Maritime Memos February 2010
INDEPENDENCE
SEAPORT MUSEUM UP THE CREEK
Philadelphia's Independence Seaport Museum - visit it here - has notified the Navy that it can no longer accommodate the historic USS Olympia, (C 6) - pictured on the right. Read the report in the Navy Times here. A sign of the times and not a good one, if a city the size of Philadelphia cannot support a museum of this significance. February 28, 2010.
SUPERFERRIES NOT SO SUPER
So the Alakai was mobilized but never actually left Norfolk. The Huakai did its part and is now loading for the return to Norfolk, but talk about a tough duty for the crew: sleeping on air mattresses and sharing a single shower! Somebody please upgrade these boats before they are mobilized again. February 28, 2010.
NASSCO GETS FUNDING FOR T-AKEs 13 AND 14
The Navy has exercised an option on its contract with NASSCO for the construction of T-AKEs 13 and 14. The contract value is $825 million, with completion by Dec-13 and Nov-14, respectively. Read the DefenseLink announcement here. February 26, 2010.
BATH GETS FUNDING FOR DDG 115
The Navy has exercised an option on its contract with BIW for the long-lead-time material for DDG 115. The contract value is $114 million, with completion by Dec-12. Read the DefenseLink announcement here. February 26, 2010.
NAVY THROWING MONEY AT ENTERPRISE
The USS Enterprise will be retired in three years' time but that apparently doesn't discourage the Navy from throwing the taxpayers' money at her. Yet another amendment yesterday to the contract for her current EDSRA brings the total to over $600 million, enough to buy a new DDG. See the numbers below. February 26, 2010.
| Date | Amount | Cum. |
| 6/26/2007 | 20,669,181 | 20,669,181 |
| 10/18/2007 | 6,000,000 | 26,669,181 |
| 4/11/2008 | 453,263,184 | 479,932,365 |
| 11/6/2008 | 6,457,805 | 486,390,170 |
| 12/9/2008 | 12,000,000 | 498,390,170 |
| 4/29/2009 | 6,000,000 | 504,390,170 |
| 5/22/2009 | 21,000,000 | 525,390,170 |
| 6/15/2009 | 14,500,000 | 539,890,170 |
| 8/3/2009 | 7,000,000 | 546,890,170 |
| 8/10/2009 | 28,000,000 | 574,890,170 |
| 10/20/2009 | 7,000,000 | 581,890,170 |
| 11/13/2009 | 6,000,000 | 587,890,170 |
| 12/3/2009 | 6,000,000 | 593,890,170 |
| 2/23/2010 | 19,400,942 | 613,291,112 |
ANOTHER DOUBLE PLAY FROM NASSCO
NASSCO delivered T-AKE 9 on Wednesday - a month early - and will launch T-AKE 10 tomorrow. Read NASSCO's announcement here and the Navy's here. At least one of the "Big Six" has a clue about modern shipbuilding. February 26, 2010.
DAVIE BANKRUPT AGAIN
Davie Yards ASA has filed for bankruptcy protection. Read the announcement here. By my count, this is the seventh time they've gone bust: somehow they always seem to get bailed out for another try. This most recent time it was a bunch of Norwegians - not the same ones that own the failing Aker Philadelphia, but another bunch that also thinks it knows more about shipbuilding in North America than we do. It's a shame, because Davie is a fine facility, with a highly skilled work force: the economics of running a large, unionized shipyard in Quebec are, however, just not in its favor. See its record here. February 26, 2010.
GD OUTPERFORMED NG AGAIN LAST YEAR
General Dynamics released its 10-K for 2009 yesterday. Read it here. The corporation as a whole made a profit of $2,394 million on revenues of $31,981 million, a margin of about 7.5%. Operating profit was $3,675 million, a margin of about 11.5%. The shipbuilding division had an operating profit of $642 million on revenues of about $6,363 million, a margin of 10.1%, double that of NG's shipbuilding division. To see a summary of GD's historical financial performance, plus that of its predecessor companies, going back to 1985, click here. The comparable data for NG are here. See below for a comparison of NG's and GD's results for 2009. There's not much doubt which is the better company, is there? February 22, 2010.
