New Canadian Shipbuilding Strategy

[Stoker]

As a HT, I would have to start as an apprentice.  No Red Seal for us.

Could you in your spare time at a shore unit upgrade yourself to get close to your red seal say in welding?

Just curious.

 

[jollyjacktar]

I suppose anything is possible.  However, unless you are in the business of welding on a regular basis, it would not be worth the effort as you would not be able to keep your certification up.  Not to mention your skills.  The only place you would have a ghost of a chance would be at FMF.  In my time there, there were no military personnel engaged in the welding shop.  The only fellows I know of that have a Red Seal, were already journeymen before they entered the CF.

 

[Haletown]

I'll predict the navy contract will go East coast and the coast guard  contract will go West to BC.

Quebec won't get either but will do very well in the end, as will all shipbuilding capacity  in Canada.

Quebec will whine on and the media will drone on about Quebec blah, blah, blah . . .but the reality is Davie yards is a bankrupt political hell hole that would be a money sucker and political headache for the life of the contracts.

Harper is smart enough to know not to pull a boneheaded move like Mulroney did when he stole the CF18 contract from Manitoba and gave it to Quebec to buy their votes.

At least he better be smart enough.  If he isn't, he's toast in the West.

 

[SeaKingTacco]

What everyone needs to remember is that welding steel for a hull in a shipyard is not where the money in ship building contract  really is- I recall seeing a number that only about 30% of the total contract cost goes to steel and assembly.  The real money is in the electronics, sensors, and weapons.  Guess which two high populous Canadian Provinces have the bulk of the companies that deal in that  sort of thing?

In other words, no matter who wins the shipbuilding contracts, Ontario and Quebec based companies will do very, very well out of this process.

 

[MSEng314]

A lot of those contracts for that type of equipment will go to foreign companies as well, since not a lot of that type of equipment is made in Canada. That includes companies like Thales, Saab, Raytheon, BAE Systems, and Rheinmetall, which are already providing a lot of equipment for HCM/FELEX.

 

[MightyIndustry]

If you retire with your contract complete, or 24 year + a day, you are eligible for an immediate annuity.  That cannot be taken from you.

Is that CF or FMF?

 

[MightyIndustry]

I'll predict the navy contract will go East coast and the coast guard  contract will go West to BC.

Quebec won't get either but will do very well in the end, as will all shipbuilding capacity  in Canada.

Quebec will whine on and the media will drone on about Quebec blah, blah, blah . . .but the reality is Davie yards is a bankrupt political hell hole that would be a money sucker and political headache for the life of the contracts.

Harper is smart enough to know not to pull a boneheaded move like Mulroney did when he stole the CF18 contract from Manitoba and gave it to Quebec to buy their votes.

At least he better be smart enough.  If he isn't, he's toast in the West.

I think that Quebec will get a piece of the pie because of the new ownership at Davie Shipyard.
Daewoo, to put it mildly, knows how to build ships and SNC Lavalin knows how to do business with the federal Government (not to mention Quebec) AND employs canadians all over Canada and the world. All of those factors make good political hay.
Getting Davie Ship viable will be a huge challenge, and depending on who you talk to it may or may not be worth it.
Having to choose between Seaspan and Irving is like choosing between the proverbial rock and the proverbial hard place.
I would LOVE to see Irvings and Seaspan try to outperform Daewoo. SNC Lavalin, I think, is there to take care of the "wrangling" that Seaspan and Irving are so good at.
I forsee this being a motivating factor in propping up Davie.

 

[jollyjacktar]

Is that CF or FMF?

I'm in the CF.  I'll also clarify further.  I am at present short of 24 years + a day, however, I have completed over 20 years service.  I have earned and am entitled to an immediate annuity should I release from the CF.  I would be subject to a stringent penalty if I do so before I reach the 24 year + milestone as I am on an IPS (indefinite period of service) contract which will allow me to serve until the age of 55 years if I so choose.  As I am CF not Public Service I cannot give you chapter and verse on their pension rules.

