www.BrooklynSteelBloodTenacityAppendix.com

The International Political Economy of Shipbuilding:

The case of Seatrain Shipbuilding

and the

Brooklyn Navy Yard

by

Frank J. Trezza

Seatrain Shipbuilding

Commerce Labor Industry Corporation of Kings [CLICK]

Leasing space inside Brooklyn Navy Yard

United Industrial Workers of North America [Union]

Becoming a Shipbuilder

Shipbuilding multiplier effect in the U.S.

Energy Transportation Security Act [Cargo Preference Bill]

President Ford

Congress Woman Shirley Chisholm

Report on the Trans-Alaska Pipeline Service Tanker Structural Failure Study

Cost of construction of VLCC’s in the U.S. during the 1970’s

Economic Stimulis to the City of New York

Payrole-Rent-Yard Improvements in Constant 2010 Dollars

Employment Data

Seatrain Shipbuilding Cranes-New York City Taxes

Seatrain Lines Bankruptcy

Brooklyn Navy Yard Development Corporation

Coastal Dry Dock and Repair Corporation

New York Naval Shipyard- Industrial Park

Brooklyn Navy Yard Center at Building 92

Professor Seymour Melman Engineering Economist of Columbia Graduate School

Map of the New York Naval Shipyard

When I was writing Brooklyn Steel-Blood Tenacity, I contemplated just how deep I should go into the life of

my fellow shipbuilders and the politics, which lead to the demise of Seatrain Lines & Seatrain Shipbuilding.   

I decided not to write about the personal and intimate lives of my fellow shipbuilders; instead, I focused on

what it was like to building ships inside the Brooklyn Navy Yard for Seatrain Shipbuilding. I did not want the

reader to focus on their race, nationality, education or social status of my fellow shipbuilders. We were all

human beings just trying to make a decent living under some of the worst horrible conditions in the industry.  

Those wishing insight into the personal lives of Seatrain shipbuilders read the New York Times article

“Laid-Off Seatrain Workers Angry at the Company,”[1]

  Politics and economics played a critical role in the demise of Seatrain Shipbuilding, ranging from the

supply and demand of Very Large Crude Carriers to President Ford’s pocket veto of the

Cargo Prefence Bill to New York City’s takeover of the Brooklyn Navy Yard and CLICK.  I addressed these

issues in my book so that the reader could draw their own conclusions; in hindsight, I believe this to have been

a mistake. This paper will   attempt to shed new light on the subject in the hope to clearify  the history of

Seatrain Shipbuilding, Coastal Dry Dock & Repair and the attempt to transition  the Brooklyn Navy Yard

into a true Industrial Park.     

      Anyone who has read Brooklyn Steel-Blood Tenacity may have been left with the impression that I am

totally against free market capitalism. This is not entirely true; I am for capitalism. Where I differ with the

theory of free market capitalism is in regulation. I believe the government should regulate capitalism to the

point of extending a hand to  assist the poor to climb out of poverty with whatever support the poor require.

[2] It is my opinion that the true obstacle to government assistance to social programs designed to help the

poor ascend out of poverty is that these programs can be eliminated with a change in administration.  

Therefore, because of a potential reversal of social assistant programs funded by the federal and state

governments, true free market trade in its literal definition does not exist and cannot exist

    The study of Economics, in simplistic terms, teaches that state (country) (A) has a comparable advantage

in manufacturing a product; in this case commercial ships.State (A) having a comparable advantage in

shipbuilding over a number of other states should manufacture ships. The states that doe not have a

comparable advantage should abandon their effort and pursue industries where they do have a comparable

advantage. In other words, states that cannot compete in an industry that is dominated by another state should

not waste its resources in pursuit of a product that cannot produce a profit.

   However, this is not realistic because it does not take place in the real world of shipbuilding because states

with established or new shipyards realize the advantage of attracting workers to their state to work in the

shipbuilding industry.  These states Norway, France, Finland Germany, Italy, Japan, South Korea, and to an extent,

China.[3] subsidize their shipyards with tax breaks, direct infusion of cash, export subsidies, and in some cases

even build modern shipyards and lease it to indigenously owned companies for next to nothing in order to spur

employment All of these states represent the major shipbuilding industries in the world.