|
Item |
NG |
GD |
|
2009 |
2009 |
|
|
mm USD |
mm USD |
|
|
Total Company |
||
|
Net Sales |
33,755 |
31,981 |
|
Operating Margin |
2,483 |
3,675 |
|
Operating Margin (%) |
7.4% |
11.5% |
|
Net Income |
1,686 |
2,394 |
|
Net Income (%) |
5.0% |
7.5% |
|
Total Assets |
30,252 |
31,077 |
|
Stockholders' Equity |
12,687 |
12,423 |
|
Property, Plant and Equipment |
4,868 |
2,912 |
|
Depreciation |
736 |
344 |
|
Capital Expenditure |
654 |
385 |
|
Employees |
120,700 |
91,700 |
|
Net Sales/Employee |
279,660 |
346,500 |
|
Shipbuilding Unit |
||
|
Net Sales |
6,213 |
6,363 |
|
Operating Margin |
299 |
642 |
|
Operating Margin (%) |
4.8% |
10.1% |
|
Total Assets |
4,585 |
2,512 |
|
Depreciation |
186 |
71 |
|
Capital Expenditure |
181 |
85 |
|
Shipbuilding as a Proportion of the Total Company |
||
|
Net Sales |
18.4% |
19.9% |
|
Operating Margin |
12.0% |
17.5% |
|
Total Assets |
15.2% |
8.1% |
|
Depreciation |
25.3% |
20.6% |
|
Capital Expenditure |
27.7% |
22.1% |
AKER PHILADELPHIA ON DOWNWARD SLOPE
Aker Philly incurred a net loss of $4.4 million in 2009, on revenues of $226.7 million. Read the report here. Given their remaining backlog, it'll only be another twelve months before they'll be gone. February 22, 2010.
THE COAST GUARD'S FLEET IS FALLING APART
Twelve of the 19 Coast Guard cutters mobilized to Haiti have had serious mechanical problems, the Commandant says. Read the story in Navy Times here. So, let's get on with fleet renewal, right? If the Coast Guard had not wasted years of effort and many millions of taxpayers' money on its insane flirtation with Northrop Grumman and Lockheed Martin, it might not now be having these problems. February 22, 2010.
LCS 3 VERY DIFFERENT FROM LCS 1
Navy Times reports that the design has changed. Read the story here. But has it changed enough? Or too much? Is it still proven? Has the Navy changed its requirements since accepting delivery of LCS 1? I think we should be told. February 20, 2010.
ROME'S FAST PATROL BOATS
I have just been introduced to the wonderful web site/blog Cog and Galley, which is currently featuring an article on the FPBs deployed by Rome on the Rhine River in the 4th century, with the mission of preventing a crossing by those dastardly Visigoths. Isn't naval architecture a great profession? February 20, 2010.
NDIA ANALYSES THE LCS PROGRAM
There's a really remarkable analysis of the LCS program's two competitors in the latest issue of National Defense, the journal of the NDIA web site. Read it here. Now, given the way the Navy has structured the proposal evaluation factors - see Section M of the RFP here - is there not a danger that they could end up with the wrong boat? February 19, 2010.
CROWLEY
ORDERS FROM BOLLINGER
In a surprise move, Crowley Maritime has ordered two 11,000-hp oceangoing tugs - pictured on the right - from Bollinger Shipyards, with an unspecified number of options for more. The boats, designed for ocean towing of rigs and Crowley's new 400-foot deck barges, will be built at Bollinger's Amelia shipyard, which used to be McDermott's and which built all but two of Crowley's 25-boat Invader class, which are now around 35 years old. Could these be the first two of a wholesale replacement of the Invaders? Other large Crowley tugs are currently being built by Dakota Creek and by VT Halter. The price was not revealed but deliveries will be in 2011 and 2012. Read Crowley's announcement here. Note that they specifically address the greenness of the design. I think that, in future, I'm going to blast all announcements of new designs that don't feature green initiatives. February 17/18, 2010.
OUR INDUSTRY JUST GOT A BIT OLDER
Archeologists have discovered tools on Crete that are at least 130,000 years old, providing evidence of migration by sea that is at least 70,000 years earlier than had previously been identified. Read the story in the New York Times here. February 16, 2010.