 

[Occam]

I'm in the CF.  I'll also clarify further.  I am at present short of 24 years + a day, however, I have completed over 20 years service.  I have earned and am entitled to an immediate annuity should I release from the CF.  I would be subject to a stringent penalty if I do so before I reach the 24 year + milestone as I am on an IPS (indefinite period of service) contract which will allow me to serve until the age of 55 years if I so choose.  As I am CF not Public Service I cannot give you chapter and verse on their pension rules.

The penalty is not as much as you make it sound.  The reduction is 5% for every full year of service short of 25 years, so if you had 23 years and one day, it would only be a 5% reduction.  The reduction cannot take you below the protected minimum (2% x 20 yrs) pension.

 

[jollyjacktar]

The penalty is not as much as you make it sound.  The reduction is 5% for every full year of service short of 25 years, so if you had 23 years and one day, it would only be a 5% reduction.  The reduction cannot take you below the protected minimum (2% x 20 yrs) pension.

What the girls from the release center told us it was as ff:  leave with a 20 year pension.  At the rank level you were at 20 years.  Forfeit any pension contributions between 20 years and release date.  That sounded pretty damn grim to me.

 

[dapaterson]

BTW
From what I understand (and I'm probably the only guy here that didn't already know this-so ecuse my ignorance) there is no more double dipping. There is one federal pension, and only one federal pension.

[pension digression]

Further clarification:

You can only accumulate 35 years of pensionable service with the Federal government.  That is:

If you get out of the CF after 25 years and jump to the public service, you can only accumulate 10 years of pensionable service i nthe public service; at that point you'll make only a small (1%?) pension contribution.  You could combine, or keep your CF pension seperate and draw it from your release date - so you'd get 50% of your best five in the military, plus 20% of your best five in the public service.

However, you can draw your CF annuity while working in the public service.  You may also transfer it over to the PS superannuation act if you choose; that may be beneficial if you anticipate a much higher final salary in the public service.

[/pension digression]

My prediction on shipbuilding: Regardless of the decision, there will be irate folks somewhere in Canada who will complain vociferously.

 

[Oldgateboatdriver]

Trying to get back on topic here, I'll advance the following facts - and opinions, which you can easily separate from the context (just for everyone's enlightenment):

What is this constant bashing of Davies shipbuilding? Yes, they have had some past problems with the IRO refits, but consider that Quebec yards built 9 of the 20 steamers - more than any other province - and no one complained about those ships. Similarly, Davies originally built ALL the IROQUOIS Class and no one ever complained about them in their original configuration.

Has Davies run into financial problems? Yes, which yards hasn't. Why were Davies more severe: Simply put (for those who do not know that) it is THE largest shipyard in Canada. Bigger than any west coast ones and completely dwarfing Irving's yards. You want frigates? Davies has enough slips and docks to build you a dozen at a time. That is why when orders are not there they get into financial trouble faster: so big it burns through money too fast. But give them guaranteed work for a predictable future and watch them get back to their proper level of work, especially now that they are under Ontario management.

P.S.: Also for those who still mention Saint-John in the same breath as Irving: The yard (that was built from almost scratch at taxpayer's expense) that built the HALIFAX'es is closed down with a deal never to reopen struck with the Government. So if Irving gets anything in this round, it has to be possible to build it in Halifax. I, for one, am not convinced the yard is big enough to handle SCSC's at a rate of one every eighteen months, but that is a personal opinion.

Ultimately, only one thing matters, however: Getting new hulls in the water.

 

[Occam]

I think the bashing of Davie is due to much more recent issues than the ones you mentioned - the CPFs which were built there.  You can pretty much sum up the reasons with a little song (with apologies to Sesame Street):

"Three of these things are not like the others..."

 

[Oldgateboatdriver]

You mean, the ones for which they were, allegedly mind you, not given the same plans? http://forums.army.ca/forums/Smileys/Armyca/grin.gif

 

[Occam]

You mean, the ones for which they were, allegedly mind you, not given the same plans? http://forums.army.ca/forums/Smileys/Armyca/grin.gif

Them's the ones.  ;D

The ones with the incredible shrinking Towed Array Equipment Rooms. 

