AWSC -- Anticipating A Better Future

In these hard times, we are all experiencing- severe economic strains, and we are all looking for the proverbial "light at the end of the tunnel." Over the last few years, many events have coincided bringing both the economy and this segment of the shipbuilding industry to a virtual standstill. We believe that several years will pass before supply and demand are again in balance.

But those industries—inland and coastal barging and towing, offshore supply and service, and fishing — which our segment of the shipbuilding industry serves, are essential to the nation, and they will recover as the general domestic and world economic situations improve and the large over capacity of transportation equipment is absorbed.

Although it may be the worst of times for business, it may turn out to be the best of times for certain efforts which the American Waterways Shipyard Conference (AWSC) has undertaken on behalf of the industry. We cannot change the economy, but we can try to change those conditions that will help our industry when business improves.

The AWSC is working on several projects which will not only save the industry large sums of money and remove many uncertainties about future liabilities, but which will also preserve and protect the "build American" provisions of the Jones Act and related laws.

The Longshoremen's and Harbor Workers' Compensation Act (LHWCA) remains a top priority for the AWSC. Amendment of this costly compensation program will create a more manageable system. We expect that the the LHWCA reform bill, S. 38, will be passed during this session of Congress.

In the 97th Congress, the LHWCA reform bill was unanimously passed by the U.S. Senate, but it unfortunately died in a House Committee during the "lame duck" session of Congress.

Senate passage of S. 38 is expected shortly, while work on it continues in the House of Representatives.

We expect both Houses to act on the bill before the summer recess in August.

Included in the bill is a provision which will exempt most small shipbuilders from the Act's coverage.

The bill also contains many economic relief provisions such as: a 5 percent cap on the escalation of benefits, repeal of the unrelated death benefit, capping the unlimited death benefit, and excluding fringe benefits from the calculation of the average weekly wage. This last item is now before the U.S. Supreme Court, and if there is an adverse decision, the cost of benefits could increase tremendously.

Another area of concern is the great number of standards with which this industry now must comply. The AWSC recognized this problem and worked towards the consolidation of the shipbuilding, ship repair and shipbreaking standards, which became effective May 20, 1982. Currently, we are working closely with the Occupational Safety and Health Administration (OSHA) to develop a vertical standard, which would be directly applicable to our industry. Through this process, all inappropriate general industry standards will be deleted, and the standard will serve as a more accurate reflection of the industry.

Now is the time for us to improve our regulatory environment.

The AWSC has already commented on a preliminary working draft of a vertical standard, and is awaiting further developments from OSHA.

But, as always seems to occur during economic downswings, there are increasing assaults on the "build American" provisions of the Jones Act.

When the United States gained its independence, it was immediately cut off from all of the shipping that was controlled under the British Navigation Laws. One of the first acts of our founding fathers was to enact legislation to encourage the building of a merchant marine and to reserve the coastwise trades to U.S. built vessels. The underlying principles which were true then and which are true now are that: -—a strong domestic maritime industry should be both promoted for the economic good of the country as well as maintained as an adjunct to national security forces.

Today, the Jones Act and related laws protect this industry from unfair foreign competition.

However, we have uncovered many attempts to alter those laws, change the implementing regulations, seek waivers, or otherwise find loopholes to use foreign flag vessels in our domestic trades.

Even more ominous, the current Administration has released its National Maritime Policy which does not bode well for the major shipyards. The Administration is seeking to amend the Merchant Marine Act of 1936 to allow subsidized operators to build, acquire, or convert vessels in foreign shipyards. They are also seeking the repeal of the 50 percent ad valorem tax on foreign repairs, and to extend the Capital Construction Fund for use in foreign yards.

There are many in Washington who see the "build American" requirements as obsolete, and who wish to do away wth them.

Because of that, if our industry does not defend the Jones Act and educate people about its importance, who will?

The member companies of the AWSC firmly believe in the importance of the Jones Act, not only as it affects their individual companies, but also as it benefits the nation. We are constantly on the alert for any actions which would undermine the integrity of this law.

Many problems have beset our industry in past years, but the American Waterways Shipyard Conference is taking this lull in the economy to improve the environment in which our industry must operate when things turn around.