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December 1, 2017 | Local, Naval
Chantier Davie won’t take ‘no’ for an answer
By Kevin Dougherty. Published on Dec 1, 2017 10:46am
QUEBEC – Chantier Davie in Lévis, across the St. Lawrence from Quebec City, will be forced to lay off 800 shipyard workers before Christmas without a new contract to build a second supply vessel for the Canadian navy.
“We're not taking no for an answer on that,” Davie CEO Alex Vicefield said in a telephone interview on Thursday, after Defence Minister Harjit Singh Sajjan told Le Journal de Québec last week through his press attaché that the government does not plan to buy a second supply ship.
In an email response Thursday, Sajjan's press attaché Bryne Furlong reiterated that, “Navy and Coast Guard supply requirements have been extensively studied and are subject to long-term planning, which does not include a second supply vessel.”
The layoffs have begun, now that the Davie workforce has completed — on time and on budget — conversion of the German-built container ship Asterix into a supply ship to deliver fuel, water, food and supplies to the ships of the Royal Canadian Navy.
Davie's plan now is the $600 million conversion of the Obelix, a sister ship to the Asterix, into the navy's second supply ship. Vicefield said Ottawa's plan calls for paying $2 billion each for two new supply vessels, the first of which will only be available 10 years from now.
“Why do we need to build these ships for $2 billion each?” Vicefield asked, noting the Asterix and Obelix cost $600 million each and are superior vessels.
“I'm not a political activist but we believe in the project and we delivered,” Vicefield said.
In 2011, the Harper government unveiled its National Shipbuilding Procurement Program, awarding $38-billion in contracts to build ships for the Navy and Coast Guard to Irving Shipbuilding Inc. of Halifax and Seaspan Shipbuilding of Vancouver.
Davie, emerging from bankruptcy at the time, is Canada's largest shipyard and was excluded.
Cost estimates have risen since then, Vicefield noted, with the cost ballooning to over $100 billion. And in the six years since the plan was announced, the two winning shipyards have delivered no ships.
Officially, Seaspan is to launch its first replacement supply ship in 2021.
But Vicefield noted that Andy Smith, the official responsible for shipbuilding in the federal department of fisheries and oceans, told a Commons committee Nov. 7 that Seaspan has a backlog of three ships to build before work on the first supply ship can begin in 2023, for delivery in 2027.
Vicefield said that in spite of granting the lion's share of shipbuilding contracts to Halifax, the Conservatives where shut out in Atlantic Canada in the 2015 election, and Steven Blaney, the Conservative MP representing Lévis, was re-elected even though Davie was excluded from the National Shipbuilding Procurement Strategy.
“The key point here is that shipbuilding contracts do not win votes,” Vicefield said. “But major procurement scandals bring down governments.
“If I was in government, I would be worried about a major procurement scandal, where you are spending five, six times the cost to buy a ship than any other country in the world pays and nothing is being delivered.”
The Asterix is also a hospital ship and can deliver humanitarian aid in the event of major natural disasters, such as a tsunami or a devastating hurricane.
Davie stepped into the breach in 2014, when the navy's two existing supply ships were scrapped and plans by Seaspan to build two replacement supply ships were a distant prospect.
The Harper government granted Davie a contract to convert the Asterix into a supply ship for about $600 million as a private-public partnership, with Davie managing the project from stem to stern, its financing, as well as providing its civilian crew and leasing the ship to the federal government for five years.
When Justin Trudeau led his Liberals to power in 2015, Irving Shipbuilding leaned on Liberal ministers from the Maritimes to have the contract cancelled.
But the work was underway and Ottawa did not block the Asterix project.
The Halifax-based and crewed Asterix will supply Canadian navy ships off the east coast, while off the west coast Canadian naval vessels will be supplied by Chilean and Spanish navy supply ships.
“Why would you do that when you can put the money back into Canada and ensure the jobs of 800 people here for another two years?” Vicefield said. “It makes no sense.”
Vicefield regards the Harper government's plans, renamed by the Liberal government as the National Shipbuilding Strategy, as “mind-boggling” and “a bit of a joke.”
And he believes Canada can have three shipyards, including Davie, to build and maintain naval and Coast Guard vessels.
“There are about 50 large ships that need replacing,” he said, noting the average age of the Coast Guard fleet is 40 years. “So there is enough work for sure for three shipyards for the next 30 years.”
“We haven't been pushing against the National Shipbuilding Strategy,” Vicefield said. “I think it is going to fall on its own.”
Irving, which is now building ships in Romania, and Seaspan, which has ordered two ferries to be built in Turkey, are defending the plan, and so far have political support.