 

[STONEY]

Maybe Arctic patrol vessels , tankers and some CG vessels will get built fairly soon but any new Frigates will be lucky to be built in under 15-20 years  from now so there's no reason to rush to release centre. Remember JSS & FWSAR  were no1 priorities 10 years ago and I don't see very many of those around.      Cheers

 

[Occam]

The comments are largely supportive (gasp!) of the Conservatives.  I think it's a great article, and sums everything up nicely.  Shared with the usual caveats.



ANALYSIS | Politics of shipbuilding mean rough seas for Harper
Original Link

The Harper government is sailing into a potential political hurricane over $35 billion of naval shipbuilding contracts, the largest military procurement in modern Canadian history.

Later this week, the government is expected to announce two winning bidders for most of the work, one to build $25 billion of naval warships; another to construct $8 billion of supply vessels and other non-combat craft.

The Titanic-sized political problem for the Conservatives is there are three shipyards — in Halifax, Quebec City and Vancouver — competing for just two mega-deals and the thousands of regional jobs that come with them.

That means either the Maritimes, Quebec or the West is about to get one huge, painful and likely lasting kick in the shipyard.

Recent interviews with industry and government insiders suggest that Irving Shipbuilding of Halifax is the odds-on favourite to win the grand prize, the massive contract to build up to 15 warships at a cost of $25 billion over the next several decades.

That would leave Quebec and the West at broadsides for the $8-billion contract for the non-combat vessels.

Vancouver Shipyards is in a strong position to win that deal.

But so is a Canadian-Korean consortium that recently acquired the previously insolvent Quebec-based Davie shipyards. The group is betting everything on the non-combat project, and didn't even bid on the much larger deal for the warships.

The likelihood of a political storm from whatever region gets shut out of the naval contracts helps to explain why a Conservative political machine ordinarily fuelled by photo-ops has become all but invisible in the lead-up to such a huge and important military procurement.

Ministers not out front

Senior Conservative sources say this week's expected contract awards are causing so much political trepidation inside the Harper government that there is a good chance the prime minister, Defence Minister Peter MacKay and most other members of cabinet will be nowhere in sight for the official announcement.

If anyone isn't hiding under the cabinet table, it will be Public Works Minister Rona Ambrose.

She may lend her face and considerable communications skills to the event as the minister responsible for federal contracting, and to press the claim that $35 billion of taxpayers' money is being awarded entirely free of partisan and regional politics.

One senior official told CBC News that most ministers won't even know which companies have won the bids until the last minute.

Instead, the final selection and official announcement are being handled entirely by a special group of senior bureaucrats who have been managing the bid process for the past 16 months.

The official says the whole $35 billion worth of contracts were reviewed and approved by the Treasury Board in the past few weeks, but even those documents did not include the names of the two winning companies.

At no time will the full federal cabinet have any role in approving or otherwise reviewing the winning bids.

"The whole bidding process has been unprecedented," said the senior government official. "Everything has been done to ensure there is a fair result."

Consultants provided oversight

In addition to public servants trying to keep the process out of the hands of the politicians, teams of outside consultants were hired to oversee the bureaucrats.

For instance, a large British naval consulting firm, First Marine International, was hired to review all the Canadian shipyards in the running to ensure they were capable of undertaking such massive projects.

The accounting and business management firm KPMG was hired to ensure the bid selection process was set up to be fair and reasonable — that is, not slanted by the military to favour one shipyard over another.

Finally, the government hired a number of outside firms to act as "fairness monitors," essentially independent consultants overseeing the other consultants overseeing the bureaucrats managing the process.

There was certainly no shortage of material to oversee.

According to one report, Vancouver Shipyards alone spent more than $1 million just to prepare its bid — 30,000 pages of documents in 125 binders, shipped to the federal government in 22 boxes.

One of the more unusual moves by the Harper government was a warning to all the bidders this past summer that last-minute lobbying would not be welcome.

Perhaps the government had simply heard enough.

