Why Can't the US produce Cruise Ships???

[Mark]

Here is a question that has been bothering me for a while since I have yet to find a definitive answer.

 

WHY CAN'T THE US PRODUCE CRUISE SHIPS?

 

We have shipyards in this country (USA) that continue to produce the high volume of warships which some feel are the best warships in the world. Why are none of the cruise ships produced in the USA to take advantage of the yards already in use and the expertise of the workforce?

 

I honestly do not think it is the cost of labor or materials in the USA versus the other countries. Let's look at just who the other major players are in producing cruise ships: Italy, France, Germany, Finland and Japan. Most of these countries have the same or similar costs associated with labor and materials as do we in the US. So, is the problem that there is no intersest in building cruise ships and competing or is it that we are not as good at building ships as these countries? We have shown that we can compete against these countries in building passenger jets so why not passenger ships? It would seem to me that building cruise ships would help the economy in the US...also most of the major cruise lines are owned by American shareholders and headquartered in the US...so why buy only foreign built cruise ships?

 

I do not think that all of these countries subsidize the building of cruise ships....most of these countries do not have the money to subsidize these industries at least in a significant way.

 

Maybe one of our Cruise Critic Directors can research this issue and provide some details???:confused:

[Happy ks]

This was attempted several years ago, by the company that owned American Hawaiian Cruises and Delta Queen, sorry I cannot remember the corporate name. The materials and building was started on what is now one (or is it 2?) of the NCLA fleet. The company went bankrupt after 9/11/01 and the US government was left with a partially built hull and the rest of the materials. It cost the American public a lot of $$.

 

Fast forward a couple of years and NCL struck a deal with the gov't. to take the materials off their hands if they allowed the NCLA ships to sail Hawaii without a foreign port stop. They took the material over seas (someone with better memory chips could fill in the mistakes and gaping holes in my story) and had these ships built. NCL bailed the US out of a huge loss to the tax payers, but I'm sure it still cost us plenty. They were also required to purchase the old Independence, which sadly is withering away, I think, in San Francisco.

 

End of story, it costs too much to produce a cruise ship in the US, labor costs are way too high. There are a few small ship companies that operate in the US, some coastal, some river cruises.

[ancldaca]

Happy is pretty much on the money here.

 

The fact is that, yes, there are excellent US shipyards as the OP mentioned. These are, however, specialized in warships precisely because the cruise ship business has gone overseas.

 

When these cruise ship companies buy their ships, it is important that the builder have experience in building these because things just tend to go smoother without the horrendous cost overruns experienced in that recent episode. The NCL episode proves exactly that; you can't buy experience.

 

Remember that these ships aren't a couple of mill, but worth hundreds of millions at a time. That's too big of an investment to send it to a builder with only partially significant experience in the field.

 

Chances are that if the US is seriously interested in re-entering that market, it'll need to "rebuild" this segment of the economy slowly. Start with small cruise ships/mega yachts and rebuild the experience factor. Then, in time, the mega ships could be built as well.

[runner15km]

The Germans, Finns, French and Italians just do it better.:D

[Mark]

Not for nothing, but I think it is kind of embarassing that a country that builds the best warships in the world cannot figure out how to build a good passenger ship. This takes nothing away from the work of the Finns, Italians, Germans, French, Finns and Japanese...but are they really better at this than we are...I think it we just applied ourselves, we could blow them away.

 

On a related matter, the UK used to be good at building both warships and passenger ships and look where they are today! If I am not mistaken, I believe the Queen Mary 2 was build in France! What an embarassment to the Brits!:cool:

[bonoriffic]

The company went bankrupt after 9/11/01 and the US government was left with a partially built hull and the rest of the materials. It cost the American public a lot of $$.

 

Fast forward a couple of years and NCL struck a deal with the gov't. to take the materials off their hands if they allowed the NCLA ships to sail Hawaii without a foreign port stop.

 

The US government wasn't left with a partially built hull. This isn't Europe, the government doesn't own corporations. This was a private company that filed for bankruptcy protection. The courts take control of the company but that doesn't mean the government or the American tax payer suddenly has to foot the bill.

 

When NCL took over the ships there still remained two laws on the books preventing large foreign flagged ships from docking exclusively at Hawaiian ports. One was for ships that allowed gambling and the other the long standing Passenger Vessel Services Act, both kept around to benefit American Classic Voyages Co.

 

Once AMVC was bankrupt, the laws were changed not as part of some deal with NCL to take materials off the hands of the government (who didn't have the materials to begin with) but out of pressure from Hawaiian law makers who saw that for tourism and jobs to grow they needed the laws changed.

[bonoriffic]

The Germans, Finns, French and Italians just do it better.:D

 

They just do it cheaper with heavily subsidized ship yards and some government owned yards.

 

This isn't to say the US doesn't subsidize some industries, most notably farming, but those products are usually not competing on a global market. They are produced domestically for domestic consumption only.

