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2009 WORLD YEARBOOK SHIPBUILDING U.S. Shipbuilding At the beginning of May, the Shipbuilders Council of America (SCA) elected Herschel Vinyard, Vice President at Atlantic Marine Holding Company, as its new chair. Maritime Reporter sisterpublication MarineNews spoke with Vinyard about the state of U.S. shipbuilding, the outlook for the future and the council's priorities. What's the state of shipbuilding in the U.S. today? The current state of commercial, mid-tier shipyard, represented by the Shipbuilders Council of America, is stable with the vast majority of our membership continuing to report strong order books. The current economic situation has, however, made it more difficult for ship owners to obtain project financing, thereby delaying certain projects. At the same time, the commercial shipyard industry continues to have a challenge with recruiting, training and retaining skilled labor. Our member shipyards, including Atlantic Marine, provide workforce training, giving our employees greater skill sets, and in turn, greater job security. There is, however, a great deal of competition for this skilled shipyard labor and there is no guarantee that at the end of the training program an employee will remain with your shipyard. In addition, I believe the shipyard industry work environment has improved significantly, and we need to be more effective in communicating that fact to high schools, technical colleges and maritime institutions to encourage and promote careers in our industry. What's the outlook for industry? While energy prices are relatively low right now, there is continued offshore oil and gas development in the Gulf of Mexico, which is a promising sector for the construction and repair of the vessels that service this industry. Deeper oil and gas development in the Gulf region will trigger the need to construct shuttle tankers and larger workboat vessels to service these areas. The recapitalization of the Jones Act fleet, especially the vessels servicing the non-contiguous trades is a steady sector, including the vessels that must be replaced to meet the 2012 singlehull phase out date under the Oil Pollution Act of 1990. Another potential new market for our industry in the coming 50 Challenges ahead "Another potential new market for our industry in the coming years could be building vessels for the short sea transportation initiative." Herschel Vinyard, Vice President at Atlantic Marine Holding Company, is the new chairman of the Shipbuilder's Council of America. years could be building vessels for the short sea transportation initiative. Short sea shipping has been discussed in this Congress as a potential alternative transportation mode to reduce congestion on the road and rail systems. The concept of moving commerce domestically on the water is viewed by all as a "green" transportation option. Do you see any opportunities resulting from the stimulus funds? The stimulus funds provided $100 million for the Small Shipyard Assistance Program. The Shipbuilders Council of America advocated for this program to provide grants for capital improvements at shipyards. The rationale for the Small Shipyard Assistance Program was to provide a competitive-based grants process for qualified shipyards to receive some financial assistance to become more efficient, cost-effective and increase the quality of domestic ship construction. From an economic stimulus perspective, there are over 300 shipyards located in almost every region of the United States that will qualify for the Small Shipyard Assistance Program. The grants from this program will provide substantial employment opportunities in direct infrastructure construction work and sustained high-wage jobs in U.S. commercial shipyards around the U.S. What legislative issues are currently the most important for the shipbuilding industry? The defense of the Jones Act is always a top priority for the Shipbuilders Council of America. One of the biggest concerns recently for the association has been the amount of rebuilding and conversion work that is being performed on Jones Act vessels in foreign shipyards. The Jones Act prohibits vessels that operate in the domestic trades from being rebuilt outside the U.S. Unfortunately, there has been some confusion about the amount and type of work that can be legally performed on Jones Act ships in foreign shipyards. The SCA is actively working to clear up that confusion to ensure Jones Act vessel rebuilding and conversion work is done in U.S. shipyards. The proper enforcement of the Jones Act is one policy area that must be improved. It is critical that the Jones Act be properly enforced for the benefit of the entire Jones Act maritime community � this includes U.S. shipyards, U.S. owners and U.S. labor. The domestic maritime industry must stand together to make certain that the U.S. agencies responsible for enforcing the Jones Act perform those tasks as Congress intended. What are your priorities for the Shipbuilders Council of America? The SCA is focused on being a leader in the U.S. maritime community, working with maritime labor and vessel operators to produce the best and most cost effective vessels for the industry. Since 1920, SCA has been the leading advocate for shipyards that build, repair and service America's fleet of commercial vessels. The priority is to make sure that this Congress and the Obama Administration support the shipyard industrial base and that SCA continues to be a strong voice for our membership. As discussed earlier, an important initiative for the SCA will be to continue to support full funding for the Small Shipyard Assistance Program. In addition, the SCA will continue to advocate for several other legislative initiatives that create stability and greater market certainty for the commercial shipyard industrial base. We are also working diligently on improving shipyard safety. I know that this is priority one at Atlantic Marine (and routinely reinforced by our CEO, Ron McAlear). Maritime Reporter & Engineering News $100M "Stimulus" Funds The US Maritime Administration (MARAD) has announced the availability of $100 million in grants through the American Recovery and Reinvestment Act (the so-called "economic stimulus act") for shipyards with fewer than 1200 employees. An additional $17 million will also available through the Omnibus Appropriations Act of 2009. The program provides 75 percent federal funds with 25 percent matching funds from the shipyard for capital improvements and related infrastructure improvements to foster efficiency, competitive operations, and quality ship construction and repair. MARAD reported that it received a total of 453 grant applications from shipyards on all coasts.