(The following was submitted:]

QUESTIONS OF MR. MURPHY ANSWERED BY MR. MOLLARD

Question 1. What is your retired seagoing membership? (Page 6, line 6)

Answer. There are approximately 8,000 retirees covered by the SIU Pension and Welfare Plan.

Question 2: how many of those could be capable of being recalled if there happened to be an emergency to perform sea duties? (Page 6, line 10.) Answer. Approximately 50 percent of our retirees are on a disability pension, a situation which would preclude their return to active seagoing employment. Of the remaining retirees, approximately 50 percent retire at age 62 or older. As such, most if not all of these individuals could not realistically be expected to return to acre swing duty. The remaining 2,000 retirees would be capable of being reMed 2 ATUP sering service.

Queston & You testified in favor of subsidizing the construction of three dry bulk shy What well those ships cost to build in U.S. shipyards as compared to building # Treg" & ears' Pare 7, line 200

Lowery inwese exact cost differentials between the construction of the west brygn yards as opposed to US. yards are presently unavailable. Lovreng at Assistant Secretary for Maritime Affairs Robert Blackwell, anticipated Susy Ass or these ressers would total $69,000,000. But, on the subject of cost affevencials, I would be to point out that following the 1917 Mideast oil embargo, De ¿Pecençar a cost between US and foreign-built merchant_vessels was percep 500 viesing. For example, CDS on tankers was down from 50 percent to 33.38 percent on "LNG carrers down from 30 percent to 16.5 percent. These changes in COMPATROVĘ, GCVnomme positioning were in fact a reflection of the technological and operacional progress which has taken place within the U.S. shipyard industry in new years rortunately, any economic betterments deriving from this substanbal woes tave been negated by the latterday disposition of many foreign shipbunder to sender or quote prices which have no relationship to true costs. This CONTACTOR At daste economic principles is increasing in practice with the direct or mdech đó of the involved governments who recognize the importance of upholding a o pau modization base necessary to national defense and security. Thus. Amercial price and government motivations control the economics of world shipbuong thereby providing a climate for an increasing number of foreign shipburders, openly indemnified against losses by their governments, to corner a subsaat portion of an already scarce market by offering prices below real costs. ghcatore & Do you have any opinion on behalf of the union whether or not it unght enhance our ability to operate ships and provide more jobs for union membeis if we permitted our shipping companies to buy foreign-built ships and put them under US flag**** (Page 8, line 5)

We are faced with a choice possibly between the number of jobs that we promote for your umons and the number of jobs we promote for shipyard workers. Do you see that distinction" (Page 10, line 255

Answer. As I stated during my appearance before the Subcommittee on March 7, the SIU will continue to man any ships that are readily available to meet the economie needs and defense needs of this country."

However, I would like to reemphasize my opposition to the assumption that the source of the vessel is not material and germane to the SIU.

The purchase of foreign built vessels would endanger the existing shipyard mobilisation base necessary to the defense and security of this nation.

The continued loss of shipbuilding orders and contracts will result in a significant downturn in employment not only in the U.S. shipyard workforce, but throughout the economy About 30 percent of the cost of a U.S.-built ship consists of purchased materials and components which come in part from all States of the Union. With respect to some naval vessels, as much as 70 percent of the cost may involve purchased items These purchases spread throughout the entire U.S. economy, and with the usual multiplier effect of three to one, a 45,000 decrease in shipyard employment equates to the loss of at least another 135,000 jobs in the private sector. Not only would the social costs of unemployment created by such an action be staggering, but American dollars and jobs would once again be exported at the expense of the American economy.

*

In addition, the SIU disagrees with statement that "we are faced with a dilemma as to whether or not we want to continue subsidizing U.S. shipyards as opposed to trying to promote the American merchant marine (and thus) we are approaching a problem where we must distinguish between the interest in preserving the maximum number of ships and jobs as compared with preserving American ship

(and that)

yards we are faced with a choice possibly between the number of jobs that we promote for your union and the number of jobs we promote for shipyard workers *

As a matter of principle, we are not faced with a dilemma, nor should we choose between the livelihood of shipboard or onshore workers. The SIUNA is a labor organization representing both offshore and onshore workers. In fact, many members of the United Industrial Workers of the SIU-AGLIWD are gainfully employed by U.S. shipyards. To reiterate my statement to the Subcommittee, "we represent people on the job and anything that enhances the general area of jobs for Americans, we tend to favor. That is the basic position of the Seafarers Union. We are, as you know, affiliated with the AFL-CIO and whatever is good for the Federation of Labor, as working people we obviously support.'

