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Guest Editorial BUILD AND CHARTER' —A VITAL STEP IN THE RIGHT DIRECTION By William E. Haggett* William Haggett Although funding for Senator Ted Stevens's "Build and Char- ter" program has been appropriated by the Congress, this particular ef- fort to revive commercial shipbuild- ing in the United States cannot become a reality until the authoriza- tion plan makes its way through Congress and the White House. No one in the shipbuilding indus- try underestimates the task of winning the rough second lap of this important race. The program, al- ready eyed with caution by some Congressional skeptics, will no doubt receive an even closer look with passage of the Gramm-Rud- man deficit-cutting legislation. In a nutshell, the Stevens plan earmarks $852 million of savings from Navy shipbuilding programs for a "Maritime Fund." Patterned after President Eisenhower's mariner program to construct ships for commercial operation, the ships could ultimately be used for mili- tary sealift. The Navy would have a voice in the type of vessels to be built, the shipbuilder and the leaser. In the event of a national emergen- cy, the ships would be on call to our government on short notice. The Shipbuilders Council of America has supported the "build and charter" approach as a good faith attempt to focus Congressional and White House attention on a very serious problem—the severely declining U.S. merchant marine fleet and its implications for defense readiness. As chairman of the Shipbuilders Council and president of Bath Iron Works, I appeared before the Mer- chant Marine Subcommittee of the Commerce, Science and Transpor- tation Committee to support the "build and charter" program as the most effective legislative initiative which can contribute to the achieve- ment of the following vital national objectives: 1. Provide needed, mili- tarily-useful ships, operating in a commercial environment; 2. Sustain shipyards, skilled workers and man- agement needed as components of the shipyard mobilization base; 3. Sustain the pool of U.S. citizen seagoing manpower which must al- ways be available; and 4. Provide an opportunity to improve the opera- tion of American shipping compa- nies. There seems to be no real debate in Congress over the need to main- tain an adequate maritime capabili- ty to make certain that vital sup- plies and equipment can be trans- ported in a time of war or interna- tional crisis. Likewise, there seems to be general agreement that our merchant marine fleet has been in a steady state of decline for the past several years. It seems that the only real ques- tion in the minds of some of our national leaders is whether the de- cline in our commercial shipbuild- ing capabilities has reached a point where national security is a major concern. Data presented by M. Lee Rice, president of the Shipbuilders Coun- cil, to the National Strategic Mobili- ty Conference last November demonstrated conclusively that there is a significant problem to be solved if America's shipbuilding and ship repair capability is to be main- tained. Mr. Rice's analysis showed that manpower projected to be in place at a time of mobilization will be less than adequate. In reality, a shortfall of at least 25 percent of the required skilled manpower base will occur in the near future. As of today, the shortfall is over 18 percent. In other words, we lack 30,000 skilled pro- duction workers who would need to be on the job if mobilization tasks were to be done correctly and on time. It is certainly not an overstate- ment that the problem has become a critical one and that national securi- ty could easily be impacted. It is especially distressing to see America's shipbuilding base con- tinuing to erode at a time when the performance of our shipyards is im- proving. Because of a number of things—technological advances, fa- cility improvements and various cost containment efforts—the cost of building ships in the United States has decreased dramatically. At the same time, quality and schedule adherence are improving. Having reached a point where American shipyards are capable of competing with the best in the world in naval construction, it is particularly sad to see them closing and, in doing so, weakening our national defense capabilities. Because of the improved perfor- mance of U.S. yards, several major Navy shipbuilding programs have been coming in under cost in recent years. As a result, there exists with- in the Navy's shipbuilding budgets unexpended funds which have been appropriated but not obligated. Senator Stevens's approach of us- ing those funds to rekindle militari- ly-useful commercial shipbuilding in America is sound, fair and. above all, fiscally responsible. While much-needed progress is being made rebuilding the Navy and attaining an essential 600-ship fleet, Navy construction alone to support combatant fleets will not sustain an adequate shipyard mobilization base. Fewer funds are available to purchase shipyard services when large amounts are required for com- bat systems in the construction of combatants and auxiliaries. Gener- ally, only 30 percent of the naval shipbuilding budget is spent in our shipyards, compared with nearly 100 percent which flows to the yards when commercial ships are con- structed. David Klinges, vice president of Bethlehem Steel's Marine Con- struction Group, may have summed up the shipbuilding industry's gen- eral feeling about the Stevens's ini- tiative in a recent interview with Baltimore's "The News American." "This legislative initiative repre- sents the realization that something has to be done about our nation's decreased maritime capability," said Mr. Klinges. "We are encour- aged to see a move in a direction that would strengthen shipbuilding and our maritime fleet and its per- sonnel. "We think it makes sense to have a ship being used commercially as a viable maritime asset, rather than attempting to reactivate crewless vessels that may not be well suited to a particular military transporta- tion need," Mr. Klinges contin- ued. The bottom line is that ships con- structed under this program would be put to a commercial use and would have high military utility should they ever be needed for that purpose. Other approaches to "build and charter" might work, but the plan awaiting Congressional au- thorization is workable and offers sound solutions to the various and difficult problems facing the ship- building industry. It fills a real void and is not a subsidy. "Mr. Haggett is the chairman of the Shipbuilders Council of America, and the president and chief operating officer of Bath tron Works Corporation. Bath, Maine. 6 Maritime Reporter/Engineering News
