THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, January 29, 1996 TAG: 9601290022
SECTION: BUSINESS WEEKLY PAGE: 11 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY CHRISTOPHER DINSMORE, BUSINESS WEEKLY
LENGTH: Long : 148 lines
When John Brandon and Charles Joscelyn retired from the Navy in the early-1980s the ship repair business looked good.
Elizabeth River shipyards were full as President Reagan built toward a 600-ship Navy. In 1985 they formed Dreadnought Marine Inc. to take advantage of small jobs ignored by the big yards. The company soon took off.
Times change. The Cold War ended and the Navy no longer needed so many ships. Hampton Roads shipyards are now scrambling for slices of a shrinking Navy maintenance and upgrade pie.
But Dreadnought has more than survived the Navy's post-Cold War downsizing. It's grown into a viable competitor for the shipyards. As other yards saw business drop off precipitously, Dreadnought has maintained a steady flow of work despite fierce competition thanks to its low overhead.
Dreadnought is a ``downriver'' ship repairer, a firm that has operated without waterfront facilities until recently. It began leasing a pier in November. It mostly worked in other yards, in Navy drydocks and aboard ships in port. Instead of having the work come to it, it would go to the work.
Dreadnought succeeded by competing more directly with the very shipyards from which it used to subcontract work for larger repair contracts.
The Elizabeth River shipyards complain the low overhead gives Dreadnought and other downriver firms such as Earl Industries Inc. an advantage. They argue it's unfair that these ``upstart'' firms are allowed to compete for the same jobs as they, who have spent decades investing in costly waterfront facilities. The yards' bids must reflect the cost of maintaining those yards.
But Dreadnought shrugs off the arguments. Brandon, Dreadnought's chairman, chief executive and principal owner, doesn't believe his company has unfair cost advantage. Many of those yards were built years ago, he said.
``We have less facilities than a large shipyard, but does that mean we shouldn't be able to bid on some jobs?'' asked Brandon, a retired Navy captain.
And because Dreadnought has less overhead it makes sense for the Navy to send work its way.
``The amount of money that the Navy has for maintaining and altering the ships it has is insufficient,'' Brandon said. ``There are tremendous pressures to take what little money there is and use it to pay for things like Bosnia and ship replacement programs, so the Navy has got to get maintenance at the lowest possible price.''
``It's our objective to meet that requirement,'' he added.
Toward that end, Dreadnought has asked the Navy for permission to bid on even bigger overhauls and upgrades than it already is allowed to perform. It has an application pending before the Naval Sea Systems Command to get a so-called ``master ship repair'' agreement, that would allow it to perform just about any job on most conventionally powered Navy surface ships.
That application is on hold, though, because Dreadnought does not have access to a drydock, a requirement for the agreement, Brandon said.
Portsmouth's Earl Industries recently got the designation because it has an agreement to lease the drydock at Metro Machine Corp., a big Norfolk shipyard. It recently started its second short overhaul in Metro's drydock.
Still, Dreadnought has succeeded in the past year at getting bigger maintenance contracts from the Navy. It just completed a $2.5 million mini-overhaul of the cruiser Leyte Gulf in the Navy drydock Sustain at the Norfolk Naval Base.
``We're certainly well-qualified for drydock jobs,'' Brandon said.
And, in November, Dreadnought leased part of Pier 3 at Norfolk International Terminals from the Virginia Port Authority, giving it its own waterfront presence.
It is doing a $2 million job there on the guided-missile frigate Hawes. It also has several dozen smaller ongoing jobs for the Navy throughout the port.
The Navy clearly likes what Dreadnought gives it. ``They're a go-to company,'' said Capt. Robert B. Ploeger, commander of the Navy's contracting office in Portsmouth.
And commercial customers are starting to discover Dreadnought. The M.V. Donegal, a civilian bulk ship, is tied up at Pier 3 for engine repairs. Dreadnought is also replacing steel plates in the holds of a Greek bulker tied up at Lambert's Point Docks in Norfolk.
About 10 percent of the work Dreadnought does is commercial, said Joscelyn, Dreadnought's president and a retired master chief petty officer.
Dreadnought has a core employment of about 250, Joscelyn said.
The company employed as many as 476 this fall when it was doing an overhaul of the cruiser Leyte Gulf in a drydock at the Norfolk Naval Base. Right now it employs about 352, Joscelyn said.
Dreadnought began in a 1,200-square-foot leased garage on Norfolk's Sewell's Point Road. In three years the company had expanded to five garages and 30 employees.
Dreadnought grew by doing small jobs that the busy big shipyards weren't interested in and by subcontracting work from those yards.
In 1988 it moved to its present location in the 3200 block of Princess Anne Road, formerly the site of Edward A. Whaley & Co. and an active machine shop since right after World War I. That site now houses Dreadnought's administrative offices and its machine, sheet-metal, steel-cutting and sandblasting shops.
That facility and the leased pier required substantial investment, Brandon said. The pier needed parking, fences, additional electrical hookups and firefighting capability and locked storage space.
``In a sense we have a `virtual' shipyard that's very far-flung, from Newport News to Little Creek to Portsmouth,'' Brandon said.
And Dreadnought has other work in the pipeline. It has been awarded a contract for maintenance on the U.S.-government freighter Cape Avinof. The Maritime Administration has also informed Dreadnought that it is the low bidder for work on two other government freighters, the Cape Ann and the Cape Catawba, Joscelyn said.
``We feel very fortunate to have the work we do,'' Brandon said. ``The work that we've gotten, we've got because we bid the lowest price and we're capable of performing it.'' ILLUSTRATION: [Cover, Color photo]
MAKING KNOTS DOWNRIVER
CHRISTOPHER REDDICK
The Virginian-Pilot
[Color Photos]
CHRISTOPHER REDDICK
The Virginian-Pilot
Dale Dorsey, a welder for Dreadnought Marine Inc., works on air
inlet for a gas turbine engine.
CHRISTOPHER REDDICK
The Virginian-Pilot
Dreadnought's low overheard helps it compete with the big yards, and
its work - at such sites as its machine shop on Norfolk's Prncess
Anne Road - remains steady.
CHRISTOPHER REDDICK
The Virginian-Pilot
"It's a sense we have a 'virtual' shipyard that's very far-flung,
from Newport News to Little Creek to Portsmouth," says Dreadnought
CEO John Brandon.
JIM WALKER
The Virginian-Pilot
Dick Blankenship, an outside machinist at Dreadnought Marine, works
with a lube oil strainer from the Hawes, a guided-missile frigate.
JIM WALKER
The Virginian-Pilot
Dreadnought's Randy Byrne, the ship superintendent, and vice
president Jody Badeaux survey engine repairs to the Donegal.
by CNB