Page 8: of Maritime Reporter Magazine (February 1991)

Southwest Marine

Celebrates RCCL

Cruise Ship Contract

Southwest Marine, San Diego,

Calif., recently hosted a celebration of its contract award from Royal

Caribbean Cruise Lines to convert the M/S Viking Serenade cruise ship. Deputy Secretary of Transpor- tation Elaine Chao was on hand for the occasion.

Southwest Marine is the first U.S. yard to have successfully won a for- eign export order in excess of $50 million in more than 30 years. The yard was successful in winning the contract despite the existence of ex- tensive subsidies in the countries against whom it was competing. No subsidies are received by U.S. yards.

JUST ADD

WATER

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Proad horsepower range, and unique types for all vessels. This Proad application range represents the HALEY concept of the "Total Package" with all machining, gear cut- ting, grinding, case faPrication and clutch manufacture, in- house, on our own premises. No other gear manufacturer in the

U.S. supports the user with all in- house capability.

Our engineering philoso- phy at MARINE GEARS,

INC. has always been to meet the customer's most demanding specifica- tions, even if it requires special case designs and gear configurations. The HALEY gear line is available from 800 HP to 5000 HP with engine RPM's up to 1800. HALEY gears are available in many different series and are compatible with a wide variety of diesel engines. Our out- standing service and parts de- partments back each sale.

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AMERICAN GEAR MANUFACTURERS ASSOCIATION CERTIFIED MANUFACTURER

Application For Use Of

Foreign-Flag Vessels By

U.S. Operator

Receives Close Attention By

Both MarAd And Congress

The responses to an October application filed with the

Maritime Administration (MarAd) by Lykes Bros. Steam- ship Company have generally not been supportive. Lykes, one of the largest subsidized U.S.- flag liner shipping companies, is seeking permission to replace

U.S.-flag vessels in its fleet with ten foreign-flag vessels, while continuing to receive govern- ment operating differential subsidies (ODS) for the remain- ing vessels in the fleet. Some of the responses have strongly opposed the request to permit the subsidized carrier to replace

U.S.-flag vessels coming to the end of their subsidizable lives with foreign-built, foreign- crewed ships. However, one

U.S.-flag company has sup- ported the request.

C.E. "Gene" DeFries, presi- dent of the National Marine En- gineers' Beneficial Association, strongly opposed the Lykes application because, if ap- proved, "it would cost hundreds and eventually thousands of vital maritime jobs." In a De- cember 14 letter, Mr. DeFries argued that "this loss of jobs not only would be a crushing blow to men and women who have long served—and serve now in Des- ert Shield—our nation and our industry faithfully, but it would run counter to the clear agree- ment, both military and civil- ian, that our merchant marine manpower base needs to grow not shrink. It would also se- verely diminish America's sea- lift capability as many Lykes vessels are highly-useful breakbulk vessels in the extremely short demand in the U.S-flag fleet."

U.S.-flag shipping compa- nies, including Farrell Lines

Inc. and Sea-Land Service Inc., also criticized the Lykes appli- cation. These shipping compa- nies are concerned about the damaging effects the use of for- eign-flag ships might have on the subsidized U.S.-flag fleet.

One representative from Sea-

Land summed up a general con- sensus that MarAd's action on the Lykes request might either help or hurt the prospects for changes to strengthen the oper- ating differential subsidy pro- gram. He noted that granting the application might "simply diminish the prospects of and arguments for any form of ODS to promote and maintain a U.S.- flag, U.S.-manned merchant marine," while rejection might force action necessary to rejuve- nate the program.

One U.S.-flag shipping com- pany, American President

Lines, Ltd., supported the

Lykes application. American

President Line based its argu- ment on the precedent set in the early 1980's when MarAd granted extensive waivers to operators of subsidized U.S.- flag bulk vessels to operate for- eign-flag bulk vessels in the

U.S. foreign commerce in order to renew their fleets. According to American President Lines, "the waivers were grounded on hardship on the applicants de- riving from the existing statu- tory environment in which

U.S.-flag operators have virtu- ally no means to acquire new tonnage due to the unavailabil- ity of [subsidies] to construct

U.S.-built vessels and their inability to acquire foreign- built vessels for subsidized op- eration; the applicant's need for additional business opportuni- ties; and the recognition that by granting the waiver for foreign- flag operation, MarAd is pro- moting the existing U.S.-flag breakbulk fleet."

MarAd will review the com- ments submitted before making any final decision on the Lykes application. The application is also expected to receive close attention from the recently-con- verted 102nd Congress, already concerned about the capabilites of and necessity for sealift made clear by the extensive military build-up in the Middle East.

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Maritime Reporter/Engineering News