The following statement was issued today by Premier Brian Tobin. It was also read in the House of Assembly:

Honourable Members of the House will recall that in June, the government announced that it would provide Marystown Shipyard Limited with an increase in the loan guarantee for its operating line of credit. This was required in order to proceed with the implementation of a five- year business plan that had been presented to Cabinet by the board of directors and senior management of the yard. At that time, we had also authorized a performance guarantee for the $45 million contract to refit the federal vessel CFAV "Quest".

Honourable Members will also recall that support from government was contingent upon firm commitments from the employees at Marystown Shipyard to work toward productivity improvements. At that time, Local 20 of the Marine and General Workers, as well as Local 904 of the International Union of Operating Engineers, agreed to an 11-item agenda. This agenda focused on productivity improvement and the formation of a working committee, which was given a six-month mandate to arrive at a firm agreement to achieve a minimum 10 per cent productivity improvement at the yard.

A great deal of negotiation and detailed discussion has taken place during the working committee process, which involved representatation from all employee groups as well as senior management for the yard. I am pleased to inform Members of the House that an agreement on productivity improvement measures has been reached within the context of the 11-item agenda. One of the key issues on this agenda was trade flexibility. Management and the board see the progress made in this area as an excellent platform from which to build and are confident that the members of that union are prepared to embrace the changes in work practices at the yard. In fact, in a recent vote, 96 per cent of Local 20's membership supported the measures agreed to by their executive.

I commend the union, the senior managment and the board of directors for their commitment to the future of the yard. Things are indeed turning around and hard work is beginning to yield results. I am pleased to announce today that Marystown Shipyard Limited has just won a contract with AMFELS Inc. of Brownsville, Texas for the fabrication of pontoon sponsons that will be used to cover existing pontoons on oil rigs to be used in the Gulf of Mexico. The work, valued at approximately $8 million, will involve approximately 150,000 person hours of work for the yard and is projected to contribute in the order of $1 million towards covering its overhead costs in 1996/97. The proposed work will be an excellent opportunity to confirm the productivity gains to be secured from improvements at the yard.

In addition to measures agreed to as part of the 11-item productivity improvement agenda, Local 20 has made a no-strike agreement with the shipyard for the AMFELS contract and has also agreed to a modified shift schedule. As well, supervisors at the shipyard have voluntarily agreed to a wage rollback, further improving the yard's competitiveness.

The province will provide performance guarantees on behalf of the yard in order to proceed with this contract, as it has done on several occasions in the past without any difficulty or penalty incurred. Honourable Members will recall that Hulls 53 and 54 recently completed for Maersk were constructed under this arrangement.

All parties involved in this process have demonstrated a serious commitment to proceed with turning Marystown Shipyard Limited into a profitable business. Based on past commitments, the present spirit of cooperation, and the benefits that will accrue as a result of future changes, I am confident that the Marystown Shipyard is well-positioned to become a leaner, more effective operation and a significant player in projects like Terra Nova and Voisey's Bay.

Change is always difficult. I commend the unions and their members for taking the necessary bold steps to secure its future. I admire the perseverance of supervisors and senior management to stay the course during this process, and I thank the board members who have voluntarily contributed a great deal of their time in the past. I congratulate all of those involved and invite my Honourable Colleagues to join me in wishing them success in the future.