PERCENT EXHIBIT 1 COMPARISON OF MARAD IMPACT A. COMPARISON OF NAVY AND PRIVATE WORK BEFORE/AFTER THE MERCHANT MARINE ACT OF 1970 The relative importance of Navy and total private (MarAd CDS and other private) construction to the shipbuilding industry has changed significantly since the passage of the Merchant Marine Act of 1970. Exhibit 1 compares the importance of each sector on July 1, 1970 and July 1, 1974. Shipyards, production labor, building positions, ships under contract and dollar value of the backlog are compared for Navy, CDS and other private ships under construction on these two dates on a percentile basis.1 The Navy has continued as the dominant influence in the shipbuilding industry. It utilizes more than 50 percent of the two critical resources, production labor and building positions. Although there is Navy work currently in six major shipyards, all but four ships are being built at Newport News, Electric Boat, and Ingalls. There are only two Navy ships at Avondale and one each at NASSCO and Bath. Private work, however, is presently distributed throughout the Nation in 22 shipyards. The contract value of the current backlog of work is approximately $4.2 billion each for the Navy and the commercial sector. However, only 63 ships are under contract for the Navy, whereas 94 are being constructed for commercial operation. 1 Large oceangoing ships only. B. ARRANGEMENTS FOR COORDINATION OF NAVY AND MARAD SHIPBUILDING, WITHIN THE EXECUTIVE BRANCH The Maritime Administration and the Navy have always maintained a liaison formally or informally, in order to be continuously aware of each other's planned building programs. The Navy is well aware of the subsidized program as the Merchant Marine Act, 1936, requires the approval of each ship design by the Secretary of the Navy as being: "suitable for economical and speedy conversion into a naval or military auxiliary, or otherwise suitable for the use of the United States Government in time of war or national emergency." In 1970, when legislation was being considered to revitalize the Merchant Marine, the Maritime Administration and the Navy created the MarAd/Navy Shipbuilding and Repair Committee. The purpose of the committee as stated in the charter is: "To provide for coordination and cooperation between the Maritime Administration and the Navy Department and to advise the Secretary of Commerce and the Secretary of the Navy as to the mobilization, adequacy and efficiency of the shipbuilding and repair industry and the impact of all Government and private shipbuilding programs upon the industry." This committee had its first meeting on March 26, 1971, and has met seven times since. The last meeting took place on June 7, 1974. The discussions at these meetings have covered a wide range of subjects of mutual interest. Included have been discussions on defense priorities as provided in the Defense Production Act of 1950, presentations of shipbuilding programs, and exchanges of views on material and labor shortages. This group was also instrumental in developing analytical techniques that will soon be able to measure more accurately the impact of various shipbuilding programs on the industry and its adequacy to meet a variety of mobilization scenarios. In addition to the above-mentioned liaison activities generated by the requirements of the Merchant Marine Act, 1936, the Department of Defense and the Department of Commerce signed a letter of agreement dated November 9, 1955, establishing the DOD/DOC Office of the Coordinator for Ship Repair and Conversion. This coordinating activity established a peacetime association between the two Departments through which data on shipbuilding and ship repair facilities and manpower are maintained. In the event of a national emergency, procedures and information will be immediately available to coordinate ship repair and conversion activities. C. SHIPYARD MODERNIZATION INVESTMENT AND CAPACITY EXPANSION FOR NAVAL AND MERCHANT CONSTRUCTION Since the passage of the Merchant Marine Act of 1970, commercial shipyards have experienced a significant growth due to the greatly expanded CDS program, liberalization of vessel-types eligible for subsidy assistance and mortgage guarantee, and an increase in the allowable amount of outstanding mortgage guarantees on ships. This growth is demonstrated in the extensive capital expenditure programs of the shipyards throughout the Nation. 