Going Belly Up

We’ve made it clear in these commentaries that “shipbuilding” in the United States is the way – the only way – to bring an end to this disastrous economic downturn.

Isn’t it ironic that overseas interests, after gaining a stranglehold on the “shipbuilding” industry, are now faced with insurmountable problems? The companies, the “ships”, and even the “shipyards” owned by these overseas interests will soon be history. It’s all over. This “recession” has already become a full-fledged depression, and in spite of attempts by authorities to hide this truth, worldwide developments point to economic disaster. Just two short years ago, the following headlines were unthinkable:

• “2,000 ships to the breakers next year” – “Up to 2,000 vessels could be setting out on their final voyages next year, Henning Gramman, head of ship recycling at Germanisher Lloyd’s, told a conference in London recently, according to Lloyd’s List.”

• “Idle ships set to grow” – “Already congested anchorages around the world could be set to get a whole lot busier next year.”

• “CESA: shipbuilding capacity needs to be altered” – “At the CESA meeting in Berlin on October 29, delegates from Europe, Japan, China and the USA acknowledged that ‘the shipbuilding industry throughout the world is experiencing a more challenging business environment than ever before in its history.”

• “Crunch time for yards” – “The boom times proved to be shorter lived for shipbuilders than many other sectors of the industry.”

• “Box barometers” – “This time last year, Neptune Orient Lines was in the black – just. It was the final quarter of 2008 that tipped lines into the red, and that is where they and most others remain, with cash fast running out.”

• “Hapag-Lloyd cuts pay” – “The crisis stricken liner company Hapag-Lloyd has announced pay cuts across the board in the organisation ashore and at sea.”

• “More capacity must be cut to produce profit: Alphaliner” – “All of the carriers which have reported their third quarter results so far are making losses on their container shipping operations.”

• “Banks anticipate huge credit losses next year” – “More than nine per cent of the world’s ship finance loans will be bad (non-performing) in 2010, according to more than half of 27 top shipping managers in nanks with a total of USD 287.7 billion in their shipping portfolios, about 70 percent of the world’s ship finance.”

• “Evergreen cutting fleet size” – “Evergreen Line said Thursday it is scaling down its operating fleet and rationalising its services in an effort to cope with marketing conditions.”

• “Difficulties ahead for the shipbuilding industry” – “The Norwegian shipbuilding industry is facing a difficult future, with few new orders on the books and the looming threat of mass lay-offs.”

• “Time to consolidate?” – “Could Israeli line Zim be the catalyst for another round of rationalisation in the container trades that most agree is urgently needed?”

“It’s all over,” we stated. The “shipping” industry – which includes “shipbuilding”, “ship” ownership and “ship” financing – needs consumers. Without consumers there are no goods being manufactured for “shipment”, and therefore there is no need for vessels that “ship” such goods.

As things stand now, it’s all over for the world of “shipping”. It’s all over because consumerism in the U.S. is rapidly declining, and this deterioration is the direct result of our unemployment crisis.

Government gobbledegook would have us believe, however, that “job cuts are easing as the economy slowly heals”. Many will be taken in by that nonsense, of course, but that’s exactly what the administration is hoping for. The jobless claims, according to the Labor Department, fell to 512,000 last week, fully 20,000 less than the previous week, the report pointed out.

Sounds good alright, but the report failed to emphasize that 7,000 Americans run out of benefits every day, and because those 49,000 people are omitted from the weekly figures, why wouldn’t the Labor Department’s weekly report sound good? It’s fudging – that’s what it is.

So things are bad all around. No paychecks for the ever-increasing numbers of U.S. unemployed means dwindling buying power for U.S. consumers.

When U.S. consumers aren’t buying, the Asian manufacturing centers are no longer producing goods to be “shipped” to U.S. markets.

When there are no goods to be “shipped” aboard foreign-owned container “ships”, that industry goes belly up. That’s what all those headlines are telling us. It’s all over for them.

But it’s not all over for us. The solution to the world’s economic woe is in our hands. “There’s no other way,” we’ve said.

We own the patents to a revolutionary container “ship” design. These “ships” will be built only in U.S. “shipyards”. They will be “Jones Act ships”. We have Title XI. We have shuttered “shipyards” that can easily and quickly be revitalized – and we have about 40 million desperate and unemployed citizens who will jump at the chance to build those “ships”, just like the 40 million that staffed our World War II yards.

All we need now is for someone to authorize another Emergency “Shipbuilding” Program.