private shipyards, we are joined this afternoon by
two distinguished and incredibly experienced witnesses.
Mr. Ray Bagley is the Vice President of Trades Operations
for Newport News Shipbuilding. He is responsible for production
labor resources and processes, plant engineering and
maintenance, waterfront support services, training in
structural design, and the Apprentice School. Mr. Bagley has
worked at Newport News Shipbuilding since 1974.
Mr. Paul O'Connor is President of the Metal Trades Council
at Portsmouth Naval Shipyard, representing 2500 tradesmen and
women at the shipyard. His career spans 40 years at Portsmouth
Naval Shipyard, including work as a journeyman electrician,
performing maintenance and modernization work on the Navy's
nuclear-powered submarines. Mr. O'Connor is an active member of
the Naval Sea Systems Command, or NAVSEA, Labor Management
Partnership. I deeply appreciate having the opportunity to meet
with and work with Mr. O'Connor for many years now, his
leadership at the shipyard.
I deeply appreciate both witnesses' willingness to come and
appear before our committee today. I would also note that Mr.
Steven Fahey, a nuclear production manager at Portsmouth Naval
Shipyard, was scheduled to testify, and was eager to be here.
Unfortunately, at the last minute, he was called away on an
assignment. But, in a tangible demonstration of the labor/
management collaboration at Portsmouth Naval Shipyard that has
resulted in such strong performance, Mr. Fahey has submitted a
written statement for the record.
If there are no objections, I request that this statement
be submitted for the record. Thank you.
[The prepared statement of Mr. Fahey follows:]
Prepared Statement by Mr. Stephen B. Fahey, Nuclear Production Manager
at Portsmouth Naval Shipyard
Chair Ayotte and Ranking Member Kaine, thank you for calling this
hearing on shipyard best practices. I regret that my responsibilities
preclude me from testifying, but I am honored to provide this testimony
regarding the practices we have recently applied at the Portsmouth
Naval Shipyard to improve our performance.
Portsmouth Naval Shipyard has been supporting our Navy and our
Nation for over two hundred and fifteen years. In the periods of
greatest challenge, we have provided leadership and innovation
necessary to overcome obstacles and provide impeccable excellence and
quality. For example, in 1944, the shipyard built 32 fleet submarines
to support our war efforts for World War II. For perspective, the most
submarines the shipyard had produced in one year were four in the pre-
war years.
Building on this proud history, management and labor at Portsmouth
Naval Shipyard have been collaborating for years in support of
productivity improvements, process innovations and development of our
people. As with any relationship, there are challenges for the
management and labor team to face every day, but through commitment,
transparency, courage and confidence, trust develops. This trust is the
currency leading to shared success.
As the Declaration of Independence provided the ideals that drove
the development of this great nation, management and labor developed
and signed a Declaration of Excellence on July 4th, 2012. This document
established our shared vision and ``marked the beginning of our next
two hundred years of continued outstanding service to the citizens of
our Nation.'' It established our values, beliefs, attitudes, and
behaviors in pursuit of the perfect ``shipyard worker'' and ``shipyard
workday''. We learned that when we could look past our differences and
our individual self-interests, and focused on our common shared
interests in support of our people, our Ships Force partners, and our
Nation, we achieve great things.
Every day our Declaration of Excellence serves as our compass to
ensure we focus on the continuous pursuit of excellence. We are
utilizing state of the art Learning Centers to develop our people and
continue to work on creative ways to engage our workers hearts and
minds in achieving mastery of our craft.
Thank you again for calling this hearing and for the opportunity to
provide this written testimony.
Senator Ayotte. I would now like to call on our Ranking
Member, Senator Kaine, for his opening remarks. I would like to
thank Senator Kaine for collaborating with me on this important
hearing.
STATEMENT OF SENATOR TIM KAINE
Senator Kaine. Absolutely. Well, thank you, Madam Chair.
Thanks, to Senator Rounds, for being here, and to our
witnesses. I'm very excited about this.
Sometimes, you'll run into people who will say that they
worry that American manufacturing is dead or declining.
Whenever I hear that, I say, ``Come with me to see American
workers who build and manufacture the largest items on the
planet, a nuclear aircraft carrier. Come and talk to our
shipbuilders and ship-repairers,'' and you're going to be
convinced, not only is American manufacturing not dead, but
you're going to be convinced that these shipbuilders and
repairers are really doing amazing work.
It's amazing work. It's important to recognize it. It's
also important not to take it for granted. We live in an
environment with budget sequester and all kinds of other
uncertainties, where, if we're not careful, we can impact the
current, and especially the future, workforce that we need to
do this important work.
I'm so glad that Senator Ayotte wanted to have this
hearing, you know, readiness on public and private shipyards.
But, it's not about the yard, it's about the builders and the
repairers.
In Virginia, we have a great public shipyard in Norfolk. We
have the spectacular private shipyard in Newport News. We have
ship-repairers, large and very small. You know, the Ship
Repairers Association of Virginia, hundreds of members. Senator
Ayotte is facing the same kind of reality on the ground in her
State. This is a huge and important task to do this important
work to keep our country safe. What we want to learn today is
best practices, things that we should do more of, and things
that we should be--if there are warning signs or things we
should be aware of and--we need to know that, too.
The reason I'm so happy to have Mr. Bagley here is not only
because of the great work that is done, in terms of the
shipbuilding and submarine-building at the shipyard. This
Saturday is a big day, the launch of the USS John Warner, which
was a Virginia-class sub that's ready to be launched out of the
Norfolk base this Saturday. It seems like there's always
something being christened, or a keel being laid, or a launch.
But, in addition to the end product, I think what the
Huntington-Ingalls Shipyard at Newport News has done very, very
well, that we can take a lesson on within shipbuilding more
broadly, is the spectacular apprenticeship program that has
been in place for a century. Mr. Bagley, as part of his
responsibilities, has that apprentice program as one of his
areas of--I mean, he came through the apprenticeship program as
a painter, beginning in 1974, but now has it as one of his
areas of supervision.
This is an--a remarkably important thing for us to
understand. The more we understand about it--New York Times
recently had an article about apprenticeship programs, and
focused on the apprenticeship program in Newport News--it
offers some lessons, more broadly--to keep this industry
strong, but, more broadly, in terms of how we should do
education work in the country, how we should look at the
spectrum of educational opportunities.
So, I'm interested to learn today what we need to do to
keep our shipbuilder and -repair industry strong, but also the
techniques that are used in the apprenticeship school, and how
we might apply them to others.
The last thing I'll do is, I'll tell one story. I went with
Senator King, last October, to India. We asked--I guess not a
lot of folks ask to do this--we wanted to go visit their
shipyard. Now, they have a shipyard that builds carriers. They
have a shipyard in Mumbai that builds surfer ships that are not
carriers and subs. Senator King, obviously, is very familiar
with the Portsmouth Shipyard, very familiar with Bath Iron
Works. I'm very familiar with the Virginia operations. We
wanted to see how an ally did it. We went to the Mazagon Docks
Shipyard in Mumbai, and the degree of pride of the workers
there, and how excited they were to show us what they were
doing, it's just hard to put it into words. They were so
excited that a delegation from the United States Senate wanted
to come and see what they had. We were really impressed with
that pride. But, boy, the more we saw, the more we were even
more impressed with what we see and what we do here. I actually
think a delegation from the Indian shipbuilding industry is
coming to visit some American shipyards in about 2 and a half
weeks, which is great, because I think that partnerships is
strong. We do it better than anybody in the world. Of course
people want to come and learn how we do it. But, we shouldn't
take it for granted, and we need to learn what we can do to
keep this industry strong.
So, Madam Chair, very, very happy to be here today with
these witnesses.
Senator Ayotte: Thank you so much, Senator Kaine.
I would like to now call on our first witness, Mr. Ray
Bagley, who is Vice President of Trade Operations for Newport
News Shipbuilding, for your opening remarks.
Mr. Bagley.
STATEMENT OF RAY BAGLEY, VICE PRESIDENT OF TRADES OPERATIONS
FOR NEWPORT NEWS SHIPBUILDING
Mr. Bagley. First, I'd like to start by saying good
afternoon and thank you, Madam Chair Ayotte, Senator Kaine, and
to the other distinguished members of the Subcommittee on
Readiness and Management Support.
You know, I've got to say that, for me, it is truly beyond
my expression, so I'll just use words that I can best describe
it. I'm delighted, excited just to be able to sit before you
today and just to talk about some of the things that our
industry is doing, specifically--down to the Apprentice School,
specifically.
My name is Ray Bagley. Again, I am the Vice President of
Trades Operations at Newport News Shipbuilding, which is a
division of Huntington-Ingalls based in Newport News, Virginia.
Part of my job as--has already been fore stated, and I consider
it to be the most critical part of my job, is to provide and
prepare a capable production and maintenance workforce to
perform all the critical work that we do to serve our U.S.
Navy. So, that is a tremendous pleasure and a privilege. With
that comes another important element to be able to perform
that, is training.
So, I would like to ask--I do have a written statement
that, if it's appropriate, Madam Chair, to have permission to
just read my statement.
Senator Ayotte. Yes.
Mr. Bagley. Thank you.
Forgive this, what I will call, I will say, a umbrella
approach, if I may. I want to just talk about our Huntington-
Ingalls Industries. If you bear with me, I'll try to get
through this as fast as I can. But, I want to talk about the
industry, because it's appropriate, just to put it in
perspective, to say that we are grateful for our country
because we're able to be able to provide jobs by way of having
what I call a revenue--yearly revenue of 6.8 million and, of
course, a current backlog of around 24 billion. Between all of
our, I will say, subsidiaries, we actually employ around 38,000
people. Of that 38,000, greater than 50 percent are our
craftmen and women who actually turn the wrench on the job.
That's the way we like to say it. Not to belittle or make small
of it, but it lets them know that people like myself, we truly
work for our workers who are on the deck plate. We stretch from
States like Virginia, of course, Mississippi, California,
Louisiana, Texas, and Colorado. Of course, you know, we are a--
in our employment of our people, we put a lot of emphasis on
hiring our veterans. I think, currently, man total, we are up
to around better than 5,000 veterans.
So, we also provide a wide variety of products and services
to the commercial, I will say, energy industry--this is some of
our new endeavors--and other Government customers, including
Department of Energy. So, we are looking for other avenues to
continue to grow our business. I'll elaborate, as I get to my
closing, why this is so important to us.
As you can see, we have a corporate slogan--I think it's
pretty widely known--``Hard stuff done right.'' When you think
about everything that, Senator Kaine, you have actually stated
about the products that we build and the magnitude of their
size, that is truly what we believe, and it is committed to our
goal. It's a commitment to our people, our communities, and,
more importantly, our country.
So, today I want to talk about Newport News Shipbuilding as
the sole designer and builder and refueler of U.S. Navy
aircraft carriers. We are one of two providers of the U.S.
nuclear-power submarines. The ships we build, they do some of
our country most important work, from, you know, taking on a
fight, wherever we need to take on one, to the point of
providing humanitarian efforts throughout this great world.
Nothing--you know, I will say, when I see a carrier come on
television, I grab all of my family in the house--I'm at the
age now where I'm into my grandchildren stage--I become like a
kid. I start shouting, jumping up and down. They look at
granddad, like, ``What is going on?'' I say, ``You've got to
get in here, you've got to get in here,'' because it's only,
like, 3 minutes when they play that clip on the news. We see
one of our products giving humanitarian efforts, flying in
supplies to places that have suffered, you know, a catastrophe
or something like that, nothing makes me feel any more prouder
to be a shipbuilder.
