This is in response to your letter of July 8, 1974, to the Secretary of The report reflects an extensive study and analysis of the U. S. Shipbuilding Industry. The substance of the report would appear to derive from the Report of The Commission of American Shipbuilding and a review of the major legislation governing shipbuilding, ship construction subsidies, and shipyard utilization. Two major considerations, not addressed in the report, but which are essential in this study, are the shortage of skilled manpower and the shortage of steel. The United States cannot achieve a strong and effective ship construction and ship repair industry without skilled manpower and an adequate supply of steel. At the present time, the entire industry is suffering from shortages of skilled manpower. I will not go into the plethora of causes for these shortages. A quick look at the shipbuilding industry's skilled personnel age groups will reveal that significant blocks of these personnel will arrive at retirement simultaneously which will increase the severity of the problem as time proceeds. Action involving government support is going to have to be taken to alleviate this problem. Most of the industry experiences difficulty in obtaining steel. The increased demand for steel generated by the large MARAD and Navy shipbuilding programs themselves have contributed to the shortage. Again I shall not go into the many other contributing factors. The government must field this problem in terms of resolving the issues of demand versus capacity, ore resources, reclamation requirements, and priorities assessment from a national overview. APPENDIX IV Un erlying the entire study is our concern that the MARAD and the Na find themselves in competition with each other for their respective prorams. We should establish a way to determine the relative priorities of litary and commercial shipbuilding so that the national interests are ser ed. To this end, it is in order for the Secretary of Defense and the Secretary of Commerce to establish the forum in which their respective stals may come to grips with the many problems mutually facing the two organizations. The several problems and recommendations of the subject study would be addressed most appropriately in this forum. Subsequent to the joint review of mutual problems it may be in order for the Secretary of Defense and the Secretary of Commerce to meet with the appropriate committees of Congress. Sincerely yours, G. I. Mandolin ARTHUR I. MENDOLIA Assistant Secretary of Defense CONSTRUCTION SUBSIDY PROGRAM TUESDAY, SEPTEMBER 23, 1975 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MERCHANT MARINE OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES, Washington, D.C. The subcommittee met, pursuant to call, at 10:10 a.m., in room 1334, Longworth Office Building, the Honorable Thomas N. Downing (subcommittee chairman), presiding. Mr. DOWNING. Good morning. The Subcommittee on Merchant Marine will please come to order. This morning we continue with respect to the construction subsidy element of our current oversight hearings. In this regard, it is interesting to note that the witnesses today represent Sea-Land Service, Inc., an American company that operates U.S.-flag vessels without such subsidy. Gentleman, welcome to the committee. If you will be seated and identify yourselves, we can commence. The committee looks forward to learning your views on this very important subject, gentlemen. STATEMENT OF J. PAUL STICHT, PRESIDENT OF R. J. REYNOLDS INDUSTRIES, INC.; ACCOMPANIED BY MICHAEL R. MCEVOY, CHAIRMAN OF THE BOARD, SEA-LAND SERVICES, INC.; CHARLES I. HILTZHEIMER, PRESIDENT AND CHIEF OFFICER, SEA-LAND SERVICES, INC.; AND WILLIAM F. RAGAN, ESQ., RAGAN & MASON, WASHINGTON COUNSEL Mr. STICHT. Mr. Chairman, members of the committee, my name is J. Paul Sticht. I am president of R. J. Reynolds Industries, Inc. With your permission I am accompanied today at the table by Mr. Michael R. McEvoy, chairman of the board of Sea-Land Service, Inc.; Mr. Charles I. Hiltzheimer, president of Sea-Land Service, Inc.; and William F. Ragan, of Ragan & Mason, our Washington counsel. Mr. DOWNING. I believe this is your first appearance before this committee, is it not? Mr. STICHT. It is. Mr. DOWNING. We welcome you. Mr. JONES. I especially welcome the president of R. J. Reynolds Industries, Inc., and their tobacco company in North Carolina, which is one of our great industries in North Carolina, and I do welcome you and your associates before this committee. (853) |