In addition, the institution of a national cargo policy would assure the availability of cargo, stimulate investment in the construction of new vessels in U.S. shipyards to carry that cargo, and create the resulting beneficial employment ripple effect throughout the economy. This action would negate the supposition that a choice must be made between shipyard workers and seagoing personnel.

Question 5. Do you have any comment on the difference in the manning level there as to why 40 crew members were required of the PFEL ship as opposed to 32 for the Delta ship? (Page 11, line 20.)

Answer. Delta Steamship Lines, Inc. currently owns four LASH vessels as follows: Three C9-S-81D (design type) LASH vessels, the first of this design to be contracted for and built under the Merchant Marine Act of 1970 and delivered in 1973. One C8-S-81B (design type) LASH contracted for previous to the 1970 Act. This vessel, now known as the Delta Caribe, was purchased from Prudential Lines (formerly Prudential-Grace Lines, Inc.) in 1977. This vessel along with two sister ships was ordered and delivereed to PGL and six vessels of the same design type were ordered and delivered to PFEL by 1973.

Therefore, in comparing the crew complement of a LASH vessel, a distinction should be made as to the date a construction application for these vessels was filed to and approve by the Maritime Subsidy Board of the Maritime Administration since the criteria used for MSB approval of manning levels with the first experimental LASH C8-S-81B design type vessels varied from those used in the approval of manning levels of the vessels C9-S-81D (design type) built, under the Merchant Marine Act of 1970.

In 1970, the MSB ruled that the first nine LASH vessels (design type C8-S-81B) to be constructed for PFEL and Prudential should carry a crew complement of 38 men-for these two operators only. The opinion was based on the fact that the LASH vessels were a new concept in ship design type with no previous historical U.S.-flag precedent for calculating base manning levels and because their CDS applications had been accepted by the Maritime Administration with crew accomodations for 38 men in 1967. Therefore, due to the substantial investment in these vessels by these two companies, the Maritime Subsidy Board ruled that these first nine LASH vessels be manned with a higher crew compliment of 38 men-for these two operators only.

In addition, identical vessels operating in different trades will vary in manning requirements. Manning requirements depend not only on the type and size of the vessel, but also on the type of operation, trade routes, and cargo in which the vessel is engaged.

Trade routes and operating conditions for Pacific Coast vessels may not be necessarily identical to those on the East and Gulf Coast. It is, therefore, a matter of negotiation between management and labor, cognizant of the respective conditions and needs within each area ot knowledgeably and responsibly determine crew size. Question 6. If we have a shipping line go bankrupt because it is carrying 25 percent more crew on the same ship that another line is operating profitably, the Delta, the suspicion is unescapable that the additional crew members may have been one of the factors that caused PFEL: to go out of business Whatever evidence you can furnish to me to disprove that suspicion would be helpful to the committee *. (Page 12, line 5.)

* *

Answer. The Seafarers International Union takes exception to the statement made during the hearing that "* if we have a shipping line go bankrupt

because it is carrying 25 percent more crew The assumption that PFEL's decline was a direct result of costs for eight crew members is innaccurate. In fact, the proportion of maritime labor costs to the total operating, capitalization, port charge, and terminal expenses of a vessel has been steadily decreasing.

In addition, the Maritime Administration has identified significant areas which contributed to PFEL's demise as follow:

Container trade in trans-Pacific service grew from 6 percent in 1968 to 71 percent in 1974.

PFEL lost many millions of dollars on an unsubsidized, three ship, RO/RO service which was initiated in 1976 from the U.S. East Coast to the Middle East. Although the service was originally profitable, the trade soon became overtonnaged and very unprofitable.

Decline of breakbulk miltary shipments/aid to Far East.

Rate cutting and overtonnaging on TR 29.

Loss of shipper support.

Continuous losses in the operation of the U.S. merchant marine's last passenger vessels.

Malpractices such as rebating by foreign competition seriously eroded PFEL's revenue base.

PFEL as a small company was unable to compete in a highly capital-intensive industry; many foreign steamship companies went out of business or formed consortia.

PFEL had no other trade routes to offset losses in the Pacific.

Question 7. Do you have any statistics to show that most shipping accidents (explosions, crashes, etc.) which occur are not sailing under the U.S. flag, not using American seamen and are not built according to American standards? (Page 19, line 9.)

