By Frank Foti
State legislators had three goals in passing the law requiring Washington’s ferries to be built in Washington: employ people, have a positive economic impact and help develop a capable maritime workforce while replenishing the aging ferry fleet.
Under the Build in Washington law, a team of Washington shipbuilders led by Vigor Industrial built three 64-car ferries between 2010 and 2012 to replace 80-year-old Steel Electric class vessels. We are currently building two 144-car Olympic Class ferries to replace 1950s-era Evergreen State class vessels.
With three new boats in service and two on the way, now is a great time to ask whether building them in Washington is accomplishing the goals lawmakers envisioned. In all areas the answer is yes.
Building a single 144-car ferry creates about 500 direct, family-wage jobs at Vigor and subcontractors including Nichols Brothers Boat Builders on Whidbey Island and Jesse Engineering in Tacoma. Wages earned in these jobs support about a thousand indirect jobs around the region.
Washington’s Office of Financial Management found that investing $150 million in ferry construction creates more than $180 million in economic activity in Washington. So building ferries here provides boats our communities need while sustaining jobs and strengthening our economy.
As for the capable maritime sector, shipbuilding can be a cyclical business. In the absence of steady work, highly skilled, highly employable industrial workers move away to find jobs, or return to work after a slow period with skills degraded. Sometimes they leave the industry altogether. This leaves the region less able to compete in shipbuilding.
Building ferries in sequence has provided consistent work for several years, helping the region retain some of the most productive, competitive workers in the industry. New workers learn critical industry skills, experienced craftspeople hone their crafts, and the region’s manufacturers improve the way we make vessels.
For the taxpayer, this means that building ferries in Washington becomes even more affordable over time. For example, the first 64-car ferry, the Chetzemoka, was an expensive vessel. But in the end the three-vessel project came in millions of dollars under the approved budget primarily because the entire team used the experience building the first vessel to improve efficiency and drive down the cost of subsequent boats. This trend continues with the new 144-car ferries, which are on time and on budget, each being built faster than the one before without sacrificing quality.
And thanks to our experience building ferries, Vigor is able to compete for business that would have gone to other parts of the country in years past.
One example is exploration for oil and gas off the coast of Alaska, which has already generated jobs here. From drill rigs to numerous support vessels for each rig, tapping these reserves safely requires dozens of vessels for each venture and stands to dramatically increase the demand to build new ships and upgrade existing ones.
Previously much of this work went to shipyards along the Gulf of Mexico, where yards have strong relationships with the oil and gas industry. But now we compete for these contracts and win, keeping the work in the Pacific Northwest.
Private-sector opportunities like these become increasingly important in light of federal budget cuts. Reduced defense spending due to sequestration could result in thousands of lost jobs here, from layoffs at Puget Sound Naval Shipyard to cancellation of repair contracts with private shipyards. Building Washington ferries helps blunt the impact of these cuts both through the direct economic impact of creating jobs in Washington and by helping build a more diverse, competitive and capable private maritime sector and workforce.
With all the benefits of Build in Washington — jobs, economic activity, workforce development, helping Washington attract new business, and providing needed boats on time and on budget — state lawmakers should be congratulated. The law is doing exactly what they hoped.
Frank Foti is president and CEO of Vigor Industrial, which has facilities in Seattle, Everett, Tacoma, Bremerton and Port Angeles, as well as Oregon and Alaska. Two-thirds of the company’s 2,000 employees reside in Washington.