NEW ORLEANS -- Southern Scrap Recycling removed the last of its fleet in the Industrial Canal Tuesday, a week after three of its ships broke loose during Hurricane Gustav and rammed into a railroad bridge precariously close to a floodwall.

On Sept. 5, the Coast Guard ordered the company to remove its vessels for the rest of the hurricane season, which ends on Nov. 30. Southern Scrap is an old New Orleans business that specializes in cutting up and recycling military ships and barges.

The Coast Guard said the company had failed to secure its vessels in the canal in advance of Gustav's storm surge. Southern Scrap vessels also broke loose during Hurricane Katrina.

In his order, the Coast Guard's New Orleans port captain said he took the action because Southern Scrap's faulty operations pose a risk to New Orleans.

"The captain ordered the ships removed, completely out, for the season," said Chief Petty Officer Mike O'Berry.

Joel Dupre, the head of Southern Scrap, said the Coast Guard's order has shut down the workyard on the Industrial Canal -- perhaps for good. Dupre said the yard employs about 75 workers and hires about 325 subcontractors.

Southern Scrap is owned by Southern Recycling, a New Orleans-based large metal recycler. The company was founded in 1900 and it has facilities throughout the South, but Dupre said the Industrial Canal site was the "flagship operation."

The scrap yard on the canal began after the Army Corps of Engineers dug the Mississippi River-Gulf Outlet as a shortcut for ships between the Gulf of Mexico and New Orleans.

The channel was dug to stimulate development in eastern New Orleans, but since the 1960s it has widened and eroded large tracts of wetlands.

Scientists say the MRGO is largely to blame for worsening hurricane flooding and there are plans to close it with a rock dam to help stop the erosion and storm surge from heading toward the city.

"We think we have the premiere piece of real estate to do what we need to do," Dupre said.

But the coastal erosion is "making storm surge worse and worse and it's forcing us out," Dupre said. "And we anticipate a lot of political pressure on us to evacuate the area."

Before Gustav, Congress had considered relocating businesses like Southern Scrap along the Industrial Canal but the proposal stalled.

The scrap yard has torn apart a variety of vessels, among them the USS Newport News, submarines, aircraft carriers and landingcraft, Dupre said.

The Coast Guard is investigating whether Southern Scrap should be made to pay hefty fines.

(Copyright 2008 by The Associated Press. All Rights Reserved.)