NGSB BOASTS OF LPD 21'S ACCEPTANCE TRIALS

A couple of days late, but NGSB has just put out another of its revoltingly self-congratulatory press releases, this one claiming that LPD 21's Acceptance Trials were a huge success.  Read it here.  She allegedly came back in with three brooms at the masthead but after the bogus brooms for DDG 105's AT, that no longer means anything at all.  What NGSB doesn't tell us is how much she cost or how late she is (about two years).  July 30, 2009.

BENDER TO PURSUE NON-MARINE FABRICATION

Bender Shipbuilding has announced that it has obtained AISC certification and will pursue non-marine fabrication contracts.  Read what they say here.  This is a good idea in theory, especially given Bender's excellent prefabrication shop, but tough in practice.  I can think of almost no case of a shipyard that tried this and succeeded in competing with the many small fabricators out there.  But they get points for initiative.  July 30, 2009.

TIDEWATER LOSES FOUR MORE BOATS TO CHAVEZ

Tidewater's latest quarterly report is more notable for its news than for its numbers.  Read it here.  It reveals that the Venezuelans have now appropriated four more Tidewater vessels, bringing the total to 15.  As a result, Tidewater took a one-time charge of $45 million in the second quarter.  July 30, 2009.

OSG BUYING BACK OSG AMERICA

Less than two years after setting up its Jones Act operations as a semi-independent entity, OSG announced yesterday that it was offering $8 a share to buy back up to 27% of the 47% of OSG America's common stock that it doesn't already own.  Read the announcement here.  They appear to be doing this to protect OSG America from the realities of the Jones Act market.  OSG's Chairman, Morton Arntzen, is quoted in the announcement as saying "recent adverse changes in the outlook for the Jones Act market have created significant near- and medium-term challenges for OSG America’s business."  Although Morton Arntzen is undoubtedly one of the smartest men in the industry, one has to wonder about this whole episode.  The spin-off was a good idea only two years ago and now it isn't?  I, for one, have said several times that they were overbuilding and it would come back and bite them in the posterior.  July 30, 2009.

SWIFTSHIPS WINS IRAQI PATROL BOAT CONTRACT

Defense Daily reports that Swiftships has won the contract to provide Iraq with up to 15 patrol boats.  MNF headquarters in Iraq had already revealed its plan to acquire 15 35-meter patrol boats for the Iraqi Navy, without identifying the builder - read that announcement here - but the first batch of patrol boats for Iraq is being built by Fincantieri, so this is a good win for Swiftships.  July 29, 2009.

PROFIT MARGIN UP AT GD MARINE SYSTEMS

General Dynamics reported net income of $618 million and operating income of $945 million on revenues of $8,100 million in the second quarter of 2009, compared to $641 million and $921 million on revenues of $7,303 million in the same quarter last year.  As a percentage of revenues, net income was down from 8.8% to 7.6%, while operating income was down from 12.6% to 11.7%.  This decline was clearly not caused by the Marine Systems Division, however, which had operating income of $168 million on revenues of $1,625 million in the second quarter of 2009, compared to $127 million on revenues of $1,324 million in the same quarter last year, an increase in margin from 9.6% to 10.3%.  No 10-Q yet but read their press release here.  Why does GD's shipbuilding division consistently outperform NG's shipbuilding division?  It couldn't be anything to do with the competence of the management, could it?  July 29, 2009.

CROWLEY TO MANAGE EX-US SHIPPING PRODUCT CARRIERS

Following US Shipping's release of its interest in the five NASSCO product carrier newbuildings, Blackstone Group has hired Crowley to manage them and changed the name of the company to American Petroleum Transportation.  Read Crowley's announcement here.  July 28, 2009.

