Navy Beans

Nick Blenkey produced an eye-opener in “MARINE LOG’S” 2007 Yearbook. “JONES AND NAVY ARE STILL THE NAME OF THE GAME’ he titled his analysis, and he not only gives his readers some food for thought, but his data supports our criticism of the U.S. shipbuilding program.

“According to the keepers of the most often quoted international building statistics,” he writes, “U.S. shipyards have around one percent of the world’s shipbuilding pie. That’s because those statistics don’t count the sorts of vessels built in American shipyards,” Mr. Blenkey reasoned. “In fact, the U.S. actually has the world’s largest shipbuilding industry in terms of sales volume,” he continues. “To put things in perspective, the Korean shipbuilding industry expects its export orders this year to total $ 26 billion. The House Armed Services Committee last month approved a version of the FY08 Defense Authorization Act that would provide $ 50 billion for U.S. Navy shipbuilding.

“While this might be comparing apples to oranges, it still illustrates the size of the U.S. shipbuilding market,” Mr. Blenkey states.

We were glad to see the ‘apples to oranges’ comparison but we fail to understand the use of the terms ‘sales volume’ and ‘market’. What ‘sales volume’? And what ‘market’? In all honesty, how can U.S. taxpayers be considered the buyers of warships? That ‘$ 50 billion for U.S. Navy shipbuilding’ is forcefully extracted as taxes from U.S. citizens and used to construct warships that generate absolutely no financial return for the duped taxpayer-investor. That same $ 50 billion, if used to construct Korean-like containerships, could be supporting wholesale revival of the U.S. shipbuilding industry. U.S. shipyards would be turning out twice the number of merchant vessels produced by the rest of the world combined, and U.S. shipowners would once again dominate international trade. Would the U.S. taxpayer-investor see a profit under those circumstances? You bet they would. They’d see a substantial profit.

First of all, they’d realize an honest-to-goodness financial return when these containerships are sold on the ‘market’ … the real market. The mark-up alone would significantly reduce the tax burden on U.S. citizens. Moreover, the rebirth of the U.S. shipbuilding industry would require several dozen Newport News-sized yards in order to handle the demand. The demand? Just think of the numbers of containerships these new U.S. yards could turn out if, for example, the $ 13.5 billion expense for just the latest proposed aircraft carrier were to be diverted to containership construction.

Let’s do some math. If each containership costs a whopping $ 100 million (they’ll cost much less), then 135 containerships could be built, and sold, by U.S. yards, right? But wait. Because Title XI provides an 87.5 % financing guarantee, 945 containerships could be built, and sold, with that $ 13.5 billion, right? But what if the whole $ 50 billion were used for Title XI guarantees? We’d be building 3,500 ships, and the nation’s unemployment problems would be solved … that’s “what if”!!

[The irony of it all is that a paltry $ 30 million appropriation for Title XI is about to be rejected by the Bush administration!! ]