Answer. The Liverpool Underwriters Association, in its annual report for 1976, showed the six worst accident rates among the world's fleets. They included the following flags of convenience: Cyprus was worst; Panama was second worst; and Libia was fifth worst.

This is not accounted for by the massive size of the Liberian fleet. On the contrary, when reduced to percentage terms, and despite the introduction of a Liberian inspection service, the Liberian flag's loss ratio was 48 percent higher than the world loss ratio. The United Kingdom, France, West Germany, Japan, Norway, and the United States, however, were among those nations cited by the Liverpool Underwriters Association as having the lowest loss ratios.

In addition, the following is a chronological listing of tanker mishaps since December 15, 1976:

QUESTIONS OF MR. SNYDER ANSWERED BY MR. MOLLARD

1. The total number of SIU members employed on U.S.-flag oceangoing vessels greater than 1000 grt is as follows:

(a) Deep sea...

(b) Great Lakes

16,331 1,328

2. The total number of U.S.-flag oceangoing vessels greater than 1000 grt under SIU contract is as follows:

(a) Deep sea...

(b) Great Lakes

399 59

3. There are approximately 8,000 retirees covered by the SIU Pension and Welfare Plan. Approximately 50% (4,000) of these retirees are on a disability pension, a situation which would preclude their return to active seagoing employment. Of the remaining retirees (4,000), approximately 50% (2,000) retire at age 62 or older. As such, most if not all of these individuals could not realistically be expected to return to active seagoing duty. The remaining 50% (2,000) retirees would be capable of being recalled to active seagoing service.

4. During my appearance before the Merchant Marine Subcommittee on March 7, 1979, I was asked to comment on the difference between the manning levels of a Delta operated LASH vessel and a PFEL-operated LASH vessel.

In a written response to the Subcommittee, I submitted the following explanation on this question which I believe is pertinent to your request:

Delta Steamship Lines, Inc. currently owns 4 LASH vessels as follows: Three C9-S-81D (Design Type), LASH vessels, the first of this design to be contracted for and built under the Merchant Marine Act of 1970 and delivered in 1973.

One C8-S-81B (Design Type), LASH vessel, one of the first nine of this design type (LASH) contracted previous to the 1970 Act. This vessel, now known as the Delta Caribe, was purchased from Prudential Lines (formerly Prudential Grace Lines, Inc.) in 1977. This vessel along with two sister ships was ordered and deliv ered to PGL and six vessels of the same design type were ordered and delivered to PFEL by 1973.

Therefore, in comparing the crew complement of a LASH vessel, a distinction should be made as to the date a construction application for these vessels was filed to and approved by the Maritime Subsidy Board of the Maritime Administration since the criteria used for MSB approval of manning levels with the first experi mental LASH C8-S-81B design type vessels varied from those used in the approval of manning levels of the vessels C9-S-81D (Design Type) under the Merchant Marine Act of 1970.

In 1970, the MSB ruled that the first nine LASH vessels (Design Type C8 S 81B) to be constructed for PFEL and Prudential should carry a crew complement of 38 men-for these two operators only. The opinion was based on the fact that the LASH vessels were a new concept in ship design type with no previous historical U.S.-flag precedent for calculating base manning levels and because their CDS applications had been accepted by the Maritime Administration with crew accom modations for 38 men in 1967. Therfore, due to the substantial investment in these vessels by these two companies, the Maritime Subsidy Board ruled that these first nine LASH vessels be manned with a higher crew complement of 38 men- for these two operators only.

In addition, identical vessels operating in different trades will vary in manning requirements. Manning requirements depend not only on the type and size of the vessel, but also on the type of operation, trade routes, and cargo in which the vessel is engaged.

Trade routes and operating conditions for Pacific Coast vessels may not be neces sarily identical to those on the East and Gulf Coasts. It is, therefore, a matter of negotiation between management and labor, cognizant of the respective conditions and needs within each area to knowledgeably and responsibly determine crew size, 5. As I stated during my appearance before the Subcommittee on March 7, the SIU will "continue to man any ships that are readily available to meet the economic needs and defense needs of this country."

However, I would like to reemphasize my opposition to the assumption that the source of the vessel is not material and germane to the SIU.

The purchase of foreign-built vessels would endanger the existing shipyard mobilization base necessary to the defense and security of this nation.