“They see the writing on the wall,” Vicefield said. “They want to destroy the competition. They see that now they have the upper hand.
“But we're not going to let that happen,” he insists.
“We're convinced the new government, the Liberals, will actually see sense.
“But it is taking time for them to get their feet under the desk.”
https://ipolitics.ca/article/chantier-davie-wont-take-no-answer/
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Silicon Valley-style innovation clusters to include aviation companies
Canada's aviation and aerospace industries will play a key role in the creation of innovation superclusters similar to Silicon Valley. Air Canada and PAL Aerospace are among hundreds of companies involved in creating five superclusters across Canada, with a $950 million investment from the federal government that will be matched dollar-for-dollar by the private sector. “We think this is important for Canada,” said Catherine Dyer, chief information officer for Air Canada, in an interview with Skies. “We really view ourselves as a leader in this space, and to build capability in this part of the country, and more broadly for Canada, are two things that we think go very nicely together.” Air Canada will be part of the Quebec-based SCALE.AI supercluster, which aims to use artificial intelligence and robotics to build intelligent supply chains, making Canada a world-leading exporter. “Our hope around this is that it will help us become more efficient in how we deal in our operations excellence program, as well as in our cargo business,” said Dyer. “But from my perspective it has got probably further-reaching opportunities in terms of how we enable employees and customers in creating that Air Canada experience that we're all very focused on. “So most immediately it's going to be focused on the logistics components of our business. But we do believe that artificial intelligence, more generally, has got some fairly broad-reaching implications for our company.” Air Canada was a key player in creating the supercluster submission in late 2017 and sees its involvement as a step toward becoming a global leader in supply chain management. SCALE.AI includes 120 partners across Canada from a wide range of industries, including transportation, telecommunications, mining, food, and oil and gas. “We [Air Canada] would be looking at how we could use artificial intelligence to help us see things maybe we don't see when we're looking at it with human brains,” said Dyer. “That really is the purpose of artificial intelligence, is to take the collective wisdom of many people, and the computing power of machines, and apply it to the business problems that we have today.” Air Canada plans to use artificial intelligence to develop new tools that allow it to better manage cargo capacity, resulting in better customer service. “Timeliness is essential when shipping fresh products and employees will have better tools to forecast the need for space in temperature controlled facilities, facilitate tracking and ensure timely delivery,” said Isabelle Arthur, senior media relations manager for Air Canada, in a statement. “Air Canada already uses artificial intelligence in revenue management, to forecast aircraft maintenance, in marketing, in elevating customer experience and communications by partnering with government, universities in Toronto and Montreal to help Canada retake a leadership position.” PAL Aerospace will be part of the Ocean Supercluster in Atlantic Canada, which plans to use innovation to improve competitiveness in ocean-based industries like fisheries, oil and gas, and clean energy. The company will design and execute projects that encourage collaboration with other supercluster members, small and medium-sized enterprises (SMEs) and academic institutions, said Derek F. Scott, vice-president of program development for PAL Aerospace, in a statement to Skies. “We aim to use supercluster initiatives to advance our digitalization objectives in our modern ocean surveillance programs such as the ice management services we continue to provide the oil and gas industry today,” he said. “In addition, we intend to use the program to advance opportunities to strategically insert other entities such as SME companies into our solution and supply chain for our domestic and international customers.” He noted Canada has the longest coastline in the world, which spans some of the most challenging ocean environments, including the North Atlantic. “Innovation is a solution to challenge, and Canada has an ocean of opportunity to drive innovation into technologies and capabilities that contribute to Canada's economic growth, sustainability and export growth,” said Scott “PAL Aerospace is a leading example of how ocean innovation contributed to its success and the Ocean Supercluster initiative will now give us an opportunity to capitalize on that strength and create even more success for PAL Aerospace and for those companies and entities that work with us on the program.” Along with the SCALE.AI and Ocean superclusters, three others are planned: The Advanced Manufacturing Supercluster in Ontario, which aims to connect Canada's technology strengths to its manufacturing industry; The Protein Industries Supercluster, based in the Prairies, which intends to make Canada a leading source for plant proteins; and The Digital Technology Supercluster, based in British Columbia, which will use big data and digital technologies to unlock new potential in sectors like healthcare, forestry and manufacturing. More than 450 businesses, 60 post-secondary institutions and 180 other participants are involved in the five supercluster initiatives, according to a government news release. It's expected the superclusters will create 50,000 middle-class jobs and grow Canada's economy by $50 billion over the next 10 years. https://www.skiesmag.com/news/silicon-valley-style-innovation-clusters-include-aviation-companies/