UAW members at General Dynamics' Electric Boat vote to authorize strike

Unionized workers at General Dynamics' (NYSE:GD) Electric Boat unit, which builds nuclear-powered submarines for the U.S. Navy, have voted to authorize a strike, the United Auto Workers (UAW) announced on Tuesday.

The decision follows the expiration of the union members' contract on April 4th, igniting a labor dispute centered on demands for cost-of-living adjustments (COLA), affordable healthcare, and the restoration of pension benefits.

The UAW represents over 2,400 marine drafters at the Electric Boat unit, who are responsible for designing the submarines.

The union argues that General Dynamics is proposing significant increases in weekly medical insurance costs, ranging from 52% to 161%.

This, coupled with the lack of COLA to address inflation and the absence of pension benefits, has fueled the authorization of a strike.

"Inferior compensation at Electric Boat is leading to worker shortages and production delays," the UAW stated.

This sentiment aligns with existing challenges faced by General Dynamics in its marine systems segment.

The company has secured substantial contracts from the Pentagon for the Navy's Virginia-class submarines but is reportedly years behind schedule.

These delays have been attributed to skilled labor shortages, design issues, and supply chain disruptions stemming from the pandemic.

General Dynamics CEO Phebe Novakovic acknowledged in January the ongoing pressure on the marine systems segment's profit margins, citing continued delays and quality issues within the submarine supply chain as contributing factors to rising costs.

The potential strike action by Electric Boat workers raises concerns about further delays in the production of crucial nuclear submarines for the U.S. Navy.