     More than twenty states around the world enacted cargo preference laws or policies, which requiree the

use of their own flaged ships to transport a portion of their imports and exports after President Ford veto the

Cargo Pereface bill; no other state, including the United States, has threatened reprisals.

   The greatest domestic advantage to a state, which promotes its shipbuilding program, is the multiplier effect.

For example, the multiplier effect in United States ranges from 2.5 to 3.5 depending on who is conducting the

survey and what agenda they are pushing.   Every dollar that is directly injected into a shipyard in the United States

will yeild 2.5 dollars inside the U.S. Economy.  This figure includes everything manufactured domestically in the U.S.

Economy in order to build a ship. The local economic stimulus produced by wages and the collection of local,

state and federal taxes generate a multiplier effect.  The higher the multiplier effect the more employment

opportunities exist inn an economy.

    So what went wrong in the United States? The best example to illustrate the principles of comparative advantage

and the multiplier effect is Seatrain Shipbuilding and the Brooklyn Navy Yard. First, in order to understand the

linage, one must consider labor and labor costs in a cost benefit analysis.

How does a person become a highly skilled shipbuilder? An individual  looking to become a shipbuilder

is typically an  individual with a high school education seeking higher wages, which they can find in

manufacturing industries, i.e. shipbuilding. Presently, there are no formal high schools that prepare a

high school graduate with the skills needed to enter a shipyard and begin working as a highly skilled

shipbuilder. Technical high schools can teach basic skills in welding, electrical, pipe fitting, sheet metal,

blue print reading, etc.  These are all great skills that will help lead to a good paying job in a shipyard;

however, it is not enough.

         Essentially, there are only two ways to become a highly skilled shipbuilder. First is to obtain

         a job in a shipyard with basic industrial trade skills. The novice will then be partnered with a

        master shipbuilder in the respective trade  (welder, pipefitter, etc) and over a period of

        three to four years learn how to build a ship by skills being demonstratedand honed; this 

        has existed in shipyards since the beginning of shipbuilding.  

The second way to become a highly skilled shipbuilder is to be hired as an apprentice by a company.

An apprentice in a given trade will spend the first half of thier day in a company classroom learning the theory

of their trade and the second half receiving on the job training. This type of learning will usually last for three

years before they can graduate and reach First Class status in their trade. Without the basic skills needed in a

shipyard, it is very difficult to obtain a job building ships. Someone cannot walk off the street without the

necessary skills to do this type of work. They must have the basic skills and are directly hired or obtain an

apprenticeship. Either way, a novice to shipbuilding has to pay their dues.

           It also takes a very special person. One cannot have fear of heights, be claustrophobic, work under extremely

           dangerous conditions in all kinds of weather and has the tenacity to do the job required day-in and day-out with long

          periods of overtime. In short, shipbuilding is a very tough job, which will wear on your body the longer you

          stay in the industry and it certainly is not for everyone

           It is clear that the shipbuilding industry demands that shipbuilders possess the necessary skills in order to

           become a shipbuilder. However, this was not the case when Seatrain Shipbuilding, Inc came to the

           Brooklyn Navy Yard to build VLCCs.

          In order to make sense of the following paragraphs, it is necessary to understand one of the key

          organizations that played a major role in success and failures of Seatrain’s shipbuilding venture in the

          Brooklyn Navy Yard. The organization was called the Commerce, Labor, Industry Corporation of Kings

         (CLICK). CLICK was incorporated on 21 February 1966 as a non-profit agency set up to run, maintain,

          and lease space inside the Yard for the purpose of creating jobs. CLICK leased the Brooklyn Navy Yard from

 New York City after the Nixon Administration turned the Yard over to NYC on 6 February 1966.[4] CLICK’s

40 year lease required payment of $800,000 to NYC in the fourth year, $900,000 in the fifth, $1 million in the

sixth and $1,226,470 annually thereafter until the end of the contract period; the lease had a renewal term of

30 years.

