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SCA Weekly Report | May 29 - June 2, 2023

Shipbuilders Council of America

20 F Street NW, Suite 500

Washington, DC 20001

www.shipbuildersusa.org

 

 

SCA Weekly Report | May 29 - June 2, 2023

 

 

ANNOUNCEMENTS

 

Save the Dates: Upcoming SCA Meetings

 

2023 SCA Fall General Membership Meeting: October 11-12, 2023 | Portland, Maine

2024 SCA Winter General Membership Meeting: February 7-8, 2024 | Coral Gables, Florida

 

PROPOSED EDA TRANSFER TO HONDURAS

 

The Defense Logistics Agency is proposing the transfer of two Mechanized Landing Craft (LCM-8) to Honduras under the Excess Defense Articles (EDA) program. 

 

The EDA craft would replace the Honduran Navy’s current inventory of LCM-8s, which are approaching or at end-of-life.

 

Please contact Lee Ann Carpenter at the Department of Commerce if you have any concerns by 08 June. A non-response will be considered as agreement to the transfer.

 

Lee Ann Carpenter / Bureau of Industry & Security / US Department of Commerce / 202-482-2583 / LeeAnn.Carpenter@bis.doc.gov

 

CONGRESSIONAL NEWS

 

Congress Passes Debt and Spending Bill to Avert Default

This week, the House and Senate voted on a package that would raise the debt limit and cap discretionary spending levels for two fiscal years. Congressional approval of the bill now sends the measure to President Biden's desk where it will be signed into law to avert default.

 

Overall, the measure funds total defense for fiscal year at $886 billion, with a 1% increase in fiscal year 2025. However, senior lawmakers from both parties say there is bipartisan support for supplemental funding that could boost defense and non-defense budgets. Several GOP senators, including Sen. Susan Collins (R-ME), the ranking member on the Senate Appropriations Committee, said they want a commitment from the White House and Senate Democrats to support an “emergency defense supplemental” following the passage of the deal in order to ensure defense budgets keep pace with inflation.

 

Additionally, there is support for another supplemental funding bill for continued military aid to Ukraine, which could become a potential vehicle for moving more defense funds into the budget.

 

HASC Eyes New Dates for NDAA Markup

The House Armed Services Committee has set new dates for marking up its annual defense policy bill, the FY24 National Defense Authorization Act, now that the debt deal has been struck. The panel will hold subcommittee marks the week of June 12; full committee June 21 and have the bill on the floor after the July 4 recess.

 

The Senate is now planning a late-June markup for its version of the NDAA. Neither House or Senate appropriators have released a new schedule for defense markups.

 

NAVY NEWS

 

White House Nominates Gen. Eric Smith to be USMC Commandant

The White House on Tuesday nominated Marine Corps Assistant Commandant Gen. Eric Smith, a key figure in the service’s Force Design 2030 modernization efforts, to serve as the next commandant, according to a Senate notification.If confirmed, Smith would succeed Gen. David Berger as the Marine Corps’ top officer. Berger is expected to retire this summer.

 

Prior to becoming the assistant commandant in 2021, Smith led Marine Corps Combat Development Command and was the deputy commandant for combat development and integration, where he oversaw the Marine Corps’ effort to overhaul the force to make it lighter and more mobile for a potential conflict with China in the Indo-Pacific. Known as Force Design 2030, the modernization push has been at the forefront of Berger’s time as commandant and an initiative Smith spearheaded as the Marine Corps’ top requirements officer.

 

Smith’s nomination helps solidify the future of the Marine Corps’ Force Design 2030, which has received criticism of retired generals. The overhaul has seen the Marine Corps divest of legacy platforms like tanks in favor of lighter equipment that smaller units of Marines could haul around as they set up expeditionary bases on Pacific islands, from which they could fire anti-ship missiles.

