Matson's new ships to be sold, leased back
By Kelly Yamanouchi
Advertiser Staff Writer
Matson Navigation Co. said it wants to find a different owner for two cargo ships being built in Philadelphia.
The company said it does not expect to get enough labor cost savings to operate the ships based on discussions with offshore labor unions.
"We're interested in another owner stepping into our shoes," said Jim Andrasick, Matson's president and chief executive. "It now makes more economic sense for Matson to charter those vessels than to own and operate them."
Matson is still in negotiations with unions that crew its ships, Andrasick said. The talks affect the Masters, Mates & Pilots union among other labor groups. Matson's decision does not include the International Longshore and Warehouse Union.
Matson announced last year it would spend nearly $220 million to buy two diesel-powered ships built by Kvaerner Philadelphia Shipyard Inc. to replace two steam-powered ships that are more than 30 years old. The ships are expected to be more reliable and fuel efficient, and will be cheaper for Matson to load and unload.
Matson had planned to tap its $170 million capital construction fund to help finance the ships' construction along with another $50 million it would borrow.
Andrasick said Matson still plans to use the ships in Hawai'i trade, but would not own or operate them.
He said Matson could wait until just prior to the first ship's delivery, scheduled for the third quarter of this year, before it makes a final decision to transfer the vessel to a different owner and operator. The second ship would be delivered in mid-2004.
Six unions crew Matson ships. The Masters, Mates & Pilots union Web site says if Matson transfers the ships to another company, it would draw shipboard personnel from other unions who maintain contracts with the company.
According to the site, officials from Matson unions were working "to find a compromise in wages and benefits for these two new ships that would solve Matson's financial problems and allow all the unions currently represented to keep their members aboard."
Another meeting between the unions and the company is scheduled for next week. Officials from other unions could not be reached yesterday.
Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.
