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HOW DEEP WILL THE CUTS BE?

Virginia has benefited from a massive influx of Defense Department dollars, but after the JFCOM decision and as more budget cuts loom, some area contractors are feeling a little nervous.
  By Robert McCabe
  The Virginian-Pilot
     A block south of the busy auto dealerships and fast-food franchises on Military Highway in Chesapeake, an 80,000-square-foot building sits on a side street in an industrial park.

 

   Most people looking for a new car or a burger, a minute away, would never suspect it’s there, much less what goes on inside.

 

   Small Navy patrol boats, Humvees and black, armor-laden SUVs, like those in movies, are brought by tractor-trailer into the hangar-like facility. There, BAE Systems Inc. installs and tests prototype communications devices in them for U.S. special operations forces, the Navy and an array of other government agencies.

 

   Since Sept. 11, 2001, the facility has grown from a handful of employees to nearly 250.

 

   Many are former military personnel who may have once used equipment similar to what they now help perfect. Others are engineers or programmers, busy at work stations adorned with coils of wire and assorted electronics gear.

 

   BAE Systems, one of the world’s largest defense contractors, is one of thousands of such firms operating in Hampton Roads. The region is so thick with contractors it’s known by some as “Pentagon South.” They’re vying for contracts that are part of a requested Pentagon budget worth $708 billion. Virginia – along with California and Texas – is one of the Big Three states for Department of Defense expenditures. In 2009, it was No. 1 in the nation in total defense spending, surpassing even California.        In terms of defense-contracting dollars, Virginia ranked second only to California. Quite naturally, Hampton Roads gets its share.

 

   The four congressional districts that represent South Hampton Roads were awarded more than $12.5 billion in defense contracts in 2009, federal figures show.

 

   But the defense landscape is shifting.

 

   In a speech last spring, Defense Secretary Robert Gates laid out his case for why business-as-usual at the Pentagon must end.

 

   “The attacks of Sept. 11, 2001, opened a gusher of defense spending that nearly doubled the base budget over the last decade,” he said. “… Given America’s difficult economic circumstances and parlous fiscal condition, military spending on things large and small can and should expect closer, harsher scrutiny. The gusher has been turned off,   and will stay off for a good period of time.”

 

   In early January, Gates called for $78 billion in defense cuts; later the same day, President Barack Obama signed off on the closure of the Norfolk-based Joint Forces Command, which will mean a loss of roughly 1,900 jobs.

 

   “The canary has died,” said E. Dana Dickens III, president and CEO of the Hampton Roads Partnership, a regional economic development organization.

 

   When the partnership was founded in 1996, military/ federal spending accounted for roughly 26 percent of the local economy. Today, he said, it’s “north of 45 percent.”

 

   “There’s a wake-up call, that the region needs to diversify our economy,” Dickens said.  

 

   Defense contractors and their facilities are so much a part of the local landscape as to seem virtually invisible.

 

   “It’s like the layers of an onion,” said Chris Philbrick, vice president of marketing at ADS Inc., or Atlantic Diving Supply Inc., a roughly $1 billion-a-year defense-contracting firm based in Virginia Beach. “For every large defense contractor, there are hundreds of small ones.”

 

   They range in size and service from huge, well-known companies such as Northrop Grumman Corp. and Lockheed Martin Corp. to a Norfolk-based unit of Flowers Foods Inc., which makes bakery and cereal products, and Jo-Kell Inc. of Chesapeake, which supplies shipboard electrical systems. Even Landmark Media Enterprises LLC, owner of The Virginian-Pilot, publishes base newspapers under a defense contract.  

 

   Together, defense contractors pack an economic wallop.

 

   Procurement contracts in the region totaled more than $ 8.3 billion in fiscal year 2009, according to the Hampton Roads Planning District Commission. Toss in other defense spending in the area, including salaries/ wages as well as retirement/ disability payments, and the Pentagon’s contribution to the local economy came to nearly $14.5 billion.

 

   Of course, not all that money stays in Hampton Roads. When a contractor such as Northrop Grumman, for example, gets a large award for work on an aircraft carrier, its expenditures will be spread across a number of years and will include purchases of services and materials from companies outside of the region and the state, said Greg Grootendorst, an economist with the   commission.

