OFFSHORE DRILLING RIGS, SUPPORT VESSELS, NAVY SHIPS, INLAND BARGES, AND REPAIR WORK BRIGHTEN THE U.S. PICTURE
For the U.S. shipbuilding industry, the psychology of hope went full circle in 1980. Starting with the optimism of Congressional enactment of c o m p r e h e n s i ve "omnibus" maritime legislation in conjunction with an accelerated naval shipbuilding program and ending with the optimism of a more assertive leadership on the part of a newly elected President, the period in between was marked by a mixture of intense activity, confusing commotion, and much talk but little positive effect.
T h i s c o n v o l u t i o n must be viewed against the background of recent events. The U.S. commercial and Naval fleets have d e c r e a s e d . The U.S. Navy is stretched paper-thin and is now at its lowest level since before World War II. The volume of cargoes carried by U.S.-flag ships has declined. The number of merchant shipbuilding contracts has dropped. The Naval shipbuilding program has been generally down.
The industrial support base for ship construction has diminished.
There has been no coherent policy to assure the uninterrupted movement of c r i t i c a l i m p o r ts without which the U.S. military and industrial structure could not endure.
Alarms have been sounded repeatedly.
The statistics have been recited endlessly. As in other recent years, there was no visible high-level recognition of the nation's endangered national security.
Assurance of an adequacy of ships, shipping, and shipyard resources under U.S. sovereignty to serve essential national interests suffered from unresponsive leadership and adverse economic conditions.
As of December 31, 1980, the order book for merchant shipbuilding totaled 49 ships, with an approximate value of $2.3 billion, being constructed by 13 U.S. shipbuilders (compared to 15 at the end of 1979). Only 17 of these vessels will remain to be delivered a f t e r the end of 1981.
With regard to Naval shipbuilding, commitments were made in 1980 for the construction of six guided-missile frigates (FFGs), one guided-missile cruiser (CG), one nuclear-powered aircraft carrier (CVN), and three ocean surveillance ships (T-AGOS) in 1980.
Contracts for several submarines were still under negotiation at year-end.
The value of the backlog of 91 Navy vessels on order at the close of 1980 is estimated at $9.0 billion, and deliveries will extend through 1987. Eleven shipyards (compared to 10 at the end of 1979) hold these contracts, one of which is also building four U.S. Coast Guard c u t t e rs (WMEC).
New orders at an annual rate of seven merchant ships and 11 Naval vessels will obviously not utilize the full capabilities of the s h i p b u i l d i n g industry of the United States. As a consequence, some 30,000 skilled shipyard workers in those yards which compose the so-called shipbuilding mobilization base face the uneasy prospect of unemployment over the next several years, with another 90,000 in supplier activities similarly affected. Conversion of existing vessels and construction of non-self-propelled barges for coastwise service in addition to non-ship work could moderate this forecast, but not substantially.
This downward trend has been compounded by expedient actions of the Department of Defense in planning to acquire 11 commercial- type, foreign-built vessels to fill ship voids in the nation's sealift forces, which should have been ordered from domestic shipbuilders three or more years ago.
It should be noted that these 11 vessels are greater than the total number of definite contracts (seven ships) signed by U.S.
builders in 1980: an incredible situation, more so because of the role of government.
A loss of 80 million man-hours of employment for the U.S. shipyard labor force takes place while the public treasury is paying millions of dollars in adjustment assistance to U.S. workers displaced by reason of low-cost foreign imports.
With one hand, the government purchases foreign-built ships, while with the other hand, it bestows generous unemployment benefits to U.S. shipyard workers who should have built the ships in the first place.
The order book for offshore drilling rigs presents a much brighter picture. With 72 rigs on order at year-end with 11 U.S.
builders (compared to six at the end of 1979), contracts for 53 were placed in 1980. Valued at about $2.4 billion, deliveries extend into 1984. Worldwide, competition for jackup and semisubmersible rigs intensified during the year as offshore oil and gas fields expanded. In like manner, the demand for new offshore petroleum service vessels has expanded ; more than 200 of these supply boats were reportedly delivered in 1980.
Also on the plus side of the shipyard ledger, the demand for inland waterway barges as well as for commercial ship-repairing services has been strong throughout the year. The dollar value of ship repair work for 1980, both Naval and commercial is estimated at nearly $2.5 billion.
MERCHANT SHIPBUILDING From the record of the past two decades, one is struck by the repeated evidences of a fruitless search for a fully effective and enduring policy to govern U.S.
maritime affairs. 1980 was equally sterile.