SHIPBUILDING DRAGS NORTHROP GRUMMAN DOWN

Northrop Grumman reported net income of $394 million and operating income of $653 million on revenues of $8,957 million in the second quarter of 2009, compared to $495 million and $806 million on revenues of $8,628 million in the same quarter last year.  As a percentage of revenues, net income was down from 5.1% to 4.4%, while operating income was down from 9.3% to 7.3%.  Some of this decline was apparently driven by the Shipbuilding Division, which had operating income of only $14 million on revenues of $1,524 million in the second quarter of 2009, compared to $126 million on revenues of $1,688 million in the same quarter last year, a decline in margin from 7.5% to 0.9%.  The decrease in operating income was primarily caused by $105 million in cost over-runs on the LPD and LHA programs.  Read the full 10-Q here.  July 28, 2009.

LPD 21 COMPLETES ACCEPTANCE TRIALS

The future USS New York, (LPD 21), completed Acceptance Trials yesterday and according to PEO Ships is on track for her commissioning in NYC on November 7.  Read the Navy's announcement here.  July 28, 2009.

NEW QUALITY PROBLEMS AT NGSB NEWPORT NEWS

The Virginia Daily Press reports that cracks have been found in the hull of the USS Toledo, only four months after it completed a 27-month overhaul at NGSB Newport News.  Read the report here.  July 26, 2009.

DETAILS OF THE JHSV PROGRAM

At a joint SNAME/IHS meeting last week, MAJ Chris Frey USMC, who is the JHSV Deputy Program Manager, gave an excellent presentation which provides a lot of information that was new to me and may be to many of you too.  Read it here.  July 26, 2009.

SECRETARY PULLS BACK SHIPYARD GRANTS LIST

In a stunning development, the Secretary of Transportation has pulled back the list of shipyard grants announced on July 16.  Read the announcement here, particularly the stuff in bold type.  The announcement appears to be saying that he's only talking about the second list, which handed out the ARRA money: the grants on the first list, which handed out the DOD money, seem to be OK, but who knows.  What does all this mean?  Again, who knows?  I suspect that it means that the Secretary is responding to a lot of angry congress-people, who want to know why Shipyard X got a grant but Shipyard Y, in my district, didn't.  Obviously, when you have over 500 applications and make 81 awards, there are a lot of unhappy losers.  We shall see what happens next but not any time soon, I fear.  Never a dull moment in Washington is there?  One sympathizes with the good folks at MARAD, who cannot be enjoying life right now.  July 22, 2009.

TWO KEELS LAID AT INGALLS

On Friday they laid the keel of the future USS America, the first of the new class of LHAs, and on Monday they laid the keel of the future USCGC Stratton, the third of the "Legends" class of WMSLs.  Note that the LHA contract is FPI, although the ship is the first of its class, while the WMSL contract is cost-plus, although the ship is the third of its class: watch NGSB suck up the huge over-runs on the LHA while sticking it to the taxpayers for the over-runs on the WMSL.  July 22, 2009.

SECOND SUPERFERRY ON ITS WAY

The Hawaiian Super Ferry Huakai just passed here (1000, Wednesday) at a fuel-conscious 17 knots.  At that rate, she should be joining Alakai in Norfolk some time on Friday morning.  July 22, 2009.

GUNS FOR EVERYONE

I'm with the NRA all the way: it's clearly our God-given right to carry guns and to defend ourselves against all comers.  The only thing I don't get is this concealment business.  Why do guns have to be concealed?  I say, if you want to carry a gun, let's see it.  What's the advantage in concealing it, other than to be able to take some dastardly antagonist by surprise?  Is that fair?  In fact, come to think of it, why don't we all carry guns, right out in the open?  Let's have some state laws that require all citizens over 17 to carry a gun at all times and to carry it where everybody else can see it.  What a deterrent to crime that would be!  Villains would think twice about robbing a bank if everybody in the building were armed to the teeth.  And think of the economic stimulus for our manufacturing industry!  Are we a country of strong, independent individuals or are we just a bunch of wusses?  July 22, 2009.  A bunch of folks have reminded me that Archie Bunker used to preach that the best way to stop airliner hijackings was to arm all the passengers.  All I can say is that Mr. Bunker was a great thinker and ahead of his time.

