About 1,000 members of the shipbuilders union struck the Bethlehem Steel Corp. shipyard at Sparrows Point at midnight, after a last-ditch attempt to reach agreement on a new contract failed.
Day-long negotiations aimed at averting the strike ended at 10:50 p.m. when union representatives said they had reached an impasse over terms of a new contract.
Negotiations were expected to resume at noon Saturday.
The two sides talked directly yesterday afternoon and met separately in the evening with federal mediator Leo Gant and Rep. Helen Delich Bentley, R-2nd, who attempted to help craft a compromise.
After meeting with both sides, Representative Bentley said she was worried that the strike would be a death blow to the troubled shipyard.
"The Sparrows Point shipyard is in a very precarious position," she said. "It is on a precipice."
"Places shut down very fast now," she said. "It's not the good old days. There are not other jobs that people can go to."
The strike came 24 hours after the shipbuilders overwhelmingly rejected the company's proposal of a $950 signing bonus and three-year wage freeze. Union members voted at the time to start picketing when the contract expired at midnight last night.
The strike comes as BethShip workers were nearing the completion of the last section of the Boston Harbor tunnel tube. The 12th and final section was scheduled to be shipped north by the end of the month.
The yard's only other job -- repairing a car-carrying ship for the U.S. Naval Reserve -- would likely provide only a few months' worth of work, said G. Ted Baldwin, a spokesman for the yard.
Although the shipyard has bid on additional jobs, it has no other signed contracts for work, he said.
David Watson, president of the division known as BethShip, warned in a statement released late yesterday that the union's rejection of the company's proposal would make things even more difficult for the troubled shipyard.
The Baltimore shipyard is already "in an extremely difficult competitive position," he said.
Union officials disputed the company's claim of financial difficulties, however, noting that last fall, Mr. Watson sent a letter to The Sun saying that 1992 would be the yard's most profitable year since the mid-1980s.
The yard, which once employed as many as 4,000 workers, suffered mass layoffs as the shipping companies shifted their orders to cheaper overseas yards in the 1980s. Staffing sank as low as a few hundred employees.
The work force jumped back up to nearly 1,200 in 1991, however, after BethShip won a $60 million contract to supply the tubes for the third Boston Harbor tunnel.
Because the work is winding down, the yard employed only 600 workers as of Friday, Mr. Baldwin said. And as work has slowed, so have profits, he said.
This year "has been disappointing so far due to a lull in the U.S. Navy work and a general softness in the ship repair market," he said.
Union officials said yesterday that the rank and file rejected the company's argument that, because of recent company losses, Bethlehem Steel needed a three-year wage freeze to remain competitive.
"The workers didn't believe the company's claims" that the shipyard was losing money, said Robert W. Pemberton, a vice president of the International Association of Machinists and Aerospace Workers/Industrial Union of Marine and Shipbuilding Workers of America.
The company had offered the members of Lodge S-33 a $950 signing bonus to be paid over 18 months. In return, the company wanted a three-year wage freeze and the elimination of an agreement to pay workers a bonus of 45 cents an hour in "guaranteed profit sharing." The company wanted to pay bonuses only if the shipyard made a profit.
Unionized shipyard workers currently earn between $10.38 and $12.52 an hour before profit sharing.
The union members voted 491-153 Thursday night to reject the company's proposal and go on strike when the contract expired at midnight, Mr. Pemberton said. It would be their first strike since 1989.
Although more than half of Lodge 33's approximately 1,000 members have been laid off because of slack work at the shipyard, and even more workers were expected to be furloughed when the harbor tunnel job ended, Mr. Pemberton said members were willing to stop work altogether to fight the loss of the 45-cent-an-hour bonus.
Analysts said the shipyard strike probably would not cause much immediate financial pain to the parent company, which is the nation's second-largest steelmaker.
But the strike could cause problems if it spreads to the steelmaking operations, or if it hurts the company's chances of reaching a contract settlement with the United Steel Workers union.