So, with that, I want to speak about the importance--the
reason why I'm here--of a fully developed and productive
workforce. Two things I want to highlight is, we invest heavily
in workforce development. Just to give you the idea of the
magnitude, yearly we spend in excess of $80 million in our
training. That training covers a variety of things that we do.
Apprentice School is one of them. But, also, in that, we invest
in our capital funds. We take our capital funds, invest in
things like new technology. We look at, How can we get better
products in, markups, anything that would help our craftsmen
and women, that, when they go out to execute their work, they
ready to execute to give us the best quality, to operate in the
most safe way, and to give us a product that we can be the best
for the taxpayers' money, under cost, and certainly on
schedule.
So, the workforce community that we're talking about, we do
look at the workforce investment boards. We coordinate with
school districts, community colleges, certainly in the area of
Virginia, and we are focused on bringing world-class CTE
[career and technical education] high schools to our region.
We annually perform 75,000 training events on the
waterfront. That number excludes the Apprentice School. As ship
technologies have advanced, as with the Ford-class carriers,
our internal training has also had to advance. For the Ford, we
had to develop 50 new production training courses to provide
the needed skills and knowledge to our workforce. We are up to
the task and the challenges that lie ahead.
As a company, we believe so strongly in our technical
training and capabilities that we are actively exploring and
offering these training services to commercial non-shipbuilding
clients to assist with their workforce development, as well.
Now, let's talk about the Apprentice School. I am very
proud to say that I am responsible for overseeing the
Apprentice School at Newport News Shipbuilding. In addition,
I'm very proud to say that I am a graduate of the Apprentice
School, some 36 years ago. The Apprentice School provided me an
education and opened doors to experiences and opportunities, as
I look back, that I don't think I would have otherwise gotten.
So, today it serves as an excellent example of how intense
career and technical education can prepare students for high
skilled, in-demand careers through a combination of rigorous
academic and real-world experiences with the potential to
change the course of lives of the people who actually have this
experience. In fact, it actually changed my life.
In less than 4 years, the Apprentice School will have the
opportunity to celebrate centennial celebration of 100 years.
So, when you think about how Newport News feel about the
Apprentice School, that's an investment we started back in
1919. Even though we've seen the company go through various ups
and downs, various, you know, valley experiences and back up
the mountains, we've never forsaken the value of the Apprentice
School to be there to help train our men and women to be
excellent in what they do.
So, the Apprentice School for Newport News, we have three
pillars that we love to bring students in and perfect them in.
Those three pillars are craftsmanship, scholarship, and
leadership.
In respect to craftsmanship, each apprentice follows a
specifically designed and preapproved work rotation that
ensures that experience and competence in relevant aspects of
their chosen trade. The apprentices are evaluated by their
craft instructors, and they receive a shop grade based on their
quality, their safety, their work habits, initiatives, and
their demonstrated leadership abilities. As apprentices mature
through their apprenticeship, they advance from being a entry-
level helper to a full-fledged mechanic. That's pretty
phenomenal, to be--to turn out that product in approximately 4
years.
The second pillar: scholarship. One-hundred percent of
academic courses of our curriculum, which we call the ``world-
class shipbuilding,'' are taught by our own faculty, who holds
the same academic credentials as those required by colleges and
universities. We currently have articulations agreement with 10
colleges and universities, and regularly work collaboratively
with centers of learning. One example, Webb Institute, Old
Dominion University, Thomas Nelson Community College, and
certainly Tidewater Community College. We now have apprentices
that offer an associate's degree. Now, with Old Dominion, we
have the opportunity to offer a bachelor's degree in
engineering, which has been one of my--our most recent programs
that we have stood up. These relationships that remain--or,
excuse me, that the integrity and quality of education at the
Apprentice School remain excellent and provides a seamless
transfer of credits, which ensures a continuing education that,
if the student wanted to pursue their education beyond
Apprentice School, all of those credits will go along with
them, and count.
All graduates will complete a Certificate of Apprenticeship
in their specific trade. Those who advance to one of eight
optional advanced programs will graduate with an associate's
degree and, in some cases, as I stated, a bachelor's degree in
engineering. One-hundred percent of our programs are registered
with the Virginia Apprenticeship Council and recognized by the
U.S. Department of Labor. We also are accredited, and have been
for the past 32 years.
The last pillar is leadership. Shipbuilding leadership is
learned through increasingly challenging assignments and
opportunities. So, we create opportunity through leadership. We
develop professional societies. We have student organizations.
We have intercollegiate athletic programs.
One of our premier leadership program is what we call
iLead. That program was based off of the United States Naval
Academy. There are nine leadership principles. We team those
principles up with successful leaders in Newport News. Students
are challenged academically and vocationally to master those
principles.
A second one of our leadership programs is what we call
Front line FAST. FAST is the acronym for Foreman Accelerated
Skills Training. The reason why this one is so important to us
is, we had people coming out of the Apprentice School, and,
instead of wanting to stay on the waterfront, they were taking
jobs that would take them off the waterfront. So, we target a
specific program that will train our apprentices with specific
skills that, when they come out, they would be ready to hit the
deck plate as a first-line foreman. That has been very
successful for us.
Opportunities. Within the past 10 years, we reestablished
apprenticeships in patternmaking and molder, and we introduced
new programs, such as dimensional control, nuclear tests,
marine engineering, and modeling and simulization. The
Apprentice School is responsive, not only to meet the demands
of Newport News, but what we try to do is anticipate what their
future demands will be. We realize that the world is changing.
It has changed a lot for Newport News. Certainly we are active
business partners with the Senate CTE Caucus in fostering
technical education needs for American workers. At Newport
News, we have graduated 10,000 apprentices, and that is a
testament to our career in technical education. Forty-four
percent of our graduated apprentice are in production
management. Well, let me just change that. Our production
management consists of 44 percent of apprentices. So,
therefore, when we look at it, we have 4,000 people each year--
4,000 plus, in fact--that submit applications to enter into our
apprenticeship program. Out of that 4,000, or 4,500 plus, we
end up only hiring 230. So, we get the chance to really take
some very, very good students that are coming in. The
Apprentice School, for one reason, can be an alternative for
people who may not--for students who may not want to go to
college, and they want to choose another path. Also, we are
able to pick up students that have gone to college and have
gotten their bachelor's, and when they--they are looking for a
job, jobs are hard to find. So, we target those particular
students, as well, and they come in with a different skill set.
At least they have gone through that experience, so there's a
certain level of maturity that they bring into the company
with. So, again, we are able to pick what I'll call the cream
of the crop.
Of the 800 current students that we have in the program,
you would notice that we've actually had interviews with FOX
News, articles were written on Apprentice School. Most
recently, there was an article written about the Apprentice
School in the New York Times. I've got to tell you, when we see
those articles, it is very humbling for the craft instructors,
for the apprentices that come in. Instead of the pride that
rises up in a negative way, it's a very humble pride that we
are very proud of what we are able to do.
The Apprentice School is an investment. As I shared with
you, we spend a lot of money. But, it's an investment that we
have to make. It's an investment in our people. It's an
investment in our company. It's an investment in our local
regional area. It's an investment in our State. Of course, as
you go up, it's an investment in our Nation. So, there is a tie
with the Apprentice School and what we do in Newport News that
stretches across this United States of America.
Workload challenges. I'll conclude with this one. The best
way to develop shipbuilders is to continually allow them to
build ships; meaning, provide them the workload to continue to
learn and exercise their craft. This is also the best and most
efficient way to build ships. Unfortunately--and this is no
news--Newport News Shipbuilding will be facing what we call a
multiyear workload gap that's coming up in the near future. We
get concerned, because we need those non-apprentices to be able
to complement our apprentices so both of them get the benefit
to grow and learn, and to give our Nation the best product
ever.
But, I want to say, by--I'll conclude by saying, even
though we are facing this valley, I want to let everyone know
that the Apprentice School has a commitment to remain strong.
We have a commitment to keep our accreditation high, to be
reputable. We have a commitment that, when we ride through this
valley and come out on the other side, we will have produced
the leaders that are ready to lead us into the next future.
So, thank you very much, and thank you for your time.
[The prepared statement of Mr. Bagley follows:]
Prepared Statement by Mr. Ray Bagley
introduction
Good afternoon and thank you. Chairwoman Ayotte, Ranking member
Kaine and distinguished members of the subcommittee on Readiness and
Management Support. I am delighted to represent Newport News
Shipbuilding in today's discussion. I want to thank the subcommittee
for the invitation to share my thoughts with you today.
My name is Ray Bagley. I am the Vice President of Trades Operations
at Newport News Shipbuilding which is a division of Huntington
IngallsIndustries based in Newport News, Virginia. Part of my job is to
provide and prepare a capable production and maintenance workforce to
perform our work--that includes training them.
general information about hii/nns
Huntington Ingalls Industries is an American Fortune 500 company
with $6.8 billion in annual revenues and a work backlog of more than
$24 billion.
We employ almost 38,000 workers at our facilities in Virginia,
Mississippi, California, Louisiana, Texas, and Colorado. Among these
are more than 15,000 craftsmen. We employ more than 5,500 veterans.
Many of our employees are third, fourth, and fifth-generation
shipbuilders, and we have more than 1,000 ``Master Shipbuilders''
employees with 40 or more years of continuous service to the company.
Of which I am one.
We also provide a wide variety of products and services to the
commercial energy industry and other Government customers, including
the Department of Energy. We continuously grow our business in similar
marketplaces.
As you can see, we do difficult work. Our corporate slogan is
``Hard Stuff Done Right''--and we're committed to that goal and to our
people, our communities and our country.
general information about nns
Today, Newport News Shipbuilding is the sole designer, builder and
refueler of U.S. Navy aircraft carriers and one of two providers of
U.S. Navy nuclear powered submarines. The ships we build do some of our
country's most important work. Simply put, there is no other place in
the world capable of doing the work we do. It is my privilege and honor
to call myself a Newport News Shipbuilder and alumnus of the Apprentice
School, and to work alongside the finest group of shipbuilders in the
world where I still learn something new and exciting every day.
hii/nns workforce development
I want to speak about the importance of a fully developed,
productive workforce. We invest heavily in workforce development,
expending over $80 million annually in various types of training,
Apprentice School, Night School, and Tuition Reimbursement programs
that prepare our workforce to be effective in the important job of
building and repairing our Country's Navy ships. We continue to invest
precious capital funds to modernize our training facilities with state-
of-the-art technology, and with real world, Production mock-ups that
allow our workers to learn production crafts in a safe, controlled
environment. Especially through The Apprentice School, we partner with
State and local officials and education providers to jointly build a
workforce and a community. We are actively involved with the Workforce
Investment Boards, School Districts and Community Colleges in our area
of Virginia. We are focused on bringing world-class CTE High Schools to
the region.
We annually perform 75,000 training events on the waterfront, and
that number excludes the Apprentice School. Welding is a critical skill
for America and for Shipbuilding. We maintain 130 welding booths that
facilitates the instruction of hundreds of Welders on the precise,
intricate processes needed for our ships. As ship's Technologies have
advanced, as with FORD class aircraft carriers, our internal training
has also had to advance. For the FORD, we had to develop over 50 new
production training courses to provide the needed skills and knowledge
to our workforce. We are up to the tasks and challenges that lie ahead.
As a company we believe so strongly in our technical training
strengths and capabilities that we are actively exploring offering
these training services to commercial, non-shipbuilding clients to
assist with their workforce development.
All of the above is done with safety and safety training in mind.