At midyear, it became increasingly apparent that proposed legislation to counteract persistent deficiencies as affecting U.S. shipping and shipbuilding capabilities would not be enacted. In point of fact, the m u c h - p u b l i c i z ed "omnibus maritime bill" was never brought to a vote in the Congress because of its controversial scope, Carter Administration indifference, jurisdictional squabbles, and political events.
There was general agreement on the need for change and improvement, but, on details, indust ry and labor didn't agree, the Administration and the Congress did not agree, separate executive agencies within the government did not agree, shipowners and shipbuilders didn't agree, and, on some provisions, shipowners did not agree among themselves. For their part, shipbuilders made a number of concessions and compromises on basic principles in the hope of unity, but in vain.
This was not an exercise in total futility, however. The extensive Congressional hearings and accompanying public debate underscored these important points: (1) the devastating disarray with respect to U.S. maritime policy and implementation; (2) the nation's critical dependence on imported strategic m a t e r i a l s of which 95 percent or more is brought to U.S. ports by ships flying the flags of other countries; and (3) the costly impact on U.S. shipbuilding prices resulting from regulatory requirements and standards more severe than those abroad. The resulting dialogue also provided a timely focus on the positive relationship of adequate and productive domestic shipbuilding and U.S.-flag shipping capabilities to the nation's s e c u r i t y and economic structure.
Seen from today's perspective, these points need to be considered in the context of world shipping and shipbuilding conditions as they exist, not in the context of 18th century textbook theories as some classical economists even now h y p o t h e s i z e . With a depressed market worldwide that is not predicted to return to normalcy before 1984 or 1985, shipbuilders in other countries are reportedly quoting prices as much as 40 percent below actual costs, with the e n c o u r a g e m e n t and blessing of their governments.
This is possible through unique patterns of extraordinary subsidies, tax inducements, financ- ing devices, and accelerated capital depreciation.
But as prices are lowered abroad, by whatever means, construction subsidy levels in this country rise, but they cannot exceed 50 percent by statute. The real differential with U.S. shipbuilding prices at this moment is probably closer to 60 or 65 percent.
Obviously, newbuilding opportunities in this country are affected by t h a t which t a k es place abroad and, at the same time, they are inhibited by the myopia of U.S. policies.
Practices of false pricing in other countries cannot continue indefinitely; the elastic limit of artificial government supports to indemnify shipbuilders against losses is not infinite. The elastic limit of government support for maritime affairs in the United States has traditionally been dictated by the a v a i l a b i l i t y and amount of Federal funds for ship construction and operations. Over time, Federal payments for operating subsidies, in total, have exceeded those for construction subsidies.
Yet U.S. shipyards and supporting activities, over time, have provided far more jobs for American workers than seagoing operations.
It is nonetheless a fact of life that U.S. shipbuilders will prosper only to the extent that U.S.
owners are able to order ships from them. To do so, the financing package must assure parity with foreign c o m p e t i t i o n , and that assurance must be predicated on efficient u t i l i z a t i on through good management and profitable o p e r a t i o n s deriving from the transport of an increasing volume of cargoes. As President Reagan has put i t : "a greater market share of U.S. trade for U.S.-flag, U.S.-built ships." The development of a fully effective and e n d u r i n g n a t i o n al maritime policy will require enlightened recognition of the realities of world shipping and the realities of world shipbuilding as presently existing and not as they should conform with someone's vacuity about economic theories of yesteryears. Any endeavors to increase the market share of the U.S. merchant marine must begin with recognition of this pervasive fact: whatever free trade that now exists in shipping services is rapidly disappearing and will, in all probability, be virtually non-existent by the end of the 1980 decade.
As to liner trades, the Code of Conduct for Liner Conferences, dictating a 40-40-20 percent division of cargoes between the shipping fleets of trading partners and third-flag carriers, will enter into force in 1981, notwithstanding the abstention of the United States and the reservations of the European Economic Community and Japan with respect to their trade with the United States. Implementation of the Code, commonly known as UNCTAD, will severely increase pressures on U.S.-flag carriers operating in U.S. liner trades as displaced tonnages flock to the only major t r a d e s r e m a i n i ng open.
While the Code has many welldocumented flaws, it is a reality with which the United States must contend, and to which the United States must assent, if the U.S.-flag liner fleet is to prosper.
As to the bulk trades, the Third World effort to achieve similar cargo sharing arrangements is just beginning, and, as with the Liner Code 10 years ago, it is not taken seriously.