In the past two years, for instance, Irving Shipbuilding and its hired arm-twisters registered more than 100 formal meetings with Conservative cabinet ministers, senior political staffers and high-ranking bureaucrats in various departments.

Vancouver Shipyards and its lobbyists also logged dozens of equally high-level encounters.

Davie shipyards wasn't nearly as active as the others in the federal lobbying register, perhaps in part because it spent most of the past two years looking for a buyer to save the company from bankruptcy.

'Not about' one region over another

With only days to go until the final announcement of the winning bids, the Harper government is clearly scrambling for ways to try to soften the blow on the losing region.

For instance, one Conservative official close to the process tried to frame this week's expected announcement as "not about one region winning over another — this program is all a big win for Canada."

No matter where the ships are built, she said, the benefits of subcontracts will be felt across the country.

The government will point out that almost half the cost of the warships, for instance, will go into engines, high-tech components and other parts from subcontractors, many of them in Ontario and Quebec.

The government is also promising to hand the losing shipyard much of the leftover $2 billion in miscellaneous naval contracts included in the $35 billion, but not part of the two main deals being announced this week.

No matter how the government tries to spin this week's announcement, however, the Conservatives know the politics of it all guarantees rough seas ahead.

In 1986, Brian Mulroney's government took away a fighter jet maintenance contract won by Bristol Aerospace of Winnipeg, and gave it to Bombardier of Quebec.

The resulting outrage in the West drove the popularity of Mulroney's government into the basement of public opinion, and helped spawn the Reform Party.

This time, the Harper government has gone overboard to prove there was no political interference.

Voters in one part of the country, at least, will be demanding to know why.

 

[Journeyman]

The most funny, and sadly telling, line in the whole article:

"The whole bidding process has been unprecedented," said the senior government official. "Everything has been done to ensure there is a fair result."

 

[RC]

How much of a strategy is it gong to be?

What is the AIM of our shipbuilding policy? Near term AIM? Medium term AIM? Long term AIM?

Because I really don't know: what share of the Canadian shipbuilding industry is from the Gov't of Canada (Navy, Coast Guard, Fisheries & Oceans, Crown Corporations, etc)?

Where do provinces - e.g. BC which has a big public ferry fleet - fit into the strategy?

How do we do on private and off-shore sales? Are the oil rigs, that we build, for example exported?

What about design? Are we a nation with a capable naval architecture infrastructure - one that can design for export?

----------

Personally, I would like a truly national plan: one that says "we (Ottawa and St John's and Halifax and Fredricton and Quebec City and Toronto and Victoria) plan to build about x warships, y coast guard and fisheries research vessels, etc and z ferries over the next 20 years. We expect to keep n yards on the Pacific Coast, in the Great Lakes, in the St Lawrence and on the Atlantic Coast busy with a total of about __number__ permanent jobs."

From a regional industrial/employment perspective, n jobs with a 20 year + "lifespan" is better than 3n jobs that only last for six or seven years.

I participated in the original NSPS industry consultations.  It will be a strategy for 25 years.  The near term aim is to get the ships that are desperately needed built and to get the industry back on its feet.  The medium term aim is to sustain the industry with government work supplemented by repair/private newbuilds.  The longterm aim is to build a competitive industry that will be capable of providing government ships as needed and when needed without having to reinvest and retrain each time.

At the moment, I think government work makes up about half of the contracts in Irving and Seaspan, with a large part of the rest being repairs, and the occasional private newbuild.  That percentage will be substantially higher for the winners, at least in the short term, and will bring the winners back to a reasonable capacity.

Provinces are not currently included in the strategy (and BCFS new construction is privately directed now anyway).  However, most small and medium ferries are built locally.  There are a few exceptions with large ferries, but most of those have been built locally as well.  The NSPS should result in all ferries being built in country as the main concern has been lack of capacity to handle the large ones.

We have few offshore sales at present.  We are currently somewhere around half as productive as a good European yard and don't have too much to offer in way of references.