 

   Tracking defense contracting isn’t easy. An array of sources offer information, and their numbers don’t always align.

 

   Since its launch in 2007, however, USAspending.gov has become the government’s showcase for user-friendly, publicly accessible federal spending data.

 

   It presents a good picture of how many defense-contracting dollars have been committed to the region and how that spending has grown in recent years.

 

   Defense contract awards for work performed in Congressional Districts 1, 2, 3 and 4 – which cover Hampton Roads but extend elsewhere in Virginia – grew 32-fold between fiscal years 2004 and 2008, from $421.7 million to more than $13.5 billion.  

 

   In the past two years, the totals began to slide – to $12.6 billion in 2009 and $11.8 billion in 2010.

 

   ADS is one company whose revenues soared as defense-contracting dollars poured into the region.

 

   Its roots go back to the 1980s, when it began as part of Lynnhaven Dive Center. “SEALs were coming in and buying their own stuff,” Phil-brick said.

 

   The company soon began to compete for – and win – defense contracts.

 

   ADS was spun off as a separate company in 1997. Its president is Luke Hillier, whose father, Michael, founded Lynnhaven Dive Center. Its business has grown at a nearly incomprehensible rate, climbing from $18,380 in contract awards in 2005 to $1.08 billion in 2010, according to USAspending.gov data.

 

   For the past four years, ADS has been the No. 1 defense contractor in the 2nd District – in terms of defense contract awards – eclipsing much larger and more nationally prominent contractors.

 

   Some of ADS’ recent success is the result of a massive contract announced in January 2008. It lets ADS and four other firms compete for work worth up to $4 billion over as many as five years.

 

   Yet even before winning that contract, the kinds of products in which ADS specializes – such as boots, socks, scopes, night-vision and infrared equipment, cold-weather and flame-retardant gear – positioned it to capitalize on the wars the nation is fighting in Iraq and Afghanistan.  

 

   The Defense Department is moving away from large programs that focus on aviation or other expensive platforms, to equipment and technology to protect the individual soldier, Philbrick said. “That’s our core business.”

 

   While ADS ships massive amounts of supplies to U.S. troops in Iraq and Afghanistan, it is not a manufacturer, but what Philbrick calls a “value-added distributor,” a kind of buyer for the Pentagon.

 

   Years ago, if the Pentagon needed, for example, a flame-retardant glove, it would design and develop it, buy thousands and stockpile them in government warehouses, Phil-brick said.

 

   Today, it’s faster and more economical to buy “off-the-shelf” products on the commercial market.

 

   ADS offers the Defense Department and government agencies one-stop-shopping for equipment and logistical support, buying the products that meet the necessary standards and then “kitting” – or assembling – them for shipping.

 

   The company has an 85,000-square-foot kitting operation   off London Bridge Road in Virginia Beach and employs more than 400 people.

 

   And, Philbrick said, it expects continued growth, so it’s building another kitting operation.

 

   Not everyone is so optimistic, especially with the budget-cutting ax already falling in Hampton Roads.

 

   “These are not easy decisions,” said Charles A. Schue III, president and CEO of UrsaNav Inc. in Chesapeake. “No matter what they decide, somebody in the United States is going to get hurt.”

 

   Among other tasks, UrsaNav helps maintain and service the workhorse navigational radar systems used on most ships in the Navy and Coast Guard.

 

   Schue and another Coast Guard vet established Ursa-Nav about seven years ago when they bought the East Coast operations of a California company.  

 

   Now with about 100 employees and annual revenues in the $20 million to $30 million range, UrsaNav has positioned itself in the defense sector as a product and service provider focused on maintaining and modernizing existing systems, Schue said. Its employees travel to vessels around the world to do repairs, make adjustments and train crew members.

 

   Firms like his, however, have a lot at stake, he said.

 

   “Large defense contractors have the ability to recover from losing 500, 1,000 or 1,500 people; as public corporations, they’re big enough to absorb that,” Schue said. “Small, typically privately held businesses don’t have that big footprint; there’s much more of a drastic effect. The impact on small businesses is significant.”

 

   Service-contracting companies   that provide engineering, maintenance and information-technology services are likely to be more vulnerable to defense cutbacks, said Cindy M. Walters, director of Old Dominion University’s Government Sponsored-Industry Assistance Programs.

