Great Lakes Shipbuilding and Government Programs to Promote the Industry

GOAL: Support programs that increase commercial shipbuilding and repair at Great Lakes yards.

BACKGROUND: Great Lakes shipyards employ more than 2,700 men and women, and the wages they provide top $125 million each year. Shipyards with large-scale capability are in Sturgeon Bay, Marinette and Superior, Wisconsin; Toledo, Ohio; and Erie, Pennsylvania. Small drydocks and ship repair facilities are located in Ashtabula, Cleveland, and Toledo, Ohio; Milwaukee, Wisconsin; and Detroit, Rogers City, and Sault Ste. Marie, Michigan.

Great Lakes shipyards are fully capable of building all types of commercial and military vessels for service throughout the world, limited only by the size of the navigational locks in the St. Lawrence Seaway. Within the Great Lakes, shipyards have built 1,000-foot-long vessels that keep the mills supplying steel for U.S.-made automobiles and appliances, the lights on in southeast Michigan, and U.S. workers building America’s infrastructure.

In addition to maintaining and modernizing the Lakes fleet to the tune of $70-million plus each winter, Great Lakes shipyards are actively engaged in new commercial and military construction, including the U.S. Navy’s Freedom class littoral combat ship.

Great Lakes shipyards build and service ships sailing not only the Great Lakes but also the inland river system, saltwater coasts, and the high seas. Yards have added drydock capacity, berthing docks, facilities and personnel to build state of the art vessels, as well as heavy lift equipment and preventative maintenance assessment tools.

There are just a few federal programs to aid shipyards. The Title XI Ship Loan Guarantee Program is a government guarantee of a loan to build a vessel. The capital cost of vessels and the cyclical nature of vessel construction mean financial institutions may be unfamiliar with the industry and are hesitant to invest in vessel construction at affordable rates. Title XI Ship Loan Guarantee Program of the Maritime Administration makes vessel financing available at affordable interest rates by providing a government guarantee of 87.5 percent of a 20-year commercial vessel construction loan. In recent years Title XI has guaranteed more than $8 billion in commercial vessel construction projects in the United States, which, in turn, have generated tens of thousands of highly skilled, good-paying jobs nationwide.

ACTION: Support Title XI Ship Loan Guarantee Program and Capital Construction Fund. The minimum appropriation for Title XI should be at least $100 million. Support trade negotiations and/or legislation to end foreign government subsidies to shipyards. Advocate and support federal tax policies that encourage modernization of both plant and equipment for shipowners and shipyards by the use of investment tax credits.