My first exposure to Ship Repair was during my tenure as a CPA, a company that eventually became Vigor Industrial entered my office having been in operation for the last four months of 1985. They started well, made money, and began their journey to becoming a billion-dollar revenue company. This company remained my client until I joined their competitor Northwest Marine in 1987.
Most people don’t realize how much the US and North America dominated the build and repair global market, after WWII the US had the largest number of vessels operating in the world (Canada was in the top five.). This continued into the 1950’s and 1960’s until Europe re-built and the Asian capabilities, starting with Japan and Korea, began taking the business. As they had lower economic and social costs than North America, the forces of Capitalism moved the market overseas. Both build and repair shipyards began a slow and steady decline that lasted over 30 years.
As I entered in the 1980’s, the commercial market had moved all of its non-military build of large vessels overseas, and most of the commercial large vessel repair had departed. The only exception was Jones Act and military vessels required to be built and crewed in the US. The Reagan presidential years provided a spurt of revenue as the target was a 600 ship US Navy, even that surge materially declined when that target was abandoned, and the fleet reduced to approximately 300 surface vessels. Too many shipyards were feeding off a continually declining market and each year multiple shipyards entered bankruptcy. And as waterfront property has a greater value being commercially developed, those facilities disappeared. A workforce of over 100,000 on the West Coast alone declined to about 15% of that by the turn of the century.
In Canada, the building of the current Frigates buoyed the build yards, but after completion in the 1990’s, major vessel build disappeared from the country for over 20 years. Repair yards suffered or disappeared and learned to live on military and small vessels.
I spent my first years in ship repair in the Accounting and Finance area, it was a continual struggle to survive, the need to shrink the cost base almost annually to meet the reduced available market. The wonderful skills set of that generation of men and women in the workforce shrunk over time and began aging out, even more depressing was seeing these parents tell their children to take up other careers as they saw no future in this business. It was a time of survival into the late 1990’s, as other Eastern European and Asian countries entered this market with significant competitive advantages.
After the turn of the century, the market stabilized, what could go overseas had already left. Military, both combat and support vessels, Jones Act Vessels, and smaller craft such as barges, tugs, fishing vessels, and oil field support vessels remained as the primary market. The shipyard facilities that went out of business were converted towards Commercial development reducing the supply side of the business. Quite suddenly, the market had moved toward a balance between supply and demand. And the ability to create a new shipyard, specifically on the West Coast became almost an impossible venture – to obtain the amount of land, pier space, water depth, and environmental permitting requirements was at a cost of millions of dollars with little probability of success.
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