The Davie shipyard, shown on Oct. 19, 2011 in Levis, Que., was shut out of $33-billion in federal contracts.CLEMENT ALLARD/The Canadian Press
Synonymous with bail-out, receivership and bankruptcy, Davie Shipyard is mounting a comeback and appears to have found with its new owners, UK based ZM Industries, a formula for success.
With a recently-signed five-year-labour contract, the union is on board to help the company achieve a steady growth rate by biding on private sector contracts that offer some of the industry's lowest labour rates in North America and Europe.
"We finally have owners that are serious about getting the shipyard on a solid footing," said union president Gaëtan Sergerie. "We are confident that this time it will work."
Its former owner, Upper Lakes Group Inc., sold the community a pipe dream, the union says, when in 2011 it formed a joint venture with SNC-Lavalin and a South Korean shipbuilder and it cast itself as a serious bidder for the multi-billion dollar federal shipbuilding contracts.
The deal fell through when Ottawa awarded the contracts to the Halifax and Vancouver shipyards leaving Davie with nothing but an empty shipyard and 30 employees to care for. It was a far cry from its heyday when a couple thousand workers called Davie home.
But on Thursday the shipyard hit a milestone, hiring its 850th worker to become the biggest shipyard employer in the country. The new owners accomplished the feat by obtaining lucrative private sector contracts, including building three sophisticated ships for export to Norway. It also has a $125-million deal to build two ferries for the provincial government.
Parti Québécois leader Pauline Marois was on hand to mark the event and showcase her government's job creation efforts.
"What we are witnessing here is a healthy cooperation between the union and the new owners," Ms. Marois said. "We will continue to fight so that you get your fair share of federal government contracts as it renews its fleet of vessels."
As one of the largest shipbuilding facilities in North America, Davie Shipyard is now better positioned than ever to compete for a portion of federal contracts. Following reports of delays and cost overruns involving the $33-billion federal shipbuilding contracts, Davie Shipyard believes it can step in help solve the problem
"The [National Shipbuilding Procurement Strategy] is just an umbrellas agreement, it's a framework agreement. What it says is that the government has the right to negotiate with those two shipyards [Halifax and Vancouver] to award contracts. But that is only if the terms and conditions are right," said Alex Vicefield, the company's CEO. "What we are seeing now are major cost overruns and delays and it allows the government to choose whoever they feel will provide best value for Canada."
The federal riding of Lévis-Bellechasse is represented in Ottawa by a Conservative MP, Stephen Blainey and the provincial riding by Coalition Avenir Quebec member Christian Dubé. Ms. Marois's tour of the shipyard was meant to bolster her campaign, but it also appears to be a subtle reminder to Ottawa that excluding Quebec from lucrative federal procurement projects may eventually carry a heavy political price.