PENA: LYKES DEPICTS INDUSTRY'S PROBLEMS

PENA: LYKES DEPICTS INDUSTRY'S PROBLEMS

The Chapter 11 filing by Lykes Bros. Steamship Co. should wake up the general public about the problems facing the maritime industry, Transportation Secretary Federico Pena said Thursday after he spoke at the biennial convention of the AFL-CIO Maritime Trades Department.

"People are beginning to understand what this could mean to our national security interests," Mr. Pena said. "If they knew of the possibilities, they would be outraged."Lykes filed Oct. 11 for protection under Chapter 11 of the U.S. bankruptcy code. It is one of the handful of remaining U.S. ocean shipping companies moving cargo to and from U.S. shores. The federal government uses American ships to carry U.S. military cargo, as well as other cargo sent by the federal government.

It would hurt the national security to have foreign ships carry that cargo, Mr. Pena said. That's why it's important to keep companies like Lykes and the merchant marine going strong, he said.

The Lykes filing should not jeopardize any of the company's federal aid, Mr. Pena said, adding that he didn't know if federal cargo could be in jeopardy by foreign creditors of Lykes who may try to seize the company's ships in foreign ports.

The company obtained a court order that prevents any creditors with U.S. business ties from seizing ships, especially in the United States. Lykes also said it is current with foreign creditors and the company has enough money to pay any foreign debts.

Mr. Pena refrained from mentioning Lykes in his speech to the AFL-CIO. But he did say he and President Clinton are committed to keeping a strong merchant marine and revitalized American maritime industry.

The administration is supporting the Maritime Security Act, a federal subsidy program, that will protect the merchant fleet and preserve jobs for U.S. sailors, Mr. Pena said. The bill has stalled in both the House and the Senate.

"It is important to the economy and important for national security," Mr. Pena said to the applauding union group. "That's why we've reintroduced it. We must get this program passed. Some say why do we need the $150 million? But I believe it's a very small investment to make."

Mr. Pena also pitched for the Jones Act, which mandates that shippers use U.S. ships when they transport goods from one U.S. port to another.