BATH — Business owners and residents in Bath are welcoming the news of Bath Iron Works’ $2.8 billion Navy contract awarded on Monday, saying the contract means not only job security for BIW workers but a residual economic benefit for local businesses.

The new contract, to build four guided-missile destroyers over the next five years, will bring hundreds of jobs to the state, boost purchases of big-ticket items such as houses and cars, and drive sales at a variety of businesses for years to come, they said.

Additional Photos

The christening of the Michael Murphy DDG -112 at Bath Iron Works in 2011. A $2.8 billion Navy contract, awarded to BIW on Monday, means not only job security for thousands of shipyard workers, but economic promise for the entire region, local business interests and residents say. Portland Press Herald file photo by Gordon Chibroski

Vicki Arsenault, co-owner of Country Farm Furniture Store in Bath, said she was thrilled to hear about the new contract.

Arsenault said roughly half of her store’s business comes from BIW employees and their families.

When home sales and renovations in the area increase, so do sales at the furniture store, she said.

“I think they are going to be buying more homes. I think they are going to be renovating,” Arsenault said. “I think that (contract) is going to be very important — the confidence that it’s going to create.”

Bill Groder, a shipfitter at BIW for more than 25 years, said the economic impact would be felt statewide.

“This affects the whole state, not just people in Bath,” said Groder. “Everybody will get a share — that’s the way I look at it.”

With about 5,400 employees, BIW has one of Maine’s largest private workforces and supports thousands of subcontractor jobs.

According to BIW spokesman Jim DeMartini, the company’s operations provide jobs and revenue to counties across the state.

In 2012, BIW did business with 355 companies in 12 of Maine’s 16 counties, with a total value of roughly $67 million, he said. Of those companies, 308 were small businesses, with about $49 million of revenue going to them.

BIW’s 2012 payroll in Maine was roughly $350 million, DeMartini said, distributed among employees living in 14 counties. About 75 percent of BIW’s workforce resides in Sagadahoc, Androscoggin, Cumberland, Kennebec and Lincoln counties, he said.

In neighboring Brunswick, car dealership Brunswick Ford is likely to see a boost in sales resulting from the contract, General Sales Manager Steve Hixon said.

Hixon said even the belief that a major new contract is about to be secured usually brings in customers from BIW, one of the dealership’s biggest sources of revenue. “We do a lot of business with Bath Iron Works employees,” he said. “It (the destroyer contract) definitely helps us.”

Groder said knowledge of the new contract will boost consumer confidence among BIW employees who might have been holding off on major purchases because of uncertainty about their future job security.

“People realize they’re safer,” Groder said. “They’ll go out and buy new cars and new houses.”

BIW marine electrician Jeff Rumney said the company, a subsidiary of major defense contractor General Dynamics, already has been adding workers for an existing contract to build three DDG-1000 Zumwalt-class destroyers.

“They’re on a big hiring spree right now,” Rumney said.

Bath City Manager Bill Giroux expressed pride in BIW’s accomplishments and the quality of its products, but he emphasized that the company’s successes have a broad regional impact.

“Whenever they … get contracts like this, it’s a big plus for communities all around, not just in Bath,” Giroux said.

One of the biggest advantages of securing lucrative contracts through at least 2017 is that it will result in jobs for younger workers who will continue the 129-year-old company’s mission into the future, he said. “This means that the next generation is now going to come in and carry it on,” Giroux said.

Bath restaurateur Lisa Fraser said there was a slight sense of disappointment that the new contract was only for four ships. The community was hoping for six, she said.

Still, she said any amount of new business for BIW is good for her business, Fiona’s Catering and Takeout, which is directly across from BIW’s massive shipyard.

“Four is better than none, to me,” Fraser said.

BIW likely will get a contract for a fifth destroyer — valued at nearly $700 million — if the Navy can reach an agreement with Congress to cover a funding shortfall, government officials have said.

The option for the fifth ship, if exercised, would bring the total value of the contract to roughly $3.5 billion.

“This contract adds four ships to our workload in a fiscally challenging and highly competitive environment, and provides a clearer picture of our near-term future,” BIW President Jeff Geiger said in a news release. “Continuation of the DDG 51 program provides important work for the men and women of Bath Iron Works and allows us to extend our record of delivering these critical surface combatants to the U.S. Navy.”

Geiger said the work of Maine’s congressional delegation was critical in procuring the multi-year contract. “We appreciate the strong support of our senators and representatives, who have been instrumental in educating their colleagues and others about the vital national-security need for a strong naval fleet, and their advocacy on behalf of the shipbuilders of Maine,” he said.

The Navy announced design and construction contracts for nine DDG 51 Arleigh Burke-class destroyers through fiscal year 2017: four at the shipyard in Bath and five at Huntington Ingalls Shipbuilding in Pascagoula, Miss. BIW already has five DDG 51 ships under contract.

Measuring more than 500 feet long, the destroyers carry crews of 276 and are equipped with an array of missile, torpedo and machine gun systems plus two fully armed helicopters, according to the Navy.

Workers and business owners outside BIW’s massive shipyard in Bath said the new contract will provide a sense of job security and boost economic activity for miles around.

Defense contractors have been hit in recent years with uncertainty in the industry. About five years ago, Navy officials canceled plans for additional DDG-1000 Zumwalt-class destroyers, including some that would have been built in Bath.

There are two DDG 51 destroyers in production at BIW, Rafael Peralta (DDG 115) and Thomas Hudner (DDG 116). The shipyard began fabrication on Rafael Peralta in November 2011, and delivery to the Navy is scheduled for 2016, company officials said.

Fabrication on Thomas Hudner began in November 2012, they said. That ship is scheduled to be delivered to the Navy in 2017.

BIW also is working on the three Zumwalt-class of destroyers, officials said: Zumwalt (DDG 1000), Michael Monsoor (DDG 1001) and Lyndon Johnson (DDG 1002). All three ships are progressing in construction, according to BIW, which celebrated the keel-laying milestone for Michael Monsoor in late May. Zumwalt is expected to be launched later this year, company officials said.

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