CLICK then turned its interest in finding a company willing to build ships inside the Yard under CLICK’s

terms.[5] They signed a contract with Seatrain. Seatrain’s contract with CLICK required them to employ

more than 3,000 workers in its first 18 months.[6] CLICK was running the power plant inside the Yard,

which earned it $1.4 million annually for supplying steam and power to the Navy that still had a receiving station,

laboratory and living quarters in the Yard. CLICK’s rental business inside the Yard was running about

$1-million annually.[7]

This is important because between CLICK’s operations in the Yard, Seatrain’s poor business practices,

and the actions of the Federal government regarding transportation security in the United States,

doomed shipbuilding in the Brooklyn Navy Yard.

                    Nevertheless, there were multitudes of reasons as to why Seatrain Shipbuilding & Seatrain Lines went bankrupt.

         Even though Seatrain Shipbuilding had gained a comparative advantage when it came to shipbuilding inside

        the U.S. by 1976, Seatrain Lines had no experience in shipbuilding and running a shipyard.

In leasing space inside the Brooklyn Navy Yard, Seatrain Lines tried to be socially responsible by accepting a lease

agreement, which required Seatrain to hire an aggregate number of hard-core unemployable people from the

surrounding neighborhoods, regardless if they were qualified for a position.   According to John A. Davis, Jr.,

Chief Executive of CLICK,[8] Seatrain Shipbuilding guaranteed 3,000 jobs by the end of the first 18 months of its

20-year lease. The Seatrain lease required   6,000 people to be hired at the end of the 36^th month and 9,000 by

the end of the 60^th month.     Who ever came up with the employment figures of 6,000 and 9,000 had no clear idea

of how much labor was involved in building five VLCC’s and six container ships that Seatrain Lines was planning to build.

The only possible way those figures could be reached was if Seatrain Shipbuilding won bids for naval construction

contracts; naval ships are far more complex to build than commercial vessels. Naval vessels require a very large number

of marine electricians and other highly skilled trades. It was clear that the numbers required for job creation in the Yard

were seriously inflated. To compound the problem, Seatrain Shipbuilding could not attract enough of the skilled

shipbuilders who once worked for the New York Naval Shipyard nor did they tap into the resources of the

City of New York’s Maritime Trades High School for skilled graduates to fill positions in the electrical, pipefitting

and outside machinist departments. Seatrain was required to hire workers on a timeline in order to fulfill its lease

obligations put forth by C.L.I.C.K, but there was a labor shortage in skilled and experienced shipbuilders.

Those who did qualify were either dead or retired and Seatrain was already competing with other shipyards around

the country for skilled shipbuilders, i.e. Newport News. This list of problems that plagued Seatrain began to mount.

            Seatrain Shipbuilding built a 1,000-foot long x 100-foot wide climate controlled paint facility Building 293 over

            the steel assambly yard in order to spray paint fabricated sections before they were assembled on the ship.

            The paint facility was never used because the  New York City Fire Department would not give Seatrain the

            needed paper work to utilize the building as a paint facility.There was a major problem with the emergency

           washing stations inside the building and proved inadequate due to the  type of paint used to paint the VLCCs.

           If a fire broke out the combination of marine paint and water would have caused a fire to spread out of control.

If this were not enough, Seatrain management made a decision early on to concentrate its main efforts in building

the hull of the VLCC Brooklyn from forward of the pump house. The engine room did not become a priority until early in

1973, which s proved to be a mistake. The buyer of the VLCC Brooklyn backed out of a contract to buy the Brooklyn

at the beginning of the construction cycle. There is no data as to why the buyer backed out of the contract to buy the

Brooklyn.

By this time, employment became a revolving door due the amount of unskilled workers being hired. Some could

not take the austere and hazardous working conditions inside the Yard, while other workers had to be replaced simply

because they had died on the job; fatal accidents and disabilating accidents were not uncommon and varied. 

In the meantime, the date for completing the Brooklyn slipped away, and it would take close to  four  years to finish;

the original plan scheduled construction to take less than two years. Construction was behind schedule and over budget

due to mounting labor costs and the increasing number of injuries and deaths drove up worker compensation rates.

It got to the point that Seatrain had to hire ship fitters from Scotland on six-month visas due to the lack of skilled and

experienced labor.