US SHIPPING HEADS FOR REORGANIZATION

US Shipping has apparently reached an agreement with Blackstone and others with regard to its reorganization.  Read the announcement here.  I haven't read all the documents yet so will hold off on commenting.  July 21, 2009.

LIFE IN SOUTH FLORIDA - 4

One of the nice things about living on the beach in this part of the world - in case you were wondering - is that I can actually monitor a little shipping while I work.  The good old Gulf Stream is so close to shore here that it is actually visible.  Ships go past that are not necessarily coming from or headed to a US port.  The other day I was able to watch one of the Hawaiian Superferries heading north - I'm keeping an eye out for the other one, which should come by any day now.  As I write, I can see a Carnival cruise ship, a Japanese car carrier and a SeaBee.  A SeaBee?  Are those old things still around?  Yup.  The Cape May, built by Quincy in 1972 as the Tillie Lykes, just sailed past.  I hope she's not headed for the scrap yard: probably not as she is under her own power.  July 21, 2009.  I've since been informed that she was on her way to Beaumont, to discharge her barges for reconditioning.  My observer tells me that all three SeaBees are in great shape and valued members of the RRF.

JEFFBOAT CUTTING 10% OF WORKFORCE

In another sign of the downturn in the inland barge sector, JeffBoat is cutting 10% of its workforce.  Read the story here.  July 20, 2009.

MARAD ANNOUNCES SHIPYARD GRANTS

67 shipyards will receive grants from the ARRA funds, an average of $1.5 million each.  Read MARAD's announcement here.  Congratulations to MARAD for getting the review done so quickly.  July 16, 2009.  I posted this report at about 0830.  By about 1100, the page with MARAD's announcement had disappeared from MARAD's web site.  Shortly thereafter, all reference to ARRA disappeared from MARAD's home page.  What can this mean?  It looks like all future ARRA news will be coming from the Secretary of Transportation, not from the modal administrations.  I guess that that also means that the Secretary is willing to take all the heat from annoyed politicians.  It's a wonderful world in Washington DC.

ENSCO WRITES OFF STOLEN RIG

Ensco has written off Ensco 69, the jack-up drilling rig stolen by the Venezuelan Government.  Read the announcement here.  Does our Government not have any plans for addressing these brazen acts of piracy by a country right here in our back yard?  July 16, 2009.

F-22s AREN'T SHIPS, BUT

I know nothing about planes, I am no fan of Lockheed Martin and I'm not even quite sure why we need an Air Force at all any more, but I do understand why a whole bunch of politicians want to keep the F-22 production line going.  It's the industrial base, stupid.  This is why we are building three Zumwalt-class DDGs, even though nobody wants them - it keeps BIW's workload at a minimum level.  It may also be why we are building SSNs - EB would close without them.  The Aerospace Industries Association recently published a study of the disconnect that we now have between DoD force planning and the industrial base.  Read it here.  It's aerospace-oriented, of course, but it makes all the right points.  July 16, 2009.

WASHINGTON NOW SLIGHTLY LESS MAD AT WASHINGTON - "IT WAS AN OVERSIGHT"

So much for my early assessment of Secretary LaHood as competent.  The day after DoT did not give any ferry money to Washington State, Secretary LaHood back-pedaled and gave some ferry money to Washington State.  Read Senator Murray's bragging press release here.  This tells us that (a) Secretary LaHood has a slush fund he can draw on in situations like this, (b) Secretary LaHood concedes that the ferry grant selection system was flawed, and (c) that if you yell at Secretary LaHood loudly enough, he will cave.  Oh, great.  July 16, 2009.

