FreightWaves explores the archives of American Shipper’s nearly 70-year-old collection of shipping and maritime publications to showcase interesting freight stories of long ago.
In this week’s edition from the July 1980 issue, FreightWaves looks at a controversial bill that angered maritime workers.
Shipyard workers want to kill it all
Clearly dissatisfied with the final version of the maritime omnibus bill approved by the House Merchant Marine & Fisheries Committee, most industry and labor officials would rather go back to the drawing board on controversial promotional aspects of the legislation and move ahead with its more-or-less agreed-upon regulatory provisions during this session of Congress.
Nowhere was this feeling against the promotional aspects of the bill more evident than during the course of a mid-May two-day National Shipbuilders’ Conference, sponsored by the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers Union, held in Washington to stimulate opposition to the bill.
Indeed, speaker after speaker either voiced outright opposition to the bill or attacked its various provisions, especially those which would permit owners of foreign-built vessels to qualify (under certain conditions) for operating differential subsidy (ODS); allow the eventual phasing out of the essential trade route concept; and give the secretary of Commerce the right to disapprove ODS for vessels found to be overly manned or inefficiently operated.
Boilermakers’ president lashes out
The Boilermakers’ international president, Harold J. Buoy, led off the two-day session stressing the union’s opposition to the legislation. “I would be less than candid if I did not at this time express the steadfast opposition of the boilermakers to the bill. … For us boilermakers, one issue is central to all others — the bill, if enacted, will not build ships in U.S. yards.”
Citing the controversial reflagging provision, Buoy said, “The measure should be retitled the Foreign-Jobs Creation Act of 1980.”
The union leader indicated that problems concerning the bill are so severe that a compromise among various segments of the maritime community would be next to impossible.
“I could go on and on, but the defects of the omnibus bill are so severe and so well known that our primary challenge is the bill, if enacted, will not build ships in U.S. yards,” Buoy said.
MEBA hits
Speaking for Jesse M. Calhoon, president of the national Marine Engineers’ Beneficial Association (MEBA), David A. Leff, Joint Maritime Congress executive director, also lashed out at the bill, calling it “purposeless” since, in MEBA’s view, it is not an improvement over existing law.
Leff noted that the legislation is opposed by practically all segments of the maritime industry and is not supported by any economic analysis.
“The record has not been developed on detailed economic evidence,” Leff said. “Instead, the record is filled with self-serving statements.”
Calhoon’s spokesman said the Murphy committee failed to address the bill’s economic impact on the shipbuilding industry, on the U.S.-flag operators, and on the overall costs of the existing ODS program.
Leff charged that the legislation discards many “positive developments” put forth before the committee, such as full ODS and CDS parity. The MEBA spokesman also hit out at the proposed phasing out of the essential trade route system for liner operators, the reflagging provision, and allowing the secretary of Commerce to “invade the collective bargaining process” through a new manning-level review authority in connection with ODS applications.
Leff said MEBA is particularly disturbed over the bill’s expanded role for the secretary of Commerce in overseeing manning levels when determining ODS applications. The legislation would permit the Commerce secretary to deny the full ODS request — without a public hearing — upon determining excessive manning.
Under current law, the secretary of Commerce can deny ODS for crewmen over and above a certain number but does not have authority to deny the complete application. Under these conditions, subsidized lines can receive ODS and elect to pick up the tab for the extra crew members.
Leff said the bill would result in undue interference in the collective bargaining process, which is unparalleled in any other industry. Such an intrusion into labor-management bargaining, according to the MEBA spokesman, is clearly contrary to existing law and Supreme Court rulings.
“It’s a revolutionary idea. … It’s totally off the wall,” Leff said.
Brand: Bill developed in “punitive way”
Claiming that neither labor nor management were consulted before the bill was drafted, Transportation Institute president Herbert Brand said the legislation was developed in a rather punitive way.
“That is not the way you develop aggressive and progressive plans,” Brand said, indicating that private consultation is required in the developing stages of legislation. “The industry was called in to testify,” Brand noted, “but management cannot be as candid in public.”
Nemirow hinted possible policy change
Assistant Secretary of Commerce for Maritime Affairs Samuel B. Nemirow indicated the Carter administration might modify or drop its opposition to the reflagging provision of the bill in view of the various changes made by the Merchant Marine Committee, including amendments to require the replacement of foreign-built tonnage in U.S. shipyards and granting the secretary of Commerce authority to bar foreign building if such construction would seriously harm the U.S. shipyard mobilization base.
“The omnibus bill has been analyzed and evaluated in minute detail during some 30 days of committee hearings, in articles in the maritime press, and in public comments by interested parties, including the administration. Therefore, I do not want to engage in a rehash of the pros and cons of this very complex bill,” Nemirow said.