Part of the labor issue had to do with Seatrain never having set up an apprentice school for the trades;[9] Seatrain

anticipated many of the hard-core unemployed would be graduates of special vocational schools operated under

CLICK’s auspices.[10] Mr. Davis allegedly said that if CLICK were to recruit, test and counsel workers then leases in the

Yard would be provided. Aside from the companies’ own on-the-job training, CLICK was to engage in a joint-training

program in the Yard with the City’s Manpower and Career Development Agency.  This never happened or at least to the

extent that was intended. It is obvious that linking unrealistic labor conditions to leases inside the Yard was not good

business, but because Seatrain desired to be a socially responsible company, agreed to the unrealistic terms.

Seatrain brought outside contractors into the Yard to work inside the engine room because they claimed there were not

enough qualified workers available. The United Industrial Workers of America allowed this under the terms of the

contract with Seatrain. The contract also had a no-strike, no-lockout provision to protect the jobs of the production

employees of Seatrain.

However, by early 1973 a new wave of hiring of electricians, pipefitters and outside machinists took place as Seatrain

realized how far behind they were in the construction of the engine room, to include outside contractors. Working long

hours of overtime was the rule rather than the exception in an effort to finish the Brooklyn, something that was required

of all the trades in the Yard. The immediate impact of overtime led to construction over runs. The contract with the

United Industrial Workers of North America (the shipbuilders union) required that anytime workers put in over eight

hours in the course of a day was to be paid at time and a half.  Saturday was automatic time and half for all hours worked;

Sunday was double time for any hours worked; and any holidays the shipbuilders were required to work was paid at rate

of triple time (this was very rare).

         Seatrain Lines did not have the deep pockets needed to insure its new shipyard could survive its steep learning curve

        to a point where it could become profitable. When the Brooklyn finally left the Yard for sea trails, she carried a

       crew of over 100 people, which included the crew on board, from the Yard, and outside contractors.

       Sea trails did not go well. One boiler exploded internally when one of the anchors was dropped for testing; it took

       12 hours to haul it back up because of a failed winch. The Brooklyn limped back to the Yard for repairs after only

        one week of sea trials. Seatrain Lines charted the Brooklyn out on a long-term charter.

     The Brooklyn on her maiden voyage ran into a speed problem: she was never able to obtain the speed she was

    designed to reach. Seatrain lost $17,200,000 in 1974 and 1975[11] due to the sale of the Brooklyn and the

    Williamsburg because performance guarantees were tied to the sale both vessels.  The performance guarantees

    cost Seatrain another $8,200,000, which were directly related to various components in the ship, which were the first

    of their type. They failed sea trials in some form or fashion. Moreover, after President Ford’s pocket veto of the

    Cargo Preference Bill, Congress failed to pass another. Seatrain faced a worldwide glut of VLCC’s and cancelation

    of the contract to build a fifth VLCC, theCrown Heights was estimated to be $1 million.  Ironically, the two boilers

    and two anchors were delivered to the Yard before the contract was canceled.

          In 1974, the United States Congress passed the Energy Transportation Security Act (Cargo Preference Bill). 

   If signed by President Ford, the bill would require over time twenty per cent of all the oil imported by the

   United States be carried on U.S. built and  manned oil tankers. David Stockman[12] alerted the Republicans

   and President Ford that the bill would cause inflation and pressed President Ford to pocket veto the bill.   

   Officials at the Department of Congress estimated that the Cargo Preference Bill would raise the price of

   oil by twelve cents per barrel if carried on U.S. flagged oil tankers.[13]  President Ford implied in his veto

   message that twelve cents a barrel would wreck the U.S. economy and contribute to inflationary pressure not

   only on oil, but on every product in the economy.  Exactly two weeks later, President Ford was racing the

  Speaker of the House, Carl Albert, to go on television to raise oil prices by $3 a barrel. The serious inflationary

  pressure the President worried about disappeared into the bi-partisan ballyhoo advocating a three-dollar increase. 

In the past few weeks [1975], two of our shipyards, Seatrain Shipbuilding in Brooklyn New York and                                                                                         

Newport  News Shipbuilding & Dry Dock Company, have laid off nearly 6,000 employees.

Todd Shipyard in San Pedro, California has suspended work on tanker construction, placing 

3,500 jobs in the shipyard  in serious jeopardy. The number of vessels and deadweight tonnage

of capacity changes daily, but nearly thirty U.S.-Flagged Tankers, which comprise over 1.2 million

deadweight tons of capacity, are laid up for lack of employment.

