Jeffboat, Officials Celebrate Company's Turnaround, 1,100 Added Jobs

By Robert Schoenberger
Courier-Journal


'It's incredible,' employee says



June 9, 2006

David Doan started working at Jeffboat in 1973.

The Jeffersonville, Ind., resident has suffered through layoffs, a three-year closing and several changes in ownership. But yesterday, he said he's excited about the company's future.

"In three years, we've gone from bankruptcy to excellency. It's incredible how much things have changed," Doan said.

Now those changes include a major hiring and production expansion.

Jeffboat officials and Indiana Gov. Mitch Daniels announced yesterday that the company plans to add 1,100 jobs in the next three years as it tries to more than double its barge-building business.

"We've gotten the business profitable," said Mark Holden, chief executive of Jeffboat's parent company, American Commercial Lines. "Now we want to expand it."

Indiana offered almost $11.3 million in incentives to help -- $11 million in tax breaks and $295,000 in worker-training funds. Daniels said the expansion is the largest jobs increase he has handled since taking office in January 2005.

"Southeast Indiana's day has come," he said. "And as we build the infrastructure to go with the transportation resources that God gave us, just look out."

Since American Commercial Lines emerged from Chapter 11 bankruptcy protection early last year, Jeffboat workers say that the 172-year-old shipyard is neater, that they have new equipment and that productivity is way up.

Larry Roberts of Louisville said he has seen a steady increase in the amount of work coming in since he started at Jeffboat eight months ago.

"We're getting to the point where it's going to get overwhelming. That's why we're hiring," Roberts said.

At its peak employment years, during World War II when it was building LSTs and other ships for the Navy, the shipyard employed 13,000. The company now employs about 1,000 people at the shipyards and will reach employment levels last seen in the early 1980s after it adds 1,100 welders, laborers and equipment operators.

Nick Fletcher, American Commercial Lines' senior vice president for human resources, said most of the new jobs will be in the shipyard and pay about $33,000 a year. One of the biggest challenges is finding skilled workers, he added.

Most Jeffboat workers are welders. Because companies in Louisiana and Mississippi are paying top dollar to help rebuild communities destroyed by Hurricane Katrina, Holden said, welders are hard to find.

"We'd like to talk to anyone who knows how to weld," he said.

Teamsters Local 89 represents about 800 workers at the plant. Union attorney Robert Colone said he doubts Jeffboat will be able to hire as many people as it wants.

"Turnover is 50 percent out there. They're hiring like crazy just to keep up with that," Colone said. "One thousand people in three years isn't going to happen."

To meet hiring needs, Fletcher said, the company plans to teach unskilled workers to weld. The company also plans to step up recruitment efforts by advertising, getting involved in vocational programs in local schools and by working with technical and community colleges.

He added that American Commercial Lines is trying to make Jeffboat a more pleasant place to work. As part of the expansion, the company plans to add buildings and awnings so more work can be under cover. That will mean fewer days lost to bad weather, Fletcher said.

"We're trying everything. I may even stand on the street and say 'Yo' to people," Fletcher said of planned recruitment efforts.

Last year, Jeffboat made 127 barges and had revenue of $139 million. Holden said he wants to build more than 500 barges next year.

For American Commercial Lines, barge production made up 16 percent of revenue last year. Holden said he wants to double that this year to more than 30 percent.

"Over the past 18 months, we've made a lot of changes in how we build barges," Holden said, adding that improved efficiency and changes to sales contracts mean the company is making a profit with each barge sold, something that was rarely the case a few years ago.

Jerry Linzey, manufacturing director for American Commercial Lines, credited Jeffboat workers for productivity gains. Using concepts borrowed from Japanese manufacturers such as "kaizen," or continuous improvement, workers found more efficient ways of doing the jobs, he said.

An example is the paint area.

"Historically, that kind of work would take more than 1,000 man-hours of labor. They cut that in half," Linzey said. He added that the changes were simple things such as having tools and paint stored closer to where they were used.

"We're eliminating wasted time wherever we can," Linzey said.

If recent productivity gains continue, Holden said, building barges should be as profitable as the company's main business -- shipping grain, coal and other commodities on river barges.

Kevin Starke, an analyst with Weeden & Co. in Greenwich, Conn., said increasing barge-building operations makes sense for American Commercial Lines because manufacturing is a lot steadier and more reliable than shipping.

"With transportation, you're subject to weather, demand for grain, demand for coal, a lot of vague things," Starke said. "With barge building, you're looking at a very, very steady outlook for at least the next three years."

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20060609/NEWS02/606090378

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