The Department of State has evidently learned nothing f r om that experience, and again steadfastly opposes any momentum toward development of a rational and effective policy.
As suggested earlier, the shipbuilding industry of the United States acknowledges t h a t its prosperity and that of U.S.-flag ship operators depends upon a national maritime policy in tune with the world of the 1980's, not the 1780's or the 1880's. That policy, however, must recognize and deal with the worldwide movement toward bilateralism and promotion of national flag shipping fleets. A realistic maritime policy for the 1980's must also take into account the economic and tax stimuli that underpin the shipping and shipbuilding endeavors of other countries.
For the short term, market opportunities for U.S. shipbuilders not principally involved in naval programs would seem to consist mainly of construction of specialized ships and vessels for domestic and Great Lakes trades; construction of barges and shallow d r a f t vessels for the inland waterways and coastal trades; conversion of existing vessels; repowering of existing vessels with more fuel- and cost-efficient propulsion systems; retrofitting of existing tankers to comply with environmental requirements; and certain types of non-ship work.
For the long term, a gradual increase in merchant ship construction to accommodate incremental increases in world trade and a rise in the volume of cargoes carried by U.S.-flag shipping seems likely. Overage or uneconomic vessels will need to be r e p l a c e d . Opportunities to build dry bulk carriers, ocean mining ships, ocean thermal energy conversion plantships, and other specialized vessels should also develop.
Other stories from June 1981 issue
- SPC Coatings Combat Rising Fuel Costs- Literature Available page: 5
- Ryan-Walsh Bulk Terminal In New Orleans Resumes Coal-Handling Operations page: 5
- Brochure Available On Gilkes Self-Priming Pumps For Marine Market page: 6
- Henschel Changes Name Of Its Oklahoma Unit To Tulsa Division page: 6
- Atlantic Marine To Build Cat-Powered Drill Barge For Mecom Company page: 6
- National Marine Service Adds Sixth Drydock At Its Harvey Shipyard page: 6
- General Ship Expands Its Facilities In South Boston page: 6
- Floating Doughnut Crane Shown At Shugart Crane Conference page: 7
- EMD-Powered 'Gulf Condor' Delivered By Quality Shipyards page: 8
- RCA Opens Marine Services Office In Morgan City, La. page: 8
- Hans Schaefer Succeeds Arthur Stout As President Of Todd Shipyards page: 8
- FELS To Construct Semisubmersible Rig For Western Company page: 9
- David Parrot To Head New Aldenships Division Of John G. Alden Firm page: 9
- Edward Walsh Named Asst VP And Controller At J.J. Henry Company page: 9
- Oosterhuis Talk Describes Decline In Fuel Q u a l i t y - Free Copies Available page: 10
- Second Occidental Tug/Barge Unit Christened At Avondale Yard page: 10
- Megasystems To Provide Automation Package For Southern-Built Dredge page: 10
- Interlake's 'De Lancey' Christened- Longest Vessel On The Great Lakes page: 12
- Dravo Negotiating To Buy Operating Assets Of Nilo Barge Line From Olin page: 14
- Brochure Available On Foster Wheeler Boilers And Auxiliary Equipment page: 14
- A TIME OF GREAT EXPECTATIONS, ENTHUSIASM AND EXCITEMENT page: 15
- Vincent Ferraro Named Estimating VP For Savannah Shipyard page: 15
- Paceco Container Crane Arrives At Massport's Castle Island Terminal page: 15
- NASSCO Lays Keel Of First In Series Of Product Carriers For American Tankships page: 16
- Bay Shipbuilding Completes EMD-Powered Columbia Star page: 16
- Bryant Named Manager Of McGraw-Edison's New Marine Marketing Dept. page: 17
- Three New Technical Reports Available From Ship Structure Committee page: 17
- Penske Offers Brochure On Diesels/Gas Turbines For Marine/Offshore Power page: 18
- Subsidy Approved On USL Conversion Job To Cost $5.3 Million page: 18
- Consolidated Inland Opens East Division Office— R.R. Simms Named Manager page: 18