39-530 75 pt. 3 3 EXHIBIT 2 SHIPYARD INVESTMENTS MADE SINCE THE 1970 ACT, ACTUAL AND PLANNED, AS OF JULY 1, 1974 Exhibit 2 shows the level of shipvard investments made and proposed since the Merchant Marine Act of 1970. In the past 4 years over $371 million of capital investments have been made. The proposed program expenditures of $342 million, coupled with those completed programs will lead to a higher level of shipyard productivity and technical competence. EXHIBIT 3 Facility Improvements Since the 1970 Act Completed, Under Construction, and Planned Alabama_-_ Avondale____ Shipyard Bath Iron Works_. Bay SB Corp_. Beth-Sparrows Point----- Boston SB Corp------ Colonna's--- Improvements General facility improvements. Complete upgrading of steel fabricating plant; New building dock (basin); new steel handling Reactivation and modernization. New floating drydock; miscellaneous improvements. Modernization of shop facilities. EXHIBIT 3-Continued Facility Improvements Since the 1970 Act Completed, Under Construction, and Shipyard Dravo_ FMC Corp----- Gamage-- General Dynamics-Quincy_-. Halter. Ingalls/Litton__. Jacksonville.. Jeffboat, Inc_ Kelso Marine, Inc‒‒‒‒‒ Lake Union__ Levingston--Marinette_ Martinac_ Maryland. NASSCO Newport News (Comm. Ship Pott Industries (3 yards). Sun Ship-- Swiftships---. Todd-Galveston____ Todd-San Pedro__. Planned-Continued Improvements General improvements of shipbuilding and manufacturing facilities. New machine tools, equipment, and cranes for modular construction. General facility improvements. Modernization program centered primarily around conversion of 2 conventional shipways to building basins which can accommodate LNG's and VLCC's; new panel line for modular ship construction. General facility improvements. Completion of west bank yard; east bank, new nuclear overhaul facility and modernization of piers. Acquisition of Bellinger Shipyard; new floating drydock for 85,000-deadweight-ton ships; general facility improvements. General facility improvements. Expansion of new construction transfer system General facility improvements. Lengthen building way from 600 feet to 1,000 feet; Expansion of present shipbuilding facilities for Expansion and improvement of facilities. General facility improvements. New shipyard adjacent to existing yard; new floating drydock for 1,416-foot by 244-foot vessels. Reconstruction and enlargement of 2 shipways to accommodate ships 900 feet by 132 feet; two new 130-ton gantry cranes. Exhibit 3 shows the actual and planned facility improvements to be made in the various shipyards. These improvements range from the construction of a new shipyard at Newport News, Va., for commercial ship construction to the upgrading or replacement of shipyard equipment which will occur at most yards. D. RESULTS OF MARAD SHIPYARD R. & D. PROGRAMS The shipbuilding research program is conducted in eight technical areas under the direction of shipbuilding firms. These yards cost share their programs with the Maritime Administration and are responsible for technical management of ongoing projects, planning of new projects for consideration by industry and MarAd, and assisting other U.S. yards in the implementation of results. Each of these eight areas has been identified by the industry as an economic sore point, due either to its high cost relative to total ship cost or to the technological barriers which had prevented any single firm from making the necessary cost or productivity breakthrough. 1. Welding program-lead shipyard: Bethlehem Steel Corp., Sparrows Point shipyard Steel fabrication is an area of the construction process where production line tasks such as the welding of butt joints have great potential for automation and the use of new welding techniques. The following projects are either underway or have been completed in this area. Ongoing projects (a) Development of an improved vertical butt welder. The object of this project is to develop a machine capable of making continuous, automatic welds on transverse butt joints at any place on the shell of a ship. (b) Development of a lightweight welding power supply (phase II). Improved portability of welding equipment directly affects productivity. The first phase reduced the weight of a welding machine to 80 pounds. This project will further reduce its size and weight so that the equipment may be carried by one man. (c) Extending the application of electrogas and electroslag welding. Current use of these techniques is limited by conservative notch toughness requirements for weld joints. This project will develop data on overall weld joint toughness and will permit relaxation of the requirements so that these automatic welding methods may be used more widely in shipbuilding. (d) Feasibility study of laser and plasma arc cutting and welding. New welding and burning processes are sometimes difficult to introduce in the production process due to potential disruptions and regulatory constraints. This study will analyze and show potential for use of these processes in shipbuilding. (e) Study of the applicability of firecracker welding to ship production. Completed projects (a) An American made welding flux has been developed which allows welding up to 111⁄2" plate from one side, in one pass, with a multiple arc system. This is in contrast to the more conservative approach currently used of welding one side, using heavy and expensive equipment to turn the plate over, and welding again on the other side. |