Posted on: Tuesday, August 7, 2001
GOP senators at odds over cruise ship work
Associated Press
JACKSON, Miss. — Sen. Trent Lott, R-Miss., says he's hopeful that Ingalls Shipbuilding in his hometown of Pascagoula will be able to deliver on a billion-dollar contract to build a pair of 1,900-passenger cruise ships for American Classic Voyages, for use in Hawai'i.
One of his Senate colleagues, however, is skeptical.
Ingalls, a subsidiary of Los Angeles-based defense contractor Northrop Grumman, began work in June 2000 on the largest cruise ship ever built in the United States — and the first such project in the country in more than 40 years.
Ingalls' contract with Miami-based American Classic Voyages Co. started a new line of business for a company that has made its mark for more than 60 years building destroyers and other ships for the Navy.
Asked three weeks ago about any delays in the cruise ship project, an Ingalls spokesman said he knew of nothing out of the ordinary.
Ingalls spokesman Den Knecht declined yesterday to discuss the status of the cruise ship construction. He referred to an earlier statement by Northrop Grumman spokesman Randy Belote that the first ship is "41 percent complete," if the total design and physical construction are taken into account.
According to a July 11 letter from Sen. John McCain, R-Ariz., to President Bush, Ingalls is as much as 18 months behind schedule, and "the shipyard and American Classic Voyages are crying foul."
Lott said he has spoken to top executives with Northrop Grumman and Ingalls and "they're working very hard to go forward with this program."
The Senate minority leader said Northrop Grumman was working with American Classic Voyages and "financial groups to get this ship built."
Fran Sevcik, vice president of corporate communications for the cruise ship company, said yesterday she could not discuss the time frame or dollar amount involved in the delay.
"We remain optimistic about the yard honoring the terms of the contract," Sevcik said.
The success or failure of the project could affect the livelihood of American Classic, the reputation of Ingalls and future support for a major U.S. loan guarantee program for the domestic shipbuilding industry.
McCain's letter to the president was not about the cruise ship project in particular, but about his opposition to the federal Title XI Maritime Guaranteed Loan Program, which is administered by the U.S. Maritime Administration.
McCain urged Bush to end federal assistance for the program, which he called an unnecessary corporate subsidy to the shipbuilding industry.
"Our nation has a strong and proud maritime history that I fear is all but lost due to a dependence on government programs that do not foster a progressive, competitive attitude in what has clearly become a global market," McCain said.
McCain said the Ingalls-ACV project, which is guaranteed through the Title XI program, could cost taxpayers more than $1 billion if it "does not turn around very soon."
Lott said he supports the guaranteed loan program and that financing was in place for it to continue. He added, "Senator McCain has never been supportive of the maritime industry."
Philip C. Calian, chief executive of American Classic Voyages, told the Associated Press in March that building cruise ships was new territory for the Mississippi shipyard, but "we take Ingalls at their word that they're ready and willing and able to complete the job."
With an option for a third vessel, the contract's potential value is $1.4 billion.