 

   The Pentagon already is working to bring back under its roof work that it “outsourced” to businesses over the past 15 years, so “you don’t have as many contracts,” said Walters, who helps local firms get federal contracting work.

 

   “My biggest concern is that we have this somewhat of a perfect storm going on,” she said. “For me, the foregone conclusion would be a cut in defense spending that would impact dollars for programs and contracts, across the board, that would affect our area.”

 

   The impending closure of the Joint Forces Command, which provides research   and development, modeling and simulation, and training to the military, will slow one flow of defense contracts for firms large and small in the region.

 

   “Everybody’s kind of breathing a sigh of relief,” said Tom Mastaglio, CEO of MYMIC LLC,of news that roughly half of JFCOM’s functions will continue in Hampton Roads.

 

   Yet Mastaglio – a West Point grad, 22-year Army veteran and founding director of the Virginia Modeling, Analysis and Simulation Center in Suffolk in the late 1990s – said he’s not sure how much to buy in to what he terms “spin.”

 

   “We’re on the slippery slope here,” he said. “If we’re not careful, there are going to be some significant issues for small businesses.”

 

   The Portsmouth-based company   employs about 80 people and has about $20 million worth of defense contract work, about 90 percent of its portfolio. It’s now on a mission to diversify its product line, creating computer programs to help train emergency medical response teams, provide therapy for people with brain injuries, and improve security at U.S. ports. It’s already won a contract with the Virginia Port Authority.

 

   “As a region, we’ve got to look beyond defense,” Mastaglio said. “If you don’t want to end up like Detroit, we better figure out what we have, what our organic capabilities are and how we can use them to meet other needs, rather than being largely dependent on a single customer.”

 

   Others, however, believe that the region has such a well-established defense infrastructure, with facilities and a talent pool few other places can match, that it will continue to hold its own, at the very least, and even may see some growth.

 

   “There’s a huge customer base there, and there’s a lot of talent,” said Dave Herr, president of BAE Systems’ Rockville, Md.-based Support Solutions sector. “It’s a good place to do business; it’s fairly diversified. I’d say it’s fairly well-positioned.”

 

   BAE’s Support Solutions sector includes the Chesapeake communications facility, an office in Hampton and, most recognizable, its shipyard at the mouth of the Elizabeth River’s Southern Branch.

 

   “The Hampton Roads area is actually fairly central to the BAE strategy,” Herr said.  

 

   Last summer, anticipating some of the shifts in the defense environment now under way, BAE reconfigured its businesses, shoring up the unit Herr heads, servicing and sustaining existing systems.

 

   “We think there’s going to be rising demand to maintain and upgrade some of those older platforms,” Herr said.

 

   The local shipbuilding and ship-repair industry, in which BAE is a player, contributes significantly to the region’s economy. Nearly one of every 11 jobs in Hampton Roads is directly or indirectly dependent upon the private-sector shipbuilding and repair industry, according to a 2007 study by Old Dominion University’s Economic Forecasting Project.

 

   “Knock on wood, it’s not going to affect us very much,” said Malcolm Branch, president and CEO of the Norfolk-based Virginia Ship Repair Association, of any defense-spending   adjustments.

 

   The port’s ship-repair facilities are virtually unparalleled, Branch said, and local firms have adapted to changes by the Navy that concentrate more work in one shipyard through “multi-ship, multi-option” contracts. The Navy’s 30-year plan calls for a minimum fleet of 313 ships. As long as they continue to be built and go to sea, Navy ships will require maintenance and periodic overhaul.

 

   It’s that ongoing pace of operations that may secure continued defense contracting for businesses in Hampton Roads.

 

   “When is that going to end?” asked Al White, an executive at BAE’s Chesapeake facility, pointing to a slide-show image of two camouflaged snipers in an Afghan-like setting, near a portable satellite dish. “When is the war on terror going to be over?”

 

   Until that happens, he said, he’s not too worried.

