THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, January 22, 1996 TAG: 9601200378
SECTION: BUSINESS WEEKLY PAGE: 20 EDITION: FINAL
TYPE: Cover Story
SERIES: Forecast 1996
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 82 lines
After several years of upheaval, Hampton Roads' shipyards could face a stable year in 1996.
That would be welcome news for the local economy and ship repairers, who last year saw one peer fail and another almost go under.
``We're all sitting around with our fingers crossed,'' said Bill Craft, president of Associated Naval Architects Inc., a tiny Portsmouth shipyard specializing in barge repair.
The Navy, the biggest customer for most shipyards, will award about the same amount of overhaul and repair work as it did last year. Several dozen shipyards and repair companies, which employ about 25,000 people in Hampton Roads, received more than $250 million in Navy work last year.
``It's better than '94, about the same as '95,'' said Capt. Robert B. Ploeger, commander of the Supervisor of Shipbuilding, Conversion and Repair's Portsmouth office.
In 1994 Navy work orders bottomed out after several years of decline that forced the shipyards to lay off hundreds of workers. The Navy shrank after the Cold War, cutting the work for the shipyards.
It didn't help that aircraft carrier and submarine builder Newport News Shipbuilding jumped into the overhaul business to make up for declining orders.
The squeeze pushed several shipyards to the brink, including two small Norfolk yards, Jonathan Corp. and Marine Hydraulics International Inc. Both tried to reorganize their finances in Chapter 11 bankruptcies.
Jonathan went out of business in June, unable to get the work it needed to support its reorganization. MHI emerged from bankruptcy in October and has been landing enough work to get by for now.
Last year brought more Navy contracts, and though few yards could be described as busy, at most business was fair.
Norshipco, which had trimmed its work force to about 1,000 in the summer of 1994, had enough work to bring many laborers back, boosting its employment to nearly 3,000.
Metro Machine Corp. led the region's shipyards in payments from the Navy during the federal fiscal year ended Sept. 30 with $102.8 million, a 132-percent increase from the previous year. Navy payments to Norshipco soared 158 percent to $96.6 million, but were well below the $161.1 million it got in the 1992 federal fiscal year.
Like last year though, some Navy work late in the federal fiscal year may be delayed until after Sept. 30 as the Navy budget gets tight, Ploeger said.
Newport News Shipbuilding ended 1995 on a positive note as yard president William Fricks said that it would not be shrinking as much as it had said it would in 1994. The giant Peninsula yard, which employs 18,500, estimates a work force between 16,000 and 16,500 by 1997 instead of 14,000 to 15,000. Commercial orders and an anticipated return to submarine building helped buoy it.
The big shipbuilder expects to hear early this year whether to proceed on several pending orders for up to 16 of its double-hull tankers and whether it has been selected to build fast frigates for the United Arab Emirates, a spokeswoman said. The yard is also competing to build the next generation of Navy amphibious assault ships, a contract that should be awarded in late summer.
Meanwhile commercial repair work, which was weak in 1995, is likely to rebound this year, said Doug Forrest, vice president of Colonna's Shipyard Inc., a small Norfolk yard that relies more on commercial than Navy work.
``The colder and more miserable the winter in the Northeast, the busier some of our traditional customers are, which means our yard will be full in the spring and summer,'' Forrest said. ILLUSTRATION: Color photo by Lawrence Jackson/The Virginian-Pilot
Shipyard work orders are "better than '94, about the same as '95,"
says Navy Capt. Robert B. Ploeger.
Color photo by Vicki Cronis/The Virginian-Pilot file
Below: Robots make final welds on Ford's redesigned F-150 pickup
truck, which will brace the Norfolk assembly plant this year.
KEYWORDS: SHIPYARD by CNB