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Saturday, June 19, 2021

Maritime Logistics Professional

The LA Shipyard Wrangle is About to Hit the Bumpers

Posted to Martin Rushmere (by on May 27, 2010

Gambol Industries is not going away

A costly, unsatisfactory compromise is likely in the unsettling wrangle over the largely defunct Southwest Marine shipyard, now owned by Gambol Industries, in Los Angeles. The year's deadline is but a month away for a plan to be produced over Gambol's assertion that there will be enough business to build and repair vessels, mostly in the 200-400 foot range.
In the last 11 months, little has changed. The port wants much of the unused berth space as a dumping ground for channel deepening mud, so that two terminal projects can go ahead. Gambol wants the silt to be taken somewhere else and says it can attract enough business to employ 800 people, paying   $42 million in wages a year.
Understandably, the port takes its own view of the situation – which is extremely skeptical of Gambol's assessment. "Southwest Marine [at its height] had fewer employees than Gambol projects for its shipyard. When it closed, Southwest Marine and another failing facility had a combined sales volume less than a third of Gambol’s projected total payroll," notes a report by port staff.
Market share is projected at a maximum of 67 percent of all US-flagged vessels between 72 feet and 200 feet. Other yards are doing this work and thus Gambol would be depriving someone else – not increasing the volume of business.
Gambol boss Robert Stein wrote in a newspaper op-ed earlier this month of the prospects: "Don't only take my word for it. The beneficial economic impact of the Gambol plan is supported by a Los Angeles County Economic Development Corp. study. According to the study, the Gambol plan could spark a significant economic renaissance for the local shipbuilding and repair industry."
Ahem. That's not my recollection, or the port's. The development corporation said its forecast was based on figures supplied by Gambol.
That quibble aside, it's clear that Gambol is not going away, even though the costs and delays in changing the location for the dump site will be horrendous. This dispute is being seen in the wider context of the future of LA/Long Beach and if the talk comes down to a lawsuit slugfest, Southern California's fortunes will take another knock.
Sharp-minded deal makers sense that the only way to end this is through money, probably by cutting Gambol a yearly "compensation fee" or some such payment to let the channel work go ahead.
Just how much money will be involved (with taxpayers ultimately footing the bill) will be indicated in a month's time.

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