US SHIPPING'S ITB PHILADELPHIA HEADS OUT
Only a week after hearing of the third and fourth of US Shipping's six ITBs being sold for demolition, the fifth has now left its lay-up berth in Violet LA and is waiting to load grain in Galveston. She's bound for a port in East Africa, from which it will just be a short hop to a scrapping beach. February 16, 2010.
GOODBYE MARINETTE
In one of the shipbuilding industry's dumbest ever managerial appointments, Fred Moosally is now President of Fincantieri Marine Group, the parent of Marinette Marine, Bay Shipbuilding and Cleveland Ship Repair. Read the announcement here. This is the man who recently retired in a storm of criticism from the leadership of Lockheed Martin's Maritime Systems Division, a position which he had held for the past seven years, and we all know how brilliantly that organization has been doing, don't we? What does Fincantieri think it's doing? They don't need a good man to run the shipyards: they've already got one. And they don't need a good man in Washington: they've already got one of those too. This is suicidal. Gaaaaaah. February 15, 2010.
NGSB MADE ALMOST $300 MILLION PROFIT LAST YEAR
Northrop Grumman released its 10-K for 2009 yesterday. The corporation as a whole made a profit of $1,686 million on revenues of $33,755 million, a margin of about 5.0%. Operating profit was $2,483 million, a margin of 7.4%. The shipbuilding division had an operating profit of $299 million on revenues of about $6,213 million, a margin of 4.8%. Isn't it great that the world's most incompetent shipbuilder can also be one of the world's most profitable shipbuilders? To see a summary of NGSB's historical financial performance, plus that of its predecessor companies, going back to 1985, click here. February 9, 2010.
WASHBURN
& DOUGHTY'S NEW TUG
The highly regarded Maine tug builder, apparently fully recovered from the fire last year, has unveiled a new design for an 80-ft. Z-drive tug - pictured on the right. Read about it here. But is it green? Who knows? Why introduce a new design for any type of vessel without addressing the major challenge facing our industry, that of reducing emissions? February 9, 2010.
IF THE FRENCH CAN SELL LHAs TO RUSSIA, WHY CAN'T WE?
Defense News reports that Russia is now talking to France about buying not one but four Mistral-class helicopter carriers. Read the story here. As you can imagine, this ticks off a lot of U.S. senators, who, having an average age of 63, are still fighting the Cold War. But think how badly the Russian Navy would get screwed up if it had to buy ships from Northrop Grumman. February 9, 2010.
ALAKAI STILL IN NORFOLK
Nineteen days after being mobilized for Haiti, the ex-Hawaiian SuperFerry Alakai is still in Norfolk. Why? February 8, 2010.
ONE DECENT WEB SITE
Here's at least one decent DOD web site, at U.S. Fleet Forces Command. Good for Admiral Harvey. Note the excellent map of Haiti Operations that's halfway down the page. February 8, 2010.
US SHIPPING SCRAPS TWO MORE ITBS
Tradewinds reports that US Shipping has sold two more of its ancient ITBs for scrap. The ITB New York went for about $3.6 million and the ITB Baltimore for about $4.5 million. Progress, of a sort. February 7, 2010.
DON'T LOOK TO GOVERNMENT WEB SITES FOR USEFUL INFORMATION ON THE HAITI STORY
If you want to know what's gong on in Haiti as far as the maritime side of things is concerned - you know, fixing the port facilities, latest ship deployments, putting cargo ashore, etc. - don't waste your time visiting U.S. Government web sites. They are almost completely useless. Visit the media portals of the Navy, MSC, MARAD and the Coast Guard to see what I mean. The Coast Guard's is the worst, especially with that thoroughly off-putting opening question. Badly designed web sites, astonishingly user-unfriendly, providing little or no useful information and hardly any pictures, and what info there is is far from up to date. Where's the hard data? What ships are where? What are they doing? What have they achieved so far? What equipment are they using? What's the plan for the next few weeks? Do you see this kind of info anywhere? No. Or any decent pictures? No again. It's not as if this is a war and the info might be classified. No, it's just incompetence. Meanwhile, there's information and there are pictures out there if you have lots of time to search for them, just not on the Government web sites that you and I pay for. February 6, 2010.
