WASHINGTON - The odds of salvaging a $1 billion cruise ship project at Ingalls shipyard in Pascagoula, Miss., are sinking fast four months after American Classic Voyages Inc. filed for bankruptcy.
"I'm not optimistic. I can't afford to be optimistic," Phil Dur, president of Northrop Grumman Ship Systems, said Tuesday at a forum on shipbuilding. "Unfortunately, we're in a position where we cannot afford to lose more money completing a ship without a demand," Dur said.
Northrop owns Ingalls, which had been under contract to build two 1,900-passenger liners for American Classic. Work halted in October, soon after the Miami-based cruise line sought Chapter 11 bankruptcy protection and the federal government refused to back more financing for the once-ballyhooed venture.
Although construction on one vessel had not begun, the other is more than one-third complete. But with no one willing to continue work, Dur said, Northrop plans to float the ship to Ingalls' East Bank for a final determination of its ultimate fate.
Shortly after stopping work last fall, Ingalls laid off 1,250 workers, but later recalled about 900. Since then, Dur said, the company has sought to use employees on other jobs.
"Obviously, we're very expectant that we can keep most, if not all of them, employed productively," he told the Washington office of the Mobile Register.
Union representatives remain concerned.
At Local 733 of the International Brotherhood of Electrical Workers in Pascagoula, Business Manager W.D. "Chico" McGill said American Classic's collapse cost 34 of his members their jobs just last month.
McGill said labor and management have been working together to find other assignments, including sending some employees to another Northrop shipyard at Newport News, Va.
Because American Classic relied heavily on government-guaranteed loans, the failed project could cost taxpayers more than $200 million dollars.
The U.S. Maritime Administration, which oversees the loan guarantee program, will have the final word on the uncompleted ship's fate, Ingalls spokesman Den Knecht said.
As a last resort, Congress had urged the Navy late last year to consider using at least one of the vessels as a command ship or for some other military purpose.
After visiting Ingalls, however, Navy officials concluded that conversion wasn't feasible, a Navy spokesman said.
Tuesday's forum at the U.S. Capitol was sponsored by the American Shipbuilding Association to rally support for more federal spending on naval ship construction than the Bush administration wants.
Although Bush is seeking the biggest increase in defense spending in some 20 years, the shipbuilding budget would decline from $6.5 billion to $6.1 billion.
Sunday
April 6th, 2025
6:43PM