- El Paso Promotes Three- Harry Ray Named VP Of El Paso Marine page: 18
- MOBILE JACKUP PLATFORMSPAST, PRESENT AND FUTURE page: 19
- Serrie Joins Levingston As VP Of Operations page: 19
- lotron Conducts ARPA Demonstration In New York City page: 20
- First Of Five Hydrofoil Combatants Launched By Boeing Marine Systems page: 20
- ALL INDICATORS POINT TO DRAMATIC INCREASE IN DEMAND FOR BARGE CAPACITY page: 22
- Levingston Reorganized— Barrios, Covington And Wise To Head Three Units page: 22
- B IW Awarded $247-Million Navy Contract To Build Three Missile Frigates page: 24
- North Florida Shipyards Appoints Three—White Named Production Manager page: 25
- Captain Barry Roberts Named CO Of USCG's Curtis Bay Shipyard page: 25
- James Retert Joins Waukesha Engine As Director Of Marketing page: 27
- New U.S. Built Coal-Fired Ship To Be Powered By G.E. Steam Turbine page: 27
- Wasacz Succeeds Gray As President Of Matson Navigation page: 28
- Bel-Aire Yard To Build Two Tuna Seiners At Total Cost Of $20 Million page: 29
- AWO'S AMERICAN WATERWAYS SHIPYARD CONFERENCE IS SHAPING POLICY FOR LONG-TERM GROWTH page: 33
- Washburn & Doughty Delivers Combination Scalloper-Dragger page: 34
- GE-Powered Product Carrier For Union Oil Christened At NASSCO page: 34
- South Jersey Port Orders Heavy Duty Multi-Purpose Crane From Kocks page: 35
- U.S. NAVY - A MORE POWERFUL FUTURE page: 39
- RORO81 PREVIEW page: 39
- First Of Three Waterman Combination Carriers Features Largest MacGregor Stern Ramp page: 40
- OFFSHORE DRILLING RIGS, SUPPORT VESSELS, NAVY SHIPS, INLAND BARGES, AND REPAIR WORK BRIGHTEN THE U.S. PICTURE page: 41
- Canadian Yards And Government Speed Up Shipbuilding Training page: 41
- EDO Gets $3.9-Million Navy Award To Improve Existing ASW System page: 42
- Barber Steamship Lines Names Steven Roberts Assistant Vice President page: 43
- Navy Awards $276-Million Contract To Todd For Three Additional FFGs page: 43
- Promet Gets $60-Million Order For Drill Rig For Sedco Incorporated page: 44
- A VIEW OF WORLDWIDE SHIPBUILDING REVEALS SIGNS OF REVIVAL IN SOME SECTORS page: 45
- CANADIAN EAST COAST OFFSHORE SERVICE VESSELS-EXPERIENCES AND PROBABLE FUTURE REQUIREMENTS page: 50
- CANADA'S EAST COAST OFFSHORE OIL POTENTIALOPPORTUNITIES FOR SHIPBUILDING page: 52
- First Aegis Missile Cruiser Christened At Ingalls Yard page: 58
- Blount Delivers Commuter Boat To Fire Island Ferries page: 58
- Promet Private Limited Completes Jackup Service Barge For Sun Contractors page: 60
- Cornelsen Named Manager- Technical Operations For Well Control Systems page: 60
- Northern New England ASNE Holds Joint Meeting With NCAA & NANTS page: 64
- 'Griffin-Alexander I' Now In Service- First Of Eight Costing $280 Million page: 66
- SNAME Philadelphia Section Hears Report On Stack Performance page: 66
- Captain Sandberg Honored At New York Section SNAME Meeting page: 66
- Smit International Performs Tow Of Huge Production Platform page: 70
- Jackup For Houston Offshore Commissioned At Bethlehem Yard page: 70
- Joe B. Foster Named An Executive Vice President Of Tenneco Inc. page: 71
- New Booklet Lists Oil Spill Prevention And Cleanup Organizations page: 74
- New Brochure Describes Goodway's Full Line Of Tube Cleaning Equipment page: 74
- New Armco Weld Wire Accepted By U.S. Navy —Literature Available page: 77
- New Brochure Describes Sewage Treatment Plants From Weir Pumps Limited page: 78
- J.D. Cain Appointed A Division Manager For Racal-Decca Survey page: 79
- Wilson Walton Develops New Marine Incinerator —Literature Available page: 79
- DCC Orders Satellite Ground Equipment From Scientific-Atlanta page: 80
- Charles Orem, President Of Bird-Johnson, Named Chief Executive Officer page: 80
- J.P. Elverdin Appointed Vice President-Shipping For United States Steel page: 81
- Uniroyal Collapsible Rubber Drums Are Rugged —Literature Available page: 81
- Student Paper Presented At SNAME Northern California page: 82
