Northrop Grumman and Avondale Shipyard

Speculation turned into reality Tuesday July 13 when Northrop Grumman officials announced the Avondale Shipyard facility will wind down in 2013. Grumman, one of the largest defense contractors in the United States will consolidate all of its Gulf Coast operations to its Pascagoula, Mississippi shipyard. That shipyard at Pascagoula employs approximately 12,000 workers. Both of the shipyards were involved in building the Navy's LPD-17 landing vessels.

Louisiana's elected officials say Avondale employs about 5,000 workers who will be out of a job if the situation comes to pass. They were hoping the last two LPD-17's would be built at Avondale which would have kept the Avondale facility in business a little while longer but Grumman put that to rest with their announcement.

In a Times Picayune story dated 7-14 concerning the Avondale matter Grumman CEO Wes Bush was quoted as saying: The consolidation will reduce future costs, increase efficiency and address shipbuilding overcapacity. This difficult, but necessary decision will ensure long term improvement in Gulf Coast program performance, cost competitiveness and quality.

Bush's statement deserve some comment. It's obvious the Avondale shipyard did not fit into any future plans of Grumman unless their two other shipyards had overflow contract work and Avondale was needed to fill the void. Avondale did not fit in with Grumman's need to consolidate, reduce future cost and increase efficiency. Bush's statement also seem to confirm what was stated in another Times Picayune article dated 7-11 that reported: James McCaul, a shipbuilding expert at International Maritime Associates, Inc., said: Avondale's equipment is probably obsolete. I doubt much has been done to upgrade the facility. Avondale ships have also been plagued with malfunctions and setbacks, including cost overruns, construction delays, poor welding, leaks and computer design flaws. Does that mean Grumman let the Avondale facility loose its competitiveness because it had two other shipyard facilities that were kept up to date, especially the one in Pascagoula, Mississippi.

This situation reminds me of an old story where nothing is learned from past experience. Prior to Grumman taking over Avondale, Avondale was in business for many years and did more work unrelated to Naval shipbuilding than they did under Grumman. Avondale survived all of those years. When Grumman took over Avondale we experienced a rerun of a large corporation eliminating a competitor. It's a rerun in Louisiana of the many take overs of independent oil companies by the major oil companies promising more drilling and production that never happened.

Now some of our elected officials in Louisiana want the federal government to give out more defense contracts so Avondale can stay alive. These are the same elected officials who say they hate federal spending. They completely missed Grumman's point of why they are shedding Avondale. Avondale simply does not fit in their plans any more and with the Navy contract coming to an end it gives them an excuse to cut their losses.

No one wants to see 5,000 workers loose their jobs but it is another rerun of corporate America's misplaced priorities. We do not have to look any farther than the BP explosion. BP and the oil industry still have no answers 3 months later, 12 workers were killed, other injured and many elected officials and oil industry representatives oppose the moratorium. They have completely forgot about those workers killed and or injured. Companies as large as Grumman will survive, take over other companies to eliminate competition and the same process will start all over again. Workers will be laid off but their CEO's and executives will continue to receive their bonuses. And elected officials will continue to collect campaign contributions from corporate lobbyist at the same time.

Louisiana Big Mouths: Governor Bobby Jindal and Plaquemines Parish President Billy Nungesser

Those two Louisiana officials are still at it passing the buck to the federal government as having no strategy to fight the BP oil spill. They are mad because the U.S. Corps of Engineers has not approved their rock jetty dam idea near Grand Isle. The scientific and environmental communities have concerns rock jetty's could do more harm than good. There is also the question, "who will remove the rock jetty's after the spill is cleaned up."



The Times Picayune in a story in its July 7th issue says as follows: Col. Alvin Lee, the commander of the corps New Orleans District, noted in the letter denying the permit Saturday that he did not believe there were sufficient plans to deal with the removal of the rocks after the spill eventually subsides.

No responsible party to ensure timely structure removal to minimize environmental harm has been identified; no restoration plan to mitigate environmental damages has been furnished; and insufficient baseline date from which to assess project-related damages has been provided. Without a detailed written plan of action that is agreed to by all parties having interest in this project, I have no confidence that remedial actions will be taken in a manner that assures protection of the environment.