We value our employees above all else and will not compromise on
maintaining a safe and healthy work environment for them.
the nns apprentice school
I am proud to say that I am also responsible for overseeing The
Apprentice School at Newport News Shipbuilding. I'm especially proud
given that I graduated from the school some 36 years ago. The
Apprentice School provided me an education and opened doors to
experiences and opportunities. Today, it serves as an excellent example
of how intense Career and Technical Education can prepare students for
highly skilled, in demand careers through a combination of rigorous
academics, and real world experiences with a potential to change the
course of their lives, as it has done for me.
In less than four years, The Apprentice School will celebrate its
Centennial Celebration of 100 years. From the first week as an
apprentice, students begin on-the-job training under the watchful eye
of a Craft Instructor. Soon thereafter, apprentices also begin a
rigorous academic curriculum as well as trade related education related
to their specific trade. To round out each apprentice, they are offered
additional opportunities to develop and mature their leadership skills
through extracurricular activities including intercollegiate athletics,
professional societies, and student organizations. Their experiences
vary and can take from four to eight years, but during that duration
The Apprentice School relentlessly focuses on developing students in
``Craftsmanship, Scholarship and Leadership''. Those pillars contribute
to the success of Newport News Shipbuilding by providing a continuous
supply of graduates who are prepared to lead the industry in their
chosen field of specialization.
craftsmanship
In respect to Craftsmanship, we believe this to be a core
requirement of every apprentice. At Newport News, all apprentices begin
their careers in one of 19 individual trades. Each apprentice follows a
specifically designed and pre-approved work rotation plan that ensures
experience and competence in relevant aspects of their chosen trade.
Apprentices are evaluated monthly by their craft Instructors and
receive a shop grade based on their quality of work, safety, work
habits, initiative and demonstrated leadership. As apprentices mature
through their apprenticeship, they advance from entry level helper to
lead mechanic. It is this journey where apprentices transform from a
willing follower to a humble leader.
scholarship
In respect to Scholarship, it too serves as an important pillar of
The Apprentice School. One hundred percent of academic courses of our
Core Curriculum, World Class Shipbuilding, are taught by our own
faculty members who hold the same academic credentials as those
required by colleges and universities. Our academic faculty has
graduate degrees including mathematics, physics, naval architecture or
marine engineering and currently include four PhD's and three doctoral
candidates. They bring a wealth of life experiences coming from various
branches of the United States military, the business community or
education. We currently have articulation agreements with 10 colleges
and universities and regularly work collaboratively with centers of
learning including Webb Institute, The College of William and Mary, Old
Dominion University, Thomas Nelson Community College located in Hampton
Va., and Tidewater Community College located in Virginia Beach Va. We
now have Apprenticeships that offer an Associate's degree and now with
Old Dominion University, a Bachelor's Degree in Engineering. These
relationships ensure that the integrity and quality of education at The
Apprentice School remains excellent and provides a seamless transfer of
credit and continuing education opportunities for apprentices as they
continue to pursue their academic interests.
All graduates will complete with a certificate of apprenticeship in
their trade and those who advance to one of eight optional advance
programs, including cost estimator, designer, modeling and simulation
and production planning, will graduate with an associate's degree and
in some cases, a bachelor degree in Engineering. One hundred percent of
our programs are registered with The Virginia Apprenticeship Council
and recognized by the US Department of Labor. We are also accredited
and have been for the past 32 years by the Accrediting Commission of
the Council of Occupational Education, a national accrediting agency
based in Atlanta, Georgia.
leadership
We also hold Leadership as a core competency, a pillar of The
Apprentice School. Shipbuilding leadership is learned through
increasingly challenging assignments and opportunity. So we create
opportunity through leadership development programs, professional
societies, student organizations and intercollegiate athletics.
Our premier leadership program is iLead which was benchmarked at
the United States Naval Academy. Based on nine leadership principles
and highly successful leaders at Newport News, students are challenged
academically and vocationally to master those principles. Frontline
FAST, short for Foreman Accelerated Skills Training, has also become
ingrained in the development of successful leaders at the school. This
program develops high performing apprentices for frontline supervisor
positions through blended approach of craft competencies, leadership
practices and coaching.
Our philosophy at The Apprentice School is we create opportunities
for apprentices to grow and polish their leadership skills outside of
the shipbuilding production environment. Student government,
professional societies and community service are all important
components of growth and maturity. So student chapters of professional
societies: Society of Naval Architects and Marine Engineers, Society of
Manufacturing Engineers and a student Chapter of Jaycees, the first
collegiate chapter formed in the United States, are examples of that
investment.
Intercollegiate athletics have been a part of The Apprentice School
since it formally began in 1919. Today, we field six varsity programs
including golf, football, wrestling, men's and women's basketball and
baseball. By the way, we just won the USCAA National Small College
Championship in baseball.
opportunities
Within the past 10 years, we re-established apprenticeships in
patternmaker and molder and introduced new programs in dimensional
control or precise measurement, nuclear test, marine engineering and
modeling and simulation. The Apprentice School is responsive not only
to meet the demands of Newport News Shipbuilding but to anticipate
them.
The world is changing and Newport News Shipbuilding is active with
other businesses, as supported by the Senate's CTE Caucus in fostering
technical education needs for American workers. At Newport News
Shipbuilding, some 10,000 graduates of The Apprentice School are a
testament to career and technical education. Forty four percent of the
entire production management team are graduates of The Apprentice
School. Annually, some 4,000 people inquire about attending The
Apprentice School and being selected for one of the approximately 230
openings. Of our 800 students, over half of those selected today have
attended college. FOX News recently ran a segment about the school
titled ``Beyond The Dream'' and The New York Times also recently
highlighted The Apprentice School in an article titled A new Look at
Apprenticeships. As Mr. Mike Petters, President of Huntington Ingalls
Industries says, ``Do you take someone to the end of the pier and push
them off to see if they can swim, or do you give them swimming
lessons?'' We prefer swimming lessons and The Apprentice School is that
investment. An investment in our people; an investment in our company;
and an investment in our country.
workload challenges ahead
The best way to develop Shipbuilders is continually allow them to
build ships, meaning, provide them the workload to continue to learn
and exercise their craft. This is also the best and most efficient way
to build ships. Unfortunately, we are quickly approaching a multi-year
workload gap that will likely impact the continued learning of workers
in several crafts. It is important that the potential impacts or
workload valleys need to be fully understood, as we communicated to
Deputy Assistant Secretary of the Navy for Ship Programs in the
November Shipbuilding Industrial Base Report. Perhaps this is a topic
at a different hearing or setting. We are committed to keep our
Apprentice program strong and develop leaders for the challenges ahead.
Thank you for the opportunity to address you here today and I look
forward to any questions you may have.
Senator Ayotte. Thank you, Mr. Bagley.
I would now like to introduce our second witness, Mr. Paul
O'Connor, President of the Metal Trades Council at the
Portsmouth Naval Shipyard.
Mr. O'Connor.
STATEMENT OF PAUL R. O'CONNOR, PRESIDENT OF THE METAL TRADES
COUNCIL AT PORTSMOUTH NAVAL SHIPYARD
Mr. O'Connor. Thank you. Chair Ayotte and Ranking Member
Kaine and other distinguished members, thank you for this
opportunity to speak, to give testimony at this subcommittee
today.
I have submitted a longer written statement, so I can speak
a shorter statement to open. I would ask that my written
statement be submitted for the official record.
Senator Ayotte. Absolutely.
Mr. O'Connor. Thank you.
Before I begin, I need to say a couple of things. First of
all, if Steve Fahey was here beside me, he'd say the same
things I'm saying, because, at our shipyard, we value our
labor/management relationship, we value collaboration, we value
working together, because you can accomplish so much more when
we work together.
I also want to say that I had to chuckle when Mr. Bagley
was talking about aircraft carriers--seeing an aircraft
carrier, and how he feels about that, and bringing his family,
``There's an aircraft carrier.'' Well, I was at the movies last
month with my daughter, and, before the movie started, there
was a commercial that came on, on the screen, a Navy
commercial, and a submarine breached. So, I yell out,
``Submarines.'' My daughter was embarrassed, but I thought it
was awesome.
[Laughter.]
Mr. O'Connor. So, what you will be hearing from me today--
there'll be a few recurring themes. One is, men and women at
the jobsite have the best ideas on creating efficiencies at the
jobsite. One of the things to do at the shipyard is, we want to
spread our philosophies of workforce engagement throughout the
entire Federal sector. We have a lot of dignitaries come to the
shipyard. Senators--many Senators come to our shipyard. The
Secretary of Labor was at our shipyard. Vice President Biden
has been there. Many admirals. Many, many dignitaries come to
our shipyard to see how we do business. I tell them all, we--
men and women at the jobsite have the best ideas on creating
efficiencies at the jobsite. They all nod their heads, like we
all did when I said it in this room. The fact of the matter is,
in too many industries, that isn't the reality. The reality is,
a handful of individuals are the idea people, and kind of what
they say goes. So, what we're doing at Portsmouth is truly
listening to our workforce. We want their ideas--the men and
women at the jobsite.
I'll also talk more than once about our performance.
Maximum performance requires maximum workforce engagement. We
want--at our shipyard, there are about 6,000 men and women--we
want 6,000 men and women engaged at our shipyard in the daily
operations of our business. For each man and woman who feels
disenfranchised, we further reduce the likelihood that we will
reach our fullest potential. So, we want everyone engaged.
Finally, I've already said it, we can accomplish so much
more when we all work together. Again, it sounds so simple, but
it's so easy to find reasons or excuses to not work together,
to not listen to someone. We're trying to work past that at the
Portsmouth Naval Shipyard.
I will talk with some granularity about specific
initiatives that we have ongoing at Portsmouth that are really
having a positive impact on our performance and our engagement
of the workforce. But, more than the individual initiatives,
the most important thing we've done at our shipyard since we've
begun these initiatives in 2010 is listen to our workforce. I
mean, that is absolutely the most important thing we've done,
because all of the initiatives that we will talk about came
from the men and women doing the work. None of what you will
hear today would have happened had we not listened to the
workforce. It's that important to us. You want to engage your
workforce, you listen to them. You listen to their ideas. You
act on their ideas. You create positive feedback, quality
feedback. That's what it's all about for us.
So, like I said, our shipyard has about 6,000 men and
women. Imagine 6,000 men and women coming to work in the
morning, knowing their voices will be heard, and what that
means for each one of them, you know, and what that means for
our shipyard. For each of them on their way in to work, you
know, how does it feel, right through to the end of the day,
when they go back to bed? You know, it's a whole new
environment when you wake up and you know your voice is going
to be heard. Beyond that, imagine embedding those same
philosophies throughout the DOD [Department of Defense].
Imagine 800,000 men and women coming to work, knowing their
voices will be heard, and the positive impact that can have on
performance.
So, we begin our workforce engagement initiatives in 2010
after a few years of flat performance. None of the performance
enhancement initiatives that we implemented in those few years
were having any major effect, or really no effect at all. So,
in 2010, a handful of shipyard leaders--there were six labor
leaders and six management leaders--got together and we tried
to figure out what we could do to maybe get performance going a
little bit faster, a little bit better.
We came up with a program called RSVP, Renewal of Shipyard
Values and Pride. We thought that if we could align values,
that might improve performance. Our business model was heavily
focused on schedule, which you'd think that would be the way to
run the business, but, quite frankly, when the focus is only
the schedule, bad behaviors can infiltrate, and it becomes a
negative element. We thought, you know, align our values, and
let's see where that takes us.