WASHINGTON MAD AT WASHINGTON

DoT only had $60 million to hand out but Washington State Ferries applied for grants totaling $56 million.  Now they are mad that they didn't get anything at all, although $750,000 was allocated to the state's Skagit County ferry system.  Read the story in the Seattle Times here.  Well now, let's see.  Could it be that they were greedy and asked for too much?  Could it be that they should have realized that the grants have much more impact if they are spread around in a lot of small contracts rather than in a few big ones?  (Alaska and North Carolina, the other big ferry operating states, also got nothing.)  Or could it be that WSF has effectively demonstrated in recent years that it doesn't know how to spend the taxpayers' money wisely?  I don't know why but I'm eternally amazed at the stupidity of the average politician.  July 15, 2009.

APPEALS COURT THROWS OUT NGSB AWARD

The Fifth Circuit Court of Appeals has thrown out a contract settlement in which NGSB was awarded $70 million, to be paid by the Government of Venezuela.  The deal, brokered by since-jailed attorney Dickie Scruggs, was supposed to be compensation to NGSB for cost over-runs and delays on the overhaul and modernization of two Venezuelan frigates.  Cost over-runs and delays at NGSB?  Surely not!  Well, it did take them five years to complete this job, longer than it would have taken to build two new ships.  Read the story in the Times-Picayune here.  July 15, 2009.

DOT AWARDS FUNDS FOR FERRY PROJECTS

The Secretary of Transportation has announced the award of $60 million to 29 state ferry projects.  Read the announcement here.  The twelve projects that specifically involve new boats are summarized below.  It's not a whole lot of money but it all helps.  July 14, 2009.  Two more for Senator Murray are added at the bottom.  July 16, 2009.

POSITIVE REPORTS FROM LCS 2'S TRIALS

It's too early to reach any conclusions but it sounds as though the builders' trials of the future USS Independence, (LCS 2), were pretty successful.  She certainly appears to corner well.  July 14, 2009.  For more pictures, go to Austal's web site, here.  Scary looking boat, eh?  July 15, 2009.

HOT NEWS - SUPERFERRIES HEADING TO NORFOLK

The Hawaiian Super Ferry Alakai just zipped past here at about 30 knots.  According to www.marinetraffic.com, (which is a great system, even if it's not a complete system), her destination is Norfolk.  I wonder why.  July 13, 2009.  I've been told that both ships are being moved to Norfolk because their insurance underwriters don't want them on the Gulf Coast during hurricane season.  Oh, right.  July 14, 2009.  Latest: Alakai is at a pier in the West Ghent section of downtown Norfolk, the first pier west of the MLK Freeway bridge.  July 15, 2009.  Later still: MARAD has now taken possession of both ferries and the other will be moved to Norfolk later this week.  July 15, 2009.

THE NAVY'S VIEW OF THE SHIPBUILDING SITUATION

Today's Defense News features an interview by Chris Cavas with DASN Alison Stiller.  Read it here.  July 13, 2009.

HIGH-SPEED RAIL CORRIDORS

Anyone who has ever travelled on high-speed trains in Europe or Japan knows how great they are.  So I'm all for the development of high-speed rail corridors in the U.S., as the Administration intends.  But why just for passenger transportation?  These corridors should be dual-tracked - one track for high-speed passenger rail and a parallel track for high-speed freight.  (You have to have two tracks so that freight transportation won't have to come to a screeching halt whenever it's rush hour on the passenger track.)  Would that not reduce highway congestion in a hurry?  In addition, the high-speed freight corridors should obviously link our major seaports (and short-sea shipping terminals) with our centers of population and manufacturing, which might not require exactly the same network configuration as high-speed passenger rail.  Task number one for the incoming Maritime Administrator.  July 11, 2009.

MORE ON DDG 105

It has been confirmed that DDG 105 broke her gun mount before firing a single round and never even attempted her high-speed trials.  A second "Super Trial" is scheduled for next month.  So much for the "clean sweep".  July 11, 2009.