The continued loss of shipbuilding orders and contracts will result in a significant downturn in employment not only in the US. shipyard workforce, but throughout the economy. About 50 percent of the cost of a US-built ship consists of purchased materials and components which come in part from all States of the Union. With respect to some naval vessels as much as 70 percent of the cost may involve purchased items. These purchases spread throughout the entire Ub. economy, and with the usual multiplier effect of three to one, a 45,999 decrease in shipyard employment equates to the loss of at least another 125,000 jobe in the private sector Not only would the social costs of unemployment created by such an ahim, be staggering, but American dollars and jobe would once again be exported at the expense of the American economy.

In addition, the SID disagrees with statements that we are faced with a 1.Amma as to whether or not we want to continue subedang US enpyard a wet Y trying to promote the American merchant marine (and true)

we are sur

ing a problem where we a debing.mt twee the intered a prova maximum sumber of ships and pu a owpared with preserving human v we are faced with a shock Yang Tweet. Te ma jobs that we promote for your not and the rinor d pre we promote ku shipyard workers

and that

As a matter of principle, we are not faced with a dilemma, nor should we choose between the livelihood of shipboard or onshore workers. The SIUNA is a labor organization representing both offshore and onshore workers. In fact, many members of the United Industrial Workers of the SIUAGLIWD are gainfully employed by U.S. shipyards. To reiterate my statement to the Subcommittee, "we represent people on the job and anything that enhances the general area of jobs for Americans, we tend to favor. That is the basic position of the Seafarers Union. We are, as you know, affiliated with the AFL-CIO and whatever is good for the Federation of Labor, as working people we obviously support."

In addition, the institution of a national cargo policy would assure the availability of cargo, stimulate investment in the construction of new vessels in U.S. shipyards to carry that cargo, and create the resulting beneficial employment ripple effect throughout the economy. This action would negate the supposition that a choice must be made between shipyard workers and seagoing personnel.

6. I have review with interest the brief report of the "Tagus" reduced manning experiment.

Before commenting on this experiment, the SIU must have more detailed information than is offered by the study.

As an example, pertinent financial data, identification of variables, definition of terms, and other relevant information are absent. This omission of factual and related material precludes an indepth and conclusive examination and comment on the experiment at this time.

7. The majority of SIU members employed on deep sea ships, great lakes ships, tugboards and towboats, and fishing vessels are dependent on the U.S. Public Health Service System for major medical coverage. It is the dependents of eligible SIU members as well as eligible retirees and their dependents who are the recipients of SIU welfare/medical plan benefits.

(a) Active SIU members working on the above types of vessels whose dependents would be eligible for welfare/medical plan benefits approximate 28,996.

(b) While all the retirees of affiliated unions may not be covered by the welfare plan it could be assumed that the total covered would approximate the total number of retirees, therefore, there would be approximately 8000 retirees covered under the various SIU welfare/medical benefits. This figure does not include dependents of retirees who are eligible for coverage.

8. A copy of the 1976 audit of the SIU, AGLIWD welfare and medical plan is attached. We do not have copies available from the other SIUNA affiliates, however, if you would like copies of same we will send a suitable request to each of our affiliates.

9. The SIU welfare/medical plan is not a "union-maintained private health care plan." In fact, the SIU welfare/medical plan is a jointly administered labor-management trust fund which responds to the welfare/medical needs of eligible SIU member dependents and retirees and their dependents as indicated in Answer No. 7. Active SIU members are serviced by the U.S. Public Health Service System for their major medical needs. Because of the mobile nature of the industry in which these workers are employed, it has long been government policy to provide these workers with a priority health care system comparable to that of onshore workers. 10. To my knowledge, a "Joint Employment Committee" trust fund account does

not exist.

11. I understand from testimony provided by the Transportation Institute to this Subcommittee that the latter will submit copies of audited trust fund statements. The CHAIRMAN. Mr. Charles S. Caldwell, legislative representative, National Marine Engineers' Beneficial Association. Captain Caldwell.

STATEMENT OF CHARLES S. CALDWELL, LEGISLATIVE REPRESENTATIVE, NATIONAL MARINE ENGINEERS' BENEFICIAL ASSOCIATION

Mr. CALDWELL. Chairman Murphy and members of the subcommittee, I am here today representing 42,000 members of the National MEBA and its affiliates. Our president, Jesse M. Calhoon, is available to advise or respond on any questions that may be raised by the committee.