The present Labor-Management program of the Company under the recently appointed (October, 1977) General Manager is one of "Bolwarism" which is causing hate, distrust and harassment of the Union employees. It is also causing an 1000% increase in the number of cases going to the Arbitration step of the grievance procedure which is very costly in both time and money. The legal staff of the Company has been greatly increased and again the Government ends up paying these costs as a contract reimbursement.

Harassment, delay in settlement of problems of employees is not conducive to encouraging employees productivity and this in turn reflects in the eventual cost of the product to the customer; The U.S. Government. Millions of dollars, eventually charged back to the Government is being wasted on Lawyers and legal costs to peruse cost overrun claims.

Security, is another area that is being compromised by Electric Boat under their present policies. The Guard force has been cut from a high of about 115 men to about 75, thereby, making security enforcement of the shipyard become suspect, guards have been removed from the vital unprotected waterfront area and from the various boats under construction, patrol boats have been taken out of service and a general relaxation of security due to reduced manpower is in effect. The U.S.S. Ohio, the first Trident Boat, which until a few weeks ago was only available in artist renditions is now on full display on the waterfront with pictures published in the local press, and on TV Stations, as well as the availability of pictures with telescopic lens cameras to be made by Foreign National vessels coming into New London Harbor. Newport News Shipyard which is of similar size as Electric Boat has during this same period stepped up security and has over 200 Guards protecting and controlling that shipyard.

Another area of suspect and in need of investigation is in the relationship between Supships, (U.S. Navy) and Electric Boat. Through the years this relationship has changed from an adversary type of Supervision and Control to one of friendship with Electric Boat even hiring retired or former U.S. Navy personnel for various positions within its management force. Joseph Pierce, Former General Manager came from Supships, Vice Admiral Joe Williams, recently retired Oommander of the North Atlantic Submarine Force is now Operations Manager, Captain Wishart, retired, has been in charge of docks, etc., for many years, plus thousands of retired Submariners in various other salaried positions throughout the Shipyard. When the massive 3000 person lay-off took place in October, 1977 very few if any of these Ex-Navy personnel were affected.

The Lay-off last October instead hit 25, 30, 37 year veteran Engineers, Managers and other Supervisors and has seriously damaged Electric Boat's capabilities in the field of Research and Development for the future, a field that Electric Boat was the World-Leader.

Another bone of contention is the fact that the new General Manager, P. Takis Veliotis is not an American Citizen, and in order for him to be cleared to run the shipyard the Security Clearance of the entire yard had to be reduced to meet the clearance granted to its top man. Up until this time one could not be hired for even the lowest menial task unless he was an American citizen. This reduced clearance of Electric Boat also affects the type of secret work that can be assigned to the Engineering Department and could have a detrimental effect on our National Security for the future.

All of the factors cited in this statement are a matter of public record and in my opinion are tangible reasons underlying the cost overruns, the horrendous delays in delivery, the quality of the product and the general unrest and uncertainty of the future of Southeastern Connecticut's Economy, but most importantly the National Security of the United States.

Senator PROXMIRE. Thank you very, very much, Mr. Eno. Mr. Camara.

STATEMENT OF ALBERT CAMARA, PRESIDENT, LOCAL NO. 1871, INTERNATIONAL ASSOCIATION OF MACHINISTS & AEROSPACE WORKERS, AFL-CIO, GROTON, CONN.

Mr. CAMARA. I would like to thank you and the committee for asking me to speak here.

I am Albert Camara, and I am lodge president of one of the unions at Electric Boat. I was formerly employed by Electric Boat for over 12 years, and I have been a union official for over 6 years. I am prepared to testify before the Joint Economic Committee on my observations on the day-to-day dealings with the Electric Boat management with regard to the production and maintenance employees.

I was a member of the Metal Trades Council negotiating team during the 1975 negotiating sessions, which started in April of 1975 and culminated in late November of 1975. The production and maintenance employees were on strike from July 1, 1975, through December 1, 1975, when the contract we are now operating under was ratified by the members.

This contract expires June 30, 1979. It is my opinion that the 5month strike was welcomed by Electric Boat management as it offered an excellent excuse to cover construction delays on the 688 and the Trident submarines for which the company did not have adequate construction facilities to proceed with manufacturing.

The massive $140 million land-level buildings and the other support facilities were not ready to be used for submarine construction and the strike gave the company a reason to cover their delays and complete the necessary facilities for construction.