In other words, no plan was submitted with the permit to the Corps to remove the rock jetty when they were no longer needed. Sounds too much like BP and the oil industry who had and still have no plan to cap a blow out and remove the spilled oil from the waters of the Gulf timely. Jindal and Nungesser remind me of so many other Republicans who like to talk tough but have no plans of their own to deal with the spill. Lets compare those two loud mouths to what Mississippi is doing.

In an article in the Times Picayune of 7/7 Mississippi is using $20 million of the $50 million BP gave so far to build and lease skimmers after they discovered BP and the Coast Guard command did not have enough skimmers. Mississippi's oil disaster plan has been to spot oil while it was miles out from the barrier islands and Mississippi sound then skim as much as possible before it makes landfall. The skimmers are being built in Mississippi and will produce a total of 27.

Elected officials have the responsibility to protect state lands. All it takes is leadership, something that is lacking in Louisiana. Too many elected officials in Louisiana are still willing to protect BP and big oil and try to pass the buck and blame on the federal government. Jindal's and Nungesser's words to the federal government, Lead or step aside, should be addressed to themselves.

The National Economy: Continued Improvement But Still A Ways To Go

The U.S. Department of Labor announced that unemployment at the end of June was 9.5%, down from the 9.7% at the end of May. Job creation for June was 83,000 from the private sector which was almost nill in May. Approximately 225,000 part time census workers lost their jobs because the U.S. Census Bureau completed it work.

This job picture is not rosy because it is estimated the economy needs to create 200,000 jobs a month to lower unemployment. However, the job picture and the economy is improving, although not fast enough to put the unemployed back to work timely. The turn around is slow but the job losses have been reversed and the economy is in positive growth.

The Obama administration needs to continue to monitor the situation and do every thing in its power to foster continued job growth, lower unemployment and a sustained economy. The Republicans in congress won't help and can't help for two reasons. (1) They are on record of being the party of NO and wanting to see the Obama administration fail. (2) The Republicans have no record of creating a sustained economy, job creation, low unemployment or balancing the federal budget. The Bush administration can confirm that.

The people should recall according to the U.S. Department of Labor, the highest sustained unemployment in the last 28 years occurred on President Reagan's watch. It stayed at over 10% for 10 straight months from September 1982 until June 1983. It should be noted that Reagan had been in office at that time for over a year and did not inherit an economic meltdown that compares with the one Obama inherited.

Unlike Reagan, Bush 41 and Bush 43 President Obama will act on the deficit and federal debt. It will not be quickly because of the shape the economy is in but it will be addressed. In the mean time, the Republicans in congress will continue to talk about the deficit and debt despite their 20 years of silence under those three Presidents who are responsible for the greater part of the national debt as of this writing. ( See my past commentary dated Dec 6, 2009 titled: The National Debt: Betrayal and Devastation for the actual numbers)

The American people are down when it comes to confidence in government, however, their best chance to improve their economic position and have a better quality of life rest with the Obama administration. The past is proof that Democratic administrations perform best for the nation and it will stay that way for the future. The people who run the Republican party today are proof that they embrace an anti American ideology and are unwilling to do those things that really matter and make a difference for the country and its people. They remain the party of blame, personal attacks and have no positive record to run on.

The past tells me it is in the best interest of the country and for the people to give the Obama administration time to continue to turn things around. They will have a fair opportunity to express themselves in the next Presidential election. Fairness is at play here and Mr. Obama is the only President we have at the present time to count on.

The Free Enterprise and Free Market System: Lost In America

I wrote a commentary dated 7/23/08 titled: Innovation: Lost In America, which pointed out how greed among Corporate America has replaced our ability to be innovative and stay on top of economic progress. That result has devastated free enterprise across our country and has destroyed competition. We have become a nation of giving away our revenue to businesses in the form of tax exemptions and etc., at the expense of the people's needs.

And individual states are at the forefront. Lets just take a look at what is happening. States are granting long range tax exemptions for businesses to be located in their state even though it is not necessary. Owners of professional sports are given millions of dollars in concessions to multi million dollar owners who can pay their own way. All of this loss revenue while the states are running huge deficits.

Every state has a built in advantage to lure business and a free market system allows businesses to compete or fail based on those principals. Smart business people find a means to compete without receiving tax exemptions. The problem is businesses have to constantly innovate to progress but why innovate when states are falling over each other to build them new plants or give 10 years of tax exemptions at the expense of the tax payers.

