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Resurrecting Todd Shipyards : Shipbuilding: Port officials say they will revive operations if either of two companies can come up with financing and customers.

December 19, 1990|GREG KRIKORIAN | TIMES STAFF WRITER

Eighteen months after Todd Shipyards shut down its sprawling ship construction and repair operation in San Pedro, groups with strong ties to Todd are trying to reopen a yard that for decades was one of the nation's busiest.

In recent weeks, two fledgling companies--one backed by former Todd supervisors, the other by what was Todd's largest union--have competed for the right to negotiate with the Los Angeles Harbor Department over reviving the shipyard, which opened in 1917 and once employed 5,000.

At present, Los Angeles Shipyards Corp., the management-backed contender, is holding talks with the port on opening a shipbuilding facility. Union-backed LA-LB Shipyards Inc. is waiting to pitch its more modest plan for a ship repair yard. Both firms envision employing 2,000 workers within two years.

If either company can pull together financing and attract customers, port officials insist that they are serious about reopening at least half of the 112-acre yard for shipbuilding or repairs. Because the yard is on port land, the Harbor Department will decide who, if anyone, will operate it.

"We want this deal to happen," said Ezunial Burts, the port's executive director. "No question."

Silent save the din of cars and trucks from the nearby Vincent Thomas Bridge, the yard today looks like a ghost town, right down to the frozen time clocks at the front gate and the abandoned coffee mugs in the machine shop, where huge lathes are covered with dust and the feathers of pigeons nesting in the rafters.

Bringing the shipyard back to life remains a project fraught with obstacles, port officials and the companies acknowledge.

Foremost, perhaps, is the fragile nature of American shipbuilding. The industry has been devastated by foreign competition and the U.S. government's elimination of subsidies in 1981. Only about half as many yards are operating as in 1982.

And although the international market for new ships is growing, it may be a long time, experts say, before the nation's shipbuilders rebound.

"I do have faith that the nation will return to a larger level of shipbuilding. But it will take several years," acknowledged retired Rear Adm. Stuart Platt, LA-LB Shipyards' chairman.

Since July, 1989, when Seattle-based Todd closed its Los Angeles yard after declaring bankruptcy, several groups of investors have unsuccessfully approached the port about taking over the yard and its millions of dollars in equipment.

The suitors included North American Shipyards Inc., a venture headed by a British marine engineer who returned to England after the company failed early this year to muster financing.

Like North American, Los Angeles Shipyards has won the right to exclusive talks with the port--talks the firm has entrusted to Los Angeles Airport Commissioner Johnnie Cochran and the law firm Gibson, Dunn & Crutcher, which also represented North American.

But to date, Los Angeles Shipyards has not secured $20 million, as promised, to prove its financial wherewithal to the port. A private stock offering last month has generated some interest among six groups of investors, company officials say, although none has committed to the venture.

Nevertheless, Shipyards President John Stupakis and officials of Price Waterhouse, the company's accounting firm, say financing will be found by the port's March 1 deadline. "I don't see any problem getting the money," said Stupakis, onetime president of El Monte-based NavCom Systems.

As evidence of the company's viability, Stupakis points to a $99.6-million contract with OSCO Group, one of Norway's largest shipping companies, to build two 40,000-ton oil tankers.

In addition, he says, Shipyards has a $10-million order from a Victorville firm for 19 environmental cleanup ships and a $432-million contract with Jumbo Barge Corp. of New York, providing Jumbo can arrange financing for its order in the next six months.

Although those contracts remain to be finalized, port officials say they are convinced that Los Angeles Shipyards' plans are workable. "We've looked at their entire package, and we're comfortable they'll be able to perform," Burts said.

But as they await the outcome of talks between the port and Shipyards, officials of LA-LB Shipyard contend that their competitor is promising more than it can deliver.

Already, they claim, Shipyards has not only exaggerated its financial viability but also has misrepresented its chances of securing a crucial labor contract with the Industrial Union of Marine and Shipbuilding Workers of America. Leaders of the union, which was Todd's largest, are actively supporting LA-LB's proposal for an employee-owned shipyard.

"They've been saying for weeks that they'll line up investors, and it still hasn't happened," said Kevin Sullivan, the union's regional director.

Further, Sullivan said, Shipyards inaccurately claimed last week that it had begun contract talks with the union. "They haven't talked to us. Period," Sullivan said.

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