 

   Robert McCabe, (757) 446-2327, robert.mccabe@pilotonline.com  

 

  

Industry Continuing Resolution Concern Expressed

On behalf of the VSRA Board of Directors, each of the six Hampton Roads delegation received a letter last week expressing concern with the federal appropriations Continuing Resolution (CR).  As currently implemented, federal spending is limited to FY2010 levels until either the FY2011 Appropriations Bills are signed.  In addition, material that should be ordered in advance of availabilities is not authorized. 

One of the Continuing Resolution letters is available at this link.  The letters were sent to Senators Webb and Warner, as well as Congressmen Forbes, Rigell, Whitman and Scott.

New Terrorism Advisory System Announced

Secrretary of Homeland Security, Janet Napolitano, has announced a new Terrorism Advisory System.  Read the National Terrorism Advisory System Press Release for specifics.

Inputs Needed from Foreman and Supervisors

VSRF is conducting a VERY brief survey for Foremen and Supervisors to help charter next steps on workforce efforts. Please ask your employees who are in these positions to participate. The Board will be holding their March 9th meeting at Earl Industries and April 13th at Colonna’s with a tour starting at 11:30 a.m. Foremen and Supervisors are invited to discuss results and issues. Please RSVP with Sylvia Bell at 233.7034 or by email sbell@VirginiaShipRepair.org
 
<a href="https://www.surveymonkey.com/s/9GRGVZY">Click here to take survey</a>
 

Obama to Cut Red Tape for Business

Greenwire (01/18/2011)

In his most forceful reply yet to industry groups and Republicans who have accused the administration of slowing the economic recovery by tying up businesses in red tape, President Obama has ordered a top-to-bottom review of federal regulations to get rid of rules that are outdated and harmful to the economy, the White House announced this morning.

Obama signed an executive order today that would step up oversight of the regulations issued by government agencies such as U.S. EPA and the Interior Department.

Seen as the president's latest effort to mend ties with businesses, it was first outlined by the president in an op-ed this morning in The Wall Street Journal.

Writing for an editorial page that has repeatedly slammed the administration's approach to regulation, Obama acknowledged that there are plenty of "absurd and unnecessary paperwork requirements that waste time and money." He cited EPA's recent decision to loosen rules for saccharin -- an artificial sweetener that is considered safe by the Food and Drug Administration and is widely used in chewing gum and diet soft drinks.

"If it goes in your coffee, it is not hazardous waste," Obama wrote.

"We won't shy away from addressing obvious gaps," he added, "but we are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb."

Along with requiring agencies to take stock of existing regulations, the executive order would lay out principles for future rulemakings. All agencies would need to consider ways to reduce burdens for U.S. businesses when they develop rules, allow more public participation and better follow the scientific integrity guidelines that were released last month after a lengthy delay.

"The administration believes firmly that regulations can both be more effective and consistent with American competitiveness," a senior White House official said this morning. "It's not a question of choosing between meeting our responsibilities to protect the public health and the environment or growing the economy and creating jobs. It's really a question of how to get the balance so we can accomplish both goals most effectively."

The initiative could signal a desire at the White House to defuse some of the efforts on Capitol Hill to rein in regulations. Republicans and a few moderate Democrats have put forward a slew of bills that would put new checks on agency rulemaking (E&ENews PM, Jan. 10).

Sen. Mark Warner (D-Va.), who recently called for a "pay as you go" approach to outdated government regulations, offered support today for the president's strategy. Any company that does not review its operations or improve its procedures will inevitably go out of business, and the government should be held to the same sort of standard, he said in a statement.

"Efforts to apply more common sense to our regulatory approach can go a long way toward addressing the uncertainty that has kept the U.S. business community from participating more fully in our nation's economic recovery," Warner said.

Obama has recently reached out to businesses, meeting with corporate CEOs last month to ask how the government could help them create jobs and rebuild the economy. Industry groups were pleased by today's announcement.

"Manufacturers have been saying for some time that overregulation is harming job creation and stifling economic growth," said Aric Newhouse, senior vice president of the National Association of Manufacturers, in a statement today. "This is an opportunity for the president to demonstrate results by eliminating unnecessary regulations already in the pipeline or delaying poorly thought-out proposals that are costing jobs."

Seen as an effort to mend ties with businesses, the new executive order did not sit well with many on the left, including some environmental and public health groups. They described the initiative as a rightward shift as President Obama gears up for his own re-election campaign.