        Congress Woman Shirley Chisholm, U. S. Representative from the Twelfth District of New York,

       fought for a 40 million dollar loan 90 per-cent would be guaranteed by the U.S. government, and the

       TT Stuyvesant and TT Bay Ridge were too be used to back the loan in case of default; the money was

       required to finish construction of both ships.  Chase Manhattan Bank made the loan to Seatrain Shipbuilding

      at the rate of 100 per cent above the prime rate, which in July 1975 was 7.5 per cent. It must be noted

     that major oil importing and exporting countries all had some sort of cargo preference laws regardless

     of whether they were a shipbuilding nation or not.

To add to the fray performance guarantees of $17,200,000 and $8,200,000 plus an additional

$1,000,000 for the cancelled contract of the fifth VLCC equaled $26,400,000 in loses.  Seatrain also

had contracted Bethlehem Steel shipyard at Sparrows Point Maryland, to build three VLCCs:

the Massachusetts in 1975, the New York and the Maryland in 1976. Each weighed 265,000 tons and cost

 $71,900,000.

             To make matters worse the Stuyvesant and Bay Ridge were forced into the Alaska Pipeline Trade by a

             lack of international demand for VLCC's. This in turn forced Seatrain Shipbuilding to pay back MARID

            10's of millions of dollars in construction subsidies for the Stuyvesant and Bay Ridge. MARID only provided

            construction subsidies for ships built in U.S. Shipyards with the intent to only operate in international trade.

On December 11, 1977, steam was escaping from the casting of the high-pressure steam turbine

of the Stuyvesant. Transamerica Delaval Inc. designed, manufactured and supervised the installation

of each of the four high-pressure steam turbine used on each of Seatrain’s VLCC’s at a cost of $1.4 million each. 

In 1978, an inspection on the high-pressure turbines on the Brooklyn and Williamsburg revealed the

first stage steam reverseing ring virtually disintegrated, this caused other parts to fail inside the turbine.

Repairs were made on both ships and they found themselves back in service.

January 1987 and again in October of 1987 the Stuyvesant bound for Panama with a full load of

Alaskan Crude Oil  ran into bad storms in the Gulf of Alaska. Each time major hull cracks resulting in

a total loss of 600,000 gallons of crude oil being spilled into the Gulf of Alaska, no environmental

problems problems were reported. The Stuyvesant was repaired in a shipyard in San Fancisco. Correction

The Stuyvesant was repaied both times at Dillingham, Portland Or. information provided by Chief Engineer

Maurice Bullard Ret. I thank him for the correction!

The following section comes from:

The Society of Naval Architects and Marine Engineers

Report on the Trans-Alaska Pipeline Service Tanker Structural Failure Study,  March 15- 19, 1991

Seatrain Class

Service:  Crude Carrier

                                                                   Year                                       Scantlings              Double            Double

Vessel                            DWT                 Built                 Steel              Reduced?              Sides?             Bottom?

Brooklyn                      225280            1973                Mild                  Yes                           No                    No

            Williamsburgh            228701           1974                 Mild                  Yes                           No                    No

            Stuyvesant                 228274            1977                 Mild                  Yes                            No                    No

     The vessel STUYVESANT has experienced the other 2 documented Class 1 events,

     both of which exceeded 17 feet in length. Each of these cracks, one in the

     bottom shell plating between frames 55 and 56 in the No. 5 Port cargo tank, the

     other in the side shell plating of the No. 5 starboard cargo tank, resulted in

     the spillage of more than 100,000 gallons of crude oil. Since the potential

     exists for similar type cracking to occur on the other vessels in this class,

     the Seatrain Class requires attention similar to that for the Atigun Pass

     Class.

     This Class of vessel was built under a special work program at Seatrain Shipbuilding

     in Brooklyn, New York. As a result, many of the welders had neither the training

     nor the skills necessary to perform the welding tasks required for shipbuilding. At the

     time of this writing, the Williamsburgh and Bay Ridge were both in lay-up status,

     the Brooklyn was operating in the Middle East, Stuyvesant had been recently

     returned to MARID.