So, we began these RSVP sessions with our workforce. We
bring them in, like, maybe 100 at a time into our auditorium,
and we talk about shipyard history. Mostly we wanted to listen
to the workforce, hear what they had to say. We offered a
scenario: ``Today is a perfect shipyard day, and you are the
perfect shipyard employee. What does that look like to you?
What does it mean when you get up in the morning, when you're
coming to work, when you get your job and you're briefed from
your supervisor? What does it look like when you get your
tooling, your materials, and you go to the boat to do your job?
What does it look like when you interact with other mechanics,
other tradesmen and women or managers?'' The comments were
amazing, they were eye-opening. There was very little focus on
schedule and process. Our workforce talked about values,
beliefs, attitudes, behaviors. They wanted a greater sense of
ownership in the day-to-day operations of our shipyard. They
talked about integrity, trust, respect, and dignity at the
jobsite. You know, and we were hoping to be able to align
values. What our workforce showed us was that they had their
values aligned, they knew what they wanted, and we hadn't been
listening.
So, now we're listening. It's making a huge difference.
What began in 2010 as a vision between a handful of shipyard
leaders has grown in 5 years to the initiatives that have
grasped the hearts and minds of our workforce. We have American
leaders in industry turning their heads, paying attention to
what we're doing in Portsmouth. You know, we're doing
incredible things. Quite frankly, in the process, our
performance has vaulted.
So, I will save the rest of my statements, probably as I
answer questions.
Again, I want to thank you, Madam Chair and Senator Kaine,
and thank you for being here and letting me testify today.
[The prepared statement of Mr. O'Connor follows:]
Prepared Statement by Mr. Paul R. O'Connor
Chair Ayotte and Ranking Member Kaine, as well as other
distinguished members of the subcommittee, thank you for the
opportunity to testify on shipyard best practices.
I admire this subcommittee's goals of identifying public and
private shipyard best practices, assessing the impact of those
practices on performance, and encouraging their dissemination across
the Department of Defense.
I believe Portsmouth Naval Shipyard has pioneered several best
practices that have improved performance there and can do the same
elsewhere.
In 2010, in order to improve performance at Portsmouth Naval
Shipyard, a joint Labor/Management (L/M) team initiated the Renewal of
Shipyard Values and Pride (RSVP) program. Up until that point, our
shipyard business model focused primarily on schedule and process. Our
collective goal was to reinvigorate our workforce by focusing on
values. Of course, we did not ignore schedule and process. We simply
believed aligning values creates the greatest opportunity for success.
Through a series of RSVP sessions, our L/M team introduced most of
our workforce to our value-based construct with the understanding that
our values form our beliefs which drive our attitudes, behaviors, and
actions. We believe if we get the values ``right,'' we will ultimately
improve performance.
In these RSVP sessions we offered one basic premise: Today is the
perfect shipyard day and you are the perfect shipyard employee . . .
what does that look like to you? We logged every comment, every idea,
and every frustration. The message from our workforce was loud and
clear. Their driving concerns were value-based not schedule/process-
based. They wanted their voices heard. They also wanted a greater
understanding of how their individual pieces fit into the greater
shipyard picture. It was not enough to know, myopically, what their
specific job was for the day. They wanted to know how that job fit into
the general overhaul and how the overhaul fit into the shipyard's
larger maintenance program. The more we understand of the `big
picture,' the more likely we are to catch inconsistencies at the
jobsite and within our purview. Our workforce wanted more ownership in
the shipyard. Up until now, we had made them responsible and
accountable without ownership (responsibility and accountability with
no buy-in). Our workforce wanted a greater sense of trust, respect,
dignity, and integrity.
With all this information, the volumes of comments and ideas
expressed by our workforce through RSVP, our L/M team began drafting
the document, a collective shipyard vision which became known as our
Declaration of Excellence (DoE). The DoE was truly inspired, drafted,
and, ultimately, validated by our shipyard workforce. Our DoE focuses
on values, beliefs, attitudes, and behaviors. It speaks of teaching and
learning. I can learn as much from a new employee as that employee can
learn from me. Our DoE speaks of respect, trust, integrity, and
dignity, both personally and as teams. Our DoE empowers our workforce
to stand-up and speak-up while focusing on professionalism and
civility. Our DoE is our shipyard vision, as well as the foundation of
a collaborative, value-based business model.
As a result of our shipyard's RSVP sessions, our L/M team developed
two primary tenets to guide our way forward:
1. Men and women at the jobsite have the best ideas on creating
efficiency at the jobsite. Although everyone nods in agreement,
historically, throughout industry, only a handful of senior managers
are considered the `idea folks.' If you want to engage a workforce
quickly and effectively, listen to their ideas, act on them, and
provide quality feedback. Our shipyard employs approximately 6,000 men
and women. Imagine 6,000 men and women coming to work every day knowing
their voices will be heard and what that means for each of them and our
shipyard from the moment they get up in the morning, to when they go to
bed at night. Now, embed that philosophy throughout DOD. Imagine
800,000 men and women coming to work knowing their voices will be
heard.
2. Maximum performance requires maximum workforce engagement. For
each employee not engaged, for each employee we leave behind, we limit
our performance potential. When we engage a workforce, we engage their
hearts, as well as their minds.
During the RSVP sessions, our workforce came up with some amazing
ideas. Here are two examples:
1. Learning Centers--Our workforce has developed elaborate
Learning Centers (mock-ups) which allow new employees the opportunity
to learn their trade and experienced employees the opportunity to
`brush-up' on a job in a safe environment. These Learning Centers are
actual submarine components removed from de-commissioned submarines and
assembled in our trade's shops. These Learning Centers allow trades and
assist-trades to work together in coordination, preparing for specific
jobs on our submarines. These Learning Centers are helping create a
synergy between trades and support codes (i.e. engineers, sailors,
inspectors, etc.). Our structural shop has built a Learning Center,
which is a full scale replica of a section of a lower-level 688 Class
submarine machinery space. Our Painter/Blasters have put together a
Learning Center consisting of a series of enclosed tanks cut from
decommissioned submarines. Learning Centers are popping-up all around
our shipyard helping to create camaraderie, as well as efficiency.
Prior to the concept of Learning Centers, our new employees' first
experience on actual submarine components and/or submarine compartments
was on the submarine. When a new employee makes a mistake in a Learning
Center, it is a learning moment. When a new employee makes that same
learning mistake on a submarine, it is re-work, resulting in delays and
cost growth. Up until the wide-spread inception of our Learning
Centers, we could train employees only when jobs were scheduled on
submarines and only on those submarines needing that specific work. Our
Learning Centers have reduced training time, in some cases, from years
down to weeks. The Learning Centers have created an engaged,
collaborative, skilled, and productive workforce, while reducing
training time and re-work.
2. Material Control Mechanics--A Material Control Mechanic (MCM)
will locate, procure, and pre-stage tooling and material for numerous
jobs within the trades. As a trades mechanic, once I brief my job with
my supervisor, I walk 50 feet to my shop's MCM staging area, locate the
bin associated with my job, take the tooling and material, and proceed
to my jobsite. Prior to the inception of the MCM, each trades mechanic
was responsible for finding their own tooling and material throughout
the shipyard before heading to the jobsite--this was time-consuming and
frustrating.
These two ideas--Learning Centers and MCM's--are estimated at
saving our shipyard $5 million annually. That is the value of an
engaged workforce. These ideas only exist because we listened to our
workforce. This point cannot be overstated and must not be undervalued.
The most important aspect of all our workforce engagement initiatives
is this: We listen to our workforce.
Our L/M team has developed a robust, employee-focused Ideas
Program. This Ideas Program is a joint L/M initiative with labor and
management co-leads in all trades shops. We have Idea Boards throughout
the shipyard. If you have an idea, you put it on the board. As the idea
originator, you are kept actively engaged with the idea throughout the
process. This program is proving to be quite successful. Our L/M team
sees the actual ideas as a secondary benefit. The primary benefit is
this: once an employee engages in ideas, he or she will most likely be
engaged in all aspects of our shipyard organization.
Prior to the inception of our shipyard's RSVP Program, our
performance was flat with many projects, our submarine overhauls over
budget or behind schedule. Since 2012, and since our RSVP initiatives
have gained traction, all our projects have been `In-The-Green', which
means on budget and on schedule. In that timeframe, most of our
projects have been under budget, ahead of schedule, or both. The only
significant change in that timeframe has been our workforce engagement
initiatives. Coupling the Learning Centers and the MCM program with a
newly designed Ideas Program has helped to re-invigorate our shipyard
workforce. Our focus on collaboration and inclusion is helping to break
down barriers which have existed for decades, barriers built by
perpetuating archaic stereotypes and barriers built into our work
processes and practices.
We are not talking about a few process changes. We are talking
about a significant cultural shift, a shift which fosters creativity
and collaboration where we are all empowered to stand-up and speak-up,
to think out-of-the-box, to teach-and-learn with intent, to be
reliable, respectful, civil, and professional.
what's next?
Our current initiative, Portsmouth Pride, Respect, and Ownership
(PRO), is designed to further engage our workforce by connecting-the-
dots since our initial rollout of RSVP. It also introduces our newest
employees to our collaborative process, our focus on trust, respect,
integrity, and dignity at the jobsite, and our expectation of teaching
and learning with intent. This initiative will be ongoing, continually
striving to reach the ideals and vision of our DoE.
We are currently working with the Naval Sea Systems Command
(NAVSEA) Labor/Management Partnership Forum to promote our DoE
philosophies throughout the NAVSEA maintenance community. As co-chairs
of this partnership forum, Admiral Hilarides (Commander of NAVSEA) and
Ron Ault (Metal Trades Dept, AFL-CIO) continue to work with our
shipyard, introducing and fostering our vision enterprise-wide.
A parallel initiative (New Beginnings) exists within DOD, an
unprecedented collaboration of Labor and Management. In 2011, thirty
federal sector labor leaders joined thirty federal sector managers to
create, develop, and recommend improvements within three arenas of
DOD's federal personnel system: Performance Management, Hiring
Flexibilities, and Awards. These sixty men and women represented a
cultural and professional cross-section of DOD's organizational
structure. Our desire and intent to collaborate drove a value-based
focus within the three arenas. As a member of this initiative, I could
not help but realize the obvious; our value-based focus was in concert
with our Portsmouth Naval Shipyard workforce engagement initiatives.
Both initiatives require, promote, and embed philosophical elements to
achieve the necessary cultural shift in order to maximize their
greatest potential.
At this point, we are less than one year away from our initial
roll-out of DOD's adopted changes recommended by our New Beginnings
joint L/M teams. Our guiding body, the DOD Roundtable (the highest
level L/M partnership forum in DOD), has been involved from the start
and has matured into a highly functional, highly collaborative, working
forum.
I see this initiative as a means of advancing an overdue and much-
needed cultural shift in DOD.
conclusion
While we have made tremendous progress at Portsmouth Naval Shipyard
and our performance has been strong, our work continues. Cultural
change does not occur overnight. Yet, what began as a vision for a
handful of shipyard leaders (both Labor and Management) back in 2010
has grown in five years to grasp the hearts and minds of our workforce
and has turned the heads of America's leaders of industry, both Labor
and Management in both the public and private sectors. The success of
our workforce engagement initiatives can be measured by our
performance. We are shifting from a fear-based business model to a
value-based business model and that transition is making all the
difference. Working collaboratively compels individuals to develop
relationships breaking down those self-created, self-imposed barriers.
