American Shipbuilding Association

AMERICAN SHIPBUILDER

Shipbuilding Industry Resolutions Convey Goals for 2008 

During the annual American Shipbuilding Association convention held on November 27^th, two resolutions were adopted expressing the industry’s continued commitment to work in support of rebuilding America’s Navy, Coast Guard, and merchant fleets.

The first resolution focuses on the 2008 presidential race, in which industry agreed to work with the Congress to encourage both the Democratic and Republican parties to include language in their respective presidential platforms stating a commitment to recapitalize America’s sea services and shipbuilding industrial base.  The text of the resolution and draft party platform plank appears below: 

STRENGTHENING OUR SEA SERVICES

AND SUPPORTING INDUSTRAL BASE

Whereas America currently possesses its smallest naval fleet since 1917, the oldest Coast Guard fleet in the world, and an aging fleet of domestic merchant vessels;   

Whereas continued, low rates of ship production have resulted in the loss of vital companies that make up the defense shipbuilding manufacturing base, have forced the layoff of thousands of highly skilled workers, and have weakened the financial health of the industry;

Be it resolved that Members of Congress and the shipbuilding industry will appeal to the Democratic and Republican parties to include the following policy statement as part of their respective party platforms: 

A prolonged underinvestment in our Nation’s sea services has resulted in a dramatic contraction of our Navy, Coast Guard, and merchant fleets that are essential to defending our homeland and projecting a forward presence.  Today’s Navy is at a 90-year force structure low of just 279 ships.  Our Coast Guard has the oldest fleet of coastal vessels in the world, and our Jones Act fleet of merchant vessels dedicated to serving commerce between U.S. ports is in need of replacement with an average age of 22 years.  This underinvestment has significantly eroded our shipbuilding manufacturing base, which if not addressed, could jeopardize our ability to design and build ships necessary for our security and sustaining a strong domestic economy.

We will invest in recapitalizing our Navy, Coast Guard, and Jones Act fleets to ensure that our men and women in the sea services have the most modern, capable, and safest ships to defend our homeland  and security and economic interests around the world.

The second resolution reiterates America’s need to maintain strong military and commercial fleets.  China’s Navy continues to grow at a steady rate, and Russia has made rebuilding its naval fleet a national priority.  South Korea and China remain the world’s largest builders of commercial ships.  As other countries have made shipbuilding a cornerstone of their economic growth and national security, America continues to allow its sea services and shipbuilding industry to erode.  Without a dedicated effort to invest in and rebuild this country’s Navy and Coast Guard fleets, and to make domestic commercial shipbuilding a priority through the funding of Title XI ship loan guarantees, America will cease to be a world power. 

NAVY AND COMMERCIAL SHIPBUILDING BUDGET RESOLUTION

Whereas anemic shipbuilding budgets and low rates of Navy ship procurement have caused the U.S. naval fleet to contract to an historic low of 279 ships; and

Whereas the Title XI Ship Loan Guarantee Program has not received an annual appropriation in the last five years to finance the construction of commercial vessels in the United States;

Be it resolved that the shipbuilding industry will collectively urge the Congress of the United States to - -

1. authorize and appropriate a minimum of twelve ships each year to rebuild the Navy to a fleet of 313 ships; and

1. appropriate $60 million annually for the Title XI Ship Loan Guarantee Program to finance replacement ships for the Jones Act Fleet.  

President Signs Defense Appropriations Bill –

Navy Receives Five Ships

On November 13^th, the President signed the FY 2008 Defense Appropriations Bill into law, providing $12.8 billion for five naval ships.  Earlier this year, Members of the House stated goals to provide for the procurement of 10-12 ships in FY 2008 in an effort to accelerate rebuilding the fleet and stabilize the shipbuilding industrial base.  Despite the leadership of House Defense Appropriations Subcommittee Chairman Rep. John Murtha (D-PA) in providing for $15.6 billion to procure 9 new ships in the House bill, the compromise reached with the Senate increased the Navy’s shipbuilding account by only $300 million above the President’s request.