 

I imagine the large US ship builders are probably making more money building war ships than they could with cruise ships anyway.

[songanddance]

We could produce all of the cruise ships you might want but then you would have to find foreign flags to operate them as this country looks down on service jobs and even NCL with months of training before putting a crew member on their Hawaii run ships can't get a stable and proud crew to provide the level of service needed. Also, the unions have driven the wage rate to the point that what is now an affordable cruise for a foreign flag would be double or triple for an American Flag. NCL in trying to keep their Hawaii runs afrodable is bleeding red ink and will soon have to either abandon the run or raise the rates.

 

Everything has its consequences and high wages result in jobs overseas.

[Mark]

What amazes me about the who shipbuilding issue is that here we are, the Number 1 Superpower in the world today and for some time and we have no passenger ship fleet and no merchant marine (cargo) fleet!

 

I wonder what those kids are planning to do for a living when they graduate from the Merchant Marine Academy (Kings Point) each year? The graduates from the academnt used to go to work on American passenger ships and American cargo ships. How times have changed!

 

I remember for the two Gulf Wars, the US government had to charter foreign cargo ships to move equipment over to the gulf..but that is getting off of the passenger ship issue.

[caribsun]

Maybe it also comes down to Quality. We loss the auto, television and camera business to overseas economies.

[8mpg]

Im just going to say this... Our cost of labor is to high due to the high costs of medicine and health benefits. Our largest car manufacturers are struggling to survive, theres just no way a company will be able to sustain the man power with the high costs of benefits to build a $500mm boat.

 

Warships are usually govt funded... even the larger LNG tankers are built over seas because of labor costs. When the average national income of a country is 1/2 to 1/3 of what we pay, they can hire 2-3 times the amount of workers for the same pay.

[Mark]

Yes, understood and agree with your logic...but some of the countries are just as expensive as the US and in some ways more expensive...specifically I am thinking of Japan and Germany...not sure about France, Italy and Finland

[MsWitty1]

Money - money - money! It is more profitable for the cruise lines to be non-US. We have so many regulations that make it more expensive. Do you think a US cruise line could pay some poor cabin steward $50 a month to wait on people around the clock?

[Mark]

MsW,

 

Sorry but you may have misunderstood my original posting...I was wondering why there are no cruise ship built in the USA since we build the best warships in the world.

 

Working on or staffing the cruise ships with American employees was not part of my posting since we all know the answer...just like most Europeans, Americans do not want jobs to do the dirtywork so to speak...and even if they did, we could not afford to pay them the required wages.

 

Did you know that the German BMW cars built in Germany are designed by Germans but built by Turks since Germans do not want to do that kind of work...they just manage and supervise the Turks!

 

Building a ship is a different issue.

[Post Captain]

If I am not mistaken, I believe the Queen Mary 2 was build in France! What an embarassment to the Brits!:cool:

Yes, the QM2 was built by Alstom-Chantiers de l'Atlantique at Sainte Nazaire, France. The last major passenger vessel built in the United Kingdom was the Vistafjord (currently Saga Ruby), completed by Swan Hunter at Wallsend, near Newcastle, on the River Tyne, in 1973.

 

Britain used to be a proud shipbuilding nation. (Read The Rise and Fall of British Shipbuilding, by Anthony Burton.) Harland & Wolff in Belfast was once the most famous shipbuilder in the world, building the Titanic, Olympic, Britannic, and Canberra; they even built passenger ships for the Germans. John Brown & Co. of Clydebank, in Scotland, built the Luisitania, Aquitania, Queen Mary, Queen Elizabeth, and Queen Elizabeth 2. Vickers-Armstrong built the Monarch of Bermuda and my Queen of Bermuda and Ocean Monarch (pictured below).

[Jim Gallup]

I was on the team that had to salvage that half-built hull that was left rusting in Pascagoula Mississippi when American Hawaii Cruises went belly up.

And although some may think that the US Government (and all you taxpayers) was not stuck with that fiasco, think again. They could not find any bank that would take the risk to finance a cruise ship built in America. The US Government had to step in to guarantee the loan with your tax dollars. When the whole thing went sour, your tax dollars paid for the mess.

 

When NCL bought the entire thing (for a song by the way; thank you American Taxpayers), they were shocked at what they found. Instead of purchasing and recvieving the component parts and equipment as needed, the Ingalls Shipyard had pre-purchased everything for 2 entire cruise ships and left it all sitting outside for months and years, rusting away. They had basically tried to run this project the same way they would when building a US Government warship. Hardly surprising, as building warships was the only prior experience they had.