“However, I do want to reiterate the administration’s and MarAd’s opposition to one of the most controversial provisions, which is opposed by the labor and management segments of the American shipbuilding industry. I refer, of course, to the proposal which would permit foreign-built vessels and reflagged foreign vessels brought under U.S. registry to be eligible for ship operating subsidies.
“I testified before the committee that this provision would severely curtail shipbuilding opportunities for American yards and erode the shipyard mobilization base, which is essential for national defense. It also would contribute to unemployment and our balance of payments deficit.
“Since that time, numerous changes have been made, which appear to be designed to safeguard the interests of shipbuilders, and we are reviewing these changes at this time.”
Unless something is done to change the picture, Nemirow predicted a layoff of some 26,000 shipyard production workers during the next two years because of deliveries outpacing new orders. However, the unemployment slump, according to the assistant secretary, should bottom out by late 1982, when an upswing in U.S. shipbuilding is expected.
Between fiscal year 1980 and fiscal year 1985, Nemirow projected orders for 100-150 commercial vessels and 20 major conversions, with tankers and oceangoing dry bulk carriers leading the way.
Dry bulk package plugged
Nemirow put in a plug for the administration’s dry-bulk legislative package, which, he said, could mean well over 100 ships of various sizes. He also expressed hopes that the current controversy over the omnibus bill will not cause the administration’s dry-bulk program to be pigeonholed on Capitol Hill.
Rep. Lindy Boggs (D-La.), who co-chairs the Congressional Shipyard Coalition along with Rep. Paul Trible (R-Va.), said the Murphy committee should be given credit for bringing the industry’s problems to the attention of the public but indicated she could not fully support the bill since it failed to address all the problems of the industry. However, she called the legislation a product of a great deal of effort, noting it consumed thousands of hours of consultation.
Gibson Comments: Former MarAd administrator Andrew E. Gibson, now president of Delta Steamship Lines, voiced concern over the waning state of the U.S. merchant fleet, declaring that the “U.S. is the only trading nation that seeks to justify its merchant marine on purely economic grounds.”
Instead of continuing this policy, Gibson called on Congress and the administration to support full construction- and operating-subsidy parity.
Even Delta Lines, which he described as “one of the few lines operating at a very healthy profit,” within the next decade will have trouble replacing aging vessels without full CDS parity, Gibson said.
The bill, as reported out of the Merchant Marine & Fisheries Committee, retains a 50% CDS ceiling unless the secretary of Commerce determines that an increase is needed to sustain an adequate shipyard mobilization base.
Gibson said the trades between the U.S. and Latin America have generally “assured a reasonable share of goods for U.S.-flag carriers.”
JMC: “Needless repressive conditions”
Joint Maritime Congress (JMC) president Robert L. Leggett said wide-ranging opposition to the bill was due to “needless repressive conditions imposed by the House Merchant Marine Committee.”
Leggett, a former Congressman, said the opposition is deep-rooted and is not based upon cosmetic issues. Citing figures supplied by the Congressional Budget Office, the former Congressman and Merchant Marine Committee member, said the Congressional Budget Office statistics show that the legislation apparently would have no effect on ship trends or defense readiness if enacted.
Under a medium level of participation, the Budget Office projected the construction of zero ships in 1981, one vessel in 1982, two in both 1983 and 1984, and three in 1985.
“It is no wonder that industry and labor are totally unenthusiastic over the pending bill,” Leggett said. “If this pending bill is the program for the ’80s, it charts disaster — not a [defense] readiness program.”
Leggett called on the industry, labor, and Congress to go back to the drawing board on the legislation.
Later, the JMC president told American Shipper he doubted the Senate would consider such a confusing bill which lacks broad-based support.
Leggett expressed hopes that the Merchant Marine Committee will rewrite the promotional aspects of the legislation in the next congressional session and garner the united support of industry and labor. Otherwise, Leggett feared a bloodbath over the bill if it goes to the floor in its present form. “The fighting will give the industry a bad name,” Leggett warned.
Boilermakers’ Resolution: The Boilermakers wound up the two-day meeting by unanimously adopting a resolution calling on President Carter and the Congress to “recognize the precipitous and dangerous decline of U.S. naval and merchant marine capabilities and of U.S. shipbuilding and marine support industries, as they relate to the present global strategy decisions, and to make a firm, aggressive commitment of national talents and resources in an effort to reverse this trend so potentially perilous to U.S. survival as a free nation.”
“The resolution is only a piece of paper, but a very important piece of paper which groups can rally around to work for legislation to secure a strong merchant marine and naval force in this country,” Buoy said.
Although the resolution does not specifically mention the omnibus bill, Page Groton, who represents the union in Washington, told American Shipper he will lobby against the legislation.
