Maritime News and Comment

January 2008

    WHAT HAVE I BEEN TELLING YOU?  The current edition of "Waterways Journal" - a periodical without which I cannot do - reviews the state of that industry.  Several of the industry leaders interviewed express concerns about the risks of overbuilding and one, in particular, worries aloud about new entrants into this construction market.  I keep telling you, we don't need any new shipyards.  January 31, 2008.

    NEXT THREE SSNS NAMED.  The next three "Virginia"-class SSNs will be named "Missouri", "California" and "Mississippi".  Read the DefenseLink announcement here.  January 31, 2008.

    THREE MORE NDRF SHIPS GONE.  MARAD has disposed of three more ships from the NDRF, and this time, thanks to the strong market for steel scrap, it sold them to the breakers.  Read MARAD's press release here.  The three ships are the "Bayamon", the "Del Valle" and the "Maine".  The "Bayamon" was a trailership, built by Sun Ship (Hull 650) in 1970 as "Eric K. Holzer": she was the second of the ten "Ponce de Leon"-class trailerships built by Sun, seven of which are still active.  The "Del Valle" was a break-bulk cargo ship built by Ingalls (Hull 498) in 1968 as "Delta Uruguay".  The "Maine" was a T-2 tanker, built by MarinShip (Hull 24) in 1943 as "Tomahawk": she was converted to a "seatrain", i.e., a railcar carrier, the "Seatrain Maine", in 1967.  January 30, 2008.

    NG KNOWS BEST.  In a continuing effort to undercut the LCS program, Northrop Grumman is now trying to sell the Navy and the Congress a new class of frigate.  Read the Reuters report here.  The Navy doesn't actually want a new class of frigate but why would that bother NG and its lobbyists?  NG knows best.  And they say that they could build this variant on the new Coast Guard WMSL for a fixed price of "under" $400 million, with the first one to be delivered "as soon as" 2012.  Yeah, right.  Of course the real reason NG is pushing the WMSL as an LCS is that the WMSL is all-steel and NG can no longer build anything in aluminum.  Its aluminum shop was destroyed by Katrina and NG apparently cannot find the funds to rebuild it, even with its insurance payout and with the $99 million handout for reconstruction that it got from the taxpayers.  One outcome of this is that they are looking to farm out the superstructure for the new LHAs, as well as all those hull modules that Newport News will build for them.  In effect, NGSS is no longer a fully capable shipbuilder, just when Congressman "Back of an Envelope" Taylor wants them to get back into nuclear shipbuilding.  Even the DDG program continues to fall further and further behind schedule: they christened DDG 105 last week but it's more than a year late.  What a mess for poor Mike Petters to take on tomorrow when the three shipyards become one!  January 25/27, 2008.

    THAT'S A STIMULUS?  Heavens, these people are stupid.  What will a cash hand-out, that won't actually arrive for at least six months, be used for except to pay bills?  Economic stimulus?  I think not.  And where would this money come from?  Why from taxes, of course: in effect, therefore, they are just moving our money around, aren't they?  Now, every state in the Union has infrastructure projects sitting on the shelf, fully engineered, all ready to go, just awaiting funding.  Why not turn some of them on?  That would be a real economic stimulus, an investment in the future, that would have a positive impact as soon as next week.  January 25/27, 2008.

    STIMULATE THE ECONOMY?  This is not hard, although our idiot political leaders will probably make it hard.  The key is the ever more urgent need to rebuild our crumbling infrastructure, including our decrepit, inefficient ports.  Well, let's do it.  In a rational accounting system, this would be a capital investment, not an operating expense, so let's treat it as such.  (Sometimes I wonder if our congresspeople understand the difference between investment and expenditure.)  Appoint an independent commission to run it, with the modern equivalent of Jerry Land in charge.  Don't let the sticky-fingered Congress do anything more or less than fund it and don't let the local politicians get involved either.  Use contracts with incentives for performance and compete contractors against each other, not just in the bidding but in their performance too.  Put the early billions where they will have the most employment impact.  There will be a measurable return on this investment, so let's measure it.  And don't wait till next year: start now.  Get some limited-access freight-only highways and banked railroad tracks and high-speed trailerships and deepwater intermodal terminals built, and then watch the economy take off.  January 23, 2008.