HUAKAI
AT WORK IN HAITI
Army equipment coming ashore from the former Hawaiian SuperFerry. February 5, 2010.
ANTILLEAN SHIPPING AND SEABOARD MARINE DELIVERING TO HAITI
Two more U.S. shipping companies that are pulling out all the stops for Haiti are Antillean and Seaboard. See a series of great photographs on Antillean's web site here. Read Seaboard's latest report here: note the high-tech pier they are using. February 4, 2010.
INLS AT WORK IN HAITI
Three excellent pictures of the INLS handling cargo from the USNS PFC DeWayne T. Williams. February 4, 2010.


OFFSHORE SERVICE IS $18 BILLION INDUSTRY
OMSA has just published a study of the economic impact of the offshore service industry - both shipbuilders and vessel operators. The key conclusions are that U.S. businesses experience about $18.1 billion in new sales annually as a result of economic activities within this segment of U.S. shipbuilding and offshore vessel operations. These new businesses help to generate about $4.6 billion in new household earnings annually for U.S. workers. Approximately 103,160 jobs are supported by the economic activity of these segments, with average annual earnings of about $43,992. And it is estimated that the federal government collected nearly $1.4 billion annually in taxes directly and indirectly in 2008, and $770.8 million in state and local government taxes in the same year. Read OMSA's announcement here and the study itself here. February 4, 2010.
THE NAVY'S 30-YEAR PLAN
The new 30-year plan is interesting, reflecting several changes in policy since the previous edition. Click here to see a summary table. I have broken down the categories defined in the plan by vessel type but, because the plan is not quite as detailed as I would have liked, I'm not 100% positive that I did it correctly. In any case, the key points for me are:
•
Bad news for Newport News and Electric Boat as the carrier and submarine schedules are both cut back and stretched out.• Mixed news for Bath and Ingalls as the DDG schedule is cut back and the CG(X) goes away, but overall this schedule looks better for long-term workload planning.
• No surprises for the LCS contractors: the planned force structure is still 55 boats.
• Good news for Ingalls as the amphib schedule seems to be strongly supported and more logical than it was, although the LCC program goes away.
• Excellent news for NASSCO as the MLP not only survives but will be based on NASSCO's Alaskan crude carrier design, and the next-generation T-AO, of which 19 are planned, is also to be based on a commercial design, presumably NASSCO's product carrier.
• Wonderful news for Austal as the Navy now plans to buy 22 more JHSVs over the next 12 years, and that doesn't include the ones the Army will buy.
• Not much else: two ASs, which would have to be built in a big yard, four T-ATFs, four T-ARSs and five T-AGOSs.
• Note that 156 of the 276 ships in the table - about 5 ships a year - are large enough to require a big shipyard, while 120 - about 4 ships a year - can and will be built in mid-size shipyards. How times have changed!
February 4, 2010.
THE DECLINE IN EDITING
The almost complete lack of competent editing in today's media was emphasized this morning by the headline over a long article in the New York Times about Admiral Mike Mullen. The headline? "General's Opposition to Gay Policy was Years in the Making". Amazing. February 4, 2010.
PROPOSED 28TH AMENDMENT
Have you seen the language that's being circulated? I kinda like it and it's hard to imagine more than 535 people being against it.
"Congress shall make no law that applies to the citizens of the United States that does not apply equally to the Senators and Representatives; and Congress shall make no law that applies to the Senators and Representatives that does not apply equally to the citizens of the United States."
The general idea is to prevent them from exempting themselves from the laws that they inflict on the rest of us, which at present they do wholesale. Oh, I know it's totally impractical, but just discussing it might get their attention. February 3, 2010.
NAVY RELEASES NEW 30-YEAR SHIPBUILDING PLAN
The latest edition of the Navy's 30-year shipbuilding plan is out. Read it here. Comment and discussion tomorrow. February 3, 2010.

VT HALTER DELIVERS FISHERIES RESEARCH VESSEL
VT Halter Marine has delivered the Bell M. Shimada, (R 227), the fourth of four FRVs it has been building for NOAA. Read NOAA's announcement here. February 3, 2010.