The ultimate financial failure of Seatrain cannot be attributed to any fault of the skilled and qualified shipbuilders

that risked life and limb to build oil tankers for Seatrain Shipbuilding Corp. Low-level corruption could be

attributed over the life of the Seatrain in the Yard. A number of those hard-core unemployable from the

surrounding neighborhoods that suddenly became employable were known to steal copper and other supplies

that were sold on the outside. Of course, those who were caught had been fired and then arrested,

hence the revolving door of employment. I witnessed this first-hand on several occasions.

Now that the reasons as to why Seatrain had to declare bankruptcy have been explained, let us take a

closer look at the actual figures by comparing the cost of building VLCCs in major shipyards in the United States

during the 1970’s.[14]

Avondale Industries, New Orleans, LA

1938-Present

Bethlehem Steel, Sparrows Point,

 MD 1916-1995

Year         DWT        Price [$mm] Cost per ton

NASSCO, San Diego,

California, 1905-Present

Year         DWT        Price [$mm] Cost per ton

Newport News Shipbuilding, Newport News,

Virginia 1886-Present

 Year         DWT      Price [$mm] Cost per ton

Seatrain Shipbuilding Corp, Brooklyn Navy Yard,

 New York 1968-1980

Year         DWT        Price [$mm]   Cost per ton

            Avondale Industries in New Orleans, Louisiana had the highest cost per ton at $406.06. One can say

the size of the tanker was smaller thus increasing the cost per ship. On the other hand, Avondale Industries

was a southern yard, which had the lowest labor costs in a shipyard in the United States. In San Diego,

California NASSCO tankers were slightly bigger than Avondale Industries but the cost per ton was $361.18 &

$324.32. NASSCO had the highest labor rates simply because they were located on the West Coast.

            Bethlehem Steel at Sparrows Point, Maryland built tankers that were 100,000 tons larger than the tankers

 Avondale Industries built [100,00 tons translates into a super tanker]. Their cost per ton ranged from $271.32 to

$307.54. Bethlehem Steel’s yard was an East Coast yard with labor rates above Avondale Industries but less

then NASSCO’s yard on the West Coast.

            Comparatively, Newport News Shipbuilding in Newport News, Virginia built the largest tankers in the U.S.

They were more than twice the size of the tankers Avondale Industries built. The cost per ton was $350.00.

            Seatrain Shipbuilding at the Brooklyn Navy Yard built tankers that were very close in size to the tankers

produced at Bethlehem Steel. The cost per ton was $279.55 & $311.11. One can draw the conclusion that

Seatrain Shipbuilding became a very competitive shipyard in 1976 by using the figures cost per ton to build a tanker.

Excluded are the years 1973 and 1975 because some of the sections used in building a hull were built in Texas. 

However, the question remains, how did Seatrain Lines end up declaring chapter 11 bankruptcy if by 1976 it was

a very competitive shipyard? Beside the reasons previously outlined…..

In Rene De La Pedraja’s A Historical Dictionary of the U.S. Merchant Marine and Shipping Industry:

Since The Introduction of Steam, is an interesting synopsis of Seatrain Shipbuilding. 

 Pedraja asserts that Steve Russell, a financial expert at the time, was brought in to track

Seatrain’s expense flows:

“[Steve] Russell [a financial expert] decided to diversify Seatrain into other areas, and taking advantage of the energy crisis of the

1970’s, he borrowed money to purchase coalfields and one oil refinery. He immediately realized that the real problem of Seatrain was

caused by the shipyard and decided that once the two tankers in the ways, the Bay Ridge and Stuyvesant were finished the

company would abandon shipbuilding altogether. He had negotiated a complex arrangement to secure the funds to finish the last of the

four tankers Seatrain built was finished in May 1979 he shut down the shipyard.”[15]

Although Mr. Pedraja provides a descriptive account, it is not entirely accurate because he omits information regarding

the construction of eight barges, which produced a profit of over $1 million, two Ro-Ro ships under construction,

and work being preformed on the burned out Sea Witch during 1975-76. Pedraja’s account is not watertight

because his information raises a critical question.  Why did Seatrain Shipbuilding enter into these

contracts and commence construction if they knew the Yard was going to close before construction could

 be completed?