Rena Steinzor, the president of the Center for Progressive Reform, said the executive order reflects an incorrect analysis and diagnosis by the White House. Current environmental problems such as the Gulf of Mexico oil spill, as well as economic problems such as the collapse of the housing market, could have been avoided by better rules, she said.

She also criticized the White House for putting new burdens on agencies at a time when they are already dealing with serious budget cuts.

"It was deregulation that caused the economy to crash and everyone to lose their jobs -- not regulation," said Steinzor, an environmental law professor at the University of Maryland.

Scott Slesinger, legislative director at the Natural Resources Defense Council, agreed that a "balanced" approach is necessary -- as long as it does not put "short-term corporate profits above the public health."

With environmentalists preparing to battle Republicans in Congress over EPA regulations, he noted, Obama's op-ed cited the Clean Air Act as a prime example of a law that is worth the cost to society.

That type of calculus was praised by cost-benefit analysis supporters such as Richard Revesz, dean of New York University's law school.

"The environment and the economy are not at odds," Revesz said today. "On the contrary, the success of each one is linked to the well-being of the other. By making this case, the president pointed to a better way of safeguarding both."

Click here to read the executive order.

Register Now for 2011 National Ship Repair Industry Conference

 
The 2011 National Ship Repair Industry Conference will be held 28 February to 3 March 2011.  It will once again be at the Embassy Suites in Crystal City with the same room rate as last year, $240 single, $269 double.  Hotel reservations can be made at the Embassy Suites by calling 1-800-EMBASSY using NSR as the group code or you can go to their website at:
Two events have been added; a dinner on Navy Day at Windows over Washington in the Doubletree Hotel right around the corner from the Embassy Suites, and the ASNE Presidents Club luncheon on Hill Day.  Here's the schedule:
 
Monday 28 February       Travel day     Opening reception at Embassy Suites sponsored by PSDSRA
 
Tuesday 1 March             Navy Day      Dinner with speaker
 
Wednesday 2 March       Hill Day     VSRA reception on the Hill
 
Thursday 3 March            Industry Day (through noon)     Travel day
The registration fee is  $380 for members and $420 for non-members.  After pricing everything out, it came in higher then expected but at $380 we believe our VSRA members will certainly get their money's worth out of the four day Conference.  We are certainly getting an enthusiastic response from Navy and Coast Guard leadership.  Please use the  NSRIC 2011 Registration Form to register.
Here is our 2011 NSRIC Congressional Agenda.  Comments welcome, as always.  Note that comments are included on the FY11 budget.  There are real problems if the Navy doesn't get funded to the President's Budget ($6B for ship depot maintenance).  Hopefully it will be resolved satisfactorily before the Conference but it needed to be included in the letters that are going out now.
Actions:
All VSRA members are encouraged to register as soon as possible.  Get those hotel rooms booked.
We need to develop the agenda for Industry Day on Thursday morning.  We all agreed that this is a great opportunity for just industry to sit down and talk about whatever is on our minds.  Please get your recommendations in to the VSRA office NOW!.

Northrop Grumman Shipbuilding Sale Plan

Mike Petters' letter to shipyard employees

It could be Newport News Shipbuilding all over again.

Northrop Grumman Corp. Wednesday took another step forward in the process to spin off its shipbuilding unit to shareholders.

The company filed a new form with the SEC describing its (potential) plans for the new company, which would be named Huntington Ingalls Industries Inc.

The Newport News unit would revert back to the old "Newport News Shipbuilding," a brand that's been around, in part, since Collis P. Huntington founded the company in 1886.

Remember, that's before Newport News was even a city.

Around the same time the company's new documents went online, Northrop Shipbuilding President Mike Petters sent a letter to employees, describing the move.

(Note: Have fun combing through the filing; it's 200+ pages)

Here it is, in Mike's words:

Dear Shipbuilders:

As you know, this past July Northrop Grumman Corporation announced it is exploring strategic alternatives for its Shipbuilding business. One of the potential strategies is a spin-off of the shipbuilding business as an independent, publicly-owned company. As part of the process to pursue this path, Northrop Grumman is required to file certain documents and information with the Securities and Exchange Commission. This information is filed in a document called a Form 10, the first of which was filed this past October. An amendment to the Form 10 was filed today and it will include the name for the potential new company and a prospective, non-executive Chairman of the Board. I want to share this information with you today.

