Legislature(2009 - 2010)CAPITOL 106
02/24/2009 05:15 PM House ECON. DEV., TRADE & TOURISM
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| Start | |
| Alaska Ship & Dry Dock Presentation by Doug Ward with Discussion to Follow About Future Public/private Partnerships and Workforce Development to Further Build Alaska's Economy. | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL
TRADE AND TOURISM
February 24, 2009
5:19 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Chair
Representative Nancy Dahlstrom
Representative Kyle Johansen
Representative Mike Doogan
Representative Chris Tuck
MEMBERS ABSENT
Representative Mike Chenault
Representative Mark Neuman
COMMITTEE CALENDAR
Alaska Ship & Dry Dock Presentation by Doug Ward, Shipyard
Development, discussion to follow about future public/private
partnerships and workforce development to further build Alaska's
economy.
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
JIM LYNCH, Chair
Alaska Workforce Investment Board (AWIB)
Department of Labor & Workforce Development (DLWD)
Anchorage, Alaska; Chief Financial Officer
Fairbanks Memorial Hospital
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on workforce
development.
CORINNE OGLE, State Reporter
Alaska Future Farmers of America (FFA)
Homer, Alaska
POSITION STATEMENT: Participated in a presentation by the FFA.
TAYLOR BERBERICH, Secretary
Alaska Future Farmers of America (FFA)
Palmer, Alaska
POSITION STATEMENT: Participated in a presentation by the FFA.
RACHEL KENLEY, President
Alaska Future Farmers of America (FFA)
Palmer, Alaska
POSITION STATEMENT: Gave a presentation on Alaska Future
Farmers of America activities.
DOUG WARD, Director
Shipyard Development
Alaska Ship & DryDock
Ketchikan, Alaska
POSITION STATEMENT: Gave a presentation on Alaska Ship &
Drydock.
ACTION NARRATIVE
5:19:31 PM
CHAIR JAY RAMRAS called the House Special Committee on Economic
Development, International Trade and Tourism meeting to order at
5:19 p.m. Present at the call to order were Representatives
Doogan, Tuck, and Ramras. Representatives Dahlstrom and
Johansen arrived as the meeting was in progress.
^Alaska Ship & Dry Dock Presentation by Doug Ward with
discussion to follow about future public/private partnerships
and workforce development to further build Alaska's economy.
CHAIR RAMRAS announced that the first order of business would be
a report on workforce development by Jim Lynch, followed by a
presentation from Doug Ward of Alaska Ship & Drydock.
5:20:14 PM
JIM LYNCH, Chair, Alaska Workforce Investment Board (AWIB),
Department of Labor & Workforce Development (DLWD); Chief
Financial Officer, Fairbanks Memorial Hospital, informed the
committee he was speaking from his personal perspective and
insights. Mr. Lynch said the structure of the Alaska Workforce
Investment Board is in statute, as primarily a private sector
advisory board to the Department of Labor & Workforce
Development (DLWD). The 26 member board is a combination of
private sector members and designated seats for the
commissioners of DLWD and the Department of Education and Early
Development (EED). The Alaska Workforce Investment Board, with
the cooperation of the commissioner and deputy commissioner of
DLWD, is making unprecedented strides during this
administration. Mr. Lynch relayed AWIB now has considerable
discretion over the State Training & Employment Program (STEP)
that is funded with Unemployment Insurance funds from the
Employment Security Division of the U.S. Department of Labor.
This is a potent training program within the state. He focused
his comments on how to improve workforce development and opined
it is a supply - develop jobs and the workforce will come - or,
demand - develop the workforce for jobs that are anticipated -
question and the answer is in the middle. Now is the time for
the state to anticipate short- and long-term training for the
workers needed to build a gas pipeline; in fact, the highly
skilled labor required for the gas pipeline will take years to
prepare. Mr. Lynch said that the private sector board partners
with DLWD to try to set priorities. From his nine years of
experience, he advised that the complicated challenge of
workforce development has no flow-chart or diagram to clarify
the mix of money, programs, and employment needs. He stressed
how important it is to take advantage of opportunities and to
invest in effective programs. Mr. Lynch offered the committee
any assistance the board could provide.
5:26:20 PM
REPRESENTATIVE DOOGAN expressed his concern that it is very
difficult to tell if the right steps are being taken to promote
workforce development.
