THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Monday, January 20, 1997 TAG: 9701180839
SECTION: BUSINESS WEEKLY PAGE: 25 EDITION: FINAL
SERIES: 1997 FORECAST
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 48 lines
Stasis. Shipyards and ship repairers in Hampton Roads face another year a lot like last year. No more wrenching change, but no boom-time either.
The region's ship repair yards are still scrambling for slices of a much smaller Navy pie, but the Navy remains their primary customer. While there is some commercial work, its volume doesn't compare to the roughly $250 million the Navy spends annually to maintain the Norfolk-based Atlantic Fleet.
In March, a newly independent Newport News Shipbuilding should deliver its first commercial vessel, a petroleum tanker, in 16 years. Still, Navy shipbuilding accounts for more than 90 percent of the company's revenues.
And while takeover speculation may swirl, the big Peninsula shipyard and the majority of its 18,000 employees will remain focused on building the two aircraft carriers on its order book. It's also formed a partnership with longtime rival submarine-builder Electric Boat to build the next generation of attack submarines for the Navy starting in 1998.
Some repairers think 1997 may bring a little upswing.
``I think we'll see a lot of work out of the Navy this year,'' said Doug Forrest, vice president of Colonna's Shipyard Inc., a small Norfolk repairer with about 375 employees. ``We've had two semi-weak years and there's still a lot of old ships out there that need a lot of work.''
Forrest calls the Coast Guard a ``sleeping giant'' that also has a lot of ships that need some work.
The Navy's Atlantic Fleet will spend about $15 million more this year in the private sector than it did last year, said Rear Adm. Arthur Clark, the Atlantic Fleet's maintenance director, speaking to the Tidewater Association of Service Contractors in December.
The increase will come despite fewer ships in the fleet this year - about 207 compared to about 218 last year.
``We're stabilizing now a little bit,'' Clark said. However, ``today's budget is about as good as we're all going to see it for a while,'' he added.
The Navy's spending about half of what it was spending on maintenance when Clark took his current job about five years ago.
Ship maintenance competes with acquisition, operations and quality of life for Navy spending. ``As long as we're getting the ships out safely and on schedule, we don't always get the big bucks,'' Clark said. ILLUSTRATION: [Color Photo]
[Life jacket]
KEYWORDS: 1997 FORECAST SHIPPING SHIPYARDS