Rob Stuardi:
Matt, thanks for joining me. I thought it'd be a good idea to catch up and just see the pulse on what's going on with Shipbuilders Council of America. For those that are not familiar with the Shipbuilders Council of America – for short, SCA – could you just kind of tell us a little bit about the SCA and who the members are with the SCA?
Matthew Paxton:
Well, first of all, Rob. It's good to see you. You look good. Glad to hear you're back in the office. The Shipbuilders Council of America has about 37 shipyard companies that have about 80 facilities nationwide. Great Lakes, Alaska and Hawaii. We have 105 member companies – partner companies – that represent the supply chain and that entire coalition represents pretty much the entire shipyard industrial base here in the United States.
We’re a national advocacy organization so we are housed here in Washington, D.C. and we focus on policies and programs that really impact the shipyard industrial base. While we care greatly about our shipbuilders, equally as important is our ship repair yards that maintain and get to work the Navy ships and Coast Guard ships that are so vital to our national and homeland security.
But as you know, Rob, because you're the chairman of the industry partners committee, our partners, our supplier companies have a big voice in this trade association. As you know, we have three board seats now on the SCA board that's dedicated to companies that are in the supply chain of the shipyard industrial base. And I think that's really the great aspect of this organization. While we're focused heavily on shipyards, and what the shipyards do in our nation's economy, the supply chain touches every state in the Union, and that supply chain has a lot of importance. And so, your leadership on the industry partners committee has been part of that. Last thing I'll say on this, because you're hearing at every meeting you come to, is we support policies like the Jones Act that maintains the commercial shipyard industrial base here. While we build government ships, and that's really important, we build 40,000 commercial vessels upon the waters in the United States. And again, doing the work here back in Washington, DC, we're constantly talking to Congress and the Administration on policy and programs that really help the shipyard industrial base.
Rob Stuardi:
We've enjoyed being a partner member of the SCA and we get a lot of benefit out of that and it's a great organization. We're just we're glad to support shipbuilding and ship repair. When did you realize that COVID-19 was going to be such a big issue? I know when it struck for us, but for you. What did you know that it was going to affect the SCA?
Matthew Paxton:
Well, as you know, Rob, because we've been working together for many years now. One of the great aspects of this trade association, we get together three times a year, or four times a year if you include the National Ship Repair Industry Conference. And that fellowship, that camaraderie and coming together, and working one-on-one with business issues is a big part of what this trade association does. And so it was about two weeks out from National Ship Repair Industry Conference, which was going to be held here in DC on March 16, and we're sitting there going, well, this is becoming a problem -- you're hearing government regulations, some requirements coming out of the DC office, mayor's office, about, hey, you can't have a conference with more than 50 people. And as you know, our National Ship Repair Industry Conference brings in about 150 people. So we started seeing that about two weeks out from March 16 and started to really go into, okay, how do we manage this? And what do we do next? And obviously the first thing we were concerned about was, what do we do with 150 people coming into DC relatively quickly?
So the first thing we did, Rob, and I know you're aware of this, is we stood up our COVID-19 standing committee and that committee went to work right away, meeting every week, trying to figure out what we need to do. And so while we weren't able to have the National Ship Repair Industry Conference obviously together, we weren't able to have that virtually either, because things change so rapidly.
So we're going to figure that out. I think we're aiming for a fall meeting to get that conference back together. But yeah, it was early March, Rob, when things started happening for all of us.
Rob Stuardi:
What are you doing to adapt to that now, because we can't have the meeting, we were going to have the spring meeting in DC. We were going to have NSRA, and then we're going to have the SCA meeting, and we can't have it. We're not going to have it, but you still have a bunch of trade partners and you got the shipyards that want to get together, meet somehow, what have you. What are y'all doing to adapt to that and try and hold some type of meeting with the way we are right now in the world?
Matthew Paxton:
Well, I mean doing stuff that we're doing right here. Zoom calls have become Saturday Night Live skits. But, it's true, we have to do business differently now. And so a lot of that is going to happen this way. But it's different when you're talking about a conference that 100-and-some-odd people are coming to. So immediately we went into, what is the best platform we can use to get people together and have it be effective? And again, with your leadership as chair of the industry partners committee, that was when we came to you. We said, “what would be valuable for a critical company that wants to get in front of other companies, other shipyards? How would that look, how would that work?”
So we went through a couple different platforms, I think you recall Workcast and some other things. And now we're going to go to GoToWebinar, I believe, and we're going to make it work. I mean that's ultimately how this is all going to go. I think the main thing is we need to do the business of the trade association and we'll probably do that through some type of Zoom call or GoToMeeting-type platform. But then when the general membership meeting meets, we're going to have a more robust platform to be able to bring in key speakers from the Navy, from the Coast Guard, members of Congress, and be able to play that out in a seamless -- hopefully seamless – process, and then also allow for our key member companies to be able to get in front of all of our shipyard members in some sponsorship modes, some ability to put information out on member companies so everyone sees it.
