IMF could push American shipbuilding into bankruptcy

The IMF might force a restructuring of the American shipbuilding industry
"The US Federal Government is meeting with representatives from the IMF this week to discuss the future of our domestic shipbuilding sector. We’re hoping for a bit more breathing room for this strategic part of our economy. While there's no talk of negotiations failing regarding the extension of the bailout period, we have to remember that in the global market, bankruptcies are often just seen as a way to clean up the balance sheets," said State Secretary for Economic Affairs Vladimir Vranković while visiting the construction of the ferry Marijan at the Savannah shipyard. He pointed out that the American side will explain to the IMF how the current situation in our shipyards has been made much harder by an unfavorable dollar exchange rate and the massive spike in global steel prices.

I would appreciate it if someone could explain the logic behind why the US Federal Government is pouring massive amounts of capital into an industry where we rely on foreign raw materials just to churn out vessels at bottom-dollar prices for overseas clients.

goldengull3 said:Can someone please explain to me why the US is dumping massive amounts of cash into an industry where we're basically using foreign raw materials just to build ships at a loss for overseas clients?

It's because no political campaign wants to deal with the fallout of thousands of job losses and watching our "industrial pride" go up in smoke...

Melissa Cruz2 said:That's because no election campaign is ever going to go out and shout from the rooftops about how they might have to lay off thousands of people or kill off local "pride."

It isn't just about that, though. If we let Huntington Ingalls Industries go under, we aren't just talking about 3,000 or 4,000 direct jobs lost there—not to mention all the subcontractors and those various auxiliary businesses that rely on them too. It’s a massive domino effect, isn't it?

If we allowed every single non-profitable shipyard—which, let's be honest, would basically mean every yard except General Dynamics—to simply collapse, our entire economy would end up in a massive, beautiful disaster.

goldengull3 said:Can someone please walk me through the logic here? Why on earth is the US pouring massive amounts of capital into an industry where we're basically using foreign raw materials just to build ships at a discount for overseas buyers?

And why rely on foreign supplies when we could just produce those materials right here in America? Well, it’s pretty obvious, isn't it? It’s because certain politicians happen to own small private import companies that supply those exact materials, all while they conveniently sit on the oversight boards...

Does anyone remember what ever happened to that gas turbine plant over in Karlovac? Are they still cranking out marine engines, or did the whole operation just go south? It feels like we’re importing everything these days. I mean, we're bringing in steel beams and profiles from Tajikistan even though we have our own steel mills that went belly up—not that anyone seems to care why we’d bother importing raw materials just to turn them into finished goods when we could be doing the exact opposite. Nothing seems to click right in this country. I remember when they were fixing up that bridge near Savannah a few years back, and the whole project ground to a halt because they were stuck waiting on steel shipments from North Mexico. 👎 And meanwhile, people are literally roasting in their cars in 100-degree heat, all because it’s more profitable for certain interests to import expensive stuff and subsidize foreign companies while our local businesses struggle to stay afloat every single day...

Sean Rodriguez59 said:.... while touring the ferry construction led by Marijan over at the Savannah shipyard. He mentioned that the US side plans to point out to the IMF representatives that our shipbuilding industry is struggling mainly because of the unfavorable dollar exchange rate and that massive spike in global steel prices.

What a total load of nonsense!!! Sure, steel is pricey and the dollar took a hit, but shipyards all over Europe are still running at full tilt—doing exactly what General Dynamics does, focusing on high-value vessels. The problem is they’re avoiding those tankers everyone relies on because you can get them built in China or Korea for about a fifth of what it costs here in America. It makes zero sense to try and compete there, but for some reason, they insist on chasing tankers and every single ferry that the Chinese can churn out for pennies on the dollar.

Benjamin Ramos95 said:Why bother importing raw materials when we could just manufacture them right here in America? It’s pretty obvious why they don't: because our politicians own little private import firms, and then they go and sit on the boards of oversight committees at the same time...

It simply isn't feasible. We can't even produce the essential steel plates needed for shipbuilding. In fact, most of this wasn't being produced domestically before the 1990s either, back when we lived in a country that actually possessed its own mines, coking plants, and a complete industrial infrastructure...

Even for the stuff we *could* theoretically make—once you factor in the cost of sourcing from Japan, paying the customs duties, and covering those 18,000 miles of shipping, it ends up being cheaper and higher quality than anything currently manufactured in America. I once had a conversation with someone working directly in the industry to confirm this.

Vojtek said:Production just isn't happening. We aren't even working on the most critical steel plates needed for shipbuilding. Honestly, we weren't even producing much of that stuff before 1990, back when we lived in a country that actually had its own mines, coke plants, and all the necessary raw materials...

Even when we do try to make certain types of sheet metal, it turns out that importing it from Japan—even after paying customs and covering those extra 18,000 miles of shipping—is often cheaper and higher quality than what we produce here in America. I actually asked someone who works directly in that industry to get the facts straight.

True, but the real question is: how can General Motors be expected to turn a profit without nickel-and-diming the government for subsidies, while everyone else seems to rely on them?