5:27:10 PM
MR. LYNCH agreed. He described workshops and employer forums
that have been held in the Interior and some successful measures
that have been identified. However, there can be unnecessary
duplication and he encouraged looking for efficient programs.
5:28:38 PM
CHAIR RAMRAS listed training difficulties; for example, highly
trained workers that migrate out of the state. He asked Mr.
Lynch to address training issues.
5:30:02 PM
MR. LYNCH recommended that the state take a comprehensive look
at the related field of "workforce readiness." His personal
viewpoint is to look at the "layers" of training needed for
expertise in a given field, such as advanced degrees, the
bachelor [degree] plus on-the-job training, and associate
degrees with various levels of on-the-job or certificate
training. Mr. Lynch said the key to workforce development is to
focus on [workers] with associate degrees and below, because
these workers can be employed in a shorter period of time.
However, the state can not ignore the importance of those with
higher degrees who may be beyond the influence of the board and
DLWD. He recalled past programs, such as "student loan
forgiveness," that slowed the significant economic impact of
"brain drain" and encouraged Alaskans to return home after
college. Regarding workers who are leaving the state, he
advised DLWD has data on the cost of training individuals and
whether they are still working in the state. He then spoke of
the successful programs at the University of Alaska (UA), such
as UA Anchorage (UAA) school of nursing and UA Fairbanks (UAF)
school of nursing. Alaska Ship & Drydock in Ketchikan is also
in partnership with UA and is a great example of training
programs that teach people transferrable skills. Mr. Lynch
referred the committee to the apprenticeship coordinator at DLWD
for further information.
5:35:14 PM
REPRESENTATIVE TUCK said he appreciates the complexity of the
workforce training problem. He cited his personal experience
with an apprenticeship program and listed the benefits thereof.
Representative Tuck expressed his concern that Alaska is not
capitalizing on its investment in students educated in Alaska.
He also stated the benefit of a student loan forgiveness program
as a mechanism to encourage Alaskans to return after college.
He opined there is less cost to preparing high school students
for college than to prepare them for technical careers; in fact,
perhaps DLWD funds should go to education at the [middle] and
high school level. The Anchorage School Board opened the King
Career Center for summer school and after school classes in
response to a high demand; career and technical education keeps
kids in school and the state should continue to promote and
provide technical training to Alaskan students.
5:38:35 PM
MR. LYNCH agreed and emphasized that the state must identify
effective programs and make the system more efficient. He noted
that proposed legislation is under consideration; furthermore,
it is widely accepted that technical and traditional education
and labor are intertwined, but the system is not.
5:40:33 PM
CHAIR RAMRAS introduced three officers of the Alaska Chapter of
the Future Farmers of America.
5:42:11 PM
CHAIR RAMRAS asked Mr. Lynch to submit an outline of Alaska
Workforce Investment Board goals and activities. He opined the
cornerstone for a robust economy in Alaska may be the cost of
energy; in fact, the cost of energy is the obvious "driver" in
areas of the state that are in decline and areas that continue
to thrive.
5:44:30 PM
MR. LYNCH concurred.
5:45:04 PM
CHAIR RAMRAS opined the expectation of the return of high energy
costs suppresses investment and the hiring of a workforce; in
fact, he asked whether the state could keep a trained workforce
active if energy costs stop growth.
5:46:22 PM
CHAIR RAMRAS invited the FFA officers to make a brief
presentation.
5:47:34 PM
Corinne Ogle, State Reporter, Alaska Future Farmers of America,
informed the committee her FFA team from Homer High School
placed first in the state and second nationally at the National
Environmental Science and Natural Resource competition. The
team solved a problem involving an appropriate housing
development for an identified parcel of land.
5:48:42 PM
RACHEL KENLEY, President, *Alaska Future Farmers of America*,
said the state officers were in Juneau to celebrate FFA week.
The mission of the FFA is to make a positive difference in the
lives of students by developing their potential for leadership,
personal growth, and career success. She expressed her belief
that it is important for Alaska schools to have agricultural,
mining, and fisheries education to develop leaders for the
future of the state. Ms. Kenley said the officers have
presented leadership conferences throughout the state and have
facilitated events such as farm tours. There are seven active
FFA chapters in Alaska with about 150 members. She invited
committee members to the state convention scheduled for April
22-24, 2009, in Palmer.
