In a victory for the administration over organized labor, House and Senate conferees agreed yesterday to extend for a year a controversial maritime subsidy program that allows American ship operators to retain federal subsidies on vessels built or renovated in foreign shipyards.
The "build abroad" program, adopted last year, is a keystone of the administration's maritime policy, which aims at building up the dwindling fleet of American-flag commercial vessels by allowing their operators to acquire or refit them in lower-cost foreign yards.
Shipbuilders and shipbuilding unions such as the Boilermakers and the Machinists bitterly opposed it, saying it transfers jobs and tax dollars abroad while the U.S. shipbuilding industry languishes.
The 1983 maritime authorization bill adopted by the conferees yesterday provides $454 million in operating subsidies to operators of American-flag merchant vessels for the 1983 fiscal year. The subsidies are intended to enable the American fleet to compete for cargo in a world market dominated by ships of other nations that have much lower labor costs and smaller regulatory and safety burdens.
Until 1982, subsidies were available only to ships that were built and renovated in the U.S. yards. The build-abroad program, adopted on a one-year trial basis in 1982, resulted in Maritime Administration approval of 36 ships to be built in foreign yards, mostly in Japan and South Korea, and reconstruction of several others. The dollar value of the work to be exported is well over $1.2 billion, industry sources said yesterday.
Transportation Secretary Drew Lewis sought to make the build- abroad program permanent, and the Senate version of the bill would have done so. The House, however, voted to terminate the build-abroad program, and the one-year extension represents a compromise.