Foss Maritime has closed its money-losing shipyard on Seattle’s Lake Washington Ship Canal.
The closure, announced in late October, resulted in 115 layoffs. Foss paid the salaries, benefits and average overtime to the impacted employees through the remainder of 2021.
Sustained losses at the 11-acre shipyard and potential future pension liabilities influenced the company’s decision to close the facility, Foss spokesman Mark Grantor said.
“Our exit from the shipyard business is consistent with our strategic focus on providing core maritime transportation services and exploring new opportunities in emerging markets,” Grantor said in an email.
Further examples of that strategic focus, he said, include the company’s sale of its California tank barge business earlier this year to Centerline Logistics and its entry into the offshore wind energy sector.
Foss had operated its Seattle shipyard since the 1970s. The full-service facility had three dry docks, cranes and numerous lifts. It also was home to Foss 300, a 75-ton steam-powered floating derrick barge built during World War II.
The yard was primarily used to maintain Foss’ West Coast tugboat fleet, although it also booked other commercial business. Foss now intends to use other Pacific Northwest shipyards for fleet maintenance, Grantor said. He did not identify which yards might get the work.
The Seattle yard closure follows Foss’ 2018 shutdown of its Rainier, Ore., shipyard. Over the years, Foss used the 2.2-acre site along the Columbia River for repair and new construction. Recent deliveries from Rainier included the three 7,268-hp Arctic-class tugboats built in the mid-2010s.
Foss, a subsidiary of Seattle-based Saltchuk, said it spent years trying to improve the viability of the Seattle yard. Those efforts included proposals to expand into new construction or sell the site to another buyer. Grantor said there was “insufficient market interest” in acquiring the yard.
Foss’ exit of the shipyard business comes less than a decade after the company considered relocating shipyard operations to a 66-acre site in Everett, Wash. The deal for the former industrial property ultimately fell through. However, company officials at the time alluded to challenges with the Seattle yard.
“We’re looking at what it would take to move that (Seattle) yard to another location, so we can expand our business,” Foss’ then-CEO Paul Stevens told the Puget Sound Business Journal in 2014. “We’re restricted by the (Ballard) locks and restricted by land; we don’t have a whole lot of property there.”
Foss officials acknowledged in November that the shipyard had been losing money. They said the site’s uncertain future was no secret.
“We communicated to our labor partners consistently that the future of the shipyard hinged on many factors, including a large pension withdrawal liability,” Grantor said, without sharing specifics of that liability.
“Foss proposed employees participating in an unhealthy pension plan move to a labor-sponsored 401k plan to ensure a more sustainable retirement benefit and to address the pension liability’s impact on the financial viability of the yard,” he continued. “Up until the decision was made to close the shipyard, Foss and its unions bargained in good faith concerning this proposal.”
Multiple attempts to reach unions representing the shipyard workers were not successful. In addition to two months of severance pay, Foss said it worked to place affected employees in similar positions at other Puget Sound shipyards.
The future of the shuttered Seattle shipyard is unknown. The parcel is in Seattle’s North Queen Anne neighborhood near marinas and other maritime businesses, as well as breweries and restaurants. Redeveloping it would be challenging, according to Eugene Wasserman, president of the North Seattle Industrial Association.
“They can’t turn it into housing or restaurants,” said Wasserman, whose organization advocates for industrial businesses around Lake Union. “There is a very strict shoreline management law that has been around for many years. … It is pretty clear (that the property) is restricted to water-dependent uses.”