The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Monday, January 23, 1995               TAG: 9501210099
SECTION: BUSINESS WEEKLY          PAGE: 4    EDITION: FINAL 
SERIES: Forecast '95 
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 
                                             LENGTH: Medium:   55 lines

SHIPYARDS LOOKING FOR CLEAR SIGNAL FROM NAVY

The slow motion shakeout in Hampton Roads' shipyard industry that began in 1993 is likely to continue through 1995.

This year began with a whimper. Marine Hydraulics International Inc., one of the region's smaller repair yards, sought Chapter 11 bankruptcy protection from its creditors on Jan. 6.

All the region's shipyards are grappling with declining business from the Navy. Most are trying to diversify, to develop new lines of business and new customers.

The central fact is that the Navy fleet, the yards' lifeblood, is shrinking.

The situation has led to cash crunches at most shipyards and driven two, MHI and Jonathan Corp., into bankruptcy.

The region's overall economic health is closely tied to the fate of its shipyards. Not only do the region's shipyards employ more than 30,000 people, but they are among the highest paid laborers in the region.

Newport News Shipbuilding, the region's largest shipyard and the only Hampton Roads yard that actually builds rather than only repairs ships, has a lot of work right now, including its first commercial ship order since the 1970s.

But the giant yard is going ahead with plans to lay off about 5,000 of its 20,000 employees by the end of 1996.

Ship repair yards on the Southside are all in the same boat.

``All of the Hampton Roads shipyards have a decent workload for the moment,'' said Richard Goldbach, president of Metro Machine Corp. in Norfolk.

``But all of us are looking past May,'' Goldbach said. ``The picture from May to October is pretty unclear. I don't think any shipyard has much work scheduled then.''

Tthe Navy is rescheduling work until after October when its new fiscal year begins, Goldbach said.

Goldbach is more optimistic about the long-term future of the region's shipyards. Tight budgets mean the Navy's likely to spend more money maintaing the existing fleet instead of just replacing it. And then there's the shakeout that's going on.

``By 1996 there will be much greater compatibility between the work to be done and the resources available to do it,'' Goldbach said.

In the meantime every yard is scrambling for any kind of work.

Some are even looking at getting into new construction business.

Metro Machine wants to develop a double-hull commercial tanker. Norshipco and Colonna's Shipyard Inc. are together developing prison barges.

KEYWORDS: SHIP REPAIR SHIPYARDS by CNB