Impact of Pearl closure
would be ‘major’

The financial effect in Hawaii
of shutting the shipyard could
reach $1 billion a year

Closing Pearl Harbor Naval Shipyard would be a significant blow to Hawaii's economy, eliminating the state's largest industrial employer, more than 5,000 jobs and an enterprise that pumps $500 million into the local economy annually, the president of a leading business group said yesterday.

"From a general perspective, a half a billion dollars in the economy, plus a multiplier effect, is a major impact," said Jim Tollefson, president and chief executive of the Chamber of Commerce of Hawaii.

Questions surfaced about the shipyard's future yesterday after the chairman of a independent federal panel studying possible military base closures wrote Defense Secretary Donald Rumsfeld questioning why the Pentagon did not include the shipyard on its list of military facilities that should be closed.

The letter by Anthony Principi, chairman of the Base Realignment and Closure Commission, did not explicitly state that his commission would add the facility to the closure list. But even the specter of a closing drew strong reactions from Hawaii's congressional delegation, whose vehemence underscored the importance of the shipyard to the state's economy.

For a geographically isolated state with few manufacturing jobs, the ship repair yard is a significant operation.

The shipyard is Hawaii's largest industrial employer, with just less than 4,300 Navy civilian employees and about 780 uniformed service members, said Jason Holm, a spokesman for the facility. The yard also hires about 100 to 150 apprentices annually, thereby enhancing Hawaii's base of skilled workers, Holm said.

The workers represent a range of well-paid skilled occupations, including welders, electricians, machinists and engineers whose payroll totals $385 million annually. Local goods purchases push the shipyard's annual direct spending to $500 million, Holm said.

And, Tollefson said, the shipyard's presence creates opportunities for work beyond the military, including repairs of cruise ships and other large passenger vessels -- opportunities that would be greatly limited if the skilled ship repair jobs and firms clustered around Pearl Harbor were to vanish.

John Mapes, an economist with the state Department of Business, Economic Development and Tourism, said the total impact of that spending, or the effects of the money churning through the economy, would be 1.5 to two times the direct spending, or $750 million to $1 billion annually.

Despite his concern about the effects of a shipyard closure, Tollefson said he believes the likelihood of such an act is remote.

He noted that even if the required seven of nine commissioners vote to put Pearl Naval Shipyard on the closure list during a July 19 meeting, that would be just the beginning of the process, to be followed by a site visit by at least two commissioners and public hearings.

The nation, he said, simply cannot afford to lose the outpost.

"We see the Pearl Naval Shipyard as being critical to the defense of the United States," he said.