After we towed the rusty half-built hull to Lloyd Werft Yards in Bremerhaven, the Germans were even more shocked. When tested, the stability of the hull was about the same as a destroyer. Great for speed, but very poor for comfort. The yard announced to NCL that the original design of the American Hull was so poor for Cruise Ship Operation that the hull would have to be dismantled and completely redesigned before being put back together again. After some long negotiation, they decided that time and money could be saved if portions of the original hull were cut away, holes were cut into the hull, and concrete ballast and counterweights were pumped into the hull at strategic places in order to give the ship better stability.

During this operation, when holes were still open just above the waterline, a freak winter storm blew through Bremerhaven. Overnight, waves whipped and drove water into the open holes in the hull. Several hours later, enough water had entered the hull that the partially built ship sank at the pier.

 

It should be noted that when NCL first bought the half-built hull, they attempted to hire American Shipyards to finish the project. They could not find a single shipyard in America that would even consider making a bid to take on the job. They had no choice but to go abroad.

[MJ25]

We could produce all of the cruise ships you might want but then you would have to find foreign flags to operate them as this country looks down on service jobs and even NCL with months of training before putting a crew member on their Hawaii run ships can't get a stable and proud crew to provide the level of service needed. Also, the unions have driven the wage rate to the point that what is now an affordable cruise for a foreign flag would be double or triple for an American Flag. NCL in trying to keep their Hawaii runs afrodable is bleeding red ink and will soon have to either abandon the run or raise the rates.

 

Everything has its consequences and high wages result in jobs overseas.

 

I just have one question for Songdance (and everyone else for that matter), "Why do we always end up blaming labor and unions for earning a wage that is middle income at best and blame it for sending jobs overseas where the work is done at a wage that NONE of us would be willing to work for?"

 

The problem is not in the wages that the working men and women of the USA are paid, but the fact that the american public insists on making purchase decissions solely on price and give no thought at all at the standard of living of those producing these products. Those of us lucky enough to make a living wage should purchase products and services from companies that may charge a little more for thier product or service but do so to provide a living wage to their employees.

[BobBeaSea]

They just do it cheaper with heavily subsidized ship yards and some government owned yards.

 

This isn't to say the US doesn't subsidize some industries, most notably farming, but those products are usually not competing on a global market. They are produced domestically for domestic consumption only.

 

I imagine the large US ship builders are probably making more money building war ships than they could with cruise ships anyway.

 

Agriculture subsidies are the third world's biggest complaint against Western industrialised nations. 4% of our population is engaged in agriculture while 70% of the population of the world's poorest countries are engaged in agriculture. 40% of the population of intermediate wealth countries are engaged in agriculture. Agriculture subsidization in the Western world is a massive issue.

[BobBeaSea]

We could produce all of the cruise ships you might want but then you would have to find foreign flags to operate them as this country looks down on service jobs and even NCL with months of training before putting a crew member on their Hawaii run ships can't get a stable and proud crew to provide the level of service needed. Also, the unions have driven the wage rate to the point that what is now an affordable cruise for a foreign flag would be double or triple for an American Flag. NCL in trying to keep their Hawaii runs afrodable is bleeding red ink and will soon have to either abandon the run or raise the rates.

 

Everything has its consequences and high wages result in jobs overseas.

 

Only 11% of the U.S. workforce is unionized, time to find a new dog to kick. BTW, 90% of the crew on cruiseships belong to a union, allbeit not a good one :)

[BobBeaSea]

The Germans, Finns, French and Italians just do it better.:D

 

Exactly!!

[BobBeaSea]

They just do it cheaper with heavily subsidized ship yards and some government owned yards.

 

This isn't to say the US doesn't subsidize some industries, most notably farming, but those products are usually not competing on a global market. They are produced domestically for domestic consumption only.

 

I imagine the large US ship builders are probably making more money building war ships than they could with cruise ships anyway.

 

The most heavily subsidised industries in the world are the prime contractors who manufacture most of the requirements for the American military. It is a licence to steal, literally. God, I wish I worked for one of them....:)

[bonoriffic]

Those of us lucky enough to make a living wage should purchase products and services from companies that may charge a little more for thier product or service but do so to provide a living wage to their employees.

 

This goes against basic capitalism.

[BobBeaSea]

This goes against basic capitalism.

 

Exactly!!

[chasetf]

This was attempted several years ago, by the company that owned American Hawaiian Cruises and Delta Queen, sorry I cannot remember the corporate name. The materials and building was started on what is now one (or is it 2?) of the NCLA fleet. The company went bankrupt after 9/11/01 and the US government was left with a partially built hull and the rest of the materials. It cost the American public a lot of $$.

The ships were being build by Northup Grumman Corp.... a well know shipbuilder. The company that went bankrupt was the cruise line.

[Jim Gallup]

Chet is correct. But the bankruptcy of the cruise line resulted in the builder stuck with the cost of two complete cruise ships. That may have bankrupted Northrup - or certainly damaged the company - but your taxpayer dollars, in the form of a US Government guaranteed loan, bailed them out.