Striking submarine builders at Electric Boat could torpedo their futures if they don't acknowledge the increasing competitive marketplace and tightening military budget, analysts say. Despite a low unemployment rate and shortage of skilled workers, conditions that should favor the union, defense industry analysts say Electric Boat holds the upper hand in the 6-week-old strike by the 10,000-member Metal Trades Council. The union struck over Electric Boat's demand that employees accept lump-sum bonuses instead of wage increases in a three-year contract. The company says it needs to bring down labor costs to become more competitive with its Virginia rival, Newport News Shipbuilding and Dry Dock Co. The union said the offer doesn't take into account Connecticut's higher cost of living. In only the second negotiating session since the strike began, the company Thursday offered bonuses of 5 percent and 4 percent in the first two years and a 3 percent wage increase in the third year, in addition to a $600 bonus. The union, which said the offer was not even worth putting to a vote, has asked for wage increases of 5 percent the first year and 4 percent the final two years of the contract. The company said that as of Friday, 668 workers had crossed picket lines. During a five-month strike in 1975, only 150 workers were reported to have done so. Electric Boat's efforts to hire replacement workers, which have included placing full-page ads in newspapers, have produced meager results. Only 20 people have signed up, about the number of workers the sub builder loses each week through attrition. Electric Boat could hurt itself more by acceding to the union's demands and settling quickly than by holding out, despite the low jobless rate and shortage of skilled workers, analysts say. Electric Boat, a division of General Dynamics, has lost six attack submarine contracts in the last two years to Newport News. Electric Boat was awarded only one of three this year; Newport News had bid on only two. In all, Electric Boat has contracts for seven Trident subs and nine attack subs. The company is the only builder of the Trident. First-class mechanics, a job classification covering more than 85 percent of Electric Boat's sub builders, earn $12.02 an hour. The same workers at Newport News earn $1.24 less an hour in wages and benefits, according to Electric Boat. ``The Navy is going to the lowest bidder, and that has predominantly been Newport News. I don't know what the union expects the Navy to do,'' said Paul Nisbet, analyst for Prudential-Bache Securities. While Electric Boat is making money on the production of Trident submarines, it has not been making money on attack subs for some time, which is ``a further reason for them to hold out longer,'' Nisbet said. ``I don't think the union has much bargaining strength,'' said Gary Reich, an analyst at Shearson Lehman Brothers. Also working in the company's favor is the tightening military budget, said Phil Friedman of Drexel Burnham Lambert. Electric Boat has reassigned about 1,800 salaried workers to jobs performed by strikers. It has also shifted work to yards in Quonset Point, R.I., where all sub construction begins, and in Charleston, S.C. While certain vendors and small groceries around the shipyard here have suffered, the heavy tourist trade has kept business brisk elsewhere, said Audrey Golub, head of the regional Chamber of Commerce. ``No one has said to me yet, `God, the strike is really hurting.' If the strike continues into the fall and winter then we would begin to be able to see an impact,'' she said.