    TODD BUYS EVERETT.  The newswires report that Todd Pacific Shipyards has bought Everett Shipyard, Inc.  Read the report on Reuters here.  This makes sense, since Todd does a lot of its Navy work in Everett and, in the long term, would like to   escape from downtown Seattle.  (They'll deny that of course.)  January 22, 2008.

    LET'S BAN "ACCRETIVE".  In connection with the item above, Todd said that its acquisition of Everett Shipyard would be "accretive to earnings".  Don't you hate that word "accretive"?  What on earth would be wrong with saying that the acquisition would increase earnings?  In fact, why is it necessary to say this at all, in plain English or otherwise?  When was the last time that a company made an acquisition with a view to decreasing earnings?  But, hell, what do I know?  I'm not a Wall Street nitwit who gets paid millions for investing in sub-prime mortgages.  January 22, 2008.  An alert reader points out that the acquisition of NG Ship Systems by BAE Systems would probably not be accretive to the latter's earnings.  January 22, 2008.

    ANOTHER DERANGED SHIPBUILDER.  The Bayou Business Review reports that a another new shipyard - ludicrously named Synergy Shipbuilding - is to be built in Houma LA.  Read the story here.  Don't these people understand simple economics?  We don't need any new shipyards!  Besides, haven't these people noticed the shortage of skilled workers on the Gulf Coast?  Good grief!  And what idiot banker is going along with this loony idea?  January 21, 2008.

    LAKER SINKS AT PIER.  The Coast Guard reports that American Steamship's 1000-footer "Walter J. McCarthy, Jr." hit something while approaching a pier in Duluth MN on Monday and sustained enough damage to settle on to the lake bottom.  Read the Coast Guard's announcement here.  January 16, 2008.

    NG TO COMBINE NN AND SS.  Northrop Grumman has announced the combination of No Good Ship Systems with Newport News, effective January 28.  The new entity will be called Northrop Grumman Shipbuilding and will be run by Mike Petters from Newport News, with Phil Teel going off to run NG's Mission Systems group, whatever that might be - it's a meaningless name if ever there was one.  Read their press release here.  It will be recalled that it was always NG's intention to integrate all three shipyards but apparently they postponed the ultimate step after realizing that it was going to take a while just to get Ingalls and Avondale integrated, not to mention cope with the huge cultural divide between Newport News and the two southern upstarts.  Is this a good move?  Well, it ought to be, but we'll see.  At least we get rid of that awful "Ship Systems" name and get back to the correct description, i.e., "Shipbuilding".  January 14, 2008.

    BAE TO BUY NGSS?  The London "Daily Mail" reported on Saturday that Britain's leading defense contractor, BAE Systems, is in talks with Northrop Grumman about buying No Good Ship Systems.  BAE currently owns about 98% of what's left of Britain's once-great shipbuilding industry and also dominates the naval sector of the U.S. ship repair industry.  The same article also says that J. F. Lehman is trying to sell Atlantic Marine to BAE Systems.  Like all good rumors, both stories could be true, but are they?  Never a dull moment in this biz.  January 14, 2008.

    NEW GEARS FOR THE AOES.  The Navy has awarded a contract to the dreaded Northrop Grumman for new gears for the four ships of the "Supply" class of AOEs, which were built by NASSCO and delivered between 1994 and 1998.  The contract is worth $20.5mm and is supposed to be completed by September 2013.  Read the DefenseLink announcement here.  Obviously, we should not be replacing gearboxes in ships this young.  Will one of my many fearless correspondents please tell me what went wrong?  January 11, 2008.  OK, my memory has been refreshed.  The original gearboxes were made by Cincinnati Gear, who had never made a gearbox that big before and couldn't.  They were two years late and nothing but a problem, right from the sea trials, but the Navy persevered, at enormous cost.  In retrospect, it's amazing that they weren't replaced years ago.  January 22, 2008.

