Thursday, November 21, 2019

US Shipbuilders Protest to Government About Uncertain Funding

Seventy Industry Representatives Sign Letter of Concern
Shipping News Feature

US – It would seem that, despite all the benefits awarded to US shipbuilders through the Merchant Marine Act of 1920 (the Jones Act), times are getting hard for the industry and have prompted a strong reaction to government.

Under the act all domestic trade is conducted by American flagged vessels, crewed by native citizens and, crucially, constructed in the US. Earlier this month a letter to the Chairman and Chairwoman and two ranking members of the Senate Appropriations Committee set out the case for concerns.

The Shipbuilders Council of America (SCA) is complaining that the Continuing Resolution (CR) currently limiting Navy spending to current levels, with a moratorium on any new programmes, is having a knock on effect detrimental to the entire industry.

Over seventy organisations signed the document which claims that the continuing policy will mean 94% of shipbuilders will cease hiring and limit future investment. Furthermore, extending the CR beyond this month will lead to a 5-50% cut in the workforce and a 15 to 35% drop in revenues when small companies are viewed separately.

According to the SCA survey the current policy will also mean a protracted recovery compared to a short term CR and a shrinkage of up to 85% as against 15% for the short term measure. The SCA says the state of affairs means without stable and predictable funding the entire industrial base that services and maintains critical vessels, from Coast Guard to maritime training academy ships, will be put at risk.