169 



The two hulking vessels at Lake Union Drydock await a buyer, and 185 crew 

 members who would have earned a total of $5 million this year are out of work. 



The grounding of the two boats could signal the start of a long-predicted shakeout 

 of the overbuilt factory trawler fleet. There simply aren't enough pollock and other 

 fish with commercial value in Alaskan waters to support the mammoth high-tech 

 boats, which exploded in number in the 1980s. 



To make matters worse, the price of surimi, the fish paste that is the raw mate- 

 rial for processed seafood products such as imitation crab legs, has collapsed. In ad- 

 dition, environmentalists are up in arms over a decline in the pollock stock and 

 crashing populations of sea mammals and birds in Alaskan waters. The government 

 has a plan to bring the size of the fleet to a more manageable level by privatizing 

 fishing rights, but it may not come soon enough to prevent a tidal wave of bank- 

 ruptcies. 



People have been saying this is coming, but nobody seems to believe it," said 

 Wally Pereyra. a member of the North Pacific Fisheries Management Council and 

 the owner of Pro-Fish, a Seattle-based seafood marketing company. "It's here now." 



More than half of the boats might teeter on the edge of bankruptcy or leave the 

 Seattle area in the next year, taxing as many as 4,000 jobs, Pereyra said. That's 

 equivalent to roughly a quarter of all the Boeing layoffs expected this year. Many 

 of the lost jobs will be those of trawler crew members who earn an average salary 

 around $30,000. Others will be from local companies that make marine electronics, 

 cardboard boxes, nets and other supplies — and those that provide travel services for 

 the industry. 



"Each (boat) that goes bankrupt is the equivalent of a $20 million business shut- 

 ting down," Pereyra said. Many of the boats that go under will be sold and re-enter 

 the fleet, but industry sources said as many as 20 boats will need to leave the fish- 

 ery altogether before it can be profitable. 



The North Pacific Fisheries Management Council, an 11-member, government-ap- 

 pointed body that oversees the Northwest and Alaska fisheries, has seen this day 

 coming. In 1976, the Magnuson Act threw foreign boats out of a 200-mile off-shore 

 zone, reserving the rich Alaskan waters for the fledgling U.S. fleet. The government 

 dished out $90 million in loan guarantees in the 1980s to help fishing companies 

 build state-of-the-art boats that used hydraulic cranes to pull in the heavy nets and 

 could process the fish on board. More loan guarantees were extended to onshore 

 processors. 



Unlike grazing permits, oil leases or timber sales, the rights to the bounty of the 

 ocean have always been free for the taking, and the processors built and reconfig- 

 ured boats at a furious pace. "Nobody threw their body in front of the train to try 

 to stop it," said Joe Blum, the executive director of the American Factory Trawlers 

 Association. "Open-access fisheries lend themselves to that kind of investment." 



Now the 65-boat fleet, capitalized at $1.6 billion, fights over a total allowable 

 catch of 1.3 million tons of pollock in the Bering Sea. The pollock, harvest, which 

 accounts for roughly one-third of all the fish caught in U.S. waters, had a dockside 

 value of about $1 billion last year. 



In order to protect the stock, the government drastically cut back the number of 

 days open for fishing, sending many of the boats into the red. 



These boats were mortgaged on a 10-month fishery and now we're down to five," 

 said Chris Lyden, operations manager of Pacific Orion Seafoods. Pacific Orion's 

 boats did not have government loan guarantees, but $25 million in taxpayer funds 

 are still tied up in the fleet. 



The trawlers blame many of their financial problems on the allocative gymnastics 

 of the council, which awarded 35 percent of the pollock catch to the huge shore- 

 based processing plants along the Alaska coast last year. The decision came after 

 a bitter two-year dispute that pitted Alaskan processors financed by the Japanese 

 against the struggling fleet. 



Last year, the council finally put a moratorium on new boats in the pollock fish- 

 ery, and about that same time the price of surimi went into a dive. A worldwide 

 glut has brought the price of high-grade surimi down from $2.40 per pound last year 

 to less than $1 today. 



"At these levels, nobody is making money in the surimi business," said Ronald 

 Jensen, a director of Tyson Foods, which owns Arctic Alaska Seafoods. 



Since more than two-thirds of the pollock harvest is processed into surimi, this 

 could be the end of the line for some struggling trawlers. "It will exacerbate an al- 

 ready difficult situation," Blum said. "There's been speculation all year on how 

 many (boats) are going to go." 



Some conservationists who track the Pacific fish stocks worry that the political 

 muscle of all those floundering businesses will put pressure on the council to rec- 

 ommend catch levels higher than the sea can sustain. Many of the members of the 