If Northrop Grumman Corporation does decide to spin the Shipbuilding business, we expect to perform our shipbuilding work as part of and operate under the brand of Huntington Ingalls Industries Inc. This name builds upon the strong legacies of our shipbuilding divisions - Newport News Shipbuilding and Ingalls Shipbuilding. Collis P. Huntington founded Newport News Shipbuilding in 1886 and the Huntington family played prominent roles in the shipyard business in Newport News for more than 50 years. Ingalls Shipbuilding was established in 1938 by the Ingalls Iron Works of Birmingham, Alabama, a company founded by the Ingalls family with Robert I. Ingalls, Sr. at the helm. I believe the Huntington Ingalls Industries Inc. name, by highlighting the legacies of our shipbuilding businesses that stretch back nearly 125 years, provides us the right foundation upon which to build our future as an independent, publicly-traded company.

Importantly, if we do become an independent company, we would also use the legacy Newport News Shipbuilding and Ingalls Shipbuilding names for our shipbuilding divisions (today referred to as NGSB-Newport News and NGSB-Gulf Coast). Incorporating the names of our founding families and legacy companies into our new enterprise would build upon our long-standing traditions of demonstrated commitment to quality, customer focus, and building the best military ships in the world. These names also reflect our recognition of you, our talented shipbuilders, who rightly and strongly identify with these great shipbuilding names and the heritages they reflect.

With regard to the named Chairman of the Board if we become a publicly-traded company, the selection of Thomas B. Fargo, Admiral, United States Navy (Ret) is an excellent and thoughtful choice. Tom Fargo knows our business and our customers very well, and his insight, knowledge and perspective will be of great value as we build this “new” business. A current member of the Northrop Grumman Corporation Board of Directors, he served as Commander of the U.S. Pacific Command, leading the largest unified command while directing the joint operations of the Army, Navy, Marine Corps and Air Force from May 2002 until his retirement in March 2005. A U.S. Naval Academy graduate, Fargo’s 35 years of service included six tours in Washington, D.C. in addition to five commands in the Pacific, Indian Ocean and Middle East. He also serves on the Board of Directors for Hawaiian Electric Industries and the United States Automobile Association among others.

Please know that I am very excited about our future no matter what the outcome. It’s very important to remember that this new company name and prospective, non-executive Chairman of the Board being named is part of the process of exploring a spin-off, and that no decision has been made. The filing of this information is part of a required process and, until a decision is made, we will continue to operate as part of the Northrop Grumman Corporation as Northrop Grumman Shipbuilding. I ask for your support and your continued focus on performance and building the best military ships in the world. Our performance is what will best enable us to help shape our future.

Sincerely,

sig:

Mike Petters
Corporate Vice President and President

ODU Launches Shipbuilding and Ship Repair Business Management Course

Old Cominion Univrsity announced that The College of Public and Business Administration will launch a new graduate course beginning January 13, 2011.  The course is: PORT 695 - Shipbuiding and Ship Repair Business Management (CRN# 26493).  The course will be taught by CAPT Mike Stanton, USN (ret).  Mike's last assignment in the Navy was with the Fleet Maintenance Division of Fleet Forces Command, during which he was an active participant and liaison for the Navy with the VSRA Contracts Committee.

The course will be taught on the ODU Norfolk campus on Thursday nights from 7:10 - 9:50 PM.  The topics to be covered in the course are found in the DRAFT PORT 695 Course Outline.

The prerequiste for the course is a bachelor's degree. For information on the course and how to sign up, please contact Sandi Phillips in ODU's MBA office at 757-683-3585 or e-mail slphilli@odu.edu.   