5:50:58 PM
TAYLOR BERBERICH, Secretary, Alaska Future Farmers of America
(FFA), opined FFA is the best leadership opportunity and she
listed some of her experiences with the program.
5:51:54 PM
DOUG WARD, Director, Shipyard Development, Alaska Ship &
DryDock, informed the committee his company is the private
sector operator of the state-owned Ketchikan shipyard and is
engaged in a public-private partnership supported by the
concurrent development of the infrastructure, the market, and
the workforce of the shipyard in Ketchikan. The shipyard is
creating the capacity and the regional competitive advantage to
attract new private investment and the resulting jobs.
Planning for the shipyard began in the late 1970s following the
expansion of the Alaska Marine Highway System (AMHS) in the
1960s. Previously, all activities of the AMHS were based in
Seattle at Pier 54. The facility in Ketchikan was built to
bring those activities and jobs back to Alaska. The AMHS has
now grown to include the Ketchikan International Airport ferry,
the [Craig] Inter-Island Ferry Authority, and the new Cook Inlet
Ferry.
5:56:36 PM
MR. WARD continued with a history of the shipyard and said the
Department of Transportation & Public Facilities (DOTPF) bought
the shipyard site in 1985; in fact, shipbuilding has been sited
there since 1922. He displayed slide 2 of the shipyard as it
exists today with the M/V Matanuska in floating dry dock and the
M/V Columbia and a "fast ferry" dockside. Slides 3 and 4
displayed the current development plan and recent expansions and
improvements to the shipyard. Mr. Ward explained how the
floating dry dock works. He emphasized that all the work done at
the shipyard is based on globally competitive standards,
including the infrastructure of the yard. Workforce training at
the shipyard requires repeatable and enduring standards to guide
the lay-out of the work, development of the workforce, and the
completion of the product. This is because shipbuilding is
complex and must be competitive. In 1999, ASD developed its
plan to expand the shipyard by building the infrastructure, the
market, and the workforce concurrently to ensure success and
guarantee full employment. He also noted the intent to reduce
the cost of the operation of the AMHS. Mr. Ward discussed the
damage to the M/V Lituya that was blown away from its moorings
at Metlakatla on January 30 [2009]. There was considerable
damage done by the pounding on the rocky island where the ship
came to rest. He pointed out the savings in time and expense by
having a regionally available maintenance facility; in fact,
just towing the ship to Seattle would take one week, and would
have been dangerous to life and the environment. Furthermore,
Seattle shipyards have no relationship to the AMHS, but Alaska
Ship & Drydock has a commitment to maintain and reduce the cost
of operation AMHS ferries, and does what is needed to return
ships to service. Mr. Ward predicted in three to five years
employment at ASD will increase from 139 to about 350 full-time
jobs in advanced manufacturing.
6:04:16 PM
MR. WARD spoke of the manufacturing of the M/V Susitna, the
world's first twin hulled icebreaking ship. He said, "People
that know [said it is] one of the most complicated ships to be
designed in the last 100 years." The ship is an Office of Naval
Research Demonstrator Project to be used by the U.S. Marine
Corps to ferry marines and battle tanks 100 nautical miles from
forward-located sea bases at 30 knots in 15-foot seas. Upon
approach to land, the ship converts to a barge landing craft.
Its demonstration use will be as a ferry crossing the Knik Arm
from Anchorage to the Mat-Su Borough; in fact, the Navy was
interested in a partnership with the borough to build the ship
because the Knik Arm, with winter weather, currents, and extreme
tides, is one of most difficult transits in the world.
6:06:08 PM
CHAIR RAMRAS asked how the contract was obtained.
6:06:41 PM
MR. WARD explained that this ship was designed by Lockheed
Martin for the U. S. Navy Sea Base Initiative. This is a science
and technology project as indicated by the transformability of
the vessel. A Lockheed Martin engineer suggested the waters of
Knik Arm for testing at the same time the Mat-Su Borough was
exploring the purchase of a ferry to Anchorage. John Duffy,
representing the Mat-Su Borough, stipulated that construction of
the ship must be in Alaska. The Office of Naval Research
inspected the shipyard and determined that ASD could build the
$60 million ship. Subsequent commercial use for the ship is
high because of its stability in high seas and the design of the
hull. In addition, the ship is well suited for multiple use
with four 27,000 horsepower, fuel efficient, engines; in fact,
for ferry operations, two engines operating at 15 knots will use
7.5 gallons of fuel per hour. Mr. Ward concluded that as the
U.S. looks forward to the opening of the northern sea routes,
this ship is the global standard for polar transportation and
research.
