Why should we Bail out the Cruise industry?

[aiken]

I am not in favor of any bailouts. Let the companies reorganize under bankruptcy laws and if there's a business case moving forward, the assets will be available to those bidders. We can take care of US based employees via our safety net/unemployment insurance programs.

[Starsky]

The cruise lines employ a total of 20,600 people in this county. Not a very large industry, and one who avoids U.S. oversight like the plague. (no pun intended) They can find their own path out of this crisis. Money is cheap right now.

Regarding the Jones Act, it should be repealed and replaced with something better to protect Maritime jobs. The Act costs our U.S. islands and territories many millions of dollars every year from the unintended consequences of this Act. It wasn't designed to help our islands; it was designed to protect our maritime industry. Instead, foreign ships bypass these islands and ship directly to the mainland, then goods are shipped back on U.S. ships to the islands they passed on the way. It creates redundancies in the logistics chain, and is ruinous to certain island industries that can't compete because it costs too much to ship their products to the mainland for processing and distribution. Islands like Guam, Hawaii and Puerto Rico should be exempt from the laws. It would greatly help their economies to be more self-sufficient.

[RetiredAt55.5]

Quote:

Originally Posted by CaptTom Norwegian (not Carnival) originally planned to build a number of Jones Act ships. The Jones Act basically requires ships between US ports be US-built and US-staffed. They saw cruises between Hawaiian ports, or Hawaii and the US mainland, as a profitable market. Interesting tidbit: At one point they bought the SS United States, with plans to renovate her for those routes. All of that didn't pan out. The market wasn't there and they still only have the one ship running that route. It's sort of too bad.

Off topic, the SS United States was just in the news again as a new potential project emerged with a tie in to Airbnb -

https://gcaptain.com/historic-ocean-...t-second-life/

The economic situation will no doubt scuttle this project. This ship can't catch a break. It's been in limbo for literally 50 years, harbored in Philadelphia now.

With apologies for the tangential post, now back to the discussion about rescuing cruise ships ....

[Beststash]

Quote:

Originally Posted by aiken I am not in favor of any bailouts. Let the companies reorganize under bankruptcy laws and if there's a business case moving forward, the assets will be available to those bidders. We can take care of US based employees via our safety net/unemployment insurance programs.

Agree!

[Souschef]

Minor point. The Jones Act was for cargo only The Passenger Vessel Service Act of 1886 applies to cruise lines. The requirement is that the ship stop at a foreign port That is why the round trip cruise from LA to Hawaii has to stop at Ensenada. Also why Alaskan cruises make a stop in either Vancouver or Victoria.

[Midpack]

If you’re still sympathetic to the cruise industry https://slate.com/business/2020/03/c...ut-no-way.html

Quote:

The State Department and Centers for Disease Control and Prevention officially told Americans to avoid cruises on March 8. The industry didn’t officially shut down until five days later, after a request from Trump. Bailing out the cruise industry now would only reward its decision to keep operating after it became clear its vessels were a significant public health hazard (Cruise ships are notorious Petri dishes for pathogens, prone to outbreaks of everything from measles to norovirus), and possibly set the stage for it to repeat the same mistakes the next time the world is facing an incipient pandemic. It would be one thing if we were talking about imposing stricter codes of conduct on the industry in return for loan guarantees (which is the form these bailouts will likely be taking). But that doesn’t seem to be the case. Despite the obvious moral hazard involved, there might be some argument for bailing out the cruise biz if it were truly an essential piece of the American economy, like the major banks were in 2008. But it’s not. While the world’s three top cruise lines—Carnival, Royal Caribbean, and Norwegian—are all based in Miami, they flag their ships in foreign tax havens like Panama, Bermuda, and Liberia, which allows them to avoid U.S. corporate taxes and do an end-run around domestic labor laws. Relatively few Americans actually work on the ships (in fact, there’s only one cruise ship in the world with an all-American crew). Instead, they tend to be staffed with crews from poorer countries such as the Philippines, who are willing to work long, grueling hours. One investigation by Univision and Columbia University’s journalism school referred to them as “sweatshops on the high seas.” If one or more of these companies ended up in bankruptcy court and most of their assets got scooped up by a private equity firm, it wouldn’t exactly be a catastrophe for the domestic economy.