Quite honestly, Rob, what could come out of this is a virtual meeting – we’ll get people a little bit more exposure, because there will be more in attendance and you'll have that ability to put out your company's information and get it out there. Maybe farther. So we're hoping that's the case.
Rob Stuardi:
I think we will, we did the demo yesterday and I think it's going to work well, the partners committee did, and I think when we were speaking yesterday, we had over 90 people are you registered, which is awesome. I think we average 100-and-something maybe at some of the larger meetings. And so I have a feeling we might have a record numbers because it's easier to do, and you can jump on the calls and be on the video… and I think it's where we are now, it's the best you can do. You can't get in front of people, but I really think it's a good opportunity to get together as a community, and as a group and do that.
Matthew Paxton:
I do too. I mean, I think we're all we're all living through it. But I think this is making the best of a really, really difficult situation, and I've had these conversations where, “hey, maybe there's a way we could do a meeting in person” and you start to get into the logistics of it, and until we're at a place where people are secure traveling by air and they feel that they can be safe, it's just not going to happen. Now we're hopeful by the fall that we’ll have the ability to do that. I mean, our focus right now as a trade association is we are going to meet in person in Washington, DC, the second week of October. So that's the plan. And we hope that's what's going to happen.
Rob Stuardi:
Well, I'm excited about that because it will be good to get together. So we know we've had two stimulus packages that have come out and some other bills that are being proposed. What are your concerns with that right now? Are there any concerns with what's coming out from Congress right now or what you've seen in the past from an SCA standpoint?
Matthew Paxton:
From where we sit, as the national trade association representing the shipyard industrial base, we were deemed essential. So we went to work, we never stopped working.
So on the initial tranches of legislation that came out, as you know, there was a heavy focus on maintaining employment and a heavy focus on those small businesses that that needed to keep their workforce in place. So as an industry, we kept going. We kept working and so I think right now where we're looking at, is we know that there's been a lot of costs incurred in trying to make sure we keep our workforce as safe as possible. And I know you know this because of your line of work, but we have a culture of safety. Our shipyards compete aggressively against each other trying to be the safest. So when this started happening, we put in places a lot of PPE, a lot of sanitation, trying to stagger how our employees come in and come out of the shipyard. But there's a cost to that. And ultimately, especially if you're doing government work, that's going to impact some things down the line.
So I won’t get into specifics right here, Rob, but I do know what our shipyards are doing is we're not asking for anything other than we want to keep our people safe and we want to make sure that we're doing the business… because a lot of our shipyards, as you know, it's about national security, it’s about Homeland Security, and if we’re not in operation, we can't do those things.
Rob Stuardi:
What is it been like working on the Hill? Obviously, you're a lobbyist, you go to the Hill, you talk to Congress. What are y'all doing now to still do that? What are your challenges with that, because I'm assuming you can't go up on the Hill.
Can you get someone from the House on a Zoom meeting or from the Senate, and you're able to do that and do your points? Obviously, you talked to him on the phone in the past. You didn't just go up there. So maybe that didn't change. But has this been a challenge for y'all on what your efforts have been?
Matthew Paxton:
I think trade associations have proved their worth during this period because really, we are the collector of a lot of really important information. So, from where I sit, I feel like there was a kind of a, “Now we're going to lean on you, trade association. Give us information.”
So really what has changed is, yes, we're doing Zoom calls and we're doing stuff by telephone, but trade associations like the Shipbuilders Council of America became that much more of an important partner with the Administration and with the Congress because as I said, we still have our COVID-19 standing committee. The first thing we started doing was issuing surveys to all our members to find out, “hey, what are you experiencing? What are problems that you're experiencing? Is there anything from a government regulation that's happening?” And we learned a lot. We are on weekly calls with MARAD -- sorry if people don't know these acronyms -- the Maritime Administration, on phone calls with the Navy, with the Coast Guard, with Military Seal of Command. And we're sharing those data points. And I think we surprised some people when we talked about, “Well, some of our PPE is being diverted.” Now, we support diverting PPE for good causes. But when you're also deemed essential, you need that PPE as well.
So I think what I have experienced is trade associations, especially our trade association, has become that much more important to the Congress, to the Administration, collecting that information. And we've done our part, and our members have done their part, with really good, thoughtful – “I'm not just taking the survey to say the meeting was really good, I'm taking the survey because there’s stuff I'm seeing in my shipyard or my small business in the shipyard industrial base, this is what I'm experiencing.” And all that information was really, really critical to feedback to the government, to the Administration.