The Portsmouth Naval Shipyard is the U.S. Naval Maintenance Enterprise
Performance Standard-Bearer. Imagine where our shipyard will lead our
Navy when all 6,000 of us at the Portsmouth Naval Shipyard understand,
exemplify, and promote the values of our DoE. Further, I envision our
DoE philosophies spread across all of DOD and throughout the entire
Federal Sector. Through collaboration, with vision, our initiatives
will transform the way our Government does business.
It will take a lot of hard work but let me be very clear. Our
shipyard is a federal, nuclear, military facility. It is difficult to
find a more rigid, hierarchal-managerial construct than that. If we can
do it, everyone can do it. We can accomplish so much more when we all
work together. The Portsmouth Naval Shipyard will lead our Nation as we
lead our Navy towards a more successful future.
Thank you again for the opportunity to testify before this
subcommittee.
Senator Ayotte. Well, thank you, Mr. O'Connor.
I want to thank both of you for being here. Now I think
we'll all ask you questions.
I wanted to start, Mr. O'Connor, with--I know that each
member at--at your desk, you have what's called the
``Declaration of Excellence.'' Can you tell us what the
Declaration of Excellence is and how you put this together,
between labor and management, and how it translates into the
everyday work done at the shipyard?
Mr. O'Connor. I can. The Declaration of Excellence--all
that information we got from the workforce in RSVP sessions,
the--you know, the values and all the mountains of data they
supplied us--the 12 of us who began this process, we went off-
yard with all this information, and we spent a week organizing
the information from the workforce. We ended up putting it into
a document, our Declaration of Excellence. All the words, all
the thoughts and the values in the Declaration of Excellence
came from our workforce through RSVP. You may--you might think
that this document bears some resemblance to another famous
Declaration. That was done with intent. You know, we focus on
history--our shipyard history, our national history. Right down
to--we had the same number of delegates sign our Declaration
that signed the Declaration of Independence.
Senator Ayotte. You have it posted at the shipyard.
Mr. O'Connor. We have it posted all over the shipyard,
yeah. It is a vision for our shipyard that--if you really--
you'll notice there are--there is no current today's lingo,
buzzwords, on--business models. It's all value-based language.
We talk about trust, respect, dignity, integrity. We talk about
teaching and learning. That's really important. The--you think
about it. I can learn as much from a first-year apprentice as
that apprentice can learn from me. It's all about diversity,
open-mindedness, working together. The document itself, the 56
signatures, some of them are senior managers, some of them are
senior labor, and many of them are tradesmen and engineers--
tradesmen and women and engineers. Our shipyard commander
signed the Declaration, as well.
So, it truly is a document that was inspired, drafted, and
validated by our workforce. It's not just a document. You know,
it could just be a piece of paper up on the wall if that's what
we wanted, but that's not the case. We have a three-pronged
philosophy with our Declaration:
Prong number one is to embed the philosophies of our
Declaration into our existing work documents, our shipyard
strategic plan, and even into our technical work documents. You
know, talk about teaching and learning and trust, respect,
professionalism, civility, all of it. Embed it into our
documents to institutionalize the language.
The second prong is to turn ideas and thoughts into action.
That's critical. I talked about that with our workforce's
ideas--you know, listen to what they say, act on those ideas,
and give them positive feedback. Because ideas and thoughts
without action are just ideas and thoughts.
The third prong is, spread the philosophies of our
Declaration beyond the gates of our shipyard. I'm here.
Wherever I go, I talk about the Declaration of Excellence, I
talk about RSVP, I talk about workforce engagement,
collaboration. Wherever I go, I get rave reviews, because it
just makes sense. It's hard. You know, it's an easy concept,
but it's really hard work. It's relationships. It's the hard
stuff.
I've already said, you know, my personal vision is, we can
spread our philosophies beyond the gates of our shipyard. We
can do that. I want to do that. I want to help do that. Not
just in NAVSEA, not just in DOD, but throughout the entire
Federal sector. I mean, imagine if we could embed philosophies
of trust, respect, dignity, integrity, teaching and learning,
civility, professionalism throughout the entire Federal sector.
Imagine how many people are in the Federal sector. I don't
know. But, imagine that they all get up in the morning and come
to work knowing their voices will be heard. What an impact that
will have. We can transform the way our Government does
business. We're doing it at the shipyard at a small scale,
relatively speak. Our performance has vaulted because of our
engagement initiatives, because we're listening to our
workforce, we're valuing their knowledge and their
understanding, and we're utilizing their skills in a way that
we haven't in the past. It's making all the difference. I
sincerely believe that we can transform our Government. We want
to help. We want to be a part of that.
Senator Ayotte. Thank you for sharing that. As I hear you
speak here, I think about--these are--would be very good values
in the Congress, as well. So----
Mr. O'Connor. Oh, I was----
Senator Ayotte.--thank you----
Mr. O'Connor.--going to mention that.
Senator Ayotte.--thank you for sharing----
[Laughter.]
Senator Ayotte. Thank you for sharing that.
I now want to turn it over for an opportunity for Senator
Kaine to ask questions. Thank you.
Senator Kaine. Thank you, Madam Chair. I'd like to put in
the record, first--we've talked about this New York Times
piece. Mr. Bagley testified to it. July 13, 2015, title, ``A
New Look at Apprenticeships as a Path to the Middle Class,''
and it really focuses upon this apprenticeship program that was
founded in 1919, and others. But, if we could put that in the
record, I would appreciate it.
Senator Ayotte. Absolutely.
[The information referred to follows:]
a new look at apprenticeships as a path to the middle class
New York Times, July 13, 2015
Nelson D. Schwartz
NEWPORT NEWS, VA--With its gleaming classrooms, sports teams and
even a pep squad, the Apprentice School that serves the enormous Navy
shipyard here bears little resemblance to a traditional vocational
education program.
And that is exactly the point. While the cheerleaders may double as
trainee pipe fitters, electricians and insulators, on weekends they're
no different from college students anywhere as they shout for the
Apprentice School Builders on the sidelines.
But instead of accumulating tens of thousands of dollars in student
debt, Apprentice School students are paid an annual salary of $54,000
by the final year of the four-year program, and upon graduation are
guaranteed a job with Huntington Ingalls Industries, the military
contractor that owns Newport News Shipbuilding.
``There's a hunger among young people for good, well-paying jobs
that don't require an expensive four-year degree,'' said Sarah
Steinberg, vice president for global philanthropy at JPMorgan Chase.
``The Apprentice School is the gold standard of what a high-quality
apprenticeship program can be.''
Long regarded by parents, students and many educators as an off
ramp from the college track, apprenticeships are getting a fresh look
in many quarters. The idea has recently captured the attention of
several presidential candidates from both parties, with employer-
oriented apprentice programs increasingly seen as a way to appeal to
anxious Americans looking for an alternative route to a secure middle-
income job.
Last month, Hillary Rodham Clinton proposed a plan that would offer
companies a $1,500 tax credit for each apprenticeship slot they fill.
In a speech laying out his economic plan on Tuesday, Senator Marco
Rubio of Florida, a Republican primary contender, vowed to expand
apprenticeships and vocational training if he makes it to the White
House.
Wisconsin's Republican governor, Scott Walker, who formally entered
the presidential primary race on Monday, has promoted apprenticeships
in his state and increased funding for them even as he has cut aid to
Wisconsin's vaunted university system.
``We know this works,'' said Thomas E. Perez, the labor secretary,
describing how big companies have long trained young people in Germany,
which has 40 apprentices per 1,000 workers, compared to about three per
1,000 in the United States. ``It's not hard to figure out why the
Germans have a youth unemployment rate that is half what it is here.''
But there is a downside to the innovative approach used at the
Apprentice School in combining skills-based education, a college-like
experience and a virtually free ride for its nearly 800 students (even
class rings and textbooks are covered): This approach has been rarely
duplicated elsewhere.
Despite prominent mentions by President Obama in several State of
the Union addresses and bipartisan support in Congress, apprenticeship
programs have struggled to gain a foothold among employers.
Furthermore, the programs were devastated by the sharp losses in
manufacturing and construction jobs that started with the last
recession.
Between 2007 and 2013, the number of active apprentices in the
United States fell by over one-third, from about 451,000 to just under
288,000, according to Labor Department data. In 2014, that number
increased for the first time since the recession, rising by 27,000.
Now, Mr. Perez has set a goal of doubling enrollment by 2018.
In late June, he traveled to North Carolina, where he was joined by
two local Republican members of Congress, to spotlight Washington's
efforts to expand apprenticeships, including $100 million in new grants
to be awarded this autumn.
In Mooresville, touring the factory floor and giving a speech at
Ameritech Die & Mold, which has teamed with local high schools and a
nearby community college to recruit and train its apprentices, Mr.
Perez said what was needed was not simply more Government financing or
new private-sector programs.
``At the educational level, we need a comprehensive strategy to
change the hearts and minds of parents,'' Mr. Perez told the audience,
which included several parents of current Ameritech apprentices.
``There are highly selective, four-year colleges that are easier to get
into than many apprenticeship programs.''
The Apprentice School gets more than 4,000 applicants for about 230
spots annually, giving it an admission rate about equivalent to that of
Harvard.
Perhaps the greatest reason that students and their parents are
showing more interest in apprenticeships is the financial equation.
While the typical graduate from a four-year private college in 2014
left campus with a debt load of $31,000 and started work earning about
$45,000 a year, Apprentice School students emerge debt free and can
make nearly $10,000 more in their first job.
Other programs are equally promising. For Ameritech workers like
Shane Harmon, who completed an apprenticeship there in 2012 and earned
an associate degree at Central Piedmont Community College as part of
the program, a middle-class lifestyle is already within reach.
Many of his high school friends who have graduated from college are
back home living with their parents, Mr. Harmon said. By contrast, at
age 23, he already owns a home, has no student debt and is paid $18 an
hour.
``I didn't want to sit in a classroom for four years, not knowing
if I'd have a job,'' he said. ``I'm a hands-on guy.''
The trade-offs between college and an apprenticeship inevitably
raise one of the thorniest educational and economic issues today: Who
should or should not go to college.
When the former Pennsylvania senator Rick Santorum, a Republican
presidential contender in 2012 who has begun a long-shot campaign
again, brought up the question during his last primary bid, he was
mocked in some quarters.
And economic data clearly shows that most holders of bachelor's
degrees will earn far more over the course of their working lives than
typical high school graduates with technical training, and more than
recipients of associate's degrees.
But that's not the real issue for many young people, said Mike
Petters, chief executive of Huntington Ingalls, which owns and
financially supports the Apprentice School.
``If you're in the two-thirds of Americans that don't have a
college degree, how do you feel if someone says to be a success, you
have to have it?'' Mr. Petters said. ``It shouldn't be a requirement
for a middle-class life. We have people in our organization who don't
and are great, who've raised families and had great lives.''
It is not necessarily an either-or proposition, according to the
director of the Apprentice School, Everett Jordan. A new partnership
between the Apprentice School and Old Dominion University in nearby
Norfolk, Va., allows apprentices to earn a bachelor's degree in five to
eight years, paid for by Huntington Ingalls.
Mr. Jordan, himself a 1977 graduate of the Apprentice School, notes
that other alumni have gone on to earn degrees in medicine, business
and other fields, or served as top executives at Huntington Ingalls. Of
the current crop, he estimates about 85 percent will eventually take on
more senior salaried positions at the company.
But however much Mr. Everett and other administrators try to make
the Apprentice School resemble a traditional college, its connection to
a military contractor means that in some ways it resembles a top
military academy like West Point more than a typical university. For
many people, that is a plus.
