Irving Shipbuilding Inc. is gearing up for the full rollout of the $25-billion federal shipbuilding contract the firm won in 2011 by laying off workers at its facilities in Halifax this year. Despite extensive media coverage of the workforce reductions, Irving assures workers, funders and suppliers alike that this is business as usual.

Irving is getting support for this position from an unlikely source: Local 1 of the Canadian Auto Workers-Marine Workers Federation. Union president Cliff Pickrem says layoffs, expected to be in place by the end of September, are part of the annual rhythm of work at the Halifax Shipyard.

The local Chamber of Commerce also is responding calmly. Well, actually, not at all. Earlier this year, in the wake of concerns about the slow speed at which the shipbuilding contract was unfurling, chamber president and CEO Valerie Payn penned an op-ed to reassure the business community that it was clear sailing ahead: “As with any major project, design, planning and execution are needed before ships rise in our harbour.”

Those words apparently apply to the current situation, as well. Irving has begun a $300-million expansion and modernization of the Halifax Shipyard, a necessary foundation for building our nation’s next fleet of combat ships. The upgrade will be completed over the next two years. What it will not require are all of the 900 employees currently on the payroll.

It’s not known how many workers will lose their jobs, but Pickrem estimates it will be at least 300. That number could have been reduced if Irving had opted to phase in its modernization plans.

But that strategy is not good business, Jim Irving, co-CEO of parent company J.D. Irving Ltd., said at a media briefing: “We could have done this in stages, we could have spent less money now, but we’re putting the capacity in up front.”

The approach resonates with many Nova Scotians who are looking for the heady heyday when the shipyard will be fully active and the money flows freely. Those days may not be that far away. Delivery of the first vessel under the 30-year contract is expected for 2018, and shipbuilding will begin in earnest in two years. Between 2020 and 2021, shipyard employment will peak at anywhere from 2,000 to 2,500 workers.

Irving Shipbuilding is quick to point out that even in the getting-ready phase, the benefits of the upgrade are flowing already. According to the company, roughly $128 million in contracts have been awarded to date under the Halifax Shipyard Modernization Program.

Over the two-year life of the modernization project, approximately 733 full-time positions will be created directly with suppliers and indirectly with subcontractors. That amounts to roughly $58 million in annual employment income.

Much of that money will stay in Nova Scotia. In a project update, Irving says 53% of the total contract value has been awarded to companies owned or operating in the province. That will generate approximately 370 jobs and $26 million in employment income.

Nova Scotians are hopeful these numbers will hold water.

© 2013 Investment Executive. All rights reserved.