WASHINGTON — When the U.S. Coast Guard announced last week the three finalists to build the agency’s next-generation cutter, industry observers noted with seemingly equal interest which shipyards weren’t on the list as those that were.
In particular, Maine’s Bath Iron Works – a production giant of Navy ships and one of Maine’s largest private employers – was among the three competing for what could eventually be a $10 billion contract while BIW’s primary competitor, Huntington Ingalls Shipbuilding of Newport News, Va., did not make the cut.
“I think General Dynamics’ victory was not a huge surprise,” Loren Thompson, a defense analyst and chief operating officer of the Lexington Institute, said of BIW’s corporate owner. “But Huntington Ingalls’ loss was a huge surprise.”
Thompson noted that Huntington Ingalls makes the largest ship that the Coast Guard operates, so the notion that it didn’t snag one of the three berths was a bit of a shocker.
Landing the contract to build up to 11 of the Coast Guard “offshore patrol cutters” – with the possibility of 25 ships over the long term – would be a major coup for BIW and its roughly 5,000 employees. While BIW officials declined to estimate how many jobs the final contract might support, one of the competing shipyards, Eastern Shipbuilding Group in Florida, predicted “there will be upwards of 2,000 direct jobs created in northwest Florida” if it wins the design and bidding war.
As BIW representatives pointed out last week, there’s still a long way to go before the Coast Guard chooses whether to award its first design-and-build contract for the offshore patrol cutter to BIW, Eastern Shipbuilding or Bollinger Shipyards Lockport in Louisiana. Each received about $21.4 million for the initial design.
Bollinger already builds “fast response cutters” for the Coast Guard, and much-smaller Eastern Shipbuilding is known in the industry for producing commercial vessels at a lower cost. BIW, on the other hand, hasn’t built a Coast Guard ship in well over a generation. But shipyard spokesman Jim DeMartini said the new cutter was “right in our wheelhouse” in part because BIW built Navy frigates of a similar size for several decades.
“It’s going to be a fiercely competitive bid,” DeMartini said. “But it’s great news. It’s a morale booster internally.”
But BIW has something that the other two companies don’t: General Dynamics, a corporate parent and defense contracting behemoth that received $20.8 billion from the U.S. government in 2012.
Guy Stitt, president of the naval analyst firm AMI International, said that if he were in the Coast Guard leadership, he would want to involve deep-pocketed shipyards to make sure the offshore patrol cutter program doesn’t get the budget ax in Congress.
“This is a tough competition,” Stitt said. “I expect the Coast Guard welcomes having General Dynamics’ political support in this program to make sure it moves forward. And how (the company) can leverage that could be key.”
The competition for the Coast Guard contract is also a sign of the shipbuilding times as companies try to diversify in the face of political and financial uncertainties from Washington, D.C.
DeMartini said the Navy is buying fewer ships than it was during the 1990s, resulting in a significant volume reduction at the Maine shipyard. So BIW is always “looking to any opportunity” that fits the company’s business and financial strategies and can be incorporated into the shipyard without disrupting other work, he said.
The Lexington Institute’s Thompson agreed, to an extent.
The Navy will continue to turn to BIW for surface ships and General Dynamics’ Electric Boat in Connecticut for submarines for the foreseeable future, Thompson said. The question is how often, given the increasing competition for federal dollars.
“General Dynamics doesn’t have to worry about its relationship with the Navy,” Thompson said. “General Dynamics has to worry about what the future budget of the Navy will be.”
IS MAINE ‘READY FOR HILLARY’?
The 2016 campaign to award Maine’s four electoral votes to Hillary Clinton got its start on Saturday.
National staff members for “Ready for Hillary” – an independent political action committee – held an organizing meeting at the Portland Public Library on Saturday. The meeting was billed as “the area’s first official gathering of grassroots Hillary supporters and a beginning of area efforts to encourage Hillary to run.”
Hillary is, of course, the former first lady, New York senator and secretary of state who is perceived to be the Democratic front-runner for 2016, if such a status is possible more than 2½ years before an election.
The meeting drew approximately 25 people, according to organizers.
A Maine woman who started two programs to help older Americans start and run their own businesses testified last week during a congressional committee hearing on what was dubbed “encore entrepreneurs.”
Elizabeth Isele said her first training seminar to help senior citizens become more computer-savvy started with just 12 participants in a Portland computer lab. Within five years her CyberSeniors workshops had trained more than 28,000 seniors across the country.
Today, Isele runs two programs to help older entrepreneurs get started: SeniorEntrepreneurshipWorks.org, which offers a free online education and training curriculum for seniors, and eProvStudio.com, a new “entrepreneurship exploratory experience workshop” for those age 50 or older that launched in Florida recently and has already generated interest around the country.
Speaking to the Senate Special Committee on Aging, Isele described seniors as a “tremendously untapped resource.”
“Seniors are creating businesses and they are creating models,” said Isele, who was invited to Washington by U.S. Sen. Susan Collins of Maine, the committee’s ranking Republican member. “Entrepreneuring is definitely, definitely trumping aging.”
According to the Kauffman Foundation, individuals over age 50 start new businesses at a higher rate than any other age group.
COMMUNICATIONS DIRECTOR FOR KING
Sen. Angus King, I-Maine, filled a key post in his Washington office last week.
King announced that Kathleen Connery Dawe was hired as communications director, filling a spot left vacant earlier this winter when Crystal Canney stepped down to return to work full time in Maine. Canney is now spokeswoman for the campaign of independent gubernatorial candidate Eliot Cutler.
Connery Dawe most recently worked at Mayer Brown, a Washington law and lobbying firm. She spent nearly five years as communications director for former U.S. Rep. Rahm Emanuel, who would later serve as chief of staff to President Obama and is now mayor of Chicago.
“I am excited to welcome Kathleen to my team,” King said. “She is an experienced communicator who brings the kind of knowledge and communications experience that will well serve the people of Maine.”
Kevin Miller can be contacted at 317-6256 or at: [email protected]