In addition, the Quonset Point Naval Air Station Fabrication Facility was being set up and employees trained to man the facility. The Quonset Point plant, being in use now, was not unionized and, therefore, operated as a training facility during the 5-month strike.

It should be remembered that the Electric Boat Division of General Dynamics has only one customer, the U.S. Navy, and that each and every expenditure comes out of the pockets of the taxpayers of this country, plus a percentage of profit for the corporation."

Keeping this in mind, it can be seen that Electric Boat Co. has applied all the millions and millions of dollars that the poor planning and management decisions resulted in to the cost overrun funds that they are trying to get from the Navy at this time. I am not an accountant and, therefore, cannot tell the committee how these claims are manipulated to appear legitimate. I can only state the facts as they are with regard to the workers who are constantly demeaned, harassed, and misdirected, and blamed as a smokescreen for management to cover their accounting manipulations with the Navy.

Constant management changes, most due to incompetent and untrained people being put in charge of various departments, have taken place on a continuous basis since 1973 when Electric Boat started getting the contracts for the 688 and Trident submarines.

Supervision had made Electric Boat the greatest skilled and competent shipbuilding company in the world, a company that designed and built the complicated and sophisticated modern nuclear submarines, starting with the Nautilus in the 1950's, a company whose employees were dedicated and proud of their skills, their ability to deliver safe, efficient and quality products, not 22 to 3 years late, but many months early.

Starting in 1973, and through the present, suddenly it was a company of internal dissension, lack of leadership, lack of planning and a place that appears to be only interested in corporate profits, all at Government expense. The contrived and provoked labor problems,

strikes and other mismanagement devices used by Electric Boat are only an excuse for cost overrun claims and a way to take more money from the Government on which they get their excessive profits that are reported each quarter. The company has not paid a dividend to its stockholders for many years, but a chosen few have continued to receive enormous salaries, stock options, and personal benefits.

My sole interest in bringing these problems before the Congress is to request an investigation into the whole picture and to bring stability, job security and long-term economic growth to the Connecticut-Rhode Island area. It is my further goal to have the Government receive a quality product, expertly built and delivered on time to protect our country, this product being the 688 and Trident submarines that are to be our "first line of defense" in the years to come. Thank you.

Senator PROXMIRE. I want to thank you gentlemen for abbreviating your prepared statements and for your excellent oral statements. Gentlemen, what we are concerned about, as I am sure you realize is the colossal overrun here, the enormous increase in cost above the

contract.

Mr. Eno, you put it extremely well when you stated the disregard many people have for the dollar. Unfortunately, that is not confined to Electric Boat, but it seems to me very conspicuous in that operation.

We are concerned that between 1972 and 1977 there was an explosion of cost overruns, excess costs, of claims on the Federal Govern

ment.

Let me ask you about that. I will ask you some questions about the management reorganization of last fall. Beginning in 1972, Mr. Eno, there was a large buildup of the work force to correspond with the increase in Navy ship construction at Electric Boat. You said the problems of recruiting thousands of additional workers was extraordinarily or virtually impossible, unbelievable and so on. Why were the problems so difficult?

Mr. ENO. Senator, there are not that many people living in the general area from which you can draw employees and people to work at Electric Boat. We set up programs to bus people in

Senator PROXMIRE. From how large an area did you draw? How close are you from New York?

Mr. ENO. New York City, 145 miles.

Senator PROXMIRE. What is the nearest big city?

Mr. ENO. The nearest big city would be Hartford, Conn., and that is 52 miles to the north. Providence is 51 or 52 miles to the northeast. New Haven, which doesn't compare in size to either Hartford or Providence, would be the next largest city. That is 50 miles to the south.

Senator PROXMIRE. Fifteen?

Mr. ENO. Fifty, five-zero.

We have no area closer than 50 miles to draw on people. We set up buslines in conjunction with the State of Connecticut and Government funds for transportation. We set up a subsidized bus run. We were running at the peak as many as 50 to 60 buses a day for each shift, bringing people in and taking them home again. We set up a van pool system where we have 15-passenger vans, and we had 40 or 50 of those, which we give to one employee who lives the farthest away and then he brings in 10 other employees with him.

They tried the ferryboat system to bring the people up the river and across the river to alleviate the traffic situation, because you are on a peninsula, and you have a horrendous traffic problem and a parking problem.

Senator PROXMIRE. You brought in young people, old people, women, and you did your best, I am sure, to bring in minority groups?

Mr. ENO. Very definitely. We made all kinds of records and goals for minorities in our affirmative action program, by training and working on every type of employee we could get. In the CETA and WIN programs these were mothers who had to work certain shifts, either unwed mothers or others paid under Government programs. We brought those kinds of people into training.