For example, students receive training in dining etiquette, how to
buy a house and how to prepare for job interviews.
Similarly, having a dedicated customer with very deep pockets--the
Pentagon--enables Huntington Ingalls to cover the $270,000 cost of
training each apprentice.
``The skilled worker is a public good,'' said Mr. Petters, who
occasionally sounds more like Mayor Bill de Blasio of New York City and
other liberal politicians than an otherwise conservative corporate
executive. ``Do you give kids swimming lessons or do you take them and
throw them off the end of pier and see if they can swim? We believe in
swimming lessons.''
He added: ``The Apprentice School has been and will forever be the
centerpiece of what we do here. I know there's a red-state view and a
blue-state view. This is a shipbuilder's view.''
A version of this article appears in print on July 14, 2015, on
page B1 of the New York edition with the headline: Rising Appeal of
Apprenticeship.
Senator Kaine. I was struck, Mr. Bagley, in your testimony,
about the investment that your company makes. The New York
Times article said, for somebody to go through the
apprenticeship program, start to finish, $270,000 of training.
That's what that program costs. If I--if my staff correctly did
the quick math, you indicated about 80 million a year in
training in the company. You said 38,000 employees. I think
that's about $2,100 a year of training per employee. So, that's
a big investment in training--$270,000 to train an apprentice,
and then, thereafter, for as long as you're there, $2,100 a
year to train.
Do you think this is pretty common in the industry, on the
private-sector side? I'm sure you'll say you guys are the best
at it, but is this a pretty common thing, to focus this much
resources on training?
Mr. Bagley. Senator Kaine, most humbly, I'm not going to
refrain from saying that we're the best.
[Laughter.]
Mr. Bagley. But, I will say that--I will say that all
industry are under the pressure for costs--to reduce costs.
But, for us, it goes without saying, we've had many
conversations about how we spend our money. The apprenticeship
program, and the amount of money we invest in our students, it
comes on the table. But, because of the passion that I have in
being around or a member of the table or the staff that this
conversation takes place, it's one of those conversations where
I stand, if it's by myself standing, and say that we have to do
this. I believe--and this is what I tell my peers--is that it
is a return on the investment. What I spend today, I may not
see that return until a couple, three, or four years down the
road, but I have to be so committed to that investment, and,
instead of a product, I'm investing in human capital.
So, if I do that investment correctly--and I like what Mr.
O'Connor say--and bring along this employee as an engaged
employee, when this employee comes out of the apprenticeship
program at a minimum of 4 years--and this is where the $270,000
came up--when you consider their wages and all of their
benefits and the 2--you know, the books and things that we
purchase, the only thing it costs them is just 2 percent--just
what we call association fees. That's a small price to pay with
the investment that we're making.
Some would say, ``Why will you put that much into a person,
when they could leave you?'' Because we don't put any
restraints or--there is no back end, say, that you have to give
us 5 years of employment after we make this investment in you.
But, because we believe in the individual and we invest in the
intellect and inspiration of the heart of that person, we're
willing to take that risk. As such, I can look back 10 years of
apprentices graduating, and we are up into 80 percent. If I
will go even deeper, say 15 years back, we still in the high-
70s percent.
Senator Kaine. Master--at the shipyard, master shipbuilders
are those with 40-plus, and there's a lot of master
shipbuilders--
Mr. Bagley. Yes, sir.
Senator Kaine.--who have come out of the school. If--well,
let's see, you started in 1974, so you're getting pretty close.
Mr. Bagley. I am one.
Senator Kaine. Yeah.
The thing--I think it's interesting, the last point you
make about the apprenticeship program. Apprentices are on the
waterfront, 44 percent of your management is apprentices, but,
because you don't have a requirement that you stay, a lot of
the apprentice graduates are working in the public shipyard
over in Norfolk, or working in private ship repairs all over
the Hampton Roads area. So, this training program and the
investment that the company is really populating the entire
shipbuilding industry, which is of benefit to the Navy and to
the mission that we're performing.
Mr. Bagley. So, when you think about--I think the earlier
comment, Madam Chair, she talked about the cooperation between
private and public sector. So, even this investment--it's not
said a whole lot, but it helps us even in that area, because,
when we dispatch people to these other--just, say, a public
shipyard, there is some benefit, because it comes back. We have
a face that we can relate to. We have somebody who understands
our business. They can help us with the dialogue, the language.
It's just a win-win.
Senator Kaine. Last thing I'll ask real quickly is the
consistency point. You talked about Newport News has been
describing--Senator Wicker and I were visiting, early last
week--about sort of a work valley that's coming up. You know,
you're doing new construction, you're doing refuels on the
carriers, you kind of schedule them all in and try to have as,
you know, minimal amount of downtime. You know, this is a--I'm
preaching to the choir, among everybody here--but, sequester
and budgetary uncertainty makes that much more challenging. The
more certainty that we provide to our public and private
shipyards, the more you can then structure the work so that
you're not peaking and valleying and hiring people and having
to lay them off.
Mr. Bagley. That is so important.
Senator Kaine. I know that that--as you're looking at that
valley, the good news is, a few years out, you've got another
mountain that you're going to climb. That's great. But, that
does impose a challenge on this workforce, and you hope that
they don't just completely leave and move to another area or
something when we're in this valley period. We will do our best
to provide as much certainty as we can.
Mr. Bagley. Thank you, sir.
Senator Ayotte. Senator Ernst.
Senator Ernst. Thank you, Madam Chair, Senator Kaine, very
much.
Thank you, gentlemen, for being here today. I really do
appreciate it.
As you may know, we don't have any shipyards in Iowa, so--
--
[Laughter.]
Senator Ernst.--so, I appreciate all of you that do. It--as
Senator Kaine said, that we need to make sure that we have a
viable workforce that is there supporting our men and women in
uniform. So, your mission is extremely important, and we do
need to find ways that we can keep that workforce engaged. We
may not have a shipyard, but, between Iowa and Illinois, we
have Rock Island Arsenal, which goes through some of these
difficulties, as well, as we look at up-armament for different
types of vehicles and so forth. So, some similarities there.
That's about where it ends. But, thank you again for being
here.
I do want to commend Senator Ayotte for holding this
hearing, because it is an important issue, and one that we
don't typically talk about as being so vital to our national
security. So, thank you for doing that. She has been very
active as an advocate for our military men and women and for
the issues that you have been facing.
She's talked to me a lot, off the side, about some
construction projects that have been ongoing--the unmanned
underwater vehicles, which are very vital to national
security--and also in taking care of servicemembers. There had
been an issue at Portsmouth with the young sailors that were
housed there at one point, and they had, I think it was--with
their housing--it was substandard. So, they were moved into
better facilities after her attention to that issue. So, again,
just want to commend her for doing that.
But, I was--thank you for your Declaration of Excellence
and your discussion about the qualities that your workers are
bringing to these Navy shipyards. I think that's important.
It's fascinating for someone like me that has not spent time
near ships. But, if you could expound a little bit on your
Declaration of Excellence. Mr. Bagley, if you could talk about
this, as well. But, what are some of the most important
shipyard best practices--the best practices--what can you take
away from what you've learned which may be helpful to arsenals,
such as I said--you know, our Rock Island Arsenal--and
ammunition plants? So, if you would just share some best
practices, please.
Mr. O'Connor. Well, there's--we're doing a lot, so--the
most important thing, like I said, is listening to the
workforce and getting their ideas. We have three initiatives
ongoing right now that are really making a huge difference in
our performance. One is learning centers. Learning centers,
they're mockups, but they're sophisticated mockups,
sophisticated learning centers. I'm not really sure how that
would apply----
Senator Ernst. Is that for building of ships and----
Mr. O'Connor. It's for----
Senator Ernst.--learning different techniques, or is it
more for----
Mr. O'Connor. It's----
Senator Ernst.--civilian workforces----
Mr. O'Connor. Well, for us, it's our workforce getting
trained--our new folks being trained on a, like, simulation
submarine component or location. We have--like, one of our
learning centers is an actual full-scale replica of a lower-
level machinery space, the 688-class submarine. Our new
employees can go down onto this learning center, and, in actual
sub conditions, they can work on components, and they can learn
the trade. That's--all trades can do that.
The value is, you know, if you make a mistake in that
learning center, it's a learning moment. But, before we had
these learning centers, the only way to actually get the--that
experience of submarine work was on submarines. You make that
same learning mistake on a submarine, it's rework. Very
expensive. So, the value is, you can learn, you can make
mistakes in a safe environment, so you don't make those
mistakes on the boat. It also works for teamwork, collaborating
on larger jobs.
Senator Ernst. I think that's fantastic. Actually, I think
that can be applied to any workforce, probably----
Mr. O'Connor. It can.
Senator Ernst.--in any situation.
Mr. O'Connor. It absolutely can, yeah.
Senator Ernst. Yeah.
Mr. Bagley, did you have any thoughts?
Mr. Bagley. Yeah. I would like to start by saying that I
was thinking about what Mr. O'Connor said earlier. You know, it
sounds simple, but I will say, the greatest thing that both
public and private is learning is, when it comes to our people,
for years we've had a paradigm where all the thinking comes
from the top, and it flows down, versus going to the deck
plate, the people who actually produce the product, and allow
them to have that environment where they feel comfortable with
sharing their opinion; and then, once they share their opinion,
leaders act on their opinion, they provide them feedback. We do
not, per se, have what's called a ``Declaration,'' but what we
do have in common is, we both believe, I will say, equally
about engagement and the power of having an engaged team. We
have, certainly for the last--I will say, since 2006--
approached this area, and we've been growing every year with
having a way to be able to measure the engagement of our
people. But, again, we have--I'm going to say we've left the
gate, but we are no--we do not see the finish line in sight
yet. But, it's a path that we must travel, and I think,
equally, that we can bring value, you know, to our taxpayer and
also to the product that we're building.
The other thing that I would say is, I think about sharing.
We do have a methodology where we share between shipyards,
mostly from, I will say, the nuclear-type work. When things
happen in various yards, there is a sharing of information. We
take that information and we take a look at how we run our
business, and, based on that information, we look at what type
of lessons learned we can gain from it, and then we implement
in--that into our training. Quite the same thing happened on
our end.
So, from that standpoint, it's a lot of good sharing. Bill
De Karlovich, who's sitting in the back of me, he's my training
director, and he has the opportunity to go to various public
yards, whether it be Portsmouth, Norfolk Naval, or Puget, and
get a chance to speak with people of--you know, in his field.
We've already started a lot of changing of information with
training gaps. So, we, again--we are actually dispatching
people through what we call fleet support work, people to
Norfolk Naval, people out to Puget. Sometimes we speak
different languages. So, his job has been to go before us and
find out how do we fill that gap, so, when those people go out
to the West Coast, they can hit the ground running and be able
to produce a product.
Senator Ernst. That's fantastic.
Thank you, gentlemen, very much.
Thank you, Ms. Chair.
Senator Ayotte. Thank you.
I wanted to call on Senator Hirono. As you know, Hawaii has
an important shipyard, as well, that often cooperates with our
shipyard. So, thank you, Senator Hirono.
Senator Hirono. Thank you, Madam Chair and Ranking Member
Kaine, for this hearing.
As the Ranking Member on the Seapower Subcommittee, I have
a deep appreciation of the importance of shipbuilding and our
shipyards to what we do in the Armed Services area. So, it was
great to have the two of you. Listening to you, Mr. Bagley,
thank you very much, to your company, for the investment that
you make in your people. Mr. O'Connor, it was great to know
that you've implemented, listening to the people at the--the
men and women at the jobsite, to really enable them to be
invested in what they're doing.
