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FROM PAST TO PRESENTFROM PAST TO PRESENTA BC SHIPBUILDER’S PERSPECTIVEA BC SHIPBUILDER’S PERSPECTIVE

Malcolm McLarenMalcolm McLaren

Presented ByPresented By

President

Allied Shipbuilders Ltd.November 2009

God & Shipbuilder We AdoreGod & Shipbuilder We AdoreIn Times of Danger, Not BeforeIn Times of Danger, Not Before

When War Is Over, All Things RightedWhen War Is Over, All Things RightedGod Is Forgotten, The Shipbuilder SlightedGod Is Forgotten, The Shipbuilder Slighted

...with apologies to Kipling ...with apologies to Kipling

Launch of 10,000 Ton Victory (Liberty) Ship

West Coast Shipbuilders, Vancouver – Future Site of 2010 Winter Olympics

Fort Chilcotin in English Bay - June 1942The first WWII ship built by West Coast Shipbuilders (Hull #101)

was launched March 7, 1942 and was a casualty of war having been sunk on July 24, 1943

Rayonier No. 1 fully loaded

Rayonier No. 1 leaps as it dumps its load

Allied Shipbuilders Site – 1969

North Shore of Vancouver Harbour

Launching the rail car barge Haida Transporter - April 27, 1968

The 75-foot drum seiner Katrena Leslie (Hull # 214)underway in fog in English Bay

Ships for Offshore OilShips for Offshore OilThe West Coast & ArcticThe West Coast & Arctic

- Past- Past

- Is there a future for Canadians?- Is there a future for Canadians?

The drill rig Sedco 135Fwas built by Victoria Machinery Depot

The Lady Alexandra at sea - 1974

Do governments have a role in making sure these opportunities are available to Canadians?

OFFSHORE OIL & GASOFFSHORE OIL & GAS

Canada's Revolutionary Icebreakers Canada's Revolutionary Icebreakers Lead the WorldLead the World

1975 - 19851975 - 1985

1970 to1980 – Arctic Oil Exploration

Good for Shipbuilding & Ship Repair

Major Damage to

- Hull

- Rudders & Stocks

- Propellers

Arctic Nutsukpok in the Beaufort Sea, bound for Tuk

ALLIED HULL 235

The Kigoriak was the first icebreakerto operate year-round in the North American arctic

Ships Few & Far BetweenShips Few & Far Between(1990 - 2009)(1990 - 2009)

470 Car Ferry Construction In Steel - 1993

Simple / Effective

Chuck KoAllied’s technical manager

andEd Stephenson

Allied’s steel superintendentin front of the

Spirit of British Columbia(Hull # 254)

just before launch

Bow view of the Spirit of Vancouver Island

Chip Barges Built in BC – Post 2000Current Demand For Wood Chip Transport ?

The Inkster on sea trials, with the crew on deck

Allied Hull 259 – Delivered 2007

Slow TimesSlow TimesMetal Shipbuilding Yard ClosuresMetal Shipbuilding Yard Closures

1990’s1990’s

- Burrard Drydock (Versatile, North Vancouver)- Yarrows (Versatile, Victoria)- Bel-Aire Shipyard, North Vancouver- Westcoast Manly, Vancouver- Vito Steel Boat, Delta- Matsumoto, North Vancouver- Shore Boats, Richmond

1990’s – B.C.’s Future was in Ship Repair

Work for Some

Most Shipbuilding Yards Close

1986 – 1800 Ton Lift Capacity Floating Dry-dock

West Coast Shipbuilding Yards ThatWest Coast Shipbuilding Yards That Have Built Complex Vessels Over Have Built Complex Vessels Over 30 Meters Long: 30 Meters Long:

-- Allied Shipbuilders Allied Shipbuilders

- Vancouver Shipyards (WMG)- Vancouver Shipyards (WMG)

- Victoria Shipyards (WMG)- Victoria Shipyards (WMG)

- BUILDERS MUST COMPLY WITH STRINGENT - BUILDERS MUST COMPLY WITH STRINGENT SAFETY & ENVIRONMENTAL STANDARDS, ETC. SAFETY & ENVIRONMENTAL STANDARDS, ETC.