          In order to avoid filing for bankruptcy, Seatrain Shipbuilding tried to enter naval shipbuilding, according

to how it was explained to me in 1976 by mid-level management. Seatrain Shipbuilding approached the

U.S. Navy and inquired if they could bid on the construction of Naval Ships. Seatrain Shipbuilding proposed

that they wanted to build the hulls of navy warships and vessels and then have them towed to other shipyards

to for outfitting. The reason why Seatrain Shipbuilding wanted to approach construction in this manner was

simple. Seatrain was able to fabricate steel cheaper than any Yard in the U.S.  However, Seatrain did not

have enough skilled trades’ people to complete the outfitting of Naval Vessels and they all had to be U.S.

citizens, which in many cases was a combination hard to come by in the Yard’s surrounding neighborhoods.

The Navy replied negatively, and expressed that whoever built the hull had to outfit the ship.

          In late 1978 Seatrain Shipbuilding built an rail road freight car and invited heads of several rail

companies to the Yard in order to try to secure contracts for the manufacture of rail road freight cars.

Nothing positive came out of the meeting. Additionally, in 1979 Seatrain lost a large barge contract to

Japan, which meant Seatrain could not make the $800,000 monthly payment to Chase Manhattan Bank.

Seatrain Shipbuilding was then forced to close its gates.

Seatrain Lines, the Parent Company of Seatrain Shipbuilding.

        The end of the line for Seatrain Shipbuilding was not a great surprise considering that the parent company,

Seatrain Lines, was not exactly the best run company. On 6 September 1980, Seatrain Lines ended its

North Atlantic Shipping Service because it was losing money caused by a shipping rate war it started.

Seatrain Lines counter parts in Europe were happy to lower rates in an effort to drive Seatrain Lines out of

business.

          Meanwhile, Seatrain’s container freight operation was falling apart in a whirl of scandals and bad

business.[16] The firm had to pay the U.S. Government nearly $1 million in penalties for making kickbacks

 to shippers and about $500,000 for unpaid import duties. During the fourth quarter of last year,

Seatrain’s losses totaled more than $150 million. Seatrain filed for chapter 11 bankruptcy in a New York

court last week and the company, which had shrunk to just 550 employees, owed an estimated $200

million to some 3,500 creditors around the world including $150 million to Chase Manhattan Bank.

Deck house under construction for VLCC Bay Ridge, B.N.Y. 1977         B.N.Y. 1977 Bay Ridge under construction in Dry Dock #5

by Frank J. Trezza                                                                                    Ro-Ro's under construction in Dry Dock #6, by Frank J. Trezza

Employment Data

Seatrain Shipbuilding employment data cover the years from 1973 to 1978. It is not clear if this was the total

employment or just the production employment. In shipyards, the ratio of production workers to all other

employees (from the President of the company to the cleaning staff) is roughly 70-80% production workers

to 20-30% of all other workers.

Employment in the Major Shipbuilders

Source: MARAD

(1) Figures for 1998 1999 and 2000 are from sources other than MARAD or are estimated, because MARAD failed to publish the statutorily required annual survey in those years.  In addition, MARAD has not published the survey since 2004.

(2) Figures for Electric Boat from 1973 through 1984 are estimated.

            Despite the problems that plagued Seatrain Shipbuilding at the Brooklyn Navy Yard and the assertions

made that New York City did not benefit, I argue that New York City did indeed greatly benefit from the

Seatrain’s shipbuilding and Coastal Dry Dock & Repair Corp. inside the Brooklyn Navy Yard from 1968-1986;

the economic data contained herein illustrates how much economic stimulus the City of New York received.

According to CLICK’s survey, Seatrain invested twice the amount of money than previously thought into shipbuilding,

had resulted in supplying auxiliary goods and service to workers at the shipyard.[17]

          The following spreadsheet illustrates Seatrain Shipbuilding’s employment data, wages, production workers,

taxes paid, rent, and Yard improvements, estimated and real data [the black asterisk(^*) represents the estimated

employment data and the red asterisk (^*) represents the final layoff of skilled shipbuilders on 8 May 1979, when

Seatrain Shipbuilding closed its gates]: