June 28, 2003
Saint John Shipbuilding closes
The Canadian federal government is offering up to C$55 million to help with the shutdown of the sprawling yard. The company is expected to match the money dollar-for-dollar.
Between 1986 and 1993, Ottawa provided C$197.9 million in aid to a national shipbuilding rationalization plan that reduced shipyard capacity by about 30 percent in Ontario, Quebec and British Columbia.
In a statement issued yesterday, James K. Irving and James D. Irving, James K. Irving, chairman and president respectively of J.D. Irving Ltd., said the closure announcement marked "a sad day that we all hoped would never come," but said the closure ended "three difficult years of uncertainty for both the workers and the company."
"It is now time to turn the page to a new chapter and, we hope, a new life for the shipyard site for the next generation," said the Irvings. "We do not know what or when a viable new opportunity will be identified but we are focused on moving forward to identify and assess opportunities for a brighter future."
The statement noted that the federal transition fund of up to C$55 million had conditions. "The company must first spend a dollar in order to receive a matching dollar received in federal funding up to an established ceiling of $55 million. This fund is similar to what was provided to several shipyards in the late 1980's and early 1990's as part of the federal rationalization program."
"In closing the shipyard," said the statement, "we have agreed not to construct, refit or renovate ships of any kind for a minimum of 20 years at the Saint John site. Also, we must ensure that the existing site is prepared for redevelopment and is free and clear of any issues relating to physical plant, the environment and labor certifications. We are no longer in the shipbuilding business in Saint John and must ensure that any new use of the site is not encumbered by issues related to the former Saint John Shipbuilding Limited.
"We want to recognize those long serving employees at the shipyard who are affected by this announcement," continued the statement. "To this end, we have voluntarily established a fund of up to C$10 million to assist these employees. There is no federal or provincial financial support involved in this C$10 million fund. The fund will be paid out when all matters related to the closure of the yard--including the authorization by the New Brunswick Labour Employment Board to decertify the existing bargaining units--has been completed...Our undertaking through the $10 million fund established by the company, is to provide eligible employees with one week of closure pay for every year served up to the date of lay-off from the container vessel project and whose age plus service was 80 or more at that time. Those with less than the rule of 80 will be compensated on a graduated scale based on age and years of service. Union members eligible to receive these payments are those who retained recall rights as of April 1st, 2003."
Irving retains other shipbuilding interests. Earlier this month it announced that it had been awarded a subcontract to build three PAU's (pre-assembled units) for the "White Rose" offshore oil and gas development. The work will be completed at the Pictou yard in Pictou, Nova Scotia. This month, too, Irving's East Isle Shipyard, Prince Edward Island's largest shipbuilder, secured a C$21 million contract to construct two new tug boats for customers in the Dominican Republic as well as a third tug for Atlantic Towing, Limited. The yard had been idle since September of 2002 when a fourth tug for the Panama Canal Authority was completed. Irving's repair yards include Halifax Shipyard and Dartmouth Marine Slips in Nova Scotia.