Small Shipbuilding Company Brings Big Business

Big BusinessShipbuilding is one of the oldest industries in the United States, and was once one of the most important. During its glory days, the industry contributed in major ways toward making this country a world power — playing vital roles in all of its major wars. But since the Civil War, the U.S. shipbuilding industry has declined significantly, according to GlobalSecurity.org, a public policy organization that focuses on the fields of security, intelligence and defense.

Small Shipbuilding Company Brings Big Business Hundreds of jobseekers in Northwest Florida will have opportunity for employment, thanks to Eastern Shipbuilding Group by Wendy O. Dixon

Big BusinessShipbuilding is one of the oldest industries in the United States, and was once one of the most important. During its glory days, the industry contributed in major ways toward making this country a world power — playing vital roles in all of its major wars. But since the Civil War, the U.S. shipbuilding industry has declined significantly, according to GlobalSecurity.org, a public policy organization that focuses on the fields of security, intelligence and defense.

Despite the dramatic decline nationally, Eastern Shipbuilding Group in Bay County continues to churn out a diverse assortment of vessels in Panama City. A shipbuilding and marine repair company specializing in commercial steel and aluminum vessel construction and repair, it’s one of the big contributors to the local and regional economy as the largest private employer in Bay County.

“We’ve been here for 35 years and have seen our share of growth in spurts,” says Lisa Barnes, the company’s special projects manager since 2006. “Shipbuilding in and of itself is kind of a cyclical business, you have good years and bad years. Right now we’re doing well.”

Brian D’Isernia, Eastern’s president and CEO, familiarized himself with the Gulf of Mexico in 1976 when he brought a vessel to the area to fish for swordfish. The native New Yorker found an opportunity that hadn’t been capitalized on yet.

“I came to Panama City as a fisherman,” he says. “When I needed a new fishing boat, I knew I could do it better than anyone else could, and that is when the shipyard began.”
Though the U.S. doesn’t build nearly as many military ships as in the past, the United States shipbuilding industry has made some progress in its reemergence as an active participant in the commercial market. The National Shipbuilding and Conversion Act of 1993 and the expanded Title XI Federal Ship Financing Program are helping U.S. companies by providing financial incentives to aid in their ability to aggressively enter and compete in the market.

In the past, it was hard for small and mid-sized shipyards to compete with the bigger shipyards in Louisiana, Maine, Connecticut, Virginia and California. But because of a surge in activity relating to the offshore exploration, drilling and servicing sectors, the smaller shipyards, including Eastern Shipbuilding Group, are scoring major contracts, building an assortment of vessels for use on inland and coastal waterways, as well as for foreign markets. Eastern Shipbuilding Group has become one of the leading innovators in marine construction and repair, with three modern shipbuilding yards, all located in Bay County. These and similar shipyards around the country are expected to continue to prosper for the next decade.

Capitalizing on the increased demand for vessels for the Brazilian offshore drilling market, Eastern Shipbuilding recently took on a major Brazilian customer. Ship owner Boldini S.A. was granted a $250-million loan guarantee in 2011 by the U.S. Maritime Administration, a department within the Department of Transportation, which allows Eastern Shipbuilding to build five 282-foot-long platform supply vessels that will be used to provide service in new deepwater oil fields in Brazil.

“The Brazilian offshore field is growing because they have the pre-salt (underneath the salt layer) discoveries off the Brazilian coast,” Barnes says. “And that’s a significant market.” Eastern Shipbuilding is doing pre-engineering work for Boldini’s vessels now.

The Boldini project is a case in point that U.S. shipyards can compete in a global market. And through the Maritime Administration’s Loan Guarantee Program, the U.S. government is helping Eastern Shipbuilding and its workers build world-class vessels.

“Eastern Shipbuilding Group is an impressive entity,” says William P. Doyle, chief of staff for Marine Engineers’ Beneficial Association in Washington, D.C. Citing the Boldini contract, he adds, “This is proof positive that the United States, specifically in this case U.S. shipyards, can compete on a global scale to construct and then export its manufactured products.”

The Gulf oil industry is also starting to pick up since the Deepwater Horizon oil spill in April 2010. “People are starting to drill again,” Barnes says. “And there are opportunities in Alaska, so there are a lot of things coming together now.”

