BYLINE: By Linda Loyd; Inquirer Staff Writer
SECTION: BUSINESS; P-com Biz; Pg. A09
Yo! Philly. The region’s only commercial shipyard is getting a new name: Philly Shipyard.
Aker Philadelphia Shipyard said Thursday, after its board of directors met in Oslo, Norway, where parent company Aker ASA is located, that the Aker name is going away and that the yard will be called Philly Ship-yard, pending shareholder approval in October.
The name change was announced when second-quarter earnings were reported. A public company listed on the Oslo Stock Exchange, Aker posted second-quarter revenue of $83.7 million, compared with $60.3 million in the same period last year.
Net income for the latest quarter was $1.9 million, compared with $1.5 million the year before. The board approved a quarterly dividend of 25 cents a share to be paid on July 31.
Aker said it has an order backlog worth about $849 million to build new ships. Five product tankers are under construction.
The company employs about 1,100 at the Navy Yard in South Philadelphia.
Since last year, the majority owner of Aker Shipyard, Converto Capital Fund, an investment fund owned by Aker ASA, has been exploring “strategic initiatives” for the shipbuilder.
While Aker is “mainly focused on product tankers and large containerships,” the company said it “continues to pursue” other new construction projects, “including shuttle tankers, short-sea shipping vessels, off-shore service vessels, barges, and wind turbine installation vessels.”
Building ships that use liquefied natural gas (LNG) as fuel “continues to be a consideration for potential owners,” Aker said.
“Changing our name to Philly Shipyard more accurately reflects the shipyard we have become in recent years,” shipyard president and CEO Steinar Nerbovik said. “The new name also represents the proud tradi-tion of shipbuilding in Philly.”
Aker also announced Thursday plans to divest its ship-owning investments in a joint venture with Crowley Corp., and a venture with American Shipping Co. called Philly Tankers, for a total of eight product tankers with a contract value of $1 billion.
Aker said it expects that “two potential sale transactions” will be finalized in the current third quarter. The company did not disclose the name of the buyers.
“These assets provide a mechanism” for the shipyard “to achieve returns on the ownership, chartering, and operation of the vessels it builds, in addition to returns on traditional shipbuilding activities,” the company said in its earnings statement.
Kristian Rokke, the shipyard’s chairman, said, “The planned divestment of our shipping assets will show that we have created significant shareholder value and will greatly focus the business going forward.
“While we remain opportunistic in our investment approach, the name change comes at a natural time and will better illustrate how the shipyard connects with its stakeholders as a strong, stand-alone Philadelph-ia-based company,” Rokke said.
Aker has orders to build ships through December 2018 at the Navy Yard in compliance with the U.S. Jones Act, which requires all vessels shipping cargo between U.S. ports to be U.S.-built.
Formerly Kvaerner Philadelphia Shipyard, the commercial yard opened in 2000 on the site of the shuttered Philadelphia Naval Shipyard. The yard delivered its first ship in 2003 to Matson Navigation Co.
WASHINGTON, DC–As the labor representative for workers at the major shipyards building Naval vessels in the U.S., I am deeply disturbed by the allegations that Austal, USA violated the False Claims Act.
For years, the Metal Trades Department has suspected that the company is abusing the Alabama Industrial Development Training (AIDT) center by garnering state and local tax incentives while failing to properly train prospective employees. The legal allegations brought forth in the June 2014 lawsuit filed by the Gardner Firm PC, only further justifies our concerns.
As reported by Law360’s Jacob Fischler in Ex-Workers Say Navy Shipbuilder Faked Employee Records, the “employees were sometimes misrepresented as supervisors to skirt government provisions about how many supervisors were required per shift, as well as to boost their reimbursement potential.” We believe that this type of misrepresentation is rampant at Austal, USA.
Employees at Austal have had their voices ignored repeatedly. Our representatives have expressed concern to the Navy that these practices might be happening. We were not kept abreast of what, if any, action was taken by Navy personnel. This company has violated U.S. laws, fired employees who complain. As outlined in the lawsuit, three of the five relators—those named in the suit—were fired after reporting the alleged fraud to supervisors. The environment of intimidation and fear has caused most to keep their head down for fear of losing their jobs.
These new accusations, as well as the repeated OSHA citations issued to Austal, USA shows the callous disregard this company has for both U.S. regulations and its workforce. The U.S. Navy and the hard-working men and women in our shipyards deserve better.
The Philadelphia Metal Trades Council (PMTC) announced today that workers voted to ratify a new four-year collective bargaining agreement at Aker Philadelphia Shipyard, Inc., the sole operating subsidiary of Aker Philadelphia Shipyard ASA.
“This contract ratification is another example of successful collaboration between union and management, and a clear example of how cooperation keeps organizations moving forward,” said Lou Agre, President of the Philadelphia Metal Trades Council.
The Philadelphia Metal Trades Council is the sole bargaining representative for production and maintenance employees at Aker and consists of ten unions.
PMTC is a Council chartered under the Metal Trades Department, AFL-CIO. The Metal Trades Department is a trade department of the AFL-CIO. It was chartered in 1908 to coordinate negotiating, organizing and legislative efforts of affiliated metalworking and related crafts and trade unions. Seventeen national and international unions are affiliated with the MTD today. More than 100,000 workers in private industry and federal establishments work under contracts negotiated by MTD Councils. Workers retain membership in their own trade unions.
