AFL-CIO's Metal Trade Union Vows to go to Court over Aker Building Practices

The AFL-CIO has renewed their intention to appeal the use of imported ship components at a Philadelphia Shipyard. MTD President Ron Ault told MarEx on Thursday that Akers’ practice of importing “prefabricated and pre-assembled modules could spread like a cancer throughout the domestic shipbuilding industry.” He went on to say that the practice, if allowed to stand, could eliminate many more US shipbuilding jobs.

The MTD complaint, rejected by the US Coast guard earlier this year, stems from perceived violations of U.S. Shipbuilding rules. In May, the Metal Trades Department of the AFL-CIO asked the U.S. Coast Guard to review Aker Philadelphia Shipyard Inc.'s business practices with regard to the construction of 10 tankers. The former Kvaerner Philadelphia Shipyard has been importing and using some components obtained from South Korean sources.

An article posted on the Metal Trade Department’s WEB site stated, “The Coast Guard says its interpretation for applying the Jones Act has been “consistent” over the years. They assert that a ship qualifies for Jones Act documentation as long as the gross weight of foreign materials affixed to the ship’s hull does not exceed 1.5% of the vessels’ overall tonnage. As far as electronics, cabins and other elements of Aker’s planned Veteran Class MT-46 Product Tankers, the Coast Guard asserts that those components do not factor into its assessment. The Coast Guard maintains that these components are inconsequential to the U.S.-built consideration.”

The union claims that Aker’s building practices violate the Jones Act, which allows only American built ships to trade in the domestic markets. The vessels in question are intended for entry into the domestic, Jones Act trades and the first vessel has already been delivered to Overseas Shipholding Group. For its part, Aker has previously denied any wrongdoing and points to the Homeland Security Department decision as ample proof of that reality. Aker spokesman Thomas Marinucci told MarEx earlier this year, “The decision is confirmation of what we’ve known all along; that the way we’ve been building has been in compliance.” Aker spokespersons did not return MarEx calls for comment today.

According to Ault, the series of 10 product tankers currently under construction violate the Jones Act because they are assembled from foreign parts. Ault also said that the Metal Trades Department was expecting “any day now” a response from the coast guard on their appeal of the earlier decision. If their appeal is denied, Ault said “We will launch administrative legal proceedings against the US Coast Guard in the most advantageous court venue available.” Coast Guard spokespersons in Washington were also unavailable for comment on Thursday afternoon.