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International Representatives EDITOR'S NOTE Using the "turn of the century" is a very visible but virtually meaningless turning point when discussing the positioning of products, systems and companies for long-term prosperity. The Y2K computer problem and its unknown effects notwithstanding, when the clock strikes midnight on December 31, 1999 it can reason- ably be assumed that: the sun will rise again; marketers of the "Ultimate Millennium New Year's Eve Party" will be much richer; and U.S. shipyards will continue to wage uphill fights in the battle to win commercial business and to win political support for increasing the number of naval ships being built. I recendy had the opportunity to visit with Cynthia L. Brown, president of the American Shipbuilding Association (ASA), and speak with many members of the U.S. ship and boatbuilding community at the 1999 SNAME Ship Production Symposium to discuss the issues that will define success in years to come. Many of the qualities of a successful long term company in this era of mass corporate consolidation and true global com- petition are, of course, not particular to the maritime industry. The ability to create, produce, market and deliv- er increasingly sophisticated and reliable products and services is central to a company's ability to prosper, while enduring market turmoil. However, even the most efficient and well-defined organizations can sputter and fal- ter in an environment where unnatural market forces exist. When viewing some of the colorful bar and line charts produced by ASA, it is a wonder that there haven't been more consolidations and defections from the U.S. maritime market. The numbers are, at best, bleak, showing that shipyard production and employment have consistendy fallen for the better part of 20 years. For example, the number of new construction and ship repair workers has steadily declined since 1980, from more than 170,000 workers that year to less than 90,000 workers today. Similarly, annual naval ship acquisition has been on a roller coaster as well, (although primarily pointed down for much of the past decade.) ASA figures show naval ship acquisition at 18 ships in 1980, ascending to 26 ships by 1990, and plummeting to six ships this year. ASA calculations reveal that the current level of ship procurement and acquisition could leave the U.S. Navy severely (an estimated 41 ships) short of the 300-ship goal. Numbers on the commercial side of the business have not been encouraging either, dropping from more than 70 ships in 1976, to less than 10 in 1998 (including zero ships in 1987, 1988 and 1989.) While numbers do speak volumes, they don't tell the whole story. Optimists within the market see the current level of underproduction as a "time to buy," and are gearing up for the inevitable upturn in business that will come. Ed Ewing and his work with the revitalization of the U.S. ship repair industry is a prime example of this attitude, as last month marked the official ribbon-cutting and re- dedication of the new NORSHIPCO. Also, before shipbuilders', repairers' and outfitters' eyes is an aging fleet, (particularly on the commercial side) that is going to need replacing. For example, starting next year and running through 2015, there are an estimated 66 vessels in the 15,000 to 40,000-grt range phased out by OPA 90 alone. The facts of the matter are relatively simple and straight-forward, in that the construction and maintenance of a viable and strong U.S. merchant and naval fleet is critical to ensuring that the country's commercial and defense objectives are met. Coming In IW1R/EN September SNAME Annual • Marine Propulsion Technology • Ship Maintenance/Safety Products • Information Technology October 60th ANNIVERSARY EDITION • SatCom Innovations • Vessel Overhaul & Maintenance • Regional Focus: U.S. East Coast • Country Focus: Sweden November International Workboat Show • Europort '99 Preview • Ship Electronics • Marine Engineering • Regional Focus: Benelux December Great Vessels of 1999 • Year 2000 Market Analysis..* Ship and Boatbuilding Technology..* Software Solutions..* Regional Focus: South America Get connected @ www.marinelink.com INTERNATIONAL OPERATIONS CHARLES E. KEIL, Vice President 4400 N. Federal Highway, Ste. 121, Boca Rafon, FL 33431 Telephone: +561-368-1021; Fax: +561-368-1161 24-hr Tel/Fax: +561-998-0313; Mobile Tel: +561-716-0338 Australia/Hew Zealand Italy/Malta ANNE MURRAY VITT0RI0 NEGR0NE World Media Network. 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