The FY 2008 Department of Defense Appropriations Act provides funding for one aircraft carrier, one Virginia class attack submarine, one amphibious transport dock ship (LPD-17), one combat logistics force ship (T-AKE), and one littoral combat ship.  Funding is also included to complete the first two DDG-1000 multi-mission destroyers.  The House and Senate did agree to the House legislation providing $588 million for the purchase of long lead materials for a second Virginia class submarine.  The advance procurement funding supports acceleration of the procurement schedule to two submarines per year sooner than 2012.  The House version of the bill had provided for the acquisition of a second LPD-17 and three additional T-AKEs.  The Senate bill did not contain similar funding for these ships.  As part of the compromise between the House and Senate versions of the legislation, Congress agreed to provide $50 million in advance procurement funding for an additional LPD-17, and $300 million in advance procurement for the next three T-AKEs. 

House and Senate Compromise on $5 Million for Title XI

House and Senate Appropriators have completed work on the FY 2008 Transportation Appropriations Bill, providing $5 million in new loan guarantees for the Title XI Ship Loan Guarantee Program.  The Senate had included $10 million for Title XI loan guarantees in its version of the legislation.  However, the House included no funding in its bill.  The Title XI program has not received an appropriation since FY 2003, when $25 million was provided by Congress. 

Title XI is essential to providing small and medium sized companies affordable finance rates at reasonable terms and conditions to allow ship owners to invest in new tonnage to serve the Jones Act trade.  The average age of the Jones Act Fleet is more than 22 years, when the normal economically useful life of an oil tanker is 20 years and that of a dry cargo ship is 25.  Many of the ships are well over 30 years of age.  These ships need to be replaced to ensure that there are ships to carry domestic cargo and that its carriage is done in the safest means possible.  In order to satisfy this need for replacement tonnage, American ship owners must have access to the financing mechanisms made possible by Title XI.  Though the $5 million appropriated by the House and Senate is far below what is needed to address the need for financing, it is a positive step in keeping the program alive for commercial ship construction in the U.S.

The FY 2008 Transportation Appropriations Bill, like the other non-defense spending measures, exceeds the President’s budget request.  This bill will most likely be combined with the other appropriations bills in an omnibus spending bill to be sent to the President, who has said he will veto all appropriations bills that exceed his budget request. 

ROH, Inc. Joins ASA

ROH, Inc., has been providing program, engineering, technical, logistic, administrative, financial, and computer support to Naval Sea Systems Command (NAVSEA) for three decades.  The company is headquartered in Arlington, Virginia, and has operations in San Diego, California, and Virginia Beach, Virginia. 

Sea Power Superstars Recognized

During the 2007 convention, the American Shipbuilding Association recognized two shipyards and three Partner companies for their outstanding recruitment efforts of Sea Power Ambassadors.  Over the past year, these companies engaged in aggressive recruitment drives to register their employees, suppliers, and concerned citizens in their communities.  The collective efforts of these companies have contributed to the continued growth of the Sea Power Ambassador Program, which now numbers over 14,600 participants nationwide. 

The following companies were honored for spreading the word on the need become a Sea Power Ambassador and leading the effort to rebuild America’s sea services and maintain a strong shipbuilding industrial base:  Dugan Shipway, President of Bath Iron Works located in Bath, Maine; John Casey, President of Electric Boat Corporation located in Groton, Connecticut and Quonset Point, Rhode Island; Dale Smith, Director of Government Business Unit, Dresser-Rand located in Olean, New York; Steve Kantor, President of L-3 Communications Power & Control Systems Group¸ including the divisions of Henschel of Newburyport, Massachusetts, and SPD Electrical Systems of Philadelphia, Pennsylvania; and Patrick Marotta, Executive Vice President of Marotta Controls headquartered in Montville, New Jersey. 

Are You A Sea Power Ambassador?

If not, why not?  America’s fleet currently numbers 280 ships.  This is the smallest naval fleet in 90 years.  America’s Coast Guard is operating with ships that are some of the oldest in the world.  With America’s Navy supporting operations around the world, Coast Guard missions increasing, and the continued build-up of the Chinese and Russian navies, America cannot afford to ignore the need for more ships.  It only takes a minute to register and become part of the grassroots movement to ensure the health of America’s sea services and the industry that builds the ships for our national security.  Visit the Sea Power Ambassador website and click Join Now!   

www.seapowerambassador.org

Well Said!
 

“…Control of the sea means security.  Control of the seas can mean peace.  Control of the seas can mean victory. The United States must control the seas if it is to protect your security...."

President John F. Kennedy

June 6, 1963