[aja8888]

Quote:

Originally Posted by neihn Absolutely no bail out for any cruise that is not registered in the US. No bail out for any company that bought back stock in the last 3 or 4 years (after the tax break, instead of investing in growing the business and/or awarding employees, they send the money straight to share holders pocket)

Add to the Executives pockets also...and lots of it.

[CRLLS]

Is this a poll? I support no bail out for the foreign owned cruise companies. We owe them nothing. Definitely support, in some manner, the American employees caught in the crossfire.

It becomes more a difficult question for me to decide when the company is US based but the ships are foreign flagged. I admit, I now have mixed feelings.

[CaliKid]

I feel like cruise ships may just be a thing of the past like the train. I am ok to not bail them out.

[Souschef]

Quote:

Originally Posted by CaliKid I feel like cruise ships may just be a thing of the past like the train. I am ok to not bail them out.

I am sorry, but I have to disagree. If you look at that chart by Midpac #8, over 20 million passengers cruised last year. Also they keep building new cruise ships. This does not look at all like AMTRAK

[friar1610]

I've been on a few cruises, only one of which was on a US-registered ship (cruise was entirely within the US). I've enjoyed them and hope to go on others in the future if the industry survives. I also feel sorry for all the crew, primarily from developing countries, who have lost their jobs as a result of the pandemic.

All of that said, I don't think Uncle Sam should spend one dollar to subsidize non-US-registered cruise ships. If the industry survives it should only be because the cruise lines are able to appeal economically to a clientele which, incidentally, may have lost a good chunk of its discretionary funds.

Oh yeah...I have been on a few other US-registered ships...no pools, live entertainment or cocktail lounges. Their names all began with "USS".

[GreenEggs]

If they go bankrupt somebody else will purchase the ships & rehire the crews. They can hire on with Amazon, Walmart, Dollar Tree, or Dominos in the meantime.

[brewer12345]

Burn them down to the waterline and use what is left for Navy target practice. No bailouts for floating diarrhea prisons/petri dishes.

[ShokWaveRider]

Quote:

Originally Posted by brewer12345 Burn them down to the waterline and use what is left for Navy target practice. No bailouts for floating diarrhea prisons/petri dishes.

Err, OK.

[IMATERP]

Although I am an avid fan of cruising, ships and crew are essentially foreign entities (and staffing.). We should not bail out any corporation (or subsidiary) that is not based in the U.S.

I

[eytonxav]

What is your definition of bailout? Cash that doesn't require repayment or cash with payback required. I believe the later is what is being proposed in the senate to get us through this extraordinary situation.

[Gumby]

They do not provide essential services, do not pay much if any US taxes and do not employ US citizens. I see no reason to give them either loans or grants. Shareholders may take it in the shorts if they file Chapter 11, but that is one of the risks you have to accept as a shareholder of any company.

[DrRoy]

If they are US companies/ships.

[Spock]

Quote:

Originally Posted by DFW_M5 What is your definition of bailout? Cash that doesn't require repayment or cash with payback required. I believe the later is what is being proposed in the senate to get us through this extraordinary situation.

Either way (gift or loan) the fed is printing the money out of thin air and adding to unease about the future of the dollar. In this specific case (tiny impact to US economy, registered in foreign countries to avoid US taxes) the funny money should go else where.


The ships are not going to suddenly dissolve... if there is a market for cruises the ships can be bought by successor companies.

[PatrickA5]

I'm old and my memory is going, but I'm pretty sure I've heard the President saying multiple times that we're going to "loan" the money and not require them to pay it back - which would make it a gift. Please correct me if I'm wrong and I hope I am.

I'm not in favor of bailing out the cruise industry, but figure we probably will since the President has mentioned that industry many times.