Posted on: Friday, July 11, 2003
Matson ship helps revive Philadelphia yard
By Henry J. Holcomb
Knight Ridder News Service
PHILADELPHIA — After years of pressing ahead against political headwind, hostile corporate takeovers and even Mother Nature, Philadelphia will give birth tomorrow to its first ship in 31 years.
Margaret A. Inouye, wife of U.S. Sen. Dan Inouye, D-Hawai'i, will christen the Matson Navigation Co. ship, the M.V. Manukai, with a bottle of champagne at a noon ceremony.
The Manukai is the product of a $429 million economic development agreement signed in late 1997. The deal forged a partnership between Pennsylvania and Kvaerner ASA, an Anglo-Norwegian conglomerate, to revive Philadelphia's once mighty shipbuilding industry.
By summer's end, the Manukai will be carrying containerized cargo between the West Coast and Hawai'i.
The ship is the first of two ordered from the Kvaerner Philadelphia Shipyard Inc. by the venerable Matson Navigation Co. The San Francisco company is paying $110 million each for the ships.
"It is very important to note that the last vessel we purchased in 1991, which is essentially the same size and speed as these ships, cost us $160 million," said Jim Andresick, Matson's chief executive, in a recent interview.
Since the 1997 agreement, the yard has been buffeted by political controversy over its huge government subsidy — used for on-the-job training and to help pay for building the yard — and the near bankruptcy of its parent company. Cost overruns during construction led to elimination of a key feature — the roof over the drydock where final assembly takes place. That decision led to delays in the bitter cold and snow of last winter and the drenching rains of spring.
"We've caught every bad break. We worked through the worst conditions. A lot of forces worked against us, and we still got it built. It is a big sense of accomplishment," said Gary Gaydosh, president of the yard's Metal Trades Council, which has nearly 1,000 workers at the yard.
The yard appeared doomed in 1999 when the Kvaerner management who had signed the deal two years earlier with Gov. Tom Ridge was ousted in a hostile takeover. The new owners put all of the company's shipyards worldwide up for sale.
In 2001, with the biggest yards, including Philadelphia, still unsold, Kvaerner fell to the brink of bankruptcy, leaving the new yard short of tools and training resources.
Late that year came a second hostile takeover. This one was led by Kjell Inge Roekke, who rose from deck hand on a fishing boat to owning a fleet that once accounted for 10 percent of the world's whitefish catch. He later added a diverse array of holdings that included Europe's Aker shipyards.
After winning the takeover fight, Roekke immediately came to Philadelphia, announced that the yard was no longer for sale and that he would spend several million dollars to buy needed tools and equipment.
