U.S. SHIPBUILDING $Billions In Navy Work Plus Repairs Brighten The Picture

The number and tonnage of vessels delivered by U.S. yards during the past year were up from 1984, thanks mostly to construction for the Military Sealift Command's build-and-charter program. Six of the nine ships completed, and 155,862 of the total 164,711 dwt, were for charter to the MSC.

General Dynamics' Quincy, Mass., shipyard delivered the last of five RO/RO T-AKX maritime ^repositioning ships, the Sgt. William R. Button, in May this year. Amship's Tampa Shipyards in Florida also completed the last of five T-5 tankers for MSC charter; the Laurence Gianella left the yard in late April this year. The Tampa yard will now presumably concentrate on repair work.

The sole new merchant ship ordered during the past year went to McDermott Shipyards, headquartered in New Orleans, for a 2,830-gt hopper dredge for American Dredging. The vessel will be delivered in mid-1987. Of the six vessels currently on the merchant ship orderbooks at U.S. yards, two are scheduled for delivery later this year and the remaining four will be completed by June of next year.

$Billions In Navy Work Again, the U.S. Navy's newbuilding and overhaul/repair programs are responsible for the continued health of many U.S. shipyards.

There are at least nine major commercial shipyards currently involved solely in Navy new construction.

Some dozen smaller yards have received Navy, Coast Guard, and MSC contracts for smaller craft. In the repair and overhaul sector, it seems that every yard is in the act.

And repair will be on the increase as the size of the Navy fleet grows.

At present, Navy plans call for annual expenditures as follows: Projected over the next five years, this adds up to a total in excess of $200 billion. Since the law dictates that all new U.S. Navy vessels be constructed in private shipyards, and since the Navy traditionally allocates 30 to 40 percent of repair and overhaul work to private yards, the Navy is a definite bright spot in the U.S. shipbuilding picture for both the yards and equipment suppliers.

In Fiscal Year 1985, the U.S. shipbuilding and ship repair industry invested more than $250 million in modernization of facilities and in expansion. As of July 1, 1985, the industry planned to spend at least an additional $100 million during the year ending this month. The emphasis has been on the expansion of ship repair facilities.

According to the Martitime Administration's latest annual survey of U.S. shipbuilding and repair facilities, there were 24 active yards able to build major oceangoing or Great Lakes vessels of 1,000 gross tons or more. Last year, 69 percent of some 115,000 shipyard workers in the country were employed in these yards. Of that total, 94 percent were engaged in Navy or Coast Guard construction or repair.

Three yards thought lost have been revived under new management.

Todd's former Brooklyn yard was bought late last year by Rodermond Industries of New Jersey.

The yard is now operating as the New York Shipyard Corporation.

American Ship Building's former Toledo, Ohio, shipyard was purchased by the Toledo-Lucas County Port Authority and is now being operated by Merce Industries.

The Upper Peninsula Shipbuilding Company yard in Ontonagon, Mich., has been bought by the Wedtech Corporation of New York.

Following is a run-down of the situation in major U.S. shipyards.

East Coast Bath Iron Works Corporation in Bath, Maine, operated the BIW newbuilding and repair yard in Bath and the nearby Portland repair facility. The two yards currently employ a total of some 6,800 workers and are involved in new construction and overhauls for the Navy and the Coast Guard.

A Boston shipyard, General Ship Corporation, recently received an $8-million Navy contract for the modernization of a frigate.

There is now newbuilding of major consequence in the New York area. However, ship repair yards such as Coastal Dry Dock and the N ew York Shipyard Corporation, both in Brooklyn, are anxiously awaiting a final decision on the homeporting of the USS Iowa and her acompanying escort ships in Staten Island. They feel that move would be a boost for their business.

The Pennsylvania Shipbuilding Company in Chester has been involved in repair and conversion work. Conversions have been performed for the MSC, while the commercial repair side is holding up well. The Chester yard also has Navy contracts for the construction of three T-AO-187 Class fleet oilers at a total price of almost $320 million.

With the closing of two major repair yards in the past few years— Maryland Shipbuilding and Bethlehem's Key Highway yard—Baltimore is left with only the Bethlehem Sparrows Point yard. Primarily a newbuilding yard in the past, the Sparrows Point facility has most recently been involved in major conversions for the MSC and has also received a Navy contract for construction of two surveying vessels at a total cost of $132 million.

The yard recently added a two-position intermediate gate in its 1,200- foot building basin; this allows for more flexibility for repair jobs and smaller shipbuilding.

In Virginia, Newport News Shipbuilding (NNS), a Tenneco company, is the country's largest shipyard, and this year is celebrating its centennial. Some 30,000 people are employed by NNS, and $600 million has been spent in the past six years on capital improvements, with an additional $400 million to be spent during the next four years. Major work at NNS involves construction of nuclear-powered aircraft carriers and submarines, as well as overhaul of these vessels.

But the company is not adverse to booking a commercial vessel for repair or conversion.