Louisiana is a prime example. The legislature just passed a $26 billion budget for next fiscal year which contains approximately $7 billion of tax exemptions. The owner of the Saints football team has seen his equity in the team increase from $78 million to over $900 million, yet he is still receiving millions of dollars of tax payers money and Louisiana has to plug deficits in its budget every year. And Louisiana is close to the bottom in ranking in a number of area's compared to other states. To top it all the latest report says Louisiana has approximately 700,000 people without insurance.

State governments and their legislature have to once and for all stop the give away of tax dollars and let competition rule. That would be the true free market system, return innovation and let each state reap the benefits of its natural attractions for business and its built in advantages.

The federal government has given the oil and gas industry billions in tax incentives for over 40 years, yet our country is more dependent on foreign oil now than ever before. During the Bush administration it amounted to over $8 billion and the people got record oil and gasoline prices while oil company executives received record bonuses.

It is past time for state and federal governments to end this unnecessary Corporate Welfare that is paid for by the average tax payer and start using that loss revenue to do what is necessary to advance the quality of life for the people. The BP oil spill in the Gulf is a good example. Here we have a company and industry who has yet to develop a plan or equipment to plug a blow out in offshore drilling timely or a plan and equipment to timely remove the spilled oil from the water of the Gulf before that spilled oil reaches land. It should be noted today is day 72 since the explosion and leak.

The free market and enterprise system is truly lost in America just like innovation. All of the huge profits American companies make go to feed the greed of their executives. It is no wonder the economic and fiscal conditions of the states and federal governments are swimming in debt. It is also no wonder why the economic recession is still with us.

Moratorium On Gulf Drilling Blocked

U.S. District Judge Martin Feldman granted a preliminary injunction prohibiting the government from enforcing the six month drilling ban in the Gulf. The action was a result of a suit filed by Hornbeck Offshore Services, L.L.C., etal. The White House reported it would appeal the decision to the Fifth Circuit Court of Appeals in New Orleans.

A number of elected officials applauded the judge's decision to lift the drilling ban and some urged the President not to appeal the decision. The Times Picayune in its editorial of 6/23 said, The administration's determination to fight the preliminary injunction is disappointing. The same day another full page ad appeared in the TP by BP which has been ongoing.

Hopefully the President will follow through with his appeal and stay on the side of those 11 workers who were killed and the resulting hardships placed on their families. Those elected officials who continue to accept money from oil industry lobbyist during this sad time and continue to blame the President and federal government for the resulting fall out have no character. They continue to be the mouth piece for BP and the oil industry.

Those elected officials and the editors of the TP should be well aware that executives of BP and other oil companies recently testified before congress under oath and said they still did not know what caused the explosion, still don't not know how to timely cap such a blow out and still have no equipment available to timely remove any spilled oil from the waters of the Gulf. And in fact they had no model to test on.

The Times Picayune and elected officials who are against the moratorium should address their rhetoric to the people responsible for the spill to compensate any workers that were harmed. They should think more about the workers killed and their families, that it is over two months since the explosion and the oil industry still has no answers. Louisiana has let the oil industry off the hook with the damage they have done to the wet lands, coastal erosion and the environment and now that industry wants to cut and run with the threat to move their rigs over seas.

I wrote a previous post that when all is said and done with this spill it will be business as usual between the oil industry and elected officials. Money from lobbyist will continue to flow to elected officials and nothing will have been learned. I have seen nothing since the explosion that could lead me to change my mind. Hopefully President Obama will stand tall. He represents the people's last hope in this matter.

Louisiana Governor Jindal, The State Legislature and Balanced/Unbalanced State Budgets

Louisiana is required by law to balance the state budget and every year since Jindal became governor the state has balanced its unbalanced budgets only to become unbalanced again before the fiscal year is over. And the current fiscal year was no exception.

Now Jindal and the legislature has come up with a $26 billion budget for the next fiscal year and he and the legislature already know it will be out of balance and in deficit before the fiscal year is over and in fact many in the legislature has already predicted the deficit will be the larger than in the past.

Once again the state and its people have been high jacked by a republican conservative ideology that gets into the average persons pocket a 100 different ways under the disguise of smaller government. As pointed out by Edward Ashworth, director of the Louisiana Budget Project in a recent comment in the Times Picayune, approximately $7 billion in the states budget is for tax exemptions that don't show up in the states budget and receive almost no scruting. Of course, most people realize those billions of dollars of exemptions go to businesses, the least who need them because the tax code is already stacked in their favor. Those exemptions take revenue from the budget that should be used to improve the quality of life for the people.

