Loans will boost U.S. shipyards

August 03, 1994|By Journal of Commerce

WASHINGTON -- President Clinton yesterday celebrated what he called a renaissance in U.S. shipbuilding by announcing four loan packages that will bring more than $1 billion in business and hundreds of jobs to U.S. shipyards.

One package alone, a proposed $726 million loan guarantee to a Swiss company to build 30 containerships at McDermott Shipbuilding in Morgan City, La., could be the largest commercial export ship order for a U.S. yard in more than 30 years, the president said.

Another loan package that already has been approved is tied to shipping magnate Malcolm McLean, who operates a barge service to Puerto Rico and is bidding to purchase Navieras de Puerto Rico. The loan package will finance the construction of two U.S.-flag oceangoing barges at Trinity Marine in Gulfport, Miss.

In a White House ceremony, Mr. Clinton also announced that the administration had approved a $22.7 million guarantee to National Steel and Shipbuilding Co. in San Diego to invest in new technologies. In addition, he said the administration is considering a $133 million loan guarantee to a Greek shipowner to support the construction of four product tankers in Newport News, Va.

The president and Transportation Secretary Federico Pena said the financial guarantees prove that the administration's five-part plan to help U.S. shipyards make the transition from military to commercial construction is working.

Over the last 10 years, only a single commercial oceangoing ship has been built in the U.S., and since 1980, more than 80,000 jobs have been lost in U.S. shipyards.

"We can't allow the one commercial vessel to become a symbol of the past," said Mr. Clinton, in a ceremony attended by key members of his economic and trade team and industry officials.

The administration's effort to help U.S. shipyards has so far been geared toward the construction of new ships. BethShip, Bethlehem Steep Corp.'s shipyard at Sparrows Point, is primarily in the repair and renovation business.

Mr. Clinton said his shipbuilding initiative -- which includes just-completed negotiations to end foreign shipyard subsidy, and calls for technology development grants, streamlined regulations and greater marketing efforts -- should be part of a "permanent partnership" between government, business and labor.

The $115.9 million loan guarantee approved yesterday will help Trinity build two vessels for Coastal Ship Inc., which is controlled by McLean. They will be operated by another McLean company, Allen Freight Trailer Bridge, in the U.S.-Puerto Rico trade.

Under the McDermott deal, which is under consideration, the Louisiana builder will construct 30 containerships for Saracen, a Swiss-based investment concern. Saracen would receive a $726 million loan guarantee.

The other package under consideration, a $133 million guarantee to Fleves Shipping Corp. of Greece, will support the purchase of four product tankers at Newport News Shipbuilding.

National Steel, which constructed the only commercial ship built in the United States over the last decade, will receive a $22.7 million loan guarantee to invest in modernization to make the yard more competitive.

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