News from Maritime Cabotage Task Force

The Maritime Cabotage Task Force wishes you and your family a safe and happy holiday season!
 LATEST NEWS:  WLUK-TV in Green Bay, Wis., reports Bay Ship Shipbuilding Company recalled 70 workers to ramp up for a winter repair project for Jones Act vessels. “Laid off for months, dozens of workers are once again punching the clock at Bay Shipbuilding Co. in Sturgeon Bay. The company is ramping up its workforce as winter maintenance work gets underway and Bill Walls is filled with anticipation.  ‘I was happy, very happy,’ said Walls. Walls is a welder at the shipyard. He was laid off last June.”  Click here to read more.
 EMPLOYMENT PEAKING AT GREAT LAKES SHIPYARDS: Business North (Duluth, Minn.) reports the 1,000-foot-long Great Lakes Jones Act freighter Edwin H. Gott's arrival at Bay Shipbuilding Company in Sturgeon Bay, Wis., marks the beginning of the busiest time of year for Great Lakes shipyards. “This project and other annual winter maintenance work on U.S.-flag Great Lakes ships will provide jobs for more than 1,200 men and women at U.S. shipyards around the Great Lakes, according to the carriers' association.”  Click here to read more.
 CG ADMIRAL CALLS FOSS AN INDUSTRY LEADER: Maritime Link reports U.S. Coast Guard Rear Admiral J.R. Castillo recognized Jones Act company Foss Maritime as an industry leader in safety and compliance.  The company's San Francisco Bay Area-based tug group became the first to complete voluntary examinations for all of the vessels in its Northern California group. "The success you have achieved is due in no small part to the investment Foss Maritime has made in safety management.  This is an impressive accomplishment for (the company) and will certainly pay dividends as forthcoming towing vessel inspection regulations are enacted,” said Admiral Castillo.  Click here to rea d more.
COAST GUARD MOVES ICEBREAKER TO GREAT LAKES: For the second year in a row, the U.S. Coast Guard has transferred an icebreaker to the Great Lakes to keep the shipping lanes open and allow U.S.-flag lakers to ensure industries have enough raw materials to maintain production during the winter. In a strong economy, U.S.-flag lakers can move more than 15 million tons of iron ore, coal and other cargos during periods of ice cover on the Great Lakes. The iron ore trade has rebounded significantly this year.  Through November, cargos in U.S.-flag lakers are up 85 percent compared to a year ago.
 SIU TOYS FOR TOTS DRIVE BENEFITS ENLISTED PERSONEL: The Seafarers International Union (SIU) raised $4,200 in the fourth-annual Toys for Tots drive at the SIU Christmas party in Tacoma, Wash.  Alaska Tanker Company of Portland, Ore., matched a portion of funds bringing the total to $5,000.   The donations benefit lower-enlisted personnel through Santa's Castle.  Congratulations to SIU and all organizations that participated for giving back to the community during difficult economic times.
 DID YOU KNOW? Number of Jones Act vessels engaged in domestic waterborne commerce is 39,000 plus and growing.  The current fleet represents an investment of nearly $30 billion.
 The MCTF is the most broad-based coalition the U.S. maritime industry has ever assembled to promote the cabotage laws. Its 400-plus members span the United States and its territories and represent vessel owners and operators, shipboard and shoreside labor groups, shipbuilders and repair yards, marine equipment manufacturers and vendors, trade associations, dredging and marine construction contractors, pro-defense groups and companies in other modes of domestic transportation. These diverse but allied interests share a common goal: to promote the long-standing U.S. maritime cabotage laws. Upon a foundation of U.S. ownership, construction and crews, the United States has built an unsubsidized domestic fleet that is the world leader in efficiency, innovation and safety

USCG - Personal Floatation Device (PFD) Safety Alert

The US Coast Guard issued a safety alert stating that recent inspections of Type I Personal Flotation Devices (PFDs), in both adult and child size, revealed a potential hazard that could prevent proper donning in the event of an emergency. The chest strap on certain PFDs was threaded through the fixed “D” ring that the strap was intended to clip to when worn. Instead of the strap falling away, allowing the wearer to wrap it around himself or herself, the clip end of the strap could snag in the “D” ring. The PFDs known to be affected are: Kent Adult Model 8830 (USCG Approval Number 160.055/184/0) in Lot 53W manufactured in October 2006 and Kent Child Model 8820 (USCG Approval Number 160.055/150/0) in Lot 012T manufactured in March 2008. Vessel owners and operators should examine their PFDs to determine whether any of them present this hazard. If so, the manufacturer should be contacted. Alert 09-10 (12/15/10).