Nearby Norfolk Shipbuilding and Dry Dock Company last year completed one of the three non-MSC vessels delivered, a 2,000- gt ferry for the State of Delaware. A new 20,000-ton lifting capacity drydock was installed at the yard's Pier 1 complex last September. Two smaller repair yards are in the same area—Metro Machine, with a floating drydock 660 by 96 feet; and the Jonathan Corporation, a topside repair facility in Little Creek.

In Jacksonville, Fla., the Jacksonville Shipyards is fortunate in it proximity to the cruise liner trade, and specializes in annual drydockings of these ships operating out of Florida ports. Employment is now 1,500, down about 1,000 from last year. But the yard manages to have from three to five ships in for work at all times. A Navy topside repair facility at Mayport accounts for about 20 percent of the company's business.

Gulf Coast Yards On the Florida Gulf Coast, the Eastern Marine yard in Panama City is an aggressive smaller yard busy with repair and newbuilding of smaller craft. It is also building a 200-foot barge to work with the hopper dredge being built by McDermott for American Dredging.

The Tampa Shipyards in Florida, as mentioned before, completed its five-ship contract for build-andcharter T-5 tankers for the MSC with the delivery of the last two vessels in February and April this year; the first three were completed last year. Tampa is now without newbuilding orders, but is in a good position for repair work, with new graving docks that can handle vessels up to 740 feet long, and wet berths for ships up to 900 feet long.

Alabama Dry Dock and S h i p b u i l d i n g C o r p o r a t i on (ADDSCO) is on Pinto Island in Mobile. Employment at this facility is currently 1,200, up from 650 in mid-1985. Work involves a steady flow of merchant ships in for repairs, and Navy overhauls. ADDSCO also maintains a group of laidup offshore drilling rigs. This yard holds a tentative contract for the modernization of the SS United States.

Also in Mobile is Bender Shipyard, busy with smaller vessel overhauls for the Navy, and currently converting a dredge to diesel propulsion for the U.S. Army Corps of Engineers. Further along the Gulf Coast, in Escapawpa, Miss., is the Moss Point Marine yard, whose orderbook shows a backlog of supply vessels and tugs for the Gulf.

Two LCUs for the Navy are to be completed early next year.

The Ingalls Shipbuilding division of Litton Industries in Pascagoula, Miss., is all Navy work these days. Ingalls is the lead yard for the Ticonderoga Class (CG-47) Aegis guided missile cruiser. The yard has also overhauled various Navy ships, including the modernization of the battleship USS Iowa.

The only new commercial shipbuilding order placed last year (and the last to date for a U.S. shipyard) was the $15.8-million contract awarded to McDermott's Amelia, La., yard for a 288-foot hopper foot barge to be built by Eastern Marine.

Avondale Shipyards near New Orleans was sold last year to its employees under an employees stock ownership plan (ESOP) by parent company Ogden Corporation.

This complex of yards is the busiest in the Gulf area, and includes the Harvey Quick Repair yard for offshore vessels, tugs, and barges, and the upper and lower Avondale yards. Earlier this year, Avondale's backlog was $1.5 billion and employment was up to about 6,000. In February this year, the yard launched the second of six Kaiser Class (T-AO-187) fleet oilers for the Navy under contracts totaling $715.5 million. The yard completed its share of the SL-7 conversions for the MSC with the delivery of the third former Sea-Land ship, now the USNS Pollux (T-AKR-291) in March this year.

Todd's repair yard in New Orleans, plagued by a strike last year, was "idled" in December and put up for sale early this year. The Port of New Orleans is trying to keep the 15,000-ton drydock that Todd had under lease from the Navy.

Halter Marine's yards are busy with tug and supply boat construction and also built two patrol launches for Nigeria. Under condredge tract for the Navy are two ocean surveillance ships at a total cost of $28.5 million.

Southern Shipbuilding Company in Slidell, La., is building a non-self-propelled dipper dredge for Great Lakes International scheduled for completion later this year.

The big news around Beaumont, Texas, is the opening of Bethlehem's new Sabine repair yard in Port Arthur last August. This facility operates a 64,000-ton lifting capacity drydock that is one of the country's largest. The eight-section dock, formerly at the Navy Yard in Pearl Harbor, can accommodate vessels up to 1,000 feet long. It is leased by Bethlehem from the Port of Port Arthur, and has maintained an approximate two-month backlog of repair work since opening. Bethlehem's Beaumont yard, meanwhile, completed the conversion of the second of two Maersk Line vessels for the MSC's charter program last September.

Todd's Galveston, Texas shipyard recently completed the first of two T-AVB conversions for the MSC. The USNS Wright (T-AVB- 3) left the yard on May 1 this year.

The contracts for these two aviation logistics ships totaled $30 million.

Up from Galveston, on the Houston Ship Channel, is the Houston Ship Repair yard. This facility is a complete topside repair yard, with a berth that can accommodate ships up to 780 feet long.

West Coast Yards Lockheed Shipbuilding in Seattle recently completed the second of three dock landing ships for the Navy. The yard is the lead contractor for the LSD-41 Class. The third vessel of the class, the Fort McHenry (LSD-43), under construction at a cost of $271.5 million, will be commissioned in 1987. Lockheed has also opened a repair division, Lockport Marine, in the Port of Portland, Oregon's ship repair complex.