Yes, we do have a very important shipyard in Hawaii. So,
Madam Chair, I would like to take a part of my 5 minutes to
make a statement about our shipyard and what we're doing there.
I mean, clearly, our shipyards are essential to sustaining
our fleets and ensuring the readiness of our forces to meet the
challenges that our Nation faces around the world. The men and
women and servicemembers who work in all four of our public
shipyards--that would be Pearl Harbor Naval Shipyard,
Portsmouth Naval Shipyard, the Puget Sound Naval Shipyard,
Norfolk Naval Shipyard--as well as our private shipyards, are
invaluable to the success of our sea services. I want to extend
my heartfelt thanks and aloha to all of them.
Like a lot of our military communities, they have to cope
with doing more with less. They have to worry about whether the
budget resources will be there next year, or not. Yet, through
all of these disruptions and issues, the shipyards must
continue to be capable of providing the services our fleets
require. I have visited with the men and women at the Pearl
Harbor Naval Shipyard numerous times. It's always a good
reminder of why eliminating sequester is so important.
I know that we traditionally try to squeeze more efficiency
out of organizations as resources decline. The shipyards are no
different. Best practices, cost-effective operations are of
vital importance. An ever-dangerous world and competition for
limited resources demand it.
I would like to share with the committee some of the great
results that we are experiencing at the Pearl Harbor Shipyard.
The team at our shipyard is on track to complete the largest
quantity of work since the late 1980s, when the shipyard had
about 30 percent more employees. The workload is expected to
top over 738,000 resource days. In comparison, their workload
from 2012, 2013, and 2014 were 706,000, 679,000, and 690,000
resource days, respectively. So, they are doing so much more
with fewer people. In fact, the shipyard has reached the
highest workload, as well as produced the greatest output in
the past 25 years. The shipyard has become a learning
organization. They have developed high competency levels,
trust, a shared vision, teamwork, and problem-solving skills to
create an outstanding and efficient work environment.
The results of our shipyard's learning organization journey
is a tremendous increase in productive capacity or the ability
to create increased output with the existing resources in the
mission of repairing the Navy vessels.
Their success in working as a team has resulted in the
recent online delivery of the USS Greenville while continuing
to work the lowest injury rate amongst the four public
shipyards. I know, Mr. O'Connor, that you are probably seeing
these kinds of results at your shipyard because of the things
that you are doing, but I commend you for what you're doing. In
fact, you said that the--you want to share the experiences at
your shipyard. One of the ways in doing that is to be here to
testify, but are there some other things that you're doing to
enable other shipyards to gain from your best-practices model?
Mr. O'Connor. Yes. Let me first say that we are not in
competition with the other public shipyards.
Senator Hirono. That's good, because we're all in it
together.
Mr. O'Connor. That's correct. That's absolutely right.
Senator Hirono. Yes.
Mr. O'Connor. That's how we look at it.
Senator Hirono. Exactly.
Mr. O'Connor. We--I think the most effective labor/
management partnership forum that I'm involved with is the
NAVSEA Labor/Management Forum. That partnership actually turns
ideas into action. We began the initiative back in 2010, and we
called it ``Take Back an Hour of the Workday.'' All four public
shipyards went off and did different things. That's good, that
we've all done things.
I've also said, you know, part of our Declaration talks
about learning and teaching. We can teach other shipyards. They
can teach us just as well. We need to share information. The
NAVSEA labor partnership is a means to that end. We use that--
well, we don't use--we utilize that partnership to spread
information among the four shipyards. That's one of the ways
that we get information out. And----
Senator Hirono. Do you think the communication and the
sharing of best practices is occurring in the way you'd like
it----
Mr. O'Connor. No.
Senator Hirono.--among the four shipyards?
Mr. O'Connor. Not as efficiently, no, it is not. And----
Senator Hirono. So, what--how do you think we can improve
that capacity--capability?
Mr. O'Connor. Boy. More emphasis, more focus. If we meet
more often, set up some means of communication, you know, for
the four public shipyards. One thing that happens at those
forums sometimes is, there will be a labor rep, but maybe not a
manager rep.
What we do at Portsmouth is, whenever we go to the
partnership meetings to talk about our initiatives, I insist
that we do it, labor and management together. Steve Fahey, who
would have been here today, goes to these partnership meetings
with me, and, together, we brief our initiatives. I would like
to see more collaboration, from all public shipyards, between
labor and management. You know, that would go a long way, I
think. Even--but, it's has to--it has to begin there. You know?
You have to develop the relationships before you start
developing the workforce, really.
We have initiatives ongoing that, if we just took those
initiatives and plopped them into another shipyard, there would
be a benefit, but not as big a benefit as if the workforce came
up with them on their own, and had their own ideas, their own
thoughts, and their own way of doing their business. That's
what it's all about. You know, and----
Senator Hirono. Thank----
Mr. O'Connor.--that's really a hard thing to try to spread,
but that's what we want to do.
Senator Hirono. Thank you, Mr. O'Connor, for being so clear
as to where the initiatives really should start, is listening
to your people. So----
Mr. O'Connor. Yeah.
Senator Hirono. Thank you, Madam Chair.
Mr. O'Connor. Thank you.
Senator Ayotte. Thank you.
I also wanted to call on Senator King and Senator Shaheen,
both of whom are tremendous fans of the Portsmouth Naval
Shipyard.
If I could call on Senator King.
Senator King. Thank you, Madam Chair. Thank you for
inviting me to this hearing, although I'm on Armed Services,
not on this subcommittee.
Mr. O'Connor, I'll start with a question that I figure I
have a 50-50 chance of getting a--the right answer to. Do you
live in New Hampshire or Maine?
[Laughter.]
Mr. O'Connor. The right answer is New Hampshire, sir.
Senator King. My condolences.
[Laughter.]
Senator King. I figured it was--I had a shot on it, didn't
I? But----
I love this Declaration of Excellence. That is an
extraordinary document. I note that your signature is right in
the same place that John Hancock's signature is, on the other--
I don't know whether that was on purpose, but----
Mr. O'Connor. I signed first.
Senator King. I----
Mr. O'Connor. I signed first, so----
Senator King. I compliment you. You're the John Hancock of
this agreement.
Let me ask about how this came about. Was there always a
culture of cooperation and collaboration at the Portsmouth
Naval Shipyard, or is that something that has evolved in recent
years?
Mr. O'Connor. Well, it's actually, in earnest, I would say
18-19 years. Back in the mid-'90s, or early '90s, we went
through three rounds of base closures and three subsequent
rounds of layoffs. Our workforce went from 9,000 down to 3,000.
We really weren't doing a very good job. How could we? We had a
workload for 9,000 people, but a workforce of 3,000.
So, back then, a handful of, again, labor and management
leaders got together and said, ``If we can't find a better way
to do business''--because, back then, you know, it was
confrontational, it was adversarial--``If we can't find a
better way, then we will not survive as a shipyard.''
Senator King. So, this was a joint realization.
Mr. O'Connor. Yes.
Senator King. Did you go off somewhere and meet at a hotel
or--how did this happen? This is unusual.
Mr. O'Connor. It is, yeah. We just started talking at the
shipyard. Early on, it was really difficult. You know, we were
mocked. Openly mocked. But, as more and more people saw the
value in what we were doing, and our persistence in what we
were doing, more people kind of--you know.
Senator King. But, I take it that your union is still a
union and still negotiates and still has differences and
grievances. It's not like you've become part of management.
Mr. O'Connor. That is correct.
[Laughter.]
Mr. O'Connor. For the record, that is correct.
[Laughter.]
Senator King. I thought I'd get you--give you a chance to
get that on the record.
Mr. O'Connor. Yeah.
But, that--can I----
Senator King. Yeah, please.
Mr. O'Connor.--respond to that? That's a very good point.
I refer to that as a business maturity. We do not let the
smaller issues interfere with the bigger picture. We--you know,
we don't lock out on meetings, we don't throw the baby out with
the bath water. We can deal with grievances as grievances, and
not as a complete failure of our vision as a shipyard.
Senator King. Would you say you have buy-in from your
members? Is this a leadership-led initiative, or do you have
rank-and-file--do the rank-and-file at the yard buy into this
concept?
Mr. O'Connor. Yes. But, like I said earlier, our--the RSVP
program, from where we got all the information for the
Declaration, was a volunteer program. We didn't force anybody
to go to those sessions. Yet, we got three-quarters of our
workforce through those sessions. So, the document itself, the
information came from the workforce. The signatures on the
document are labor, management, and the workforce.
So, everybody--I need to make this really clear. We don't
have 6,000 men and women on our shipyard right now who have
bought into the Declaration, who believe in workforce
engagement. But, we have the lion's share of the workforce
right now. You know, our vision is to have everyone involved.
Senator King. I can testify to the effectiveness of the
learning centers. I--on the mockup, I learned how hard it is to
weld.
Mr. O'Connor. Oh, yeah?
Senator King. Fortunately, I wasn't welding a real
submarine.
[Laughter.]
Senator King. So, I----
Mr. O'Connor. I concur.
Senator King.--I admire what you're doing.
Well, I want to thank both of you for coming, because what
you're doing is what we have to do. You talked to Senator Kaine
about budgets and sequester. We hope to relieve the sequester,
but, long-term, we're going to be in tight budget situations,
and we have to be able to meet the country's needs, given the
resources that we have. Productivity is really--is--that's
going to be the whole answer, it seems to me.
So, thank you, gentlemen, both, for joining us.
Thank you, Madam Chair.
Senator Ayotte: Thank you, Senator King.
Senator Shaheen.
Senator Shaheen. Well, thank you, Madam Chair and Senator
Kaine, for holding this hearing.
Mr. Bagley, you will excuse Senator King, Senator Ayotte,
and I for focusing on the Portsmouth Naval Shipyard, but it's
our shipyard, and we are very proud of it.
It's so nice to be able to welcome Paul O'Connor to the
committee today.
Senator King. It's in Maine, by the way, Mr. Bagley.
[Laughter.]
Senator Shaheen. It is in Maine, but it has tremendous
workers from both New Hampshire and Maine.
[Laughter.]
Senator Shaheen. A few from Massachusetts, too, so we're
happy to have all of them.
I want to follow up on Senator King's point about the
Declaration of Excellence, because, as you pointed out, it is
really unique, I think, and serves as a model, not just for the
shipyard, but, I think, for all of Federal agencies. If we
could get everybody to buy into this kind of a Declaration of
Excellence for what we want to accomplish in each of our
agencies, I think it would--we would be more successful as a
Federal Government.
I also think it's important to point out, as you did, that
this is one of the reasons that the shipyard was on the last
BRAC [Base Realignment and Closure] closing list, and then was
taken off. Because, when people actually went in and looked at
what you were doing, the productivity at the yard, the
importance of your contribution to national security, it was--
there was a recognition that this was a shipyard we needed to
keep open. So, I congratulate you and everybody at the yard,
not just for the Declaration of Excellence, but, also, one of
the other things that I've been very interested in are the
energy efficiency efforts within the Navy. The shipyard has
also been recognized as--for its innovation and energy
efficiency measures.
But, I want to go to the issue that we're all concerned
about, and that is what happens with sequestration. Not only
what happens at our public shipyards, but our private
shipyards. One of the challenges we're facing--I know we're
facing in Portsmouth, and I would guess you might be facing it
too, Mr. Bagley, is, ``How do we keep talented people working
at our shipyards?'' We need a higher percentage of engineers of
STEM [science, technology, engineering, and math] graduates.