    HORNBECK TAKES TWO MORE FROM ATLANTIC.  Hornbeck Offshore Services has ordered two more 240-foot PSVs from Atlantic Marine Jacksonville.  Read their press release here.  They now have six boats building at Atlantic, as well as nine 250-footers at Leevac and a 285-footer at VT Halter.  Oh and those two sulfur carrier conversions that Cianbro is working on may get finished eventually.  January 9, 2008.

    GIVE A LISTEN.  OK, I've had enough of this dreadful expression "give a listen to".  I don't want to be asked to "give a listen to what Senator Rumpole said last night".  I just want to be asked to "listen to what Senator Rumpole said last night".  Where did this really irritating, ungrammatical and redundant usage come from?  I suppose it's modeled on "take a look at", which is similarly ungrammatical and redundant but has been around longer.  January 9, 2008.

    THANKS.  Speaking on behalf of all Floridians, I just want to take a moment to say how grateful we are to the party managers that the presidential candidates are banned from campaigning in Florida.  We get to make up our own minds and vote on January 29 without any of the ludicrous hoopla.  Yay.  January 9, 2008.

    THE COAST GUARD WANTS A REFUND.  Press reports say that the Coast Guard is asking ICGS - the disastrously incompetent JV of Northrop Grumman and Lockheed Martin - to refund $96 million for the eight stretched "Island" class patrol boats that it maintains are unusable.  Read the report on Reuters here.  Goodness knows, ICGS gets no sympathy here, but the basis for this claim seems a little flimsy, wouldn't you say?  Did the Coast Guard accept these boats or did it not accept these boats?  They accepted them.  If they are now unusable - which is, in any case, debatable - that's the Coast Guard's problem.  January 9, 2008.

    FIRST US-BUILT SHIPS OF 2008 DELIVERED.  The PSIX reports that in the first week of 2008, two OSVs, eight tank barges and a bunch of small stuff have been delivered.  So here we go for another busy year.  The OSVs are the "Brewster Tide", from Leevac and the "Danielle Callais" from Master Boatbuilders.  January 7, 2008.

    SAVANNAH SHIPYARD SOLD TO CREDITORS FOR $18MM.  The assets of Global Ship Systems - the former Intermarine USA - were sold at auction yesterday on the steps of Chatham County Courthouse.  They were bought by a company representing Global's bankers, which is now looking for offers.  Read the report in the Savannah Morning News here.  January 3, 2008.

    "PRESTIGE" CASE THROWN OUT.  The District Court for the Southern District of New York has thrown out the case brought by Spain against ABS.  Good.  Read the decision (on Tradewinds) here.  January 3, 2008.

    TOWBOAT SINKS IN MISSISSIPPI.  The towboat "Gate-Way" - built by Humboldt Boat Service in 1985 - sank in the Mississippi River yesterday, near Norco LA, with the apparent loss of its captain.  Read the Coast Guard's announcement here.  January 3, 2008.

    NEWPORT NEWS TO BUILD FRONT HALF OF LHA 6.  There don't seem to have been any formal announcements, but it appears that Newport News is going to build the front half of LHA 6, as a subcontractor to Northrop Grumman Ship Systems.  They are advertising for planners: check here.  Oh, great.  I suppose this is because Newport News is running out of work, because the CVN and SSN programs are being dragged out by lack of funding.  Of course, there's no reason why this shouldn't work but it fills me feelings of dread.  Questions for the Navy: If this makes sense, why didn't they compete the LHA program?  Why couldn't Newport News build the whole ship?  And all the follow ships too, for that matter?  NGSS could benefit from scaling back a bit, given the severe shortage of shipyard workers all across the Gulf Coast, and then they could concentrate on doing things right for a change.  January 2, 2008.

    SEC. MINETA JOINS MY CAMPAIGN.  Former Secretary of Transportation Norm Mineta, an excellent man, has joined my campaign - first proposed in the Naval Institute's Proceedings three years ago - to consolidate federal maritime responsibilities, turn MARAD into an effective body and take some of the pressure off the Coast Guard.  Good for him.  Read his suggestions in "American Shipper" here.  January 2, 2008.

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