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Originally published Saturday, January 1, 2011 at 8:01 PM

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Jon Talton

Losing independent Todd shipyards a sign of shipbuilding times

Washington has seen manufacturing jobs decline. Yet they contribute in an outsized way to well-paying jobs, productivity, export power and economic diversity.

Special to The Seattle Times

Big Builders

Some of the world's largest shipyards:

Hyundai Heavy Industries, South Korea

Samsung Heavy Industries, South Korea

Daewoo Shipbuilding, South Korea

Hanjin Heavy Industries, South Korea

STX Offshore and Shipbuilding, South Korea Bohai Shipyard, China Kawasaki Heavy Industries, Japan Mitsubishi Heavy Industries, Japan

Source: Seattle Times research

It's a painful list: Boeing, Washington Mutual, Safeco, Immunex, Puget Sound Energy during the last decade. These are leading corporate headquarters lost.

Add to the list: 94-year-old Todd Pacific Shipyards, which employs 800 people.

Losing headquarters costs in civic leadership, attracting talent and capital, and being where critical decisions are made. In WaMu's case, it clear-cut thousands of jobs. About the best comfort in the Todd deal is that business here is good enough that its new Portland master, Vigor Industrial, has incentives to keep the Puget Sound operations going.

Even if local control and some front-office positions are gone, Todd is an important part of the region's manufacturing strength. Like most states, Washington has seen manufacturing jobs decline. Yet they contribute in an outsized way to well-paying jobs, productivity, export power and economic diversity.

All this is contingent on the $130 million cash deal going through. Publicly traded Todd is essentially in play, and other bidders might emerge. Vigor is privately held and less vulnerable to Wall Street's destructive whims (take note, Microsoft and others).

This is an interesting time in what's left of the American shipbuilding industry, once the world's leader. Now marginalized by huge shipyards in Asia, especially in South Korea, U.S. builders have become highly consolidated and overly dependent on defense contracts. Even that is under pressure from potential government cuts and Wall Street's demands. Northrop Grumman, one of the Big Six U.S. shipbuilders, plans to spin off or sell its shipbuilding operation.

The Gulf Coast has made an aggressive play for these jobs with right-to-work laws, big incentives and congressional pressure — an aircraft carrier is named after the late Sen. John Stennis of Mississippi. Yet it's not immune to changes in the industry. Earlier this year, Northrop said it would close its shipyard near New Orleans, costing 5,000 jobs.

On the other hand, aggressive niche players are doing well. Nichols Brothers Boat Builders, of Whidbey Island, makes a variety of civilian craft and is also building the Navy's experimental Sea Fighter, a technologically advanced vessel that can operate in blue water or close in to shore (the littoral zone).

Austal, an Australian company, has set up operations in Mobile, Ala., making the Navy's new littoral combat ship and joint high-speed vessel. These are smaller, less complex vessels, similar to what Todd once made. "These are the projects that help prime the pump for innovative, tough, new shipyards," said Craig Hooper, a San Francisco-based national-security consultant and blogger on It's a foundation that can improve competitiveness against Asia for civilian contracts.

Hooper said the Todd-Vigor merger could help the company make more competitive bids, especially if it maintains high technology and efficiency standards. In addition, "Vigor is now well-positioned to take advantage of America's ongoing transfer of existing — and aging — naval ships to the Pacific. Those ships will need to be maintained and tended, and in the Pacific Northwest, this new entity is the only thing going. And that's got to be something that pleases even the toughest businessman and the least sentimental investor among us."

The outlook could also change because of regional instability in Asia, especially on the Korean peninsula. Hooper said, "That's when American shipyards, with their high-quality products and stable shipyards and supply-chains, begin to look viable."

So don't give up the ship.

You may reach Jon Talton at

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Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest



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