Although Seaspan?s Vancouver Shipyards won its bid to build $8 billion worth of federal navy and coast guard ships, the work to revive B.C.?s marine shipbuilding industry is only just beginning.
John Shaw, Seaspan?s vice-president of program management and the man behind the company?s pitch for the National Shipbuilding Procurement Strategy (NSPS) non-combat vessel contract, said his company has yet to win anything.
?We have an $8 billion opportunity,? Shaw told Business in Vancouver during an interview at his office next to the shipyard in North Vancouver.
Despite recent applause from the provincial government and a wide-range of B.C. business associations over Seaspan?s successful bid for the non-combat contract, Shaw said negotiations with the federal government have only just begun.
The non-combat contract includes new joint support ships for the Royal Canadian Navy, science vessels for the coast guard and a polar icebreaker. But before shipwrights can get to the business of cutting steel, Seaspan has to invest approximately $150 million upgrading its yards in Vancouver and Victoria to support the contract.
On top of that, it has just entered a new round of negotiations with Ottawa for an umbrella agreement that will establish a framework for each subsequent contract Seaspan signs under the NSPS non-combat program.
For Shaw, that means logging more flying time as he travels to and from the national capital to work out a deal that benefits both his company and federal government.
Thankfully, he?s used to it.
Shaw and his team spent the better part of the last year developing a bid (at a cost to Seaspan in excess of $1 million) that proved to the federal government that it had the people, know-how, finances and space to build navy and coast guard vessels.
In addition to making a case for its own shipbuilding capabilities, Seaspan had to commit to supporting the greater marine shipbuilding industry in its bid.
That means the company has agreed to spend 0.5% of each contract?s value on one of three areas: human resources development, technology development and industrial development.
Once the company reaches an umbrella agreement with Ottawa, it will negotiate individual ship construction contracts, including cost and delivery times.
The first project for Seaspan will be the $150 million coast guard fisheries science vessels. But work on them won?t begin for at least another year.
In the meantime, the company has ordered six new wood-chip barges to keep workers busy until NSPS work begins.
At the same time, Seaspan has launched a major recruitment drive to find the next generation of workers to fulfil its needs.
Shaw said Vancouver Shipyards would need an additional 200 workers by 2013, and then another 400 to 600 on top of that to support navy ship construction.
More workers will also be needed in Victoria, where the ships will be finished and sea-tested. Talks are underway between Seaspan, unions and colleges to help the company source as many local workers as possible.
The province has also created a B.C. Shipbuilding and Repair Sector task force to help the industry determine what its labour needs will be in the coming years.
But not every worker will come from B.C.
Shaw said he expects the contracts will attract oil-patch workers from Alberta as well.
The contract, although positive for the industry, could affect the labour force at Seaspan?s other North Vancouver competitor, Allied Shipbuilders.
Allied president Malcolm McLaren said the NSPS contract could mean that workers leave his company for Seaspan where there?s guaranteed work for decades to come.
?Yeah that?s an issue,? said McLaren.
?As an employer it?s our challenge [to answer], how do we compete with an outfit that looks like it has long-term work? On the other hand, if there?s work available it means there?s still usually room for more.?
But McLaren added that the NSPS could mean more sub-contract or overflow work for Allied.
In Vancouver, the NSPS has already generated new work for Robert Allan Ltd., Canada?s oldest privately owned consulting naval architecture firm.
?By virtue of the work we did on the fisheries research vessels [for NSPS] we were able to gain a very significant design contract for a 93-metre oceanographic vessel for Australia,? Allan told BIV.
The company is also bidding on the design contract for the polar icebreaker, which, if it wins, would mean more job creation for the 75-person firm.
Back on the North Shore, Percy Darbyson, business manager for the Marine and Shipbuilders local 506, said he?s not entirely sure yet how the NSPS contract will affect his people.
The union?s current contract with Seaspan is up for negotiation in 2013, said Darbyson, and he expects the company will want to hammer out a deal with workers sooner rather than later.
Shaw said the relationship between Seaspan and the union is strong and that labour contracts related to NSPS will be negotiated project to project.
Despite all of the work in front of Seaspan, Shaw said he?s confident the company will meet each challenge that comes its way.
Said Shaw: ?Will there be challenges? Of course there will, [but] the future is exciting.? ?
