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AMERICAN SHIPBUILDER
| Vol. 13, Issue 8 | December 2007 |
Shipbuilding Industry Resolutions Convey Goals for 2008
During the annual American Shipbuilding Association convention held on November 27th, 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 - -
- authorize and appropriate a minimum of twelve ships each year to rebuild the Navy to a fleet of 313 ships; and
- 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 13th,
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
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