COAST GUARD ANNOUNCES OPC ACQUISITION STRATEGY
Simultaneous with the Administration's budget request of $45 million for the design of the Coast Guard's OPC, or next-generation medium-endurance cutter, the Coast Guard has announced its acquisition strategy for this program. Read it here. There will be three Phase I design contracts followed by a winner-takes-all construction contract. Who are the probable competitors? NGSB and BIW, of course, but they will be too expensive. Bollinger, Marinette and VT Halter Marine, certainly: these three are the likely Phase I contractors. Dark horses include Todd, Derecktor and Signal Ship Repair (ex-Bender). And just to complicate things, wouldn't it be interesting if Austal were to have a candidate design? February 3, 2010.
ASN "CONFIDENT" IN NGSB
The ASN(RDA), Sean Stackley, is quoted in the Newport News Daily Press as saying that "he is confident in Northrop Grumman Corp.'s ability to deliver quality ships to the Navy despite widespread problems reported last week on surface ships built at Northrop's Gulf Coast shipyards". Read the story here. Well, he's about the only person outside Northrop Grumman who is, and his statement is way out of line. This is further evidence that the Navy and the big defense contractors are closely allied in their incompetence and unable to maintain a proper customer-supplier relationship. What Stackley, whose qualifications for being ASN include having been in charge of the disastrous LPD 17 program, should have said was something like " I am no longer confident that Northrop Grumman has the ability to deliver quality ships to the Navy and I require them to take immediate and effective action to restore my confidence." February 3/4, 2010.
NOTHING FOR TITLE XI
The entire MARAD budget request for 2011 is only $352 million, almost all of which is either for the operation of Kings Point or for subsidies to employers of Kings Point graduates. Nothing for Title XI, which actually creates jobs in the U.S. Why don't we just close MARAD down? February 3, 2010. Apostrophes deleted February 4.
AMFELS DELIVERS JACK-UP TO MEXICAN OPERATOR
The Brownsville rig builder has delivered the LeTourneau Super 116-E jack-up Tuxpan to Perforadora Central, SA. Read the announcement here. February 2, 2010.
NAVY BUDGET COVERS ONLY NINE SHIPS
The FY11 budget request totals $16.6 billion and provides for nine new ships. Notable are the decision to kill the CG(X) and LCC(R) programs and the lack of any NDSF ships. A tenth ship, a JHSV, will be paid for separately, by the Army. February 2/5, 2010.
| SC,N Program | Qty. | Amount ($000) | NDSF Program | Qty. | Amount ($000) | |
| Carrier Replacement Program | 0 | 2,639,569 | MPF MLP | 0 | 380,000 | |
| Virginia Class Submarine | 2 | 5,132,688 | Post Delivery and Outfitting | 0 | 31,202 | |
| CVN Refueling Overhauls | 0 | 1,663,836 | National Def Sealift Vessel | 0 | 1,463 | |
| DDG 1000 | 0 | 186,312 | LG Med Spd Ro/Ro Maintenance | 0 | 106,898 | |
| DDG-51 | 2 | 2,970,174 | DoD Mobilization Alterations | 0 | 25,902 | |
| Littoral Combat Ship | 2 | 1,509,335 | TAH Maintenance | 0 | 24,384 | |
| LHA Replacement | 1 | 949,897 | Strategic Sealift Support | 0 | 4,875 | |
| Intratheater Connector | 1 | 180,703 | Research And Development | 0 | 28,012 | |
| Oceanographic Ships | 1 | 88,561 | Ready Reserve Force | 0 | 332,130 | |
| Outfitting | 0 | 306,640 | ||||
| Service Craft | 0 | 13,770 | ||||
| LCAC SLEP | 0 | 83,035 | ||||
| Total SC,N | 9 | 15,724,520 | Total NDSF | 0 |
934,866 |
COAST GUARD BUDGET INCLUDES AN NSC AND FOUR FRCs
The FY11 budget request includes $538 million for the fifth NSC; $45 million for the selection of a design for the OPC; $240 million for four more FRCs; and $42 million for ten more RB(M)s. February 2, 2010.
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