Outsourcing work to South Korea violates Jones Act, says MTD
THE METAL TRADES Department, acting on behalf of more than 500 union workers at Aker American Shipping’s Philadelphia shipyard, filed a lawsuit in January alleging the U.S. Coast Guard has violated the Merchant Marine Act of 1920 (commonly known as the Jones Act) by outsourcing shipbuilding work to South Korea.
The Act states that ships engaging in coastwise trade — from one U.S. port to another, rather than engaging in international shipping — must meet several conditions. First, major structural components must be built in the United States; second, the ship must be assembled entirely in this country. The Act is intended to protect American shipbuilding capabilities, which are vital especially in times of war and other national emergencies.
However, Aker, which has an order for 10 product tankers for coastwise use, has contracted with South Korean shipyards to pre-assemble and pre-outfit numerous components. These components are then shipped to Aker for final assembly by the company’s union employees.
According to MTD President Ron Ault, South Koreans are fabricating plug-and-play modules that include “machinery rooms; bow and stern assemblies; preformed hull steel; rudders; propellers; shafts; antennas; crew ladders; stairs; deck handling equipment such as fully assembled, ready-to-operate cranes, winches, and much more.” This is work that has traditionally been done by bargaining unit employees at the Philadelphia shipyard. Ault said this method of construction amounts to building ships from kits and that it affects not only Aker but the General Dynamics NASSCO shipyard in San Diego. Boilermakers work at both locations.
The MTD and its affiliate, the Philadelphia Metal Trades Council, filed the suit in the U.S. District Court for the Eastern District of Pennsylvania. It named as defendants the U.S. Coast Guard, the Coast Guard Commandant, the National Vessel Documentation Center (NVDC), which is charged with enforcing elements of the Jones Act, and its director.
The lawsuit asks the court for a permanent injunction to prevent pre-assembly of equipment modules in any foreign facility, and to rescind any documentation permitting coastwise trade involving ships built under the Coast Guard’s and the NVDC’s faulty interpretation of the Jones Act.
MTD’s Ault noted, “Before the debut of ‘kit ships’ at Aker and NASSCO it appeared that shipbuilding might be insulated against the ravages of free trade. It is, after all, the last heavy industry left in America. Instead of protecting American workers, American jobs, and the environment, these free trade agreements open the door to unfair competition by foreign government-owned and heavily subsidized industries. NAFTA and the free trade agreements are an open invitation to our trading ‘partners’ to cheat us — and there are no mechanisms for dealing with cheating.”