WJ Editorial

Jeffboat Closing Truly Ends An Era

If ever the clichéd phrase “end of an era” was apt, the permanent closing of Jeffboat truly qualifies.

The Jeffersonville, Ind., shipyard and its parent company, ACBL, have been at the center of the inland waterways for 80 years. Jeffboat was the nation’s largest inland shipyard, with a consistent reputation for quality. Before that, the Howard Shipyard & Dock Company built boats on the site for a hundred years.

Jeffboat’s peaks and valleys closely mirrored the economics of the river industry, and the country’s as well. World War II created the modern Jeffboat. During the war, the yard’s operations came under the direction of the Navy’s Bureau of Ships, which invested $4.7 million in the site for warehouses, assembly shops, gantry cranes and railroad sidings, all arranged for fast assembly-line production.

Jeffboat became one of the most modern and advanced facilities of its type. Jeffboat’s first war contract, when the yard employed 125 people, was for eight sub-chasers. Later came contracts for LST landing craft, which required integrating the Howard Shipyard property into the expanding operation. The yard now had a mile of riverfront and took up 64 acres. Employment soared to more than 6,500 by the war’s end.

Despite the challenges of quickly training a rapidly swelling workforce, Jeffboat earned a reputation for delivering high quality results ahead of schedule. During the war, it earned three “E” quality ratings from the Pentagon.

After the war, American Barge Line, ACBL’s predecessor, bought the Howard yard and the Navy’s now-surplus facility for $301,000. After refurbishing and with an adjusted postwar workforce, Jeffboat became the largest repair yard and builder of towboats and barges on the Western rivers. During the 1940s and 1950s, it built towboats and barges for virtually every name on the rivers.

As ABL continued to pursue growth by acquisition and merger, Jeffboat underwent periodic upgrades. A major equipment upgrade came in 1967. That same year, the company concluded a long-discussed merger with Texas Gas Transmission Corporation, which led to internal reorganization. Jeffboat was made part of an Inland Waterways Service Division and continued to be a major revenue source. Further investment and equipment came between 1969 and 1971. The improvements boosted output and cut production time. Output grew from 100 units in 1970 to 317 by 1973.

Federal tax credits passed in 1976 resulted in a barge-building boom by outside investors. While it lasted, the boom led to Jeffboat’s expanding its steel yard and installing an automatic blast and paint line.

The tax credits led to overbuilding of barges beyond what the market needed. The barge bubble burst in 1981, just as the country was entering a recession. Barge construction came to a virtual halt for years. After several rounds of layoffs, Jeffboat announced a suspension of new construction while it sold off some assets and reorganized its portfolio of businesses. By 1987, ACL had just four subsidiaries.

By the second half of the 1980s, the excess barges had been absorbed and the economy rebounded. ACL resumed its strategy of acquisitions and was able to reopen Jeffboat in 1989.

In 1995, it received its largest contract since World War II, a $70 million order to build 68 double-skinned tank barges for Ashland Inc. In 1997, just four years after it completed its 7,000th vessel, it launched its 8,000th. By the time it closes for good, Jeffboat will have sent more than 12,900 vessels out the door.

After weathering so many ups and downs, why now? According to Mark Knoy, Jeffboat’s president and CEO, two factors were mainly responsible. One was the major downturn in coal, until quite recently the waterways’ top cargo. The other was the non-arrival of an expected boom in liquids shipments. Although the tank barge market has kept the yard open for the past five years, Knoy admitted, “We thought there was going to be a lot more growth in the liquid market.”

Even during the downturn of the 1980s, Jeffboat’s reputation for quality proved important, as used barges built by Jeffboat sold for far more than barges built by rival yards.

Jeffboat leaves behind it a proud tradition of quality and integrity. Its vessels will continue to sail the rivers for many years to come.

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