Here’s why a Blaine manufacturer could be hurt by Navy decision to buy ship chains overseas
A longtime Blaine manufacturer is at risk of being severely impacted by a U.S. Department of Defense decision to outsource ship anchor chain production overseas.
U.S. Representatives Suzan DelBene and Rick Larsen were among 13 congressional leaders who signed a letter urging Congress to close loopholes that allow the Defense Department to procure naval ship components from foreign sources.
DelBene said in a press release that she is particularly concerned about a potential contract change with Lister Chain & Forge of Blaine. Since 1985 the 110-year-old company has landed contracts with the U.S. Navy and Coast Guard to build anchors and chains whenever new ships were being built.
According to DelBene’s office, the Navy is currently building a new class of fleet oilers, the John Lewis Class. Under current law, the Defense Department must purchase American-made anchor chain under a certain size, which is 4 inches in diameter.
Initially, the anchor chains for the first ships in this class were built with American-made steel chains from Lister. However, the Navy recently took advantage of loopholes in current law by accepting a design change that increased the size of the chains to 4.02 inches in diameter to cut costs by procuring the chain from an overseas supplier, DelBene said.
Using the loophole would result in some cost savings for the Department of Defense, but DelBene said the modification equates to approximately 0.1% of the cost of the remaining ships in the class.
“The implications of this decision have a significant negative impact on smaller U.S. manufacturers,” DelBene said in a news release.
Lister Chain & Forge has had its facility in Blaine since 1988 and currently employs 36 people.
Lister President Mike Stobbart said in an email that they had known about the size limit loophole, but this is the first time they have seen a design change applied mid-project to enable offshore purchase of the ships anchor chain.
“Our facility here in Blaine was designed to produce the 102mm (4.02 inches) product being purchased offshore, therefore no change or investment would be required,” Stobbart said.
Without closing the loophole, Stobbart said they would anticipate some layoffs at the company starting next year.
“Lister is the last anchor chain manufacturer remaining in the U.S. industrial base and this change (closing the loophole) would support Lister’s viability going forward,” Stobbart said.
If the Department of Defense is allowed to shift the work to an overseas supplier, it would equate to the outsourcing of more than 3,000 tons of steel that would otherwise be made in the U.S. with American labor, according to the letter.
“Attempts to circumvent the law, specific to domestic content and procurement requirements, sets a dangerous precedent for American manufacturers and our economy,” said Philip Bell, president of the Steel Manufacturers Association. “Embracing President (Joe) Biden’s Buy America directives while protecting the sole U.S. supplier of anchor and mooring chain will bolster domestic steel production and ensure that we are able to source critical items on our shores and not from abroad.”