The billion dollar surplus that Jindal and the legislature inherited from the previous administration was quickly blown away by a conservative ideology and every year since then deficits have shown up that had to be plugged by cutting the budget. But the $7 billion or so tax exemptions have never been touched. Fiscal conservatives? It does not exist in this administration just like it never existed on the federal level under Reagan, Bush 41 and Bush 43. Their rhetoric sounds good but their actions and lack of leadership and courage speaks loud and clear.

The Oil Industry And The Times Picayune, Part II

The Times Picayune in its double editorial of June 9th called for President Obama to speed up the work on naming the full commission that will investigate the BP oil spill, speed up the investigation itself and reduce the 6 month moratorium called for by the President.

The TP joins the oil industry and Louisiana's elected officials and some business leaders who do not like the 6 months moratorium. They all think it is too long but are silent on how long they think it should take. They dare not stick their neck out. Here is how the TP put it. But the government can take measures to speed up the review and end the deep water moratorium earlier, at least for some rigs. The editorial writer lacks the courage and knowledge to explain how the review can be shortened.

As for the editorial talking about the loss of rigs and jobs associated with the moratorium it was pointed out in Part I no one seemed to care or talk about the 76% reduction in offshore rigs working between 2000 and 2009 as published by the TP on 1/17/10. Like Mr. Beer, the TP is more interested in the oil and gas industry then the long range welfare of the people, the environment, the coast and the seafood industry. President Obama needs to see that the investigation is done properly before lifting the moratorium despite the pressure he is getting to let it slide.

As for Louisiana elected officials, they will continue to take large sums of money from the special interest groups working with the oil industry and will continue to cater to them despite the disaster in the Gulf. And the TP will continue to hang onto every word BP says in its full page ads they are taking our in the TP.

Hang tough Mr. President.

A Lack Of Wisdom: The Root Of The Problem

The BP rig explosion, the resulting oil leak and spillage into the waters of the Gulf is not just a Louisiana problem. According to the location map in the paper each day, BP's well site is located almost directly south of the Mississippi-Alabama state line. The site is closer to Louisiana's land only because South Louisiana extends out into the Gulf some 100 plus miles farther than Mississippi and Alabama.

Mother nature (wind direction, tides, Gulf current and etc.) will determine where most of the oil finally lands. This past week, because of mother nature most of the oil slick has been directly south of Mississippi, Alabama and the Florida panhandle. It is possible for those three states to wind up with more oil on their land than Louisiana, so the spill is not just a Louisiana problem like our elected officials would like us to believe.

The governor's of the four gulf states are looking out for their own interest and will naturally be in conflict with the Presidents responsibility of looking out for the country's best interest. Louisiana and Mississippi governors do not support the Presidents 6 month moratorium. The governors of Alabama and Florida have not taken a hard position on the subject. All four governors support more offshore federal sharing.

Louisiana officials always talk about the risk of offshore drilling because most takes place offshore Louisiana. Louisiana claims it just wants its fair share for its contribution of taking such risks. However the most harm done to our wetlands, marshes and coastal erosion comes from onshore drilling in South Louisiana, yet our elected officials in La., have refused to address the issue even though onshore drilling is regulated by the state. There is no wisdom, courage or leadership among our elected officials in La. to confront the problems caused by onshore drilling. Instead they want to pass the buck to the federal government. Every one knows they want no part of big bad federal government except when they do not have the character to stand up and be counted.

Governor Jindal and other elected officials who continue to play the blame game do not need to possess ESP to know that BP and the oil industry in general are laughing out loud with the blame being put on the federal government instead of where it rightfully belongs, on BP and the industry. Those political contributions are doing just what they are supposed to do, influence our elected officials. And that says it all.

The Oil Industry and The Times Picayune: Part I of II

In the editorial section of the New Orleans Times Picayune dated 6/8 a triple play was sought against President Obama for his moratorium concerning offshore drilling in the Gulf of Mexico. In two commentaries by the TP under the heading "our opinion" and one by Kenneth Beer listed as the Chief Financial Officer of Stone Energy Corp, both oppose the President's moratorium. Part I will deal with Mr. Beer's commentary which is an open letter to the President titled, "Shutdown a Costly Mistake."