6:12:02 PM
MR. WARD continued the presentation and spoke of the Chevron
Coal Harbor Marine Fueling Station ASD is building for the Port
of Vancouver. Alaska Ship & Drydock is also the low bidder on
the Ketchikan replacement ferry. This is significant in that
the fueling station will be a manufactured export from Alaska.
Furthermore, the shipyard needs to grow beyond service only to
AMHS because the AMHS maintenance budget is not large enough to
support a shipyard with the capabilities required to perform the
necessary maintenance. The shipyard is primarily equipped to
service ships 250 feet in length or less, and this length
includes nearly all ships for the U.S. Coast Guard, the National
Oceanic and Atmospheric Administration (NOAA), and approximately
2,000 private vessels.
6:15:22 PM
REPRESENTATIVE DOOGAN asked whether the shipyard is too small to
build the new Alaska class ferry.
6:15:50 PM
MR. WARD said no. With its dry dock, his company can build a
ship 450 feet long using modular sections. He said ASD is very
interested in building new ferries for AMHS; however, ships are
the most complicated structures in the world and a shipyard is a
floating city, similar to the public works department of a city.
The shipyard is also highly regulated and, during the design of
a ship, a marine architect must consult with the shipyard and
"design for producability." During this process the shipyard
may reject a certain proposed design. He said that ASD wants to
work with AMHS as a team member and begin with procurement in
order to keep costs down. This is a departure from the standard
"design, bid, build," process that adds costs for contractor's
risk and damages. A more effective process with a public
private partnership is to identify the classes of risk that
exist, and have the risk managed by the appropriate partner.
6:21:30 PM
MR. LYNCH displayed a slide showing advanced manufacturing
ship's hull modules for the M/V Susitna and explained that the
stiffened hull panels have compound curves and 40 miles of
welds. In addition, the accuracy standards are no more than a
1/16th inch tolerance on a 38 foot module.
6:22:59 PM
REPRESENTATIVE DAHLSTROM questioned the wisdom of the government
always granting a project to the lowest bidder.
6:24:00 PM
MR. LYNCH observed that the federal highway system is learning
that its procurement practice is breaking the back of the nation
and the states; in fact, federal agencies have found guidance
from global best practices that are successful in six European
nations. This system is called "effective public private
partnering for innovative and alternative procurement." For
example, contractors can now file for "special experimental
project 15 status" and, if granted, can demonstrate a faster,
better, and cheaper program. He further described time-saving
technology in use at the shipyard that was inspired by railroad
manufacturing techniques.
6:27:46 PM
REPRESENTATIVE TUCK asked whether ASD has the rights to the
design of the ship for future mass production.
6:28:22 PM
MR. LYNCH said that his company has exclusive license on the
original Lockheed intellectual property. He then described some
of the history of the conversion of the company from the pulp
mill maintenance plant to a shipyard.
6:30:21 PM
REPRESENTATIVE TUCK asked for the period of time from the design
of the ship to completion.
6:30:35 PM
MR. LYNCH responded that the design process has taken years and
the ship is 50 percent completed. He then turned to the subject
of workforce development. Mr. Lynch has been on the Alaska
Workforce Investment Board for five years and noted that the
governor directed the commissioner of DLWD to reorganize the
board and put it to work. He stated that the board now has
fiduciary control of the funds directed for career training in
the state, including career and technical education in the
schools that is supported by the commissioner of Education and
Early Development. In 1999, while attending a shipyard
conference in Washington D. C., Mr. Lynch learned that U. S.
commercial shipbuilding production was less than one-half of one
percent of world production. Northern Europe is now building
the large cruise line ships, and Japan makes "big box" ships.