1/15/15 12:17 PM EST
The commandant of the Coast Guard waded into the congressional fight over the Jones Act on Thursday, arguing that repealing it would jeopardize the U.S. fleet of trade vessels.
“That for me is a real consequence, if we have foreign flagged vessels doing coastalized trade, what are the safety standards, what are the maritime pollution … standards, how are they in compliance with the same standards that we apply to our U.S. fleet?” Adm. Paul Zukunft said at the Surface Navy Association’s National Symposium in Crystal City, Va.
“I think, at the end of the day, it will put our entire U.S. fleet in jeopardy, where our fleet of roughly 80-plus international U.S.-flagged vessels will rapidly go to zero,” he said. “And then in a time of crisis, who are we going to charter to carry out our logistics? … Very difficult if we don’t have a U.S. flagged ship.”
Sen. John McCain (R-Ariz.) is seeking to attach an amendment to the Senate’s Keystone XL pipeline legislation that would repeal the Merchant Marine Act of 1920, known as the Jones Act, which requires that goods shipped between U.S. ports be carried by vessels built in the country and owned and operated by Americans.
The new Senate Armed Services chairman argued the policy is “antiquated,” and raises costs for U.S. consumers by placing unnecessary restrictions on trade vessels.
Zukunft didn’t hesitate to list what he viewed as negative consequences of repealing the policy, but he said he didn’t want to get in the middle of the congressional fight.
“We deal with the consequences of how these policies play out, and I’ve found it very prudent to just deal with the consequence and not find myself the salami between those two slices of bread on these policy decisions,” he said.
There are a number of stakeholders in the Jones Act battle, but first and foremost is the U.S. shipbuilding industry, Zukunft said.
Shipbuilding advocates are fighting back against McCain’s push, including the Navy League, which argued that repealing the Jones Act would lead to a reduction in the number of ships built in U.S. shipyards. The Navy League also said repealing the law would lead to increased costs for Navy and Coast Guard vessels, which are built in the United States where the trade protections mean shipyards have lower overhead costs.
There are now about 15 tanker ships under construction that will be U.S. flagged ships, increasing the fleet size by more than 20 percent, he said. And much of that increase is due to demand for U.S. export ships, which would decrease if the Jones Act is repealed, he said.
WASHINGTON, DC—Navy shipbuilder, Austal USA, was cited November 18, 2014, by the Occupational Safety and Health Administration (OSHA), for 12 serious health and safety violations. This was the third citation in the last five years.
The company was cited and fined for a dozen health violations including fall hazards; improperly secured gas cylinders; improper wiring, exposing workers to possible electrical shock, and other electrical hazards; failure to prevent accidental machine startup; improper machine guards exposing workers to potential amputations, puncture and being caught in machines; failing to properly store and label hazardous materials. Some of the most concerning issues is the overexposure to copper fumes while welding, along with overexposure to aluminum dust. Fines totaled more than $40,000.
Austal USA, is the U.S. subsidiary of the Australian company Austal, LLC. The company builds the Independence Variant of the LCS Class high-speed for the U.S. Navy.
“The government expects that contractors, such as Austal, should not only deliver a good product, but also conduct operations in a safe manner,” said Joseph Roesler, OSHA’s area director in Mobile, in a press release issued by OSHA. “The lack of attention to safety and health issues unnecessarily exposed employees to hazards at the Mobile facility, and these hazards need to be addressed and controlled throughout the shipbuilding process.”
“We have been saying for years that there are serious safety concerns in that shipyard,” said Ron Ault, president of the Metal Trades Department, AFL-CIO. “These are some of the most egregious violations that are putting workers at risk right now, but, also down the road. The company is failing to provide proper ventilation allowing workers to be overexposed to copper fumes and aluminum dust. That failure can lead to illnesses later in life. We’ve had reports of numerous workers experiencing chronic respiratory issues, headaches, and nose bleeds. And, workers are being fired for missing work because they can’t get rid of these respiratory and flu like symptoms. A quick look at the Safety data sheets related to the potential health hazards from being exposed to these materials at Austal is alarming. Flu & pneumonia like symptoms, chronic respiratory issues, memory loss, pulmonary fibrosis, kidney problems and cancer are some of the most distressing health effects.”
The Metal Trades Department, AFL-CIO was contacted by workers seeking a union at the shipyard a few years ago and has been conducting an organizing campaign through their Mobile Metal Trades Council.
Austal receives billions dollars from their Navy contract and has received more than $100 million in funding from the state of Alabama. “With all of the government funding that this foreign company receives there is no excuse for ignoring basic health and safety laws,” said Ault.
The Metal Trades Department is a trade department of the AFL-CIO. It was chartered in 1908 to coordinate negotiating, organizing and legislative efforts of affiliated metalworking and related crafts and trade unions. Seventeen national and international unions are affiliated with the MTD today. More than 100,000 workers in private industry and federal establishments work under contracts negotiated by MTD Councils. Workers retain membership in their own trade unions.