BATH — The contract negotiating committee of Bath Iron Works’ largest union rejected the shipyard’s final contract offer Saturday afternoon after negotiations ran late Friday night.

David Hench, BIW spokesman, said the company will provide “additional information concerning the other aspects of its offer beginning (Sunday), and continuing over the next several days,” after negotiations ran until 11 p.m. Friday and resumed Saturday morning.

BIW’s final 3-year contract offer includes an annual 3% pay increase, maintains current premiums on benefits including 401k and life insurance, but would increase health plan co-pays.

BIW’s full economic proposal from the company is available on the company’s website.

Local S6 of the Machinists Union, which represents 4,300 of the company’s 6,700 employees, has threatened to strike over disagreements including worker pay, subcontracting and seniority since before negotiations began three weeks ago.

Prior to the start of negotiations, Chris Wiers, president of Local S6, told The Times Record the union is focused on negotiating annual wage increases for its members, while the shipyard’s primary concern is getting back on schedule amid a pandemic.

The union is pushing for the annual wage hikes after it negotiated a $2,500 annual lump sum bonus in lieu of wage increases five years ago.

Union members are expected to vote on the contract proposal June 21, but their contract negotiation committee’s decision on Saturday not to endorse the offer as it stands makes the prospects of the looming union-wide vote more uncertain. 

Wiers said he’s also frustrated by the company’s desire to continue subcontracting work at the shipyard, a topic that drew criticism from Democratic Reps. Jared Golden and Chellie Pingree. The lawmakers last week sent a letter to Dirk Lesko, BIW’s president, suggesting the company refocus its efforts “on hiring, training and investing in Maine workers for these critical jobs” rather than continuing outsourcing work.

“Outsourcing potential work at the shipyard through subcontracting weakens efforts to address the development of the yard’s future workforce and will erode Maine’s skilled shipbuilder base over time,” Pingree and Golden wrote in their June 10 letter.

Lesko responded to the lawmakers with his own letter the following day, arguing the company continues to hire workers and plans to hire 1,000 more this year. But now the work in the shipyard’s schedule “exceeds the capacity of our workforce and additional help is required” to deliver ships to the Navy on time.

The Bath shipyard has contracts to build 11 Arleigh Burke-class destroyers for the Navy over the next decade.

Lesko told the Portland Press Herald last month that BIW is at least six months behind schedule.

Union officials said BIW made sought more freedom to hire subcontractors during contract negotiations five years ago, a request the union yielded to because it could allow the shipyard to remain flexible while competing for shipbuilding contracts.

In 2015, BIW, a subsidiary of global aerospace and defense company General Dynamics, was focused on winning a $10.5 billion contract to build Coast Guard cutters. The shipyard warned losing out on the contract could lead to the elimination of 1,000 jobs. BIW ultimately lost the cutter contract.

Local S6 officials said they’re also concerned about the company’s proposed changes to seniority, which helps determine who works in what facility and during which shift. According to a statement on BIW’s website, it recognizes the importance of seniority, but added “seniority alone may not result in the assignment of the right person to the job.”

“If BIW doesn’t cease its union-busting tactics and come back to the table with a suitable offer, our membership will likely have no other option but to strike,” Wiers wrote. “The last thing we want is a strike, but we are prepared to do so if needed.”

Local S6 last went on strike in 2000, which lasted for 55 days.