It's one of the challenges we face in the workforce throughout
the country. As people are looking at the uncertainty that
sequestration presents, can you talk, Mr. O'Connor and then Mr.
Bagley, about the impact that that's having on the workforce
and what you're seeing, and the need for us to address
sequestration?
So, Paul, would you begin?
Mr. O'Connor. Okay. Boy, oh, boy, it's a big question.
We have seven separate chains of command on our shipyard,
and not all seven were impacted equally with sequestration. The
Navy, DOD, ruled that the shipyard, the NAVSEA portion of
Portsmouth Naval Shipyard, the island, would not be impacted by
sequestration. So, we all came to work.
The other chains of command, they were still impacted by
sequestration. We had men and women who worked side by side;
some, the other chains of command, were forced to stay home,
under sequestration, and lost their pay. Others were coming to
work because they're a different chain of command. You know,
the morale, the damage to the morale of our workforce when, for
no apparent reason other than a super-committee couldn't reach
decisions, they're out of work. That's really difficult. The
impact--it's not as severe, but it does have an impact on the
people who don't get furloughed, you know, because, ``Are we
next? Will we be furloughed, you know, when sequestration is
reenacted in''--on October 1st, I believe, right? Yeah. Take
away the whole national security aspect of it, take away all of
that, and you're left with--in the middle of trying to engage
our workforce and create this synergy, this collaboration, this
unprecedented desire for our workforce to work together, we
have to deal with the threat of being kicked off the job, sent
home, for no real good reason. That's hard to deal with.
Now, we're hard workers, like anybody else. I--we get a bad
rap. Federal employees get a bad rap. We don't deserve it. We
are the most efficient, proficient workforce in our Nation in
the business of nuclear submarine maintenance and
modernization. We're the best there is. It's painful to--quite
frankly, to listen to the wrangling and the rhetoric that is
behind the decision to furlough our workforce.
Senator Shaheen. Thank you.
I'm out of time.
Senator Ayotte: I wanted to follow up on the issue of
hiring that we heard from both of you, but thinking about this
workforce issue that Senator Shaheen talked about, making sure
that we have, you know, the best workforce. I certainly share
the concerns about sequester as a negative morale force in many
ways, and not good way to do business. But, I know the shipyard
right now is--has already hired 680 new workers, and is hiring
some more. Because of the log that you have and the work that
you need to do, in terms of the important work on our attack
submarine fleet--and we heard a lot from Mr. Bagley about the--
their apprentice program--How is the shipyard doing, in terms
of recruiting people? How do you get that many new people
trained up and also bought into what you're doing with the
Declaration of Excellence?
Mr. O'Connor. Well, we hire between 1- and 200 apprentices
every year. This year, we're hiring a lot of other tradesmen
and women and engineers. We will have hired almost 800 new
employees this fiscal year alone by the end of September.
That's a huge number. That's almost one-fifth of our wage-
creating workforce, of our trades workforce.
So, we didn't begin these learning centers, which are
actually increasing our proficiency and efficiency, and
shrinking the time it takes to bring a new employee up to speed
in the trades--we didn't do that because we knew we were going
to be hiring 800 people in fiscal year 2015. We did it because
it was the right thing to do. The timing couldn't be better.
You know, we're getting these new employees up to speed, and
that's a result of men and women with vision doing what is the
right thing to do, not because of an immediate need but because
of a long-term goal. That's a big--the learning centers--again,
they came from the workforce. It was their ideas. They're the
ones who are helping to shape the new workforce. We are getting
those new folks up to speed, qualified more quickly with just--
you know, just at high a skill level now as back, you know,
years ago. So, that's the--that's pretty exciting.
Senator Ayotte: Thank you.
I'm going to allow others, if they have followup questions.
Senator Kaine.
Senator Kaine. Just one. This will be kind of a comment,
really, by--maybe more of a closing comment. I just want to go
back to Mr. Bagley.
Your stats, about 4,500 applications for 240
apprenticeships, almost 20-to-1. I went to the University of
Missouri. I tell you, it wasn't 20-to-1. I mean, I think the--
it was a lot less competitive to get into University of
Missouri when I was going than your shipyard today. That's what
points out, I think, a real disharmony in the way we do
education.
We had a Budget Committee hearing a couple of years back,
and Secretary Duncan, Arne Duncan, Education Secretary, was
there, and he was--he mentioned in his testimony that our
higher education attainment as a Nation is slipping, that the
number of Americans with postsecondary degrees was number one
in the world 20 years ago, now we're number 15 in the world.
So, I asked him this question. I used you as an example. I
said, ``Here's a question. I don't know if it's terminology or
policy. It might be both. If someone graduates from high
school, and they're one of the 4,500 who apply and one of the
240 who get in, and they do an apprenticeship program at the
shipyard, and, when they finish, they go to work, and they have
a fantastic career.'' This path to middle-class success that
the New York Times is talking about. ``Do we count that person
as somebody who has a postsecondary degree, or not?'' Secretary
Duncan said, ``I don't think we do. I said, ``Then you've got a
terminology problem and a policy problem.''
We still don't treat career and technical education as if
it's valued. If you're in the military now, you get a tuition-
assistance benefit, with the approval of your CO [commanding
officer]. It can be up to $4,500 a year. You can use it for a
community college course, you can use it at a 4-year college.
You can't use it to take the American Welding Society
Certification Exam. Three-hundred dollars. We'll give you
$4,500 to get a sociology degree. We will not give you $300 to
pass the American Welding Society Certification Exam.
Pell Grants. We were just talking about a bill we've got
going in today. Pell Grants, higher-ed institutions, but not
short-term career and technical programs that are highly
qualified, verified, fully accredited, that are going to help
somebody have a great middle-class lifestyle. We still treat,
in the educational world, career and technical education and
apprenticeships as if it's not equally valuable to a college
degree, when your program equips your people to have an
earnings potential over the life that is, in many instances,
much higher than what somebody with a college degree has.
So, I really value what you do for our Nation's security,
but I really think the model--and it's not like you guys are
some newfangled thing; you're celebrating your 100th
anniversary in 2019--the model that you have, which has been
right there before us, right in front our face for 100 years,
we still don't fully account for it in the spectrum of what
American educational success is. I do--I love things like this
New York Times article, and I love the fact that you're able to
come testify, because I hope we broaden our view a little bit
about what educational success is. You're helping us do that by
being here today. I appreciate it.
Senator Ayotte. Senator Shaheen.
Senator Shaheen. Well, thank you. I'm--I wanted to follow
up a little more on the challenge of getting STEM graduates,
which also speaks to the issue that you're raising, Senator
Kaine, and also what the potential for additional cuts does to
our ability to attract those people with that--those skills
that we need.
Again, Mr. Bagley, Paul, could you all speak to that? What
are you seeing with respect to hiring ability when there's
uncertainty around what's going to happen with contracts for
the shipyard and with future funding? It's true, I think, also,
at Huntington-Ingalls.
So, you want to go first, Mr. Bagley?
Mr. Bagley: Yeah, I'll try.
I will say, based on where we are in our current
conditions, we are more concerned with, ``How do we prepare for
coming back up the valley?'' You know, I guess we're projecting
maybe 17-18 months, just roughly, from here. So, how do we take
what I call, you know, the cornerstone, a significant piece of
our business that we're not going to affect, and allow the
apprenticeship program and the leaders who we're producing out
of that, along with our training organization to set us up,
that we're ready to come back up and take whoever is out there
that we choose to hire, and hopefully, as we have in the past,
certainly the most recent 5 to 6 years, we'll have the quality
of people to hire that can, not only come in and have the
physical attribute, but that intellectual attribute that can
help us with the training, that we're going to have leaders to
give them to come up that power curve a whole lot quicker?
So, that's really our strategy. I suspect we're going to
still be pretty selective in who we're going to be able to
hire. So, when we consider the technology, when we consider
how--How do we be proactive and anticipate the future rather
than letting the future come and take us, like sequestration,
you know, what that may do to us?--what we're trying to focus
on is, What are the things we can control? That's where we're
putting our energy. Then, the things that we can't control, we
are acknowledging those, but we are telling the people that
we've got a team of folks, you know, up here in D.C., working
with Senators and et cetera, to help change that. But, we do
have a significant piece in our hands that we can control our
own destiny.
So, that's where I'm asking the leadership, the workers--
let's put our energy there. At the end of the day, we can feel
good about--that we fought a good fight, because we're going to
stand tall. Now, will we have all the team members possibly on
the team? Maybe not. But, the ones who are there, we're going
to reset the business. This is what we're looking at now. How
do we reset the business for the future? In resetting this
business, we have to get leaner, we have to get more
productivity, we have to prepare for the unknowns, but, yet the
things that we do know, that's where we're going to put a lot
of our energy.
Senator Shaheen. Thank you.
Paul, as you're looking at an aging workforce at the
shipyard, what kind of challenges does the uncertainty of
sequestration present as you're looking at all the people that
need to be hired over the next couple of years?
Mr. O'Connor. Well, historically, you know, when the
budgets are cut, the first things that get cut are outreach,
training--you know, we try to focus on the core mission. Not
that training isn't core, but, you know, if we have to cut
somewhere, that's, historically, where they cut.
The--it's a tough question, because our people--like,
during sequestration, our outreach people were cut. It was
ended, officially. Zero budget. That didn't stop the men and
women at our shipyard who volunteer on a regular basis from
continuing to volunteer, to spend their own money, you know, to
help these kids that were in the programs that they were
involved in. We--our outreach program goes out to colleges,
high schools, and middle schools. We're not going to let those
kids down. But, we shouldn't have to bear the cost out of our
own pockets because of sequestration.
Senator Shaheen. Well, and I certainly agree that the
volunteer efforts on behalf of the shipyard for programs like
Sea Perch that really gets kids excited about----
Mr. O'Connor. Oh, they do. It's a great program.
Senator Shaheen.--work in fields that are going to
ultimately going to be important to the shipyard, are critical.
I was thinking more of whether, as you're looking at hiring
people, the challenges of bringing somebody on when there's
uncertainty about whether the funding's going to be there for
the jobs at the shipyard. That's----
Mr. O'Connor. We had to freeze our hiring.
Senator Shaheen. Yeah.
Mr. O'Connor. It was that simple. We had to freeze. So--
which has an impact on our performance, because our workload
didn't freeze.
Senator Shaheen. Right.
Mr. O'Connor. Just the workforce. So, yeah, that's a huge
issue.
Senator Shaheen. Thank you.
Thank you both.
Senator Ayotte. I want to thank both of you for being here
today and for the important and excellent work being done at
Newport News and the Portsmouth Naval Shipyard, defending our
Nation, because we couldn't defend the country and our Nation
without the incredible work done at both our public and private
shipyards. So, I hope you'll pass on our gratitude to your
workforce. I think we learned some valuable, important
information.
Certainly, Mr. Bagley, what you're doing in the private
sector and the importance of--of course, I fully agree with
Senator Kaine, the importance of career and technical education
in valuing what's being done, in terms of our manufacturing
workforce and the incredible skill set they have.
Mr. O'Connor, the lesson that the Declaration of Excellence
and the work--the important and very good relationship between
labor and management at Portsmouth Naval Shipyard, and how we
can use those examples across the Federal workforce.
So, I thank you both for being here, and for all--and all
the members that were here today. Appreciate it.
[Whereupon, at 4:05 p.m., the hearing was adjourned.]
[all]