Navy picks port firm to break ships; Contract with BMI expected to create at least 200 jobs; 3 other U.S. ports chosen; Pilot program aims to test safer ways of dismantling vessels


In a move that will create at least 200 new jobs here, the Navy decided yesterday to send obsolete warships to Baltimore and three other ports for scrapping. The program is to test new ways of safely dismantling old ships.

The $3.8 million contract awarded to Baltimore Marine Industries Inc., the Sparrows Point shipyard formerly owned by Bethlehem Steel Corp., is part of a pilot program to reform the government's troubled ship-scrapping program. Other old warships will be dismantled in Philadelphia, San Francisco and Brownsville, Texas.

Each port will initially scrap one vessel. The Navy will subsidize the scrapping, instead of trying to make money by selling the ships to private scrap yards, as it had done.

"This is a new era of dismantling Navy ships," said Capt. Garry Hall, the Navy's ship-disposal program manager. "The contracts will be used to obtain cost data for dismantling ships in the United States, and to demonstrate environmentally sound and cost-effective methods for disposal."

The shipbreaking industry is under pressure to comply with anti-pollution and worker-safety laws. The scrutiny follows a series of articles in The Sun in December 1997 that documented the industry's record of deaths, accidents, fires, mishandling of asbestos and environmental violationsat ports around the country and overseas.

A Defense Department review panel called for more rigorous management of the scrapping program, including stepped-up inspections and clearer guidelines for ship-breaking businesses. Critics, including Democratic Sen. Barbara A. Mikulski of Maryland, said those suggestions did not go far enough.

Last year, Congress adopted legislation setting up the pilot program to test new methods of scrapping ships and to better determine the costs.

"I'm so proud that BMI has won the first ship-scrapping contract under this pilot program," Mikulski said yesterday. "I know that they will prove that we don't have to send our ships and our jobs overseas. We can break ships right here in the port of Baltimore in a way that fosters American jobs, promotes safety and protects the environment."

The USS Patterson, a frigate, will be towed to Baltimore, and the Navy said the dismantling should start soon. Robert M. Bates, a consultant to BMI, said the work means at least 200 new jobs for the shipyard, which currently employs 800. He said the scrapping would take about seven months.

If they do a good job, BMI and the other three yards could scrap additional Navy ships.

"They took a lot of time to decide who could do the job, and that's why they chose us," Bates said.

The Sparrows Point yard could get more work if the U.S. Maritime Administration, which has more than 100 obsolete ships, decides to send its old vessels here.

"If we are able to work an arrangement with the Maritime Administration and the Navy, it would increase the number of workers to 400," Bates said.

He estimated that a contract with the Maritime Administration would be worth $20 million or more.

"This ship-scrapping program could be a shot in the arm to the industry," Bates said. "I hate to say that scrapping ships is a growth industry, but for the next five years it will be."

Employment at the Sparrows Point yard, which once employed 8,000 workers, declined steadily in recent decades until the operation was virtually shut down in 1997, when Bethlehem Steel sold it to Veritas Capital Inc. of New York.

Relying primarily on repair work, it has started to turn a profit.

William A. Richardson, a 38- year employee of the shipyard and the president of the local chapter of the Machinists union, hopes the contract means steady work.

"Once we get a job in, we hire people. But when it's done, then we have to lay them off," he said. "We are hoping it will be steady work coming in, and we can get more workers and keep them.

"It will be good for us, but also good for the rest of the industry, in selling and transporting the steel."

Richardson said the scrapping contract is a big break for the shipyard. One of the hundreds of employees laid off in 1997, he remembers the bleak times and hopes they don't return.

"Ship-breaking is a good future for us," he said. "We're the ones that built them, so why not let us take them apart?"

Pub Date: 9/30/99

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