May 12, 1999
(Executive Council)

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

I wish to update members of the House of Assembly on the status of Friede Goldman Newfoundland's operations at Marystown.

Honourable members will recall that Friede Goldman International took over operations at the Marystown Shipyard and the Cow Head fabrication facility in their entirety at the end of 1997. Those assets were sold to Friede Goldman (for one dollar) with the condition that the company provide 1.2 million hours of work per year at Marystown for the next three years.

Failure to meet this obligation would generate financial penalties to Friede Goldman in the amount of $10 million in the first year, and $5 million in each of the remaining two years of the contract.

Recently there has been some public and media speculation about the status of the Marystown operation. Friede Goldman Newfoundland has consolidated all their existing work at the Cow Head Fabrication Facility, and they have also been sending Marystown workers to their operations at Pascagoula, Mississippi.

Currently, there are 31 Friede Goldman Newfoundland employees working at Pascagoula.

Last week while at the Offshore Technology Conference in Houston, I met with Friede Goldman International Chairman and Chief Executive Officer J.L. Holloway to discuss Friede Goldman Newfoundland. I toured their facility at Pascagoula, and spoke with some of the Friede Goldman Newfoundland employees currently working there.

I impressed upon Mr. Holloway the nature of our agreement with Friede Goldman International, and the need to secure work for their operations at Friede Goldman Newfoundland.

There are several points in our agreement with Friede Goldman International to take over Marystown which I wish to reaffirm and clarify today.

First of all, the agreement calls for Friede Goldman Newfoundland to provide 1.2 million hours of work per year at the Marystown facility, or pay financial penalties. Last year, Friede Goldman Newfoundland exceeded the 1.2 million hour requirement by half a million hours. However, those additional hours do not apply to the hours required for 1999, or 2000. They must provide a minimum of 1.2 million hours of work in each year of that agreement.

Furthermore, we have advised Friede Goldman in writing that the hours worked by Marystown employees at their Friede Goldman facility at Pascagoula do not apply to the annual hourly requirement for Friede Goldman Newfoundland.

I want to reassure the people of Newfoundland and Labrador, and in particular, the workers of Friede Goldman Newfoundland and their families, that the Government of Newfoundland and Labrador has every intention of holding Friede Goldman to the agreement entered into in 1997, and will enforce the financial penalties if necessary.

Having said that, our meeting with Mr. J. L. Holloway was very encouraging. He reassured us in Houston and again at Pasgacoula, Mississippi of the parent company's long-term commitment to Friede Goldman Newfoundland, confirming that Marystown is an integral part of their plans for the future. Mr. Holloway reiterated the company's pledge to fully meet or exceed its 1.2 million hour commitment to Friede Goldman Newfoundland for this year two of a 3-year agreement. Beyond that Friede Goldman has undertaken to discuss ways of expanding operations at the Marystown and we're looking forward to further discussions in the weeks ahead.

We will be paying close attention to this issue in the coming months to ensure this is indeed the case, and that the best possible scenario evolves for the workers of Friede Goldman Newfoundland.

1999 05 12                                  2:25 p.m.