- Catalog Detailing Its Full Line Of Products Available From Kraissl page: 82
- Ordering Brisk At Dravo, Including Four Towboats At Cost Of $16 Million page: 84
- N.A. DiRenzo To Head New Philadelphia Office Of Designers & Planners page: 84
- Western Gear Awarded $1.5-Million Contract For Six Drilling Rig Drives page: 84
- Jan van Lier Named A Vice President Of Moore McCormack Resources page: 85
- Student Papers Presented At Los Angeles SNAME page: 85
- Sedco Jackup Drilling Rig Christened At Promet Yard page: 86
- Detroit-Powered Towboat Delivered To FOSTI By Orange Shipbuilding page: 86
- W.L. Kwitchoff Named VP-General Superintendent At Savannah Shipyard page: 87
- Lunceford Elected Board Chairman And President Of National River Academy page: 87
- Vu-Gctge Systems Ordered By NASSCO For Tankers page: 88
- Wood Elected President Of Northwest Towboat Association, Seattle page: 88
- R.E. Fisher Appointed VP-Marine Services At SeaTec International page: 88
- DEBEG Marine Opens New U.S. Headquarters page: 89
- Hampton Roads SNAME Meeting Featured Sailing Film-Narration page: 91
- Puget Sound ASNE Hears Firsthand Account Of 'Prinzendam' Incident page: 92
- Rivtow Straits Orders EMD-Powered Tugboat From John Manly Yard page: 92
- Fred Shumaker Joins McClure Associates As Vice President page: 92
- Sun Transport's Latest Carrier Has Many Advanced Features page: 93
- Albert Termo Named VP-Marketing And Planning At Universal Maritime page: 94
- Norshipco Names New Officers—Wesley Payne Promoted To Senior VP page: 94
- Yugoslav Shipyards Licensed To Build Rigs Designed By Levingston page: 95
- Walter Beam Named Vice President-Research And Development At Sperry page: 95
- Brochure Available On O i l / W a t e r Emulsifier From Cleanodan A/S page: 97
- Levingston To Build Rig For Mexican Owner At its Port Arthur Division page: 97
- $1.2-Million In Marisat Terminal Contracts Goes To Scientific-Atlanta page: 98
- Madeo Appointed Vice President-Operations For Ocean Salvors page: 98
- Riva Schwartz Promoted To Sales Manager For Simrad, Inc. page: 100
- $622,500 Contract For Atlantic Marine Yard Authorized By MSB page: 100
- New Brochure Describes High-Level Tanker Alarm With Automatic Shutdown page: 100
- Marinette Marine Awarded $1-Million Navy Contract For MCM Evaluation page: 102
- Forthofer And Reardon Named Vice Presidents For Perry Oceanographies page: 102
- Hitachi To Supply Four B&W Type Marine Diesels To People's Republic page: 103
- Hermann Helms Named VP-International For Lykes Bros. Steamship page: 103
- Reception Honors Wheeler's Appointment As Exclusive Agent For Schelde Yard page: 104
- New Kawasaki Stern Bulb System Provided Impressive Fuel Savings On Trial Run page: 104
- Marine Moisture's Tank Gauging Meets IMCO Rules —Literature Available page: 105
- Orders For Vessels Built To American Bureau Class Surged In 1980 page: 107
- Matson Promotes Three- John Couch Appointed Senior Vice President page: 107
- Macawber To Prepare Coal-Handling Manual Under MarAd Contract page: 108
- Hartzell Marine Blowers Meet Federal Specs- Literature Available page: 108
- Rick Comoglio Appointed Sales Engineer For EG&G Sea-Link Systems page: 108
- Ingalls To Build Second Jackup For Bonito Offshore page: 109
- Drew Promotes Three In Ameroid Marine D i v i s i o n - Kay Named Vice President page: 109
- Big Living Quarters Module For North Sea Production Rig Delivered By Blohm + Voss Yard page: 110
- N a t i o n a l Supply Promotes Three In Sales—Petersen Named VP-Marketing page: 112
- Boston VLCC Companies Ask For Title XI Aid On Tanker Retrofits page: 115
- New Gems Flow Switches Designed For Heavy D u t y - Literature Available page: 115
- Selfbulk Vessel Provides Versatile Cargo-Handling System page: 116
- Bender Yard Awarded Contract To Re-power Towboat 'Great America' With S.E.M.T. Pielstick Engines page: 117
- Bayou Black Shipyard Delivers Crewboat And Pusher To Sundance page: 134
- Admiral John M. W i l l - Navy And Merchant Marine Leader-1900-1981 page: 134