Page 56: of Maritime Reporter Magazine (July 1993)

CONTRACT AWARDS OF 1,000 LIGHT DISPLACEMENT TONS+ PLACED

WITH U.S. PRIVATE SHIPYARDS, 1992 ($ in Millions)

Shipyard Navy No. Vessel Type

Bath Iron Works DDG-68 Guided Missile Destroyer.

Bath Iron Works DDG-70 Guided Missile Destroyer.

Bath Iron Works DDG-72 Guided Missile Destroyer.

Ingalls Shipbuilding DDG-69 Guided Missile Destroyer.

Ingalls Shipbuilding DDG-71 Guided Missile Destroyer.

Intermarine MHC-58 Coastal Minehunter Ship ..

Intermarine MHC-59 Coastal Minehunter Ship ..

Intermarine MHC-60 Coastal Minehunter Ship ..

Trinity Industries T-AGS-62 .. Surveying Ship 1

Ingalls Shipbuilding LHD-6 Amphibious Assault Ship..

Total 10 ships

Delivery Light Approx.

Tons Price 9/96 8,300 $250 3/97 8,300 $250 9/97 8,300 $250 5/97 8,300 $285.8 1/97 8,300 $285.8 9/95 895 $62.3 11/95 895 $62.3 1/96 895 $62.3 1/95 3,019 $42.9 12/97 28,500 $760.9 75,704 .... $2,312.3

Source: Shipbuilders Council of America industries through their massive subsidy programs.

The Bush Administration under- stood our point. They attacked the problem by launching negotiations to get our trading partners to termi- nate their practices. Unfortunately, those negotiations failed, although the draft trade agreement, which had been accepted by the U.S. in- dustry as important, meaningful, and effective, was a powerful docu- ment. Now the survival of the in- dustry hinges on the ability of the

Congress to pass legislation to pun- ish those countries that place Ameri- can yards at a disadvantage.

Why do we care about foreign subsidies? Because the U.S. indus- try is largely unsubsidized. And the international market is where our future is. The market for new ships will grow dramatically in the 1990s.

Coupled with the capacity reduc-

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Fax: (902) 835-6026 tions that were achieved in the 1980s, there will be a tight squeeze between demand and the availabil- ity of capacity to meet that demand.

Therefore, prices will increase. This is a perfect market for a new market entry to make an effort to access that market. Therefore, the whole strategy of the Clinton Adminis- tration should be to focus on achiev- ing market access for U.S. ship- builders. The projected military workload will be insufficient to sup- port the industry. We need to build 30 to 50 commercial ships per year to utilize present physical capacity.

Eventually, to achieve financial health, U.S. shipbuilders must have 10 percent market share. The Ad- ministration is looking at shipbuild- ing. They understand that ship- building jobs are good-paying, skilled industrial jobs. They under- stand the multiplier effects of the shipbuilding economic activity. The problem they face is that the Trea- sury has been depleted to such an extent that seeking funds in more than a limited way will be difficult.

Thus, governmental policy will be needed to help the industry out of the mess that previous Administra- tions have created. First, the cam- paign on foreign subsidies must be- come tougher and more disciplined

Re-start the negotiations, but sup port passage of legislation that wil retaliate against those countries thai continue to subsidize their indus tries. Second, support efforts to brin£ new technologies to the shipbuild ing production process. This includes working with the Advanced Research

Projects Agency to refine anc sharpen the focus of the Nationa

Shipbuilding Initiative, an expandec research and development effort

Third, improve the availability o1 funding within the Title XI progran (the ship mortgage guarantee fund and make it available for export cus- tomers. Fourth, until the foreigr subsidy programs are terminated provide a short-term war chest thai will target competition in those coun- tries that continue to refuse to enc their subsidy practices. The short- term transition fund should be fo- cused on achieving the benefits oi series production. The approach de- fined above will mean that a ship- building and repair capability can survive the transition process. Not only does the country need a ship- building capability from an economic perspective, it also needs to main- tain a capability that will be avail- able to renew the Naval fleet when the Navy re-enters the market in the year 2006-2010 time frame. Even with a fleet of 300 ships, new ships will have to be built to replace those that age. But with the cuts in force structure that are taking place and recognizing that we have built 353 naval vessels since 1972, we have a pretty young fleet now, but it will be older in the 2010 time frame. How will we replace that fleet if our capa- bility to build is gone? The transi- tion from defense to commercial markets can be achieved. The ship- building industry needs to diversify in order to reduce its dependence on government, and the government needs a shipbuilding industry be- cause of its economic character and its defense utility. The 1990s can be a prescription for renaissance.

NAVAL VESSELS UNDER CONSTRUCTION (Private Shipyards New Construction)

Symbol Type No. of Vessels

AOE Fast Combat Support Ship 3

CG Guided Missile Cruiser 4

CVN Aircraft Carrier (Nuclear) 2

DDG Guided Missile Destroyer 20

LHD Amphibious Assault Ship 4

LSD Dock Landing Ship 3

MCM Mine Countermeasures Ship 4

MHC Coastal Minehunter Ship 10

SSBN Ballistic Missile Submarine 5

SSN-688 Attack Submarine (Nuclear) 11

SSN-21 Attack Submarine (Nuclear) 2

T-AGOS-19 Ocean Surveillance Ship (SWATH) 2

T-AGOS-23 Ocean Surveillance Ship (SWATH) 1

T-AGS-45 Deep Ocean Survey Ship 1

T-AGS-60 Oceanographic Survey Ship 3

T-AO Fleet Oiler 7

Total 82 "Note: There are currently no conversions or modernizations underway

Source: Shipbuilders Council of America 56 Circle 284 on Reader Service Card Maritime Reporter/Engineering News