In November 2011, Hornbeck Offshore Services, a Louisiana-based company that provides logistics support and specialty services to offshore oil and gas exploration in the Gulf Coast, announced $720 million worth of contracts with Eastern Shipbuilding Group (along with VT Halter Marine in Pascagoula, Miss.) for the construction of 16 high-specification offshore supply vessels. Each shipyard will build eight 300-class vessels, with options to build additional such vessels should future market conditions warrant. The project is expected to be completed by 2014.

Depending on workload, the shipyard has employed from 100 up to 1,100 employees. Currently, Eastern Shipbuilding employs around 800 people but it plans to add 300 new employees to its payroll in 2012. The work is strenuous, but the salary potential is high.

“It’s hard work, I’m not going to sugar-coat that, but there certainly is an opportunity there if you’re willing to work,” says Barnes. “We have people at the shipyard that have worked there for many years, and supervisors who are making $100,000 a year, so there are good jobs at the shipyard if you’re willing to work.”

And those jobs help the community with additional jobs, which are created to provide services to the shipyard workers. “For every job we have at Eastern, you have three ancillary jobs because of Eastern,” Barnes adds. “The guys who work at the 7-11 or at UPS have jobs because of Eastern.”

The hourly wage is $10.50 for trainees and up to $20 for experienced workers. The shipyard offers training, which includes a welding school and ship-fitters school, and hires all sorts of craftsmen, from trainees to first class craftsmen. The necessary training means that Eastern Shipbuilding is not only creating current jobs but ensuring a skilled labor force for the future.

“Shipbuilding requires skilled craftsmanship by a dedicated workforce,” Doyle says. “In these tough economic times, Eastern claims it will create and retain 300 jobs in Bay County beginning in 2012.  It is refreshing news.”

Like most shipyards, Eastern is largely made up of male employees, many who commute from a five-county area surrounding Bay County. The shipyard also hires underwater welders, who work in murky water with zero visibility.

Eastern’s 11-acre Nelson Street shipbuilding and repair facility is located close to downtown Panama City and has more than 1,300 feet of water frontage situated on St. Andrew Bay, a short distance from the Gulf of Mexico. Adjacent to the Nelson Street shipyard is Eastern’s six-acre East Avenue fabrication yard, where much of the modular pre-fabrication is performed.

With more than 5,200 feet of water frontage, Eastern’s largest shipyard facility is a 140-acre site located 12 miles east in Allanton and is adjacent to the Intracoastal Waterway. This large facility is laid out for multiple vessel and large vessel construction. The Allanton yard houses equipment and an electrical shop, carpenter shop, pipe shop, warehouse and sandblasting and painting shop in its 32,000-square-foot building.

The shipyard has had military contracts, though its focus is on commercial vessels. “We’ve built everything from small fishing vessels to a 425-foot barge,” Barnes says. Eight 200-foot supply vessels, which will transport workers, supplies, parts and chemicals to the offshore oilrigs, were built at this facility. And the shipyard is currently building 55 towboats for Florida Marine Transporters.

One of its more emotion-tinged launches came on Sept. 11, 2009, with a fireboat built for the New York City Fire Department named Three Forty Three, for the number of FDNY members killed in the line of duty on Sept. 11, 2001. The $27 million fireboat is the largest of its kind in the country.

In addition to new construction, the shipyard has done major conversions on more than 50 vessels, including the lengthening of oil supply vessels, the conversion of oil supply vessels to North Sea rescue platforms, and the conversion of utility vessels to catcher/processor fishing vessels. Its most recent conversion included a 472-foot self-unloading phosphate rock barge to a 22,000-deadweight ton heated liquid sulfur barge.

Plans to quadruple the size of the launch basin are in the works, with Florida Department of Environmental Protection and U.S. Army Corp of Engineers permits in place to facilitate expansion. The length of the basin in which vessels and barges are launched, which is now 400 feet, will nearly double to 730 feet. And the width will be increased from 125 feet to 200 feet. This expansion will make Allanton an ideal facility for large tug barge construction.

“Through the years, Eastern has maintained our competitiveness by building a wide variety of vessels,” D’Isernia says. “We will continue to build top-quality vessels for our customers. Our customers’ success is our success.”