Competition receives mine-sweeper contract; Portship responds with more emphasis on the company's engineering division.

"There are hard times ahead for Ontario shipyards," predicts a somewhat dejected Wes Allan. "We're going to be struggling to survive."

The day before an interview with Northern Ontario Business Allan, the general manager of Port Arthur Shipbuilding Company Ltd. (Portship), learned that a half-billion dollar contract for the construction of 12 mine sweepers was awarded to Montreal-based Lavalin Industries Inc.

A Toronto subsidiary of Lavalin, Fenco Engineers Inc., won the contract. German Marine of Dartmouth, N.S. will design the ships, while Halifax-Dartmouth Industries Ltd. will construct them.

Portship's parent company, Canadian Shipbuilding and Engineering Ltd. (CSE) was vying for the much-delayed contract. Had the St. Catharines, Ont. firm won the contract, the ships would have been constructed at CSE's Port Weller, Ont. and Pictou, N.S. shipyards.

Portship would have received Port Weller's repair work for between seven and 10 years, according to Allan.

"It's hard to visualize the value of the business, but it would have kept us very busy," he said.

During the community's battle to influence the federal government to award the mine sweepers contract to CSE, Thunder Bay-Atikokan MP Iain Angus warned that Portship could close forever without the spin-off repair work.

Allan is not as pessimistic. However, he indicated that for Portship to survive, grain shipments from Thunder Bay's elevators must increase and the size of the Great Lakes fleet must not drop below its current level of 120 ships.

As of Oct. 19 the volume of grain shipped through the port this year had increased to 9.5 million metric tons from 5.9 million metric tons during the same period in 1990.

The port recorded the increase despite disruptions caused by strikes by the grain handlers and Public Service Alliance of Canada employees.

Overall the port had shipped more than 12.8 million metric tons of goods compared to 10.1 million metric tons of grain during the same period in 1990.

According to Allan, the increase in shipments means more ships are at the Lakehead, and the need for repair work increases.

"Business has been reasonably steady this year due to emergency repair work," Allan noted.

In late September Portship finished an eight-week repair of the freighter Halifax. The ship had ripped open its hull on rocks.

When the Halifax returned to the East Coast, Portship's workforce was almost halved to 80.

Repair work to the Tobermory-South Baymouth ferry, the MV Chi-cheemaum, was scheduled for sometime this fall.

At press time it was not known how much repair work there will be for the winter months - the normal peak time for the company.

Perhaps seeing the writing on the wall, Portship's officers decided 40 years ago to diversify the firm's operations.

According to Allan, between 25 and 30 per cent of Portship's business is generated by its engineering division. That division, which operates from a pair of large sheds at the waterfront site, designs and repairs heavy machinery for the forestry and mining industries, as well as for Ontario Hydro.

"We're going to focus on machining this year," said Allan. "We tried very hard last year, but all manufacturers were looking for work."

The engineering division has realized some benefits from the environmental movement in the forestry sector, as it has constructed some of the environmental equipment local mills require to meet government regulations.

However, Allan noted that most of the environmental equipment is completed at the factory and is ready for installation when it arrives at the mill.

He said the loss of the mine sweeper contract means that the engineering division will become even more important to Portship's overall operation. The company intends to increase the division's share of its total business to 50 per cent.

Company officials will be pursuing contracts in the local market as well as in the United States. The push will also include visits to area mining operations.