Todd's Seattle yard has a Navy contract to construct an ARDM floating drydock, and has a $235- million ongoing contract to overhaul five U.S. Coast Guard cutters through 1990.

Several smaller yards in the Seattle area are doing well. MARCO, well known for its fishing vessels, recently received a $2-million contract to convert a cargo ship to a state-of-art reefer vessel. Foss Shipyard division of Seattle's Foss Launch & Tug Company has its drydocks in full service from last October through April for repair work.

One of the busiest West Coast shipyards in the merchant ship repair sector is the Port of Portland.

The Port operates the largest drydock on the West Coast, shared by Northwest Marine Iron Works, Gunderson, Inc. (formerly FMC Corporation), Dillingham Ship Repair, Daniel Construction (Fluor Corporation), and the recently formed Lockport Marine.

The Port has reduced tariffs on military projects, ship repair contractors have cut their management costs to the bone, and the metal trades unions have cut their basic wage on military contracts by 26 percent—all this in an effort to compete more favorably on military and commercial contracts.

A $2.8-million offshore module launch system and wharf structure were completed at PSRY recently.

The Portland yard complex represents a $200-million investment, and the battle to keep the port's repair facility is aggressive.

Todd's San Francisco shipyard, is leased from the San Francisco Port Commission. Lately, work has been mostly repairs and over- hauls for the Navy. The same can be said for the Triple A yard at Hunter's Point, a mostly repair complex leased from the city and a former Navy yard. The Continental Maritime yard in San Francisco put a newly acquired, 26,000-ton drydock to work late last year with Navy overhauls.

Early this year, Todd Pacific's Los Angeles Division yard in San Pedro won the coveted contract to reconstruct the Matson liner Matsonia. The $33-million job will increase the length of the ship from 700 to 760 feet. Redelivery of the vessel is scheduled for the spring of 1987. The San Pedro yard currently employs some 2,200 people.

The West Coast's largest and busiest yard is National Steel and Shipbuilding Company in San Diego. In addition to its large volume of Navy repairs, overhauls, and major conversions, NASSCO has a contract from Exxon Shipping Company for construction of two 205,896-dwt VLCCs at a total cost of $250 million. The first of these tankers, the largest ships ever built on the West Coast, is scheduled for completion late this year and the second in March 1987.

Inland/Great Lakes Yards Toledo Shipyard, the former AmShip yard in Ohio, recently received a $l-million contract to build a 600-passenger vessel for the Bob- Lo Island Amusement Park near Detroit. Last August, the yard was awarded a contract to build a 360- foot self-unloading cement barge for St. Mary's Holdings, Inc.

In Sturgeon Bay, Wise., Bay Shipbuilding Corporation was winner of a prized contract to build three 16,130-dwt containerships for Sea-Land Industries at a cost of $180 million. All three keels have been laid; the first ship was launched in May this year and will be delivered in November.

The Marinette Marine yard in Marinette, Wise., and Peterson Builders in Sturgeon Bay are both very busy with Navy new construction.

Fraser Shipyard in Superior, Wise., has long been involved in repairs and modernizations of big Great Lakes bulk carriers, and has converted many of these vessels to self-unloaders.

The idle Upper Peninsula Shipbuilding Company yard in Ontonagon, Mich., has been purchased by the Wedtech Corporation of The Bronx, N.Y. According to the new owner's management, they bought the yard to develop it as a small business venture to obtain government contracts.

The Outlook For U.S. Shipbuilding Ideas for the revitalization of American merchant shipbuilding range from privatization of government- owned facilities (the eight Naval Shipyards and one Coast Guard yard) to the eversurfacing cargo preference legislation.

Among the forecasters, a concensus seems to see a recovery beginning in 1987 followed by an upturn in 1989-90. The U.S. Maritime Administration's near-term outlook is that some further decline is expected in shipyard employment, although slight. This would be followed by a period of relatively stable work force requirements prior to the recovery expected to commence in late 1987. This outlook is contingent upon near-term economic conditions and future Administration and Congressional action with regard to continuation of the proposed Navy shipbuilding and conversion programs.

The Navy estimates that some 130,000 workers are needed in the nation's shipyards to meet the needs of a national emergency.

The Shipbuilders Council of America, however, forecasts that it is possible only about 95,000 workers will be employed by 1990.

A plann proposed by Rep.

Helen D. Bentley (R-MD) would restore construction subsidies to encourage the building of 20 merchant ships per year—as recommended in a recent Congressional Budget Office (CBO) report. Together with the ongoing Navy programs, it is felt that this would be enough to maintain the current industrial base.

"The annual production of 20 ships should maintain, over the long term, the sealift and shipyard capacity requirements," the CBO said. The study found that this would cost at least an additional $1 billion a year over the current annual maritime support costs of nearly $1 billion obligated under contracts before the present Administration came into office.

Maritime Reporter Magazine, page 26,  Jun 1986

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