- CANADIAN MARINE REGULATORY CLIMATE AMONG - CANADIAN MARINE REGULATORY CLIMATE AMONG MOST CHALLENGING IN THE WORLD MOST CHALLENGING IN THE WORLD

- TO MY KNOWLEDGE, NOT DUE TO EXCESSIVE - TO MY KNOWLEDGE, NOT DUE TO EXCESSIVE PROFITS FOR THE BUILDER PROFITS FOR THE BUILDER

THE COST OF CANADIAN BUILT SHIPSTHE COST OF CANADIAN BUILT SHIPS

‘‘WHAT’ IS TO BE BUILTWHAT’ IS TO BE BUILT

- TO BUILD REASONABLY PRICED SHIPS, THE CUSTOMER - TO BUILD REASONABLY PRICED SHIPS, THE CUSTOMER MUST COME TO THE PARTYMUST COME TO THE PARTY

- TOO OFTEN GOVERNMENT SHIPS ARE NEEDLESSLY - TOO OFTEN GOVERNMENT SHIPS ARE NEEDLESSLY COMPLEX COMPLEX

- BUILD SIMPLE―UTILITARIAN―EFFICIENT- BUILD SIMPLE―UTILITARIAN―EFFICIENT

- ACT AS IF IT IS YOUR OWN MONEY- ACT AS IF IT IS YOUR OWN MONEY

High Speed Ferry

Owners Idea – Builders Receive the “Credit”

Why Build In Canada?Why Build In Canada?

100 Car Commuter Ferry

Spartan, Utilitarian, Efficient

100 Car Commuter Ferry

Allied Hull 257

23.4%

14.1%

18.3%

19.8%

24.4%

B.C.Companies

Canadian(Non-B.C)

Companies

Wages & BenefitsPaid Directly To

Shipyard Employees

ForeignContent

Paid To Three Levelsof GovernmentBy Shipbuilder

BC Shipbuilding - Price Distribution

Example - 360 foot / 100 vehicle ferry

Global Shipbuilding PractiseGlobal Shipbuilding Practise

For many governments, shipbuilding is an important aspect of their national pride and industrial policy. Consequently, the industry worldwide operates in a distorted marketplace.

European Union - Had direct subsidy until recently - Supportive Government Policy

United States - Canadian built commercial vessels prohibited from USA, but US builds enjoy duty free access to Canada.

Korea - Previous bailout by government / IMF - Supportive Government Policy

China - Very low wage rates and supportive government policy

Brazil – Supportive Government Policy

Challenges For Canadian ShipbuildersChallenges For Canadian Shipbuilders

ONLY REASONABLE THAT CANADIANS ARE ONLY REASONABLE THAT CANADIANS ARE INVOLVED WITH THE DEVELOPMENT AND INVOLVED WITH THE DEVELOPMENT AND PRODUCTION OF THEIR NATURAL RESOURCES.PRODUCTION OF THEIR NATURAL RESOURCES.

MUST HAVE NATIONAL POLICIES WHICH MUST HAVE NATIONAL POLICIES WHICH CREATE A COMPETITIVE DOMESTIC MARKET TO CREATE A COMPETITIVE DOMESTIC MARKET TO USEFULLY EMPLOY CANADIANS.USEFULLY EMPLOY CANADIANS.

GOVERNMENT LEGISTATION ACTIONGOVERNMENT LEGISTATION ACTION

Ensure Canadian Industry Engaged In

Building Ships For Resource Development.

- The Rest Of The World Does

Current CanadianCurrent CanadianFederal Government PolicyFederal Government Policy

“The federal government will continue to procure, repair and refit vessels in Canada subject to operational requirements and the continued existence of a competitive domestic marketplace”

GOVERNMENT PROCUREMENT ACTIONGOVERNMENT PROCUREMENT ACTION

- COMPETITIVE BID PROCESS FOR PROCUREMENT- COMPETITIVE BID PROCESS FOR PROCUREMENT

- PRIVATE SECTOR SHIPYARDS RATHER THAN - PRIVATE SECTOR SHIPYARDS RATHER THAN GOVERNMENT SHIPYARDSGOVERNMENT SHIPYARDS

- UTILIZE THE EXISTING “SURVIVOR” SHIPYARDS; - UTILIZE THE EXISTING “SURVIVOR” SHIPYARDS; THEY HAVE PASSED THE TESTTHEY HAVE PASSED THE TEST

- IMMEDIATELY COMMENCE PRACTICAL - IMMEDIATELY COMMENCE PRACTICAL SHIPBUILDING PROJECTSSHIPBUILDING PROJECTS

- BUILD NEW GOVERNMENT SHIPS ON A RATIONAL - BUILD NEW GOVERNMENT SHIPS ON A RATIONAL SCHEDULE TO ENSURE CONTINUITY OF WORKSCHEDULE TO ENSURE CONTINUITY OF WORK

Questions