 

OFFSHORE WIND NEWS

 

Biden Administration Completes Environmental Review of Gulf of Mexico Wind Areas

The Biden Administration’s plan to achieve 30 gigawatts of offshore wind energy capacity by 2030 has taken another step forward with the Bureau of Ocean Energy Management (BOEM) issuing a final environmental assessment (EA) on the potential impacts of offshore wind leasing in the Gulf of Mexico. This marks a crucial milestone towards the potential first-ever offshore wind lease sale in the U.S. Gulf. According to the analysis conducted in the EA, BOEM has determined that there will be no significant impacts on environmental resources.

 

Crowley Invests in Tugdock's Floating Dry Dock Platform to Boost U.S. Floating Offshore Wind

U.S.-based maritime logistics and offshore services firm, Crowley, recently announced a new investment in Tugdock. Tugdock has developed "the world’s first road-transportable floating dry dock" known as the Tugdock Submersible Platform (TSP), to help advance offshore wind energy in the United States. Crowley and Tugdock will explore potential use of the platforms in locations, such as the U.S. West Coast, where depth and conventional drydocks may be ill-suited for the logistics required, Crowley said.

 

IN THE NEWS

 

Plans Announced for LNG Export Facility in U.S. Gulf of Mexico

Grand Isle LNG is proposing to build an LNG export facility, thirteen miles south of Grand Isle, Louisiana, in Plaquemines Parish, promising significant economic benefits to the region. The proposed deepwater port is a platform-based modular design; its pipeline access, and its nearshore location will result in one of the least expensive and safest operations on the market today. Additionally, all platforms and many components of the facility will be Louisiana made by Louisiana energy workers.

 

South Korean Yards Turn to Guest Workers but Have Trouble Retaining Them

In a scramble to fill vacant positions and build a slew of new shipbuilding orders, South Korea's Big Three have been hiring yard workers in from Thailand, Vietnam, the Philippines and other countries in Southeast Asia. The ranks of foreign guest workers in the yard, but there is one problem: a small number of them are walking away once they arrive in the country. Nonetheless, the Big Three have reported some disappearances from the ranks of the newly recruited workers. In April, seven Thai workers departed the HD Hyundai yard after just a week on the job.

 

The reason for the departures, according to the shipbuilders' union at HD Hyundai, is relatively low pay and difficult work - and under the circumstances, "the desertions are not surprising," the union said in a recent newsletter edition.

 

Foreign workers are an increasing share of the Korean shipyard workforce. Most of the large yards source 10-20 percent of their outsourced (contract) workforce from foreign countries, according to BusinessKorea. Given the growing role of workers from Southeast Asia in the Korean shipbuilding industries, the Korean Confederation of Trade Unions (KCTU) metalworkers' union has decided to switch its policy from opposing migrant labor to organizing migrant labor. As a practical matter, one union leader told BusinessKorea, "the metal workers' union should not give them the cold shoulder but embrace them."

 

The importance of guest workers may grow further with time. With the ongoing shipbuilding boom, South Korean yards are short about 2,000 workers, according to Korea JoongAng Daily. The working conditions are challenging, and the wages are "not particularly high," explained researcher Lee Kyung-woo of the Ulsan Research Institute. The tens of thousands of workers who were laid off during the downturn in 2016-18 are largely staying away and seeking other options, and it may take up to five years to return to stability and full staffing for the yards.

 

MetalCraft Awarded USCG Patrol Boat Contract

MetalCraft Marine Inc. (MCM) recently announced it has been awarded a $31 million contract from the U.S. Coast Guard (USCG) as part of the Long-Range Interceptor (LRI) III program. This is the second contract MCM has received for the design and build of their high-speed Interceptor patrol boat. The LRI is produced in sizes from 23-65 feet, and has had great success with other military and police forces across North America and is used for several operations including drug interception, Search and Rescue, and crew transfer.

 

Maryland Pilots Order Another Launch from Gladding-Hearn

The Association of Maryland Pilots has ordered a new pilot boat from Gladding-Hearn Shipbuilding. The high-speed vessel is a sistership to its first Baltimore Class launch, delivered less than two years ago. Delivery is scheduled for 2024.  

 

 

 

If you have any questions, please do not hesitate to contact the SCA staff.