Rob Stuardi:
So, speaking about the PPE and everything that the yards are doing… since you represent so many shipyards, you’ve probably seen several or multiple ones that are being innovative from a PPE [perspective] or staying in operation. I know, speaking with some of our [members], obviously they're doing the digital thermal scan to make sure that nobody has a temperature when they're coming in. Obviously, there was a shortness of PPE, but I think all of our yards and probably the ones that you've done in your surveys have gotten the PPE and they're using it. Is there anything else that is innovative in any of the yards that you've seen?
Matthew Paxton:
A culture of safety is where we live, and how we can make sure our skilled craftsmen come in every day and go home safe every night. So, you just mentioned it, temperature readings, spacing folks out, having shifts that are a little bit smaller and migrate in and out at different times, workplace areas that are spread out more and just going above and beyond just so we can make sure these guys who have to work in some kind of a tight spaces are absolutely safe.
Shipyards, as you know, are very innovative when it comes to using every piece of space in a shipyard to make sure you can be efficient and streamlined. What a virus like this does is it causes you to be a little bit less efficient because you got to space things out a little bit. But the yards are willing to do it because you can't just stop the work that's necessary, especially if you're building Navy and Coast Guard ships, but even commercial vessels. Those contracts are fixed term contracts and we gotta go. So, the business has to keep going.
I think one thing, Rob, coming out of this – and this might be a later question of yours – is that, boy, was it an honor to represent industrial base that never stopped working… [one] that said, “Hey, we're essential, we're going to come here and do it,” but I think it puts a lens on [that] we need to maintain some of these critical manufacturing sectors, so that’s what's happening here too.
Rob Stuardi:
What do you see as the long-term effect from this pandemic? Do you see any long-term effects with the shipbuilding and repair industry that you're seeing now?
Matthew Paxton:
Well, I think what it begs the question of -- you know, we have these lengthy policy discussions during our membership meetings. And if you read our weekly reports, there's a constant debate about [whether you] maintain a law like the Jones Act that says if you're going to move something in the United States by water, you have to be on a U.S.-built, U.S.-crewed, U.S.-owned ship. The United States has maintained that policy, a policy we brought from Britain we when we came here, but I think what this pandemic is going to show is from medical devices, ventilators, to just medicine -- what are we going to do as a nation when it comes to manufacturing policy? I would say we're probably better positioned coming out of this to build here, to maintain here, and to manufacture here.
I think the shipyard industry has been a spotlight for that saying, we're still building and repairing our government ships and we can do that because we kept that manufacturing skillset here. We didn't let it go away.
I think maybe long-term, maybe there's going to be more shipbuilding here, there's going to be more ship repair here. Because – do you want to have your vessel repaired in China? I don't know, but we know the policies here. We know the policies that we have to live by here. We're going to live by the highest standards and higher health requirements and that's going to happen. So hopefully, Rob, long-term, maybe more manufacturing or shipbuilding will be done here.
Rob Stuardi:
That would be great. I always like to ask this -- what did you learn the most from this experience? Because I think we've all learned something. I'd be interested to hear what you've learned the most.
Matthew Paxton:
Well, I've learned that as an industry, we're incredibly resilient. There [weren’t] complaints about going to work; there was happiness that had work and they weren't furloughed and that they're able to go in and do critical work in shipyards.
I think as a trade association, we learned that we have to evolve and we have to show value to our membership and we're figuring out ways to do that every day. And again, I point back to you with the role that you played as chairman of our industry partners committee… we absolutely need to drive value for our partner members and maintain those… those are small businesses, some of those guys in our industrial base… and making sure they come out the other side of this. And so, we've learned a lot and we'll probably learn a lot more as this goes on.
And I think one of the things, and this is more of a technical thing, I think we're going to learn a lot at this general membership meeting June 17 and June 18. Because if we have to do this for a little bit while longer, we want to make sure we do it right during that general membership meeting virtually and then improve as we go forward.
Rob Stuardi:
Yeah, I think we're all going to learn from that meeting, and I think hopefully not too many kinks … because this may be a way to get people together in between some of the in-person meetings, where you can use these type of platforms, because it is easier to jump on a Zoom call than it is to get on an airplane, stay in a hotel. I really think it does bring value and I'm excited about it because we do get to hear from multiple people that are going to speak… I think it'll let us really know where we're going, and where the industry's going, so that's awesome.
Matthew Paxton:
That's the whole goal. I mean, and again, your committee is our test run. So we appreciate that. I mean, we've learned a little bit just from those committee meetings, so that's good.
Rob Stuardi:
Yeah. Well, I don't want to keep you. Thank you.
Matthew Paxton:
Absolutely, Rob.