By James Heinz
(Steinbrenner Story – Chapter Thirteen)
It may have been fitting that George Steinbrenner III, the man who saved AmShip, was also the one to destroy it. His two year suspension from baseball gave George III time to turn his attention back to AmShip. And he did not like what he saw.
In 1976 George III moved to Tampa, Florida. He said it was for his and his wife’s health but the reality was that he was embarrassed at being stared at as a convicted felon on the streets of Cleveland. He also had another reason.
In 1972 George III had bought the Tampa Ship Repair and Drydock, one of the largest ship repair facilities in America. He added it to the AmShip facilities in Cleveland, Chicago, and Lorain. In 1979 he moved AmShip headquarters to Tampa. He also announced that the Cleveland yard would close and all work would be moved to Lorain.
George III sensed that the end of American shipbuilding was near.
By the end of the 1970s American, and particularly Great Lakes, shipbuilding was in as much trouble as the steel industry and the auto industry. The reason was the same for all three of them.
Foreign competition.
As a result of America’s rebuilding the rest of the world after World War II, the rest of the world was beginning to strip away much of the American industrial power that had won that war. Lower labor costs, a lack of union problems, and in some cases more competent management had led our former enemies to begin to win in peace what they had failed to gain in war.
American shipbuilding was particularly hard hit. The U.S. Maritime Administration offered a 50% subsidy for the difference in price between the cost to build a ship in the US and the cost to build it abroad. As with steel mills, post war Japanese shipyards had been rebuilt with American money and were newer and more efficient than American yards. Japanese shipyards could offer a ship for 60% less than an American yard, so building a ship in America would still cost 10% more than in Japan.
In a previous article I wrote about Daniel K. Ludwig, once the world’s richest man, I pointed out that Ludwig had made the same calculation in moving his oil tanker construction to Japan after World War II.
In addition, the decline in the American steel industry due to more modern and efficient Japanese mills had led to a sharp decline in the need for ships to carry the raw materials for the steel industry. By 1983 only about 50 bulk carriers were operating on the Great Lakes.
In the late 1970s there were only two shipyards left on the Great Lakes. AmShip was still in existence because George III had persuaded the Lorain Port Authority to issue $7 million in tax free municipal bonds to enable AmShip to build a drydock capable of building 1,000 foot ships. It was this drydock that had enabled the construction of the 858 foot long ROGER BLOUGH.
George III responded to these changes by closing the Chicago yard in 1981 and the Toledo yard in 1983 and laying off 1,000 workers at the Lorain facility the same year.
In 1983 George III persuaded the Ohio congressional delegation to urge the U.S. Navy to grant AmShip a contract to refurbish five tankers. George III made all sorts of promises to the Ohio politicians that if AmShip got the contract that the work would be done at Lorain. The Navy did eventually grant the contract to AmShip.
George III then went to the unions and told them that they had to accept concessions on wages and benefits if they wanted the tanker work in Lorain, or else he would take the work to Tampa. Politicians who had helped AmShip get the contract “felt misled and double crossed”.
Imagine politicians feeling that way. Usually, they are the ones that are doing the misleading and double crossing.
Eventually the union would reject the demands for concessions. A few weeks before Christmas 1983, George III proved that the first letter of his first name stood for Grinch, and closed the Lorain yard forever, putting 1,500 people out of work.
George III would later claim that AmShip had lost $30 million in the last 5 years and that he had battled his own board of directors to keep the yard open that long. The last ship launched at the Lorain yard was the WILLIAM J. DELANCEY, now the PAUL TREGURTHA, launched in May, 1981.
The move to Tampa was only temporarily successful. The 5 tankers were completed, but when Ronald Reagan cancelled the subsidy for American shipbuilding, 40 shipyards closed and eventually AmShip was one of them, declaring bankruptcy in 1993 and being sold in 1995.
NEXT: GEORGE STEINBRENNER III AND HIS LEGACY
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James Heinz is the Wisconsin Marine Historical Society’s acquisitions director. He became interested in maritime history as a kid watching Jacques Cousteau’s adventures on TV. He was a Great Lakes wreck diver until three episodes of the bends forced him to retire from diving. He was a University of Wisconsin – Milwaukee police officer for thirty years. He regularly flies either a Cessna 152 or 172.
GEORGE STEINBRENNER, GREAT LAKES SHIP OWNER – Chapter One
THE WRECK OF THE WESTERN RESERVE – Chapter Two
NUTTY PHIL AND THE WRECK OF THE ONOKO – Chapter Three
SOPHIA MINCH AND THE WRECK OF THE SOPHIA MINCH – Chapter Four
HENRY STEINBRENNER I, GORDON LIGHTFOOT, AND THE WRECK OF THE HENRY STEINBRENNER I – Chapter Five
THE WRECK OF THE ANNA C. MINCH – Chapter Six
HENRY STEINBRENNER II AND THE SHIPWRECK THAT BECAME A SHIP AGAIN – Chapter Seven
AN OLDIE BUT A GOLDIE: HENRY STEINBRENNER II AND THE J. B. FORD – Chapter Eight
HENRY III AND GEORGE STEINBRENNER III: LIKE FATHER LIKE SON – Chapter Nine
KINSMAN TRANSIT IS IN TROUBLE – Chapter Ten
GEORGE III SAVES KINSMAN TRANSIT – Chapter Eleven
GEORGE III SAVES AMERICAN SHIPBUILDING – Chapter Twelve
