Bay Ship gets second sailing The Sturgeon Bay company will bring back 500 workers By Joe Knaapen For The News-Chronicle Bay Shipbuilding Inc. of Sturgeon Bay last week broke out of economic doldrums and signed a contract to build a new tug-barge combination. The project, the first new construction job at the yard since last October, will assure continued employment for about 500 workers through December 2004. The project for Penn Maritime Inc. of Stamford, Conn., and Staten Island, N.Y., could signal a upturn in a shipbuilding market that went on hold last fall, said Pat O'Hern, vice president and chief executive of the shipyard. "We believe this order, and others we expect to follow, will break that mold, the wait-and-see attitude that took over the markets last year," O'Hern said. With the contract in hand, Bay Ship will start bringing back workers who were laid off because of the economic downturn in the first half of 2003. Bay Ship crews will start burning metal and fabricating sections by November or December, O'Hern said. Before that can happen, the shipyard has to prepare its construction strategy, layout schedules and confirm a supply of materials. After bringing back workers from a seniority list of about 400 people, the company expects to hire about 100 more people, said Jon Schauske, Bay Ship operations manager. "Our goal will be to build a strong local base of workers first," Schauske said. Bay Ship will need to hire production workers - steel workers, welders, electricians, fitters, plumbers and carpenters - and management and support staff, Schauske said. If Penn Marine exercises an option for a second tug-barge combination, the workforce could reach the 550 level of 2002 and keep the crew busy beyond the 2004 delivery date for the initial tug-barge, O'Hern said. The announcement comes in stark contrast to layoffs and shutdowns that resulted in the loss of about 500 jobs in Door County over the last eight months. Last year, Bay Ship was wrapping up work on three projects and enthusiastic about future ventures when the bottom dropped out of the market, O'Hern said. At the time, the shipyard was completing the tug-barge combinations Coastal Reliance and Ocean Reliance for Crowley Marine, a transportation conglomerate based in Oakland, Calif.; the ferry Arni Richter for the Washington Island ferry line and another ferry project. The two Crowley tugs were built at Marinette Marine Inc., a Bay Ship partner under the umbrella of The Manitowoc Co. The barges were built at Bay Ship, and the customers had an option to build at least one more tug-barge combination. The anticipated new-build projects failed to materialize as 2002 wound down, O'Hern said. With the world on war footing and in the midst of a battle against terrorism, new construction projects suddenly went on hold, he said. Crowley, for example, is among transportation companies that depend on the demand for oil to maintian or upgrade their fleets. The charger companies own and lease vessels to oil companies to transport petroleum products. Since the 1989 accident involving the Exxon Valdez, oil companies no longer haul their own product, preferring instead to contract out the work. Companies, such as Crowley, don't built new vessels until they have sufficient commitment from oil companies for hauling specific amounts of product, O'Hern explained. The aftermath of the Exxon Valdez spill holds out more hope for an economic upswing in the shipbuilding industry, O'Hern said. A federal law adopted in 1990 requires U.S. petroleum tankers to be double-hulled for safety. The new project will be the four double-hull barge built at Bay Ship, O'Hern said. The experience in producing the barges will be an invaluable attraction for new customers when they have to replace their tanker fleets, he added. In the meantime, O'Hern is traveling to follow up requests for bids on other shipbuilding projects, and Bay Ship is quietly celebrating the contract with Penn Maritime, the largest U.S. coastal transporter of liquid asphalt and residual fuel products. For the Penn Maritime contract, Bay Ship is building both the barge and tug. The tug will be a 123-foot, 6,000-horsepower ocean class boat that will power a 480-foot long double-hull barge. The two vessels will be joined by a coupler. The barge, capable of hauling 140,000 barrels of petroluem products, will be equipped with stainless steel coils required to heat the cargo, making it liquid enough to be pumped. The tug-barge will be manned by a crew of 10, which compares to the crew of 16-20 required to operate a tanker.