We tried to make them pipefitters and painters and shipfitters. Senator PROXMIRE. This is extraordinary. This reminds me of the fact that in World War II we had a tremendous increase all of a sudden, 1942 and 1943 specifically, of production, and we brought in a whale of a lot of people to build all kinds of planes, tanks, ships, and so forth. We had a lot of success, and the unemployment dropped down to below 2 percent at one point. There was some inefficiency and, of course, we had a great motivation because of the war.

How do you account for the fact that we were able to do a job there with reasonable efficiency and here with far more slack in the work force and in the economy generally, particularly in the northeastern part of our country, they were unable to bring in competent people to do the job?

Mr. ENO. Basically because of the fact that, I feel, and this may date me a little bit, but the modern-day worker does not have the real incentive that the older men had, and there was not the push for war products and patriotism and the rest of the thing behind us at that time. They were perfectly happy when they could make $127 a week on unemployment, not to come to work.

We had to force people to come in to work. Connecticut has one of the highest unemployment compensation funds, and also the largest debt to the Federal Government, borrowing to pay off those funds, of any State in the Union.

This was part of the-the modern-type living, the way the people only need 2 or 3 days' work, and they are happy to take the rest of the week off if they are not happy in their jobs. This is something that in the 1950's, when the Nautilus was being built, and the other classes, the 671 boats and that series, we didn't have that problem.

For some reason or other the people who were coming in to work then were more interested in coming in. They weren't fighting for a cause, but they were coming in to make good money and to have a day's work and to have a halfway decent quality product that they were proud of. When we have a launching

Senator PROXMIRE. It is a matter of morale, of pride in the product, and also of a feeling that what they are doing they are doing efficiently, and they are, as you say, reasonably satisfied with the working conditions and they don't dread going to work. They look forward to it. You said that drugs, alcoholism, sex, and discrimination incidents became a way of life. Can you expand on these problems?

First, drugs. What do you mean by that, and does this mean in the community or right at the shipyard?

Mr. Exo. Within the shipyard itself, they had to beef up and have undercover investigators going out to check on people.

Senator PROXMIRE. The people were taking drugs while they were working?

Mr. Exo. They were smoking marihuana during the lunch hours and taking pills.

Senator PROXMIRE. Was this reflected in the quality of their work, slow it down, and would they do inaccurate work because of the influence of drugs, would you say?

Mr. Exo. I would say this was brought about by poor management practices, seeing that they had enough work to do, so they had time to stand around and smoke pot or pop a few pills or pull a bottle out of their pockets and take a drink.

Senator PROXMIRE. My question is, Do you think this practice actually contributed to lower quality and less ability to do the job required, or was it simply a demoralizing element in general here? Mr. Exo. Very definitely, a person is not going to be able to perform at their peak if they are flying pretty high.

Senator PROXMIRE. Alcoholism. They were drinking heavily?

Mr. Exo. Alcoholism is something that a shipyard always had a problem with. They cracked down on it, and it is now recognized as a sickness, and programs were set up with the company and the union, to help people rather than fire them.

Senator PROXMIRE. I think that is right. We have that problem in plants all over the country. We have it in Wisconsin, and there is nothing unusual about it.

The question is, was there excessive and unusual drinking on the job that was obviously interfering with the work?

Mr. ENO. Not on the job except in the winter when it is cold out there, and the men would bring a half a pint with them to warm up their insides to work on the hulls of the boats. This is recognized.

Shipbuilders have always been heavy drinkers and always managed to build good quality products, but when they didn't have direction to keep them busy, they got colder and drank more.

Senator PROXMIRE. How about sex?

Mr. ENO. When we started bringing the women in the shipyard, we started running into problems with the boys not used to having girls around them, running around braless with their T-shirts bouncing, if you want to call it that, and I am not trying to be funny on this. But this is a natural fact, production is slowed down. There is no doubt about it.

You see some girl walking along, and she looks pretty good. You are going to stop what you are doing and take a look. If you multiply this, that adds up

Senator PROXMIRE. That is the kind of thing that I imagine happens in a lot of places. I want to know how this was unusual. Were there prostitution problems?

Mr. ENO. Not paid prostitution per se.

Senator PROXMIRE. That is the only kind of prostitution. If it is not

paid

Mr. ENO. Some of it can be free. They call it "for love," I believe. We have had a lot of problems this way, of people sneaking off, and there are a million places to hide in the shipyard-over the ways,