The military launched an investigation that led to the re-
discovery of a historical training program developed in the U.S.
during World War II. This training program successfully trained
a novice, and female, workforce in the U.S. during the war, and
then was used to re-build Europe and Japan after the war. The
document, "Training Within Industry," was lost over time in the
U.S. until April 2006, when the document was re-published. In
2000, ASD adopted another partnership with the University of
Alaska and began developing a model training plan for structured
on-the-job training: apprenticeship. Alaska Ship & Drydock also
adopted the country's first catalog of skill standards for
shipbuilding and a program for leading multi-skilled, self-
organizing work teams. This guiding document will be North
America's first multi-skilled shipyard production worker
apprenticeship program.
6:40:13 PM
MR. LYNCH advised that the workforce needed in Alaska must be
prepared for whatever task presents itself; a workforce that can
self-organize and that is multi-skilled. He stressed that
Training Within Industry (TWI) teaches workers how to think
critically about the job, how to improve the work process, and
how experienced workers can train learners by "telling, showing,
doing." He described some of the recent high school graduate
trainees at ASD and their successes. Mr. Lynch displayed a
slide of shipyard career paths and major processes, and noted
that apprentices are not productive for the first two years of
training. Then, they can enter the multi-skilled, "shipbuilder"
apprentice program. The career path then leads the worker to
specialties that may need further education. He stressed that
ASD's successful apprenticeship program can be adapted to any
industry. Moreover, students can begin learning on-line for
credit in high school, or through the UA community college
system.
6:47:22 PM
CHAIR RAMRAS asked whether ASD is a for-profit entity and
whether it is profitable. He also asked for the company's
owners and whether it is subsidized by the Alaska Industrial
Development and Export Authority (AIDEA).
6:47:48 PM
MR. LYNCH informed the committee that AIDEA owns the shipyard
property. Alaska Ship & Drydock has not borrowed money from
AIDEA, but has secured $77 million in public funding to build
the shipyard. The company makes a profit and pays a dividend
to AIDEA; however, in order to have a sufficient volume of work,
the shipyard must build its infrastructure and increase its
workforce to 350 employees. He stressed the need for a
knowledgeable and skilled workforce to grow the company and
increase profitability. Mr. Lynch pointed out that ASD is
required by AIDEA to pay into a dedicated repair and replacement
fund.
6:49:46 PM
REPRESENTATIVE TUCK asked for the source and handling details of
the steel used at the shipyard.
6:50:00 PM
MR. LYNCH said building the M/V Susitna outside is a challenge
due to inclement weather. The source of the steel depends on
the job. For example, using the standard "design, bid, build"
bidding practices for the construction of the new dry dock,
North American sources failed to win the bid for the procurement
of steel. Thus, the authorization was given to buy on the
global market and U. S. Department of Commerce, Economic
Development Administration dollars went to China for the steel.
Once again, Mr. Lynch encouraged the use of the innovative and
alternative procurement process.
REPRESENTATIVE JOHANSEN expressed his enthusiasm about the
shipyard.
6:52:56 PM
REPRESENTATIVE DOOGAN recalled taking a tour of the shipyard.
6:53:25 PM
CHAIR RAMRAS asked what the state can do to support ASD.
6:53:33 PM
MR. LYNCH pointed out that the workforce plan is not cheap. For
example, training and design modules and contract specifications
need to be part of a handheld and wireless network in the yard.
He stated that shipyard occupations overlap with those of
pipeline workers and cautioned that the shipyard may lose
trained employees to the proposed gas pipeline project. Alaska
Ship & Drydock, and other incumbent businesses throughout the
state, must be protected from the loss of their trained
workforce.
6:55:30 PM
CHAIR RAMRAS assumed the state has exclusivity with ASD.
6:55:49 PM
MR. LYNCH reported that ASD competes for jobs such as repairs
for British Columbia Ferry Services, Inc. He returned to the
subject of state assistance and said that the state can fund,
streamline, and improve the State Training and Employment
Program (STEP) through proposed legislation.
6:57:03 PM
CHAIR RAMRAS recommended that ASD contact World Trade Center
Alaska for marketing assistance in the Pacific Rim and West
Coast markets.
6:57:29 PM
REPRESENTATIVE TUCK reiterated his vision of new manufacturing
in Alaska and further investment in the University of Alaska and
technology education.
6:58:54 PM
CHAIR RAMRAS thanked the presenter.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Economic Development, International Trade
and Tourism meeting was adjourned at 6:59 p.m.
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