LHD 8 LEAVES THE YARD AT LAST

The one-off amphib designated LHD 8, the future USS Makin Island, finally left NGSB's Pascagoula yard yesterday, heading for San Diego.  The Navy contracted for this ship - illustrated on the right - in April 2002, with a scheduled delivery in July 2007.  She was actually delivered in April 2009, 21 months late, will be commissioned in San Diego on October 24, and is scheduled for a PSA in the first four months of 2010.  Some, but not all, of this delay can be blamed on Katrina.  Unusually these days, this was an FFP contract and NGSB has had to  swallow about $360 million in over-runs.  So far.  July 11, 2009.

ISRAEL TURNS ITS BACK ON LCS 1

Defense Industry Daily reports that Israel has concluded that Lockheed Martin's LCS 1 design and NGSB's Sa'ar 5.5 are both much too expensive, despite the advantages of U.S. Government financing, and is going with a stretched version of Blohm + Voss' MEKO A-100 - illustrated on the right - for its two-ship corvette program.  July 10, 2009.

MARAD AWARDS FIRST BATCH OF SHIPYARD GRANTS

MARAD has announced the award of $17.1 million in shipyard grants.  Read the announcement here.  Here's a summary.  Note that about $10 million out of the $17 million goes to seven of what I would call second-tier or mid-sized shipbuilders, while about $7 million goes to seven truly small yards.  Note that this is the money from this year's defense budget: the $100 million from the Economic Stimulus Act is still to be distributed.  July 9, 2009.

FIVE MORE SHIPS SOLD FOR SCRAPPING

MARAD has announced the sale of five more old ships for scrapping.  Read the announcements here and here.  The five ships are Resolute, built by Bath Iron Works in 1980, Gulf Farmer and Gulf Shipper, built by Avondale in 1964, Gage, (APA 168), a Victory ship, built by Oregon Shipbuilding in 1944, and Ortolan, (ASR 22) - illustrated on the right - built by Alabama in 1972.  July 9, 2009.

A THUNDERBOLT FROM THE SENATE

The Senate Commerce Committee reported out the MARAD authorization bill (S.1308) yesterday, with Section 7 intact.  Read it here.  Section 7 says that it is U.S. policy that all US-flag foreign-trade ships be US-built, as well as the domestic-trade ships.  If implemented, this policy would mean that the 60 foreign-built ships now operating with subsidies under the Maritime Security Program would have to be replaced by US-built ships: that could mean something like six new ships a year for the next ten years, followed by a continuing renewal requirement of about two ships a year.  Excuse me while I rush out and buy me a shipyard.  Unfortunately, it isn't going to happen.  July 9/13, 2009.

TWO MORE WPBS FOR BOLLINGER

The Coast Guard is planning to buy two more 87-foot, Protector-class, coastal patrol boats (#s 76 and 77) from Bollinger Shipyards, for transfer to Yemen.  Read the announcement here.  July 8, 2009.

THE BENDER BANKRUPTCY - EPISODE 2

Bender has filed a list of its major unsecured creditors.  Read it here.  July 8, 2009

BROOMS NOT EARNED

It seems that the brooms flying from DDG 105's masthead last week were hoisted by NGSB's PR department.  Informed sources report that she did not even complete her Super Trial, let alone pass with flying colors, and will have to go out again later in the month to complete her gun tests and high-speed tests.  July 8, 2009.

MORE ON LCS 2

Now we know why LCS 2 came back in for the weekend and will be doing day trips next week, rather than staying out for however long the trials take.  They had 170 observers on board!  Really, sometimes one can be forgiven for thinking that the Navy has lost its collective mind.  How could it possibly require 170 observers on a Builders Trial for a 400-foot boat that only needs 20 people to operate it?  How many do they plan to have on board for her Acceptance Trials?  More constructively, she apparently performed OK, running at 75% power on her diesels and 50% on her gas turbines, and reaching 34 knots.  We will know more at the end of the week, but it sounds promising, especially as her fuel consumption is bound to be much better than that of LCS 1.   July 5, 2009.

