It is a great honor to be here today at the third Lean Shipbuilding and Ship Repair Forum, representing the Bush Administration and the Department of Transportation.

It was a little over one year ago when President Bush appointed me to the position of Deputy Administrator at the Maritime Administration (MARAD). In that sense, you may view me as the new guy on the block. But while I am new to MARAD, I have a long history with the maritime industry.

During my tenure as a Michigan legislator, I served as Chair of the House Committee on Port and Maritime Affairs, as chair of the American Great Lakes Ports, and on the Board of Directors of the American Association of Port Authorities. I have a deep and abiding love of the sea and the world of shipping in general! I traveled on many Great Lakes freighters, crossed the North Atlantic on a Seaway class vessel in a hurricane in November, and spent three and a half weeks aboard the world’s largest ice-breaking bulk carrier on a working voyage to the Canadian Arctic.

These experiences have reinforced my understanding of how essential maritime transportation and every one of its components is to the future of our economy and of our nation. That makes it all the more imperative that our shipbuilding and ship repair industry flourish and prosper with government support and encouragement.

One of the ways MARAD supports the industry is through the trusted partnership we share with the National Shipbuilding Research Program Advanced Shipbuilding Enterprise. Our role in creating the original organization has given us a unique appreciation of its value to the nation now and in the years to come. Consequently, we stand ready to assist you in increasing shipyard productivity, training a qualified workforce, and marketing of U.S. marine goods and services.

One important element of that joint effort will be the continuation of our partnership with NRSP ASE. In fact, two years ago, MARAD’s Administrator, Captain William Schubert, met with many of you in Boston. Currently, Joe Byrne, Director of Shipbuilding at MARAD serves as an ex-officio Member of the NSRP ASE Executive Control Board. Similarly, Tom Conroy, MARAD’s representative to the Navy NSRP ASE Support Office works on a daily basis in overseeing the effective utilization of the government’s resources dedicated to the continued successful operation of the NSRP research and development program. Needless to say, we at MARAD are pleased to be part of our joint venture!

We are committed to lending our unremitting support to NSRP’s work in seeking ways to make U.S. shipbuilding more efficient. As a consequence, we will:

• Continue our active engagement and support of your Executive Control Board (ECB).
• Maintain liaison with Naval Sea Systems Command (NAVSEA) in oversight of government funding of NSRP ASE research and development.

• Increase cooperative efforts with NAVSEA through our new Memorandum of Agreement now signed by MARAD and the Navy to promote commercial/military applications to such research and development programs wherever possible.

We understand that times are tough for the U.S. shipbuilding industry. Budget restrictions, unfair competition from foreign shipbuilders, and over-capacity worldwide have had a severe impact on American shipyards.

To address some of these concerns, MARAD works to boost U.S. shipbuilding competitiveness with innovative programs such as:

• Title XI Loan Guarantee Program

• The National Maritime Resource and Education Center

• The Capital Construction Fund

• The Construction Reserve Fund

• The Maritime Energy and Clean Emissions Program

In addition to these five core programs, MARAD is hoping to re-renew our partnership with the Department of Commerce to encourage our friends overseas to build new vessels in U.S. shipyards. These new builds could be offshore supply vessels, patrol boats, barges, and other specialty vessels that can be built competitively here in the United States.

Moreover, MARAD vigorously supports ongoing dialogue to strengthen the shipbuilding industry. To demonstrate our commitment, MARAD is co-sponsoring the conference, "Shipyard USA", with MarineLog in Washington, D.C. on June 15-16, 2004.

I now want to discuss some important, innovative programs having a positive impact on the United States shipbuilding and repair industry, and the Maritime Administration's important efforts central to achieving success in these areas.

You may be pleased to hear that MARAD and the National Science Foundation (NSF) have signed a Memorandum of Agreement (MOA) to collaborate on the creation of a new generation of Polar Research Vessel (PRV) to be built in U.S. shipyards. MARAD’s role is to provide technical expertise related to the vessel’s design as well as oversight of the vessel acquisition, construction, and introduction to the NSF fleet.

We recently announced the National Defense Tank Vessel Construction Program, established in the National Defense Authorization Act for Fiscal Year 2004 (H.R.1588). This program provides financial assistance for construction in the United States of a fleet of up to 5 privately owned product tank vessels to be built in the United States, operated under the U.S. flag in commercial service in foreign commerce and to be available for national defense purposes in time of war or national emergency.

Secretary Mineta has us developing a Short Sea Shipping initiative using marine platforms built in the United States to meet anticipated growth in the movement of freight. It will bring new construction and new maritime jobs to the United States. The proposed initiative is encouraging the greater integration of waterborne transportation into our overall system to alleviate the congested highways adjacent to our coastlines and major waterways. Our initiative is not based upon competition with other modes of transportation, but rather in partnership and to complement them. In fact, MARAD’s new Short Sea Shipping Cooperative—we call it the SCOOP—includes trucking associations and shippers with intermodal opportunities, and we are encouraging railroads and others to join.

These dynamic initiatives demonstrate our positive new direction when reflecting on the fact that our oceangoing U.S.-flag merchant fleet is a third of what it was over thirty years ago. In 1970, privately owned oceangoing domestic and foreign trade vessels numbered at 793. In 1980, the number was 578 and the number is 236 today. Only 9 new oceangoing commercial vessels are on the books in U.S. shipyards today. In 1975, there were 77!

In short, we at MARAD support a revitalization of commercial shipping—an industry that was on the verge of becoming obsolete. We are confident that the continued cooperation between NSRP and MARAD will help ensure that the United States remains an economic force where trade and the free flow of commerce can continue to provide Americans with a high standard of living and ready access to the global market.

To this end, MARAD supports the U.S. shipbuilding and repair industry by making available to the industry and its clientele the latest, up-to-date technology to disseminate all types of useful information. For example, our new web site makes it easier for exporters and importers to locate U.S.- flag ships to carry cargo to designated points around the world. Under this system, a shipper simply selects from a drop-down menu the country of final destination of its cargo. Once the country has been identified, a database of U.S.- flag carriers serving that trade route appears.

In addition, potential customers can find an electronic catalog of U.S. shipyards on our web site and NMREC released the Electronic Catalog of U.S. Shipyards on CD Rom. This new resource provides current data on shipyard capabilities, facilities, types of ships built, employment, and other shipyard statistics useful to the shipyards in presenting their goods and services.

In the area of modern shipbuilding technology, its development, the resulting product improvement and its near-term applications, our recently concluded MARITECH program has seen significant results, which include, among others:

• The Outfitting Support Towers at Bath Iron Works
• The updating and upgrading of NASSCO’s information processing systems.
• The successful implementation of robotics at NASSCO.

These technological developments supplement significant changes made by many other shipyards to enhance capacity, shorten build times, install new processes and business procedures, and to invest anew in their facilities—all with the goal of improving efficiency and product quality.

With your assistance, I believe that the United States can have:

• A competitive international U.S.-flag fleet.
• An expanding Jones Act trade to meet the needs of our domestic shippers.
• U.S. shipyards that are second to none in building affordable combatant ships and Jones Act vessels.
• A marine transportation system that efficiently transports both our domestic and international waterborne commerce.

I would like to invite you to stay in touch with me in regard to how MARAD can be of further assistance. I want you to know that I will do everything possible to ensure my agency provides the assistance needed to continue and improve U.S. shipyard quality and competitiveness. I look forward to hearing from you.

Many thanks to the organizers of the NSRP for hosting this great event. It is meetings such as this that keep us moving in the right direction.

Thank you.

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