That title says a lot about Mr. Beer because the most costly mistake was not the "shutdown" but the death of 11 workers and the family they leave behind. Mr. Beer said nothing about those 11 workers in his entire article. Mr. Beer said there are tens of thousands of workers who will be affected by the moratorium but is silent on asking BP for compensation. I guess he would not like to see a precedent set for future oil spills.

Mr. Beer also says and I quote from his article: On May 27, you received a report from a group of experts that identified the key recommendations to enhance the safety and redundancy of drilling in the deep water. These steps would be more than sufficient to prevent a repeat of the Deepwater Horizon explosion. Every deep water rig has been thoroughly inspected since the April 20 explosion. The rigs and crews are ready to drill and would obviously have an even higher sense of safety. It is time to put them back to work. Mr. Beer is silent as to when offshore drilling should resume but his last sentence seems to say right now.

Mr. Beer went on to say: A senate panel is not needed; neither is a room full of political advisers. You should listen to the engineering experts and follow their operational recommendations. And the experts did not call for an arbitrary six-month moratorium. It is of note Mr. Beer does not like investigations. It should also be noted that the President did listen to the experts when just last month opened up vast new areas for offshore drilling. This was before the explosion.

Mr. Beer goes on to say: In south Louisiana we have certainly had more than our fair share of catastrophes over the past five years. Do not add another one by implementing this moratorium. What about the period before the last five years in south Louisiana Mr. Beer, like the previous 40 plus years where oil drilling and their related operations has had a catastrophic affect on the loss of wetlands, the marshes and coastal erosion that the taxpayers have been paying for.

What we have is an oil company executive who skirted around the real issue here. While reading the article I was expecting to come upon the part where Mr. Beer explains the real story, the lives of 11 workers killed and their family grief and the fact as of this moment Mr. Beer's industry has no equipment or team available to timely plug such a blow out or to remove the spilled oil from the waters of the Gulf before that oil comes ashore. Today is day 50 since the explosion and spill. (No where being timely) And to think this industry has been drilling offshore for over 40 years.

The article was also silent on the fact that President Obama has no problem if the commission finishes its work in less that 6 months and the moratorium can be lifted. Mr. Beer tried to make a comparison between 9/11 and the moratorium. A very curious statement from left field.

I wrote a previous commentary pointing out that offshore drilling activity in the Gulf of Mexico decreased 76% between 2000 and 2009. The yearly average of rigs working in the Gulf in 2000 was 145 and only 35 in 2009. (Source TP article of 1/17/10 and Baker Hughes.) The oil industry now says the moratorium will shut down 35 rigs in the Gulf and workers will be laid off or the rigs and crews will go out of the country. "Question" where did all the rigs and crew members go between 2000 and 2009, that 76%. Did they lose their jobs and did the rigs and crews go out of the country. I do not remember the oil industry or any elected official in Louisiana talking about this. Could it be because an oilman was President for 8 or those years, a time when the price of oil and gasoline was at record levels. That says it all.

The interest of Mr. Beer is his company and the oil and gas industry. The President's interest is the whole country. Mr. Beer is in no position to support his narrow view on the issue alluded too in his letter to the President. And that really says it all.

Part II coming soon.

The Moratorium In The Gulf of Mexico

We have an oil spill in the Gulf of Mexico that has turned into a major disaster, still of unknown consequences, maybe far into the future. It is 48 days since the explosion and spill and the spilled oil in the waters of the Gulf has yet to be removed timely. The plugging of the well by the drilling of two relief wells will not take place until August we are told by BP officials. Mean while the oil industry still has no method to cap the well and stop the spillage.

Yet many of Louisiana's elected officials, oil industry representatives, other Louisiana industries and other leaders are questioning President Obama's moratorium on offshore drilling on the basis of lost jobs in the oil industry and the state because of such shut down. Those people want it both ways. What elected officials and business leaders should be doing is telling the oil and gas industry to direct their drilling activities to the millions of acreage they own, rent or lease onshore Louisiana and else where in the USA that are sitting idle so they can keep their workers busy and on the job until the moratorium is canceled. Any loss of jobs is of the oil companies making and they themselves should take care of their own employees and other industries who have been harmed by the spill.

I can see where all this is leading to. When all is done with this spill it will be business as usual between Louisiana's elected officials and the oil and gas industry. We will have learned nothing because of the corrupting influence that wealth has on our elected officials. President Obama is the only one who can change that and hopefully he will be up to the task.