City businesses may suffer from Phila. Naval Shipyard's closure

The city had been home to the shipyard for 194 years; But an effort to cut jobs in the military forced the base to close The Associated Press Mary Sautter cooked on a wood-burning stove when she opened her luncheonette just outside the gates of the Philadelphia Naval Shipyard in 1924. With no electricity on the premises, she heated the place with coal. During World War II, some of the 48,000 workers who built ships around-the-clock filled her wood-frame restaurant and jammed into the phone booths that lined one wall. Today, the 194-year-old shipyard officially closes, bringing the last wave of cutbacks that have wiped out thousands of base jobs in recent years. Robert Sautter, who inherited his grandmother's old business in 1975, now faces a tough decision on the fate of Sautter's Luncheonette. ''I'll see what next week brings,'' he said Wednesday, as some of his remaining customers enjoyed eggs and coffee. Sautter spent his boyhood summers at the luncheonette, helping deliver blocks of ice to the base and going home at night to his uncle Francis' house in South Philadelphia. Seeing the shipyard wind down as the government shrank the military, Sautter, 42, returned to the crane rental business three years ago, leaving daily operation of the restaurant to his wife, Denise. Hundreds of other businesses -- primarily defense contractors -- that relied on the base are having to make their own adjustments to survive. Phillyship, an engine repair company, had to lay off all 25 employees in its government contracts office, said Myrtle Bender, the company's vice president. ''I know that some of them are unemployed to this day,'' Bender said. ''Going back maybe five years or so, it was 50 percent of our business,'' Phillyship now focuses on commercial ship repair and engine work at large hospitals and colleges. ''When we had a contract to work on, we would hire 50, 60 people,'' Bender said. Now the company has 45 employees in Philadelphia, New York and Baltimore. ''They were all being affected in different ways, depending on what they sold and what their markets were,'' Mulhern said. ''They've had several years to adjust and they're always adjusting to changes in their market.'' None of the companies indicated they would have to shut down because of the shipyard closure, but Mulhern said he would not be surprised if some businesses did just that. Comptek, a Mount Laurel, N.J., company that performed shipyard work for 10 years, is applying the skills it learned there -- bar-coding to keep track of parts -- to private industry and other military work. ''What we have done is participated in defense conversion,'' said Cheryl Newton, manager of Comptek's information technologies group. ''We aren't 100 percent successful but we are well on our way.'' Five years ago, some 13,000 civilians and 6,000 military personnel worked at the Navy complex, which fed $1.2 billion in wages and other income into the region. The complex supported 16,000 outside jobs in the Philadelphia region at the time, according to the nonprofit Pennsylvania Economy League. Since then, most of the civilian shipyard workers have received pink slips. On Wednesday, the shipyard's last project -- the refurbished aircraft carrier USS John F. Kennedy -- sailed back to Florida with 2,950 sailors. And in the last big wave of layoffs, 1,900 shipyard workers are receiving pink slips today. Several hundred others will remain behind to close up shop. Elsewhere in the Navy complex, an 1,800-person engineering operation will stay in business, as will a warfare center and a propeller foundry. ''[Today]'s the last step as far as direct job loss,'' said Terry Gillen, director of the city's Office of Defense Conversion. Most of the indirect job loss to outside businesses has occurred already, but Gillen said it's difficult to estimate the totals so far. In 1991, the Navy predicted 8,495 indirect job losses at base suppliers, restaurants and stores. The ultimate impact will depend on such factors as a German shipbuilder's proposal to make cruise ships at the shipyard. In the meantime, government and private organizations are trying to help those affected. Philadelphia has received $70 million in federal funds to retrain shipyard workers, help companies convert to civilian work and attract private industry to the shipyard. Greg Bischak, executive director of the nonprofit National commission for Economic Conversion and Disarmament in Washington, D.C., said the city has received more federal base-closure aid than any other city, ''and has less to show for it.'' He accused Mayor Edward Rendell of mismanaging the transition, leaving base suppliers ill-prepared for the closure. He blamed state and federal elected officials for wasting time with an unsuccessful legal battle to keep the base open, and the Navy for not relinquishing the base earlier for reuse planning. ''I view the last two years as a very clumsy and slow planning process,'' Bischak said. ''I think it's a scandal, frankly.'' Gillen said Rendell did try to plan for closure early on, but was criticized by other officials and labor unions who saw that as abandonment of a shipyard that had lived through false alarms in the past. Defense contractors, too, had hoped for a saved shipyard. ''We all tried so hard,'' said Newton of Comptek. ''We were all in the same boat together, first trying to save the shipyard from the closure process. We went up to the bitter end on that.'' As the shipyard faded over the last five years, Sautter's Luncheonette lost about 60 percent of its business. Sautter would like to keep it open, if possible, for sentimental reasons.

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