Page 57: of Maritime Reporter Magazine (August 1999)

BLOUNT'S LATEST • CRANKPIN AND MAIN

JOURNAL REFURBISHING

While crankshaft is in engine • ALL TYPES OF ON-BOARD

MACHINING Cylinder boring, engine top decks, horizontal joints, couplings, journals • LINE BORING OF MAIN

BEARING POCKETS

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One Big Company

Sea-Land international liner business — 70 ships — acquired by Maersk for $800M

The consolidation churn continued last month, as the A.P. Moller Group and CSX announced an agreement for A.P. Moller-

Maersk Line to acquire Sea-Land Service,

Inc.'s international liner business, including vessels, containers, related terminals and cer- tain lease obligations for $800 million.

Sea-Land currently operates about 70 con- tainership and about 200,000 containers in its international trade. "Maersk is a terrific company that will become even stronger," said John W. Snow, Chairman and CEO of

CSX. "Importantly, the transaction protects national security interests under the U.S.

Maritime Security Program." The company's reaffirmed that all vessels currently flying the

U.S. flag will continue to do so. After com- pletion of the transaction, Maersk-SeaLand will utilize 19 U.S. flag ships formerly oper- ated by Sea-Land and four Maersk Line,

Limited U.S. flag ships in global commerce, making it the largest U.S. flag ocean carriers.

Transaction Snapshot

Cost $800 Million

Ships 70 (47 owned)

Containers 200

Chassis 50,00

Gensets 3,000

Did you realize? • If joined together the fleet of containers that Maersk Line operates would stretch for some 3,310 km. • The K-type is 318 meters long and the S-type is 347 meters long - respectively 18 and 47 meters longer than the

Eiffel Tower is high. • Maersk Line made more than 16,500 port calls in 1998.

While U.S. yards cannot offer the bargain base- ment labor rates, they do offer excellent facili- ties and unsurpassed technological know-how and tools, and has found the cruise market to be an especially lucrative niche. Pictured is

Crown Princess undergoing work at Cascade

General.

The U.S. maritime market has time and again shown a resiliency, primarily derived through product and service diversity and a commitment to provid- ing technologically advanced maritime solutions. The maritime market is as diverse as the country itself, with prod- uct offerings ranging from the most technologically advanced and capable naval ships in the world — down to cost effective boats and barges.

The business of building and outfit- ting boats and ships in the United States has undergone serious transformation during the last few years, the hallmark being a continued consolidation of resources, capabilities and companies.

Companies large, medium and small have all taken part in the trend to corpo- ratize, which is of course evident in industries around the globe.

The Big Three?

Although Navy budgets have been on a steady decline for the better part of the decade, the country's Big Six — Avon- dale, Bath Iron Works, General Dynam- ics - Electric Boat, Ingalls Shipbuilding,

Newport News Shipbuilding (NNS) and

NASSCO — continue to garner a lion's share of business and much of the polit- ical attention and influence. But activi- ties at and among these six shipyards have rapidly evolved in the last few months, as the latest — and many argue last — round of consolidation has again altered the U.S. shipbuilding scene.

Literally, the Big Six could now be called the Big Three, as that is the num- ber of controlling companies behind the

U.S.' major shipyards. General Dynam- ics was an early participant in the ship- yard consolidation swing, and now counts Bath Iron Works, Electric Boat and NASSCO in its stable. Litton

Industries has been the latest to make waves, attempting (and failing) to acquire Newport News Shipbuilding earlier this year.

Concerns regarding the concentration of too many U.S. Navy dollars in too few hands had plagued this deal as well as General Dynamics' earlier $1.4 bil- lion bid to acquire NNS. Regulators did, however, approve Litton's offer to buy Avondale Industries Inc. for $529 million, which was expected to formal- ly close at press time. Avondale, which offers Litton a diverse portfolio of con- tracts and capabilities, currently is pro- gressing on the project to build three advanced technology double hull tankers for ARCO — Endeavor, Reso- lution and Discovery — the first of which is due for delivery in July 2000.

Industry analysts generally applauded the consolidations, seeing advantages of cost efficiency and competition, as

Ingalls Shipbuilding — with Avondale folded into a new unit dubbed Litton

Ship Systems — is well positioned to compete with General Dynamics for shipbuilding business. NNS, twice jilt- 600 PASSENGER DINNER-CASINO SHIP »Our Shipyard can custom build a vessel to your specifications. * Full engineering capabilities. • Skilled-dedicated craftsmanship. • Competitive Pricing. • 40 years knowledge & experience designing and building to USCG,

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BLOUNT'S 50TH YEAR

BLOUNT INDUSTRIES, INC. 461 Water Street, P.O. Box 368, Warren, RI02885 (401) 245-8300 Fax: (401) 245-8303 r CRANKSHAFT 1

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