We have capable design firms that compete internationally (and have done so as a primary activity for several decades due to lack of national activity).  We have one of the world's top design firms of offshore patrol vessels, also quite capable in other large and midsize vessels, and one of the world's top design firms (probably the top firm) in tugboat design, who are reasonably capable in midsize ships.  We have a couple of good production engineering firms as well.  We do not have the existing capacity to properly design CSCs, which I realize is what most interests people here, but the rest is well covered.  I believe we should purchase and modify a foreign frigate design.

The plan was established with about the strategy you outlined.  It was determined that the government work was sufficient to keep two large yards occupied at a suitable level for 25 years, and several smaller yards occupied with the smaller ships.  I can't tell you the number of ships or number of manhours off the top of my head, but the projections were reasonable.

The big question is how will the strategy improve productivity?  I assume that a large part of the bid analysis will focus on what the yards have proposed to bring themselves to a level that is competitive on the international stage, but I'm not sure it will work.  It's a long road from 200 hours/tonne to 90 h/T.

Anyway, the NSPS, in my opinion is a huge step in the right direction.  I think Irving will win the combatant contract and Seaspan will win the non-combatants.  I think that Seaspan should win the combatants, but I don't see it happening.  I think Davie was kept in the running to provide a third horse in the race.  It's hard to have a legitimate competition for two spots with only two contenders.  Irving and Seaspan were working hard on their plans while Davie was going through bankruptcy proceedings.  Daewoo is a red herring.  They don't add much value in this type of work, so I can't see them adding much to the bid.  Korean productivity measures simply won't work at Davie for this type of contract, so they won't add much there either.

I could go on for a long long time on this subject, but I've probaby lost most readers by now anyway, so I'll stop there...

 

[MARS]

Shared in accordance with the Fair Dealing Provisions of the Copyright Act from today's Globe and Mail

Article Link

Harper’s team keeps hands off $35-billion shipbuilding hot potato
jane taber
OTTAWA— Globe and Mail Update
Posted on Monday, October 17, 2011 1:38PM EDT

It’s the $35-billion contract that no politician wants to own.

A bureaucrat, not a federal politician, is expected to make the announcement about which two Canadian shipyards will win the mammoth contract to build warships and non-combat vessels this week.

The reason for the hands-off political approach is pretty simple: Three shipyards are in the bidding – one in Atlantic Canada, one in British Columbia and one in Quebec. Only two will win.

So, in effect, whoever makes the announcement will be announcing the loser. And the loser could very well be from Quebec.

No federal politician wants to be part of that.

“There is no upside, which is why the federal government has been falling all over itself to run away from the decision,” a source close to the process told The Globe.

Memories are still fresh, even though it happened back in the 1980s, of the repercussions that resulted from Brian Mulroney and his Progressive Conservative government awarding the CF-18 maintenance contract to Quebec instead of Winnipeg.

Stephen Harper’s Tories don’t need a repeat of that.

For the current bid there are three shipyards – Irving Shipbuilding in Halifax, the Seaspan shipyards in Vancouver and the Davie yard in the Quebec City area, which has been plagued by financial troubles – in contention.

One will receive a $25-billion contract to build combat vessels; the other is to receive about $8-billion to build ice breakers and a naval supply ship. There will be about $2-billion for smaller vessels, which could go to the losing shipyard or the other yards that bid.

What is equally interesting about this process is the secrecy around it. In leaky political Ottawa, even insiders and politicians including Defence Minister Peter MacKay, who is from Nova Scotia and B.C.’s Heritage Minister James Moore say they don’t know who’s going to win.

Even the Prime Minister reportedly doesn’t know.

Only one hour before the announcement is to be made will Public Works Minister Rona Ambrose – who is the lead minister on the file – be informed.

To guard against any whiff of regional favouritism or political influence, the Conservative government has tightly structured the process.

A committee of deputy ministers is making the decision. A company from Britain is evaluating the technical merit of the bids, according to two insiders close to the bid process.

The insiders believe only two people in the entire city know what the decision is – and even then, only one would know where the combat piece of the contract is going and the other would know where the non-combat portion is going.

The much-anticipated decision could be made public as early as Wednesday.