LCS 2 UNDER WAY

Austal's LCS finally left port for her builders trials on Thursday morning but came back in on Friday, the party line being that they wanted to give everybody involved the weekend off before starting again on Monday.  The trials had been delayed by problems with her machinery control system software, something that seems to be becoming a chronic problem with the Navy's ships.  July 3, 2009.

THE BENDER BANKRUPTCY - EPISODE 1

Yesterday Bender voluntarily sought conversion of the Chapter VII filing to Chapter XI and got permission to use money borrowed from Marquette Commercial Finance to meet its payroll.  Reads the filing here.  An attachment to this filing indicates that the company projects revenues of $1,195,516 over the next two weeks and disbursements of $1,405,871.  In addition, Tom Bender apparently lent the company $330,428 this week.  July 2, 2009.

2007 ECONOMIC CENSUS DATA INDICATE SHIPBUILDING BOOM

The Census Bureau has released some of the data from the 2007 Economic Census and it clearly shows the boom we have been experiencing.  Look at the data here.  (Note that the Economic Census is done in years that end in 2 and 7: the additional data come from the Annual Survey of Manufacturing.)  The total revenues of the industry in 2007 were $16.3 billion, compared to $14.9 billion in 2006, an increase of 10%.  Of this, shipbuilding grew by more than 14%, while ship repair didn't change at all.  Note also that revenues in boatbuilding turned down in 2005.  July 1, 2009.

EPA PROPOSES "STRINGENT" EMISSIONS STANDARDS FOR LARGE SHIPS

We've seen this coming and here it is.  Read the announcement here.  If anyone doesn't understand that this is going to be the big technological challenge for our industry over the next few years, they haven't been paying attention.  This could make compliance with OPA90 look simple.  But remember, what they make us do, they had better make the truck and car and train and airplane guys do as well.  Start planning your LNG-fuelled ships.  July 1, 2009.

BENDER TO FILE UNDER CHAPTER XI

The other shoe finally dropped.  Bender Shipbuilding said this morning that it has agreed to seek protection from its creditors, filing a Chapter 11 bankruptcy petition to reorganize the business.  Sad, but not surprising.  Read the report in the Mobile Press-Register here: don't miss the nasty comments that follow.  July 1, 2009.

NGSB OUTSHINES BIW ON SIMULTANEOUS SUPER TRIALS

Strange scheduling that must have stretched the Navy's INSURV resources saw simultaneous "Super Trials" this week of DDG 105 at NGSB and DDG 108 at BIW.  In a reversal of expectations, however, the NGSB ship apparently performed well while the BIW ship didn't.  Read the Defense News report on DDG 108 here and the NGSB release on DDG 105 here.  Insiders report, however, that the DDG 105 trial was not as smooth as the release implies and you note that there is no reference to any broom at the masthead.  In addition, DDG 105 was supposed to have been delivered in June last year, whereas DDG 108 was only supposed to have been delivered in February this year.  July 1, 2009.  Correction: I am advised, with a confirming photograph, that DDG 105 was, in fact, flying a broom from her masthead on her return to the yard.  Good for NGSB.  July 2, 2009.

LCS 2 SEA TRIAL DELAYED AGAIN - AND NO MORE PESKY QUESTIONS, PLEASE

LCS 2 did not go out on builders' trials on Monday, because of machinery problems.  And it did not go out on builders' trials yesterday either, for unspecified reasons.  And GD will no longer be providing any “interim updates”, that is to say "enough with the questions and trust us."  July 1, 2009.

MERRY CANADA DAY

Some of the snowbirds are still down here on the beach.  Check out the tan on this guy as he heads to the local saloon for some flipper pie and a Labatt 50.  By the way, this gentleman - his name is Mitch - is a beach moose.  The beach moose has very different behavioral characteristics compared to your common or forest moose.  Whereas the forest moose just nibbles on greenery, complains a lot and finds his entertainment in trying to stare down oncoming traffic, your beach moose enjoys fish and pasta, is very gregarious and plays a mean game of beach volleyball.  July 1, 2009.