Want a SuperCarrier? The US Navy will pay you to take it!

by **DoomYoshi** on Sun Aug 03, 2014 8:22 pm

http://www.navytimes.com/article/20140508/NEWS04/305080053/Navy-pays-1-cent-scrap-ex-carrier-Saratoga

I would pay at least 20 bucks for my own carrier.

by **AndyDufresne** on Sun Aug 03, 2014 9:29 pm

DY, lets pool our money. With your $20, and my varying number of saxbucks, we can make a decent offer. I'm willing to take on other off topic denizens who want to join this as well.

--Andy

by **BigBallinStalin** on Sun Aug 03, 2014 10:04 pm

I wonder how much ESCO Marine lobbied to get that deal.

If government was more benevolent, couldn't they have sold the carrier at market price and then used the funds to get more vaccines, dildos, or at least Happy Meals? Think of the deadweight loss on this one. So many children, men, and women of all ages could've been satisfied.

by **Dukasaur** on Sun Aug 03, 2014 10:05 pm

Yeah, but can you afford to fuel up a squadron of F-14s? Without those, a carrier is just a big floating box.

by **Dukasaur** on Sun Aug 03, 2014 10:12 pm

BigBallinStalin wrote:I wonder how much ESCO Marine lobbied to get that deal.

If government was more benevolent, couldn't they have sold the carrier at market price and then used the funds to get more vaccines, dildos, or at least Happy Meals? Think of the deadweight loss on this one. So many children, men, and women of all ages could've been satisfied.

Actually, I suspect they got a good deal.

"Demolition" is actually harder than it sounds. Yes, it's easy to break things, in the general sense, but breaking things up efficiently, without anyone getting hurt and without a lot of toxic debris spilling into the water, is a horse of a different colour. It's a fairly long process involving substantial expertise.

Yes, the shipyard will make a profit on this deal, but probably not a huge profit. As for market value -- the ship wouldn't be getting scrapped if it wasn't at the point that fixing it would cost more than it's worth. Basically it's market value is its scrap value at this point.

by **BigBallinStalin** on Sun Aug 03, 2014 10:41 pm

Sure, dude. A jabillion tons of steel = $0.01, or the profit margin was "not huge." Perhaps 20,000,000% or so? I'm sure there was no way the government couldn't have made more money from this exchange. It's not like there's no nation in the world which would've been willing to repair a conventional carrier. None at all. Surely, it's cheaper for them to build one from scrap, right? It's only a multi-billion project that takes a few years and requires sophisticated capital and expertise, but government knows best, right??

Errrrggggg.............

The carrier could've served as a tourist attraction or a cheap mobile hotel, but who knows because government doesn't really give a shit about making a profit. It doesn't have to! Revel in the deadweight loss, Dukasaur. Revel in it. All that inefficiency, all those dying children without access to vaccines.

by **Dukasaur** on Mon Aug 04, 2014 12:37 am

BigBallinStalin wrote:Sure, dude. A jabillion tons of steel = $0.01, or the profit margin was "not huge." Perhaps 20,000,000% or so? I'm sure there was no way the government couldn't have made more money from this exchange. It's not like there's no nation in the world which would've been willing to repair a conventional carrier. None at all. Surely, it's cheaper for them to build one from scrap, right? It's only a multi-billion project that takes a few years and requires sophisticated capital and expertise, but government knows best, right??

Errrrggggg.............

The carrier could've served as a tourist attraction or a cheap mobile hotel, but who knows because government doesn't really give a shit about making a profit. It doesn't have to! Revel in the deadweight loss, Dukasaur. Revel in it. All that inefficiency, all those dying children without access to vaccines.

Yeah, 80,000 tons of steel at probably $450/ton is $36 million, which sounds like a real nice pile of cash.

Actually more, with the copper and nickel and various specialty metals.

Until you start to count the costs. Minimum 6 months, probably closer to a year, of a major drydock being tied up, literally hundreds of skilled labourers involve @NotCheap wages, the costs of scraping off toxic paints and siphoning toxic lubricants and shipping them to enviromentally-approved disposal sites, etc., etc. The monstrous scaffolding work and fall-restraint systems, etc., etc.

Shipbreaking in industrialized countries is not generally profitable. Virtually all private shipbreaking occurs only in South Asia, where the wages are low enough to make it possible.

http://www.shipbreakingbd.info/Shipbreaking%20around%20the%20world.html

China and India each command around 30% of the world‟s recycling capacity, while Bangladesh‟s capacity is around 25%. Pakistan and Turkey each command 9% and 2%, respectively. These capacity figures are based on an analysis by IMO covering the last ten years.

The fact that there is very little ship recycling activity in Europe is often explained in terms of the inability of Europe to compete with the low labour costs and low compliance costs of South Asia.

During 2012, 1309 vessels reported for disposal at total deadweight of about 61mil tons. Ship owners scrapped a total of 1,119 ships over the course of 2013.

The ship breaking industry in South Asia has been under pressure because of alleged abuse of the environment and occupational health hazards. It is seen as a polluting industry that has adverse effects on the ecosystem and human lives, particularly the workers. Enforcement of regulations in the ship breaking industry is weak. Ship breaking activity is associated with dirty jobs, numerous deadly accidents, insecure labour, environmental injustice, and violation of human rights.

In Bangladesh...

A labourer earns around 1-3 dollars per day depending on the type of work. Some 300-500 people are typically employed on a temporary basis for dismantling a ship, and many more are employed in downstream activities for recycling of all kind of materials from the ships. Some of the recycled materials are exported, and the rest is sold of and reused in Bangladesh. A lot of the materials are of high value to the local economy. In particular, recycling of steel for producing iron rods for construction, plates for new ships or for many other purposes is a lucrative business.
(...)
Working in the ship breaking yards is a very dangerous job, which involves many human health risks. Sometimes gases explode killing workers. It also happens that workers are crushed by tumbling or falling steel parts. Sometimes workers fall from the high sides of ships on which they are working without safety harnesses. Many of the oxyacetylene cutters work without goggles. Few wear shoes, let alone protective clothing. Local organisations in Bangladesh estimate that some 1000-2000 workers have died in the last 30 years, and many more have suffered serious injuries. General health statistics show that the percentage of people with disabilities in the Chittagong area is above average for the country as a whole, because many workers have lost limbs or got other disabilities from working in the ship breaking yards.

A dirty, dangerous job, which can be done profitably only in places where "a labourer earns around 1 to 3 dollars a day" and where the dead labourers don't file multi-million dollar lawsuits. Not easy to achieve the same result in a G7 nation.

Unfortunately, for political reasons military ships can't just be sent off to Bangladesh to be broken up profitably. A job that is going to probably produce something in the neighbourhood of half a million man-hours of labour is not going to be farmed out overseas when there are plenty of congressmen with unemployed steelworkers in their constituency.

Now, there is substantially more revenue to be gained from military ships, because of the specialty alloys used in them and so on. Even so, it doesn't sound to me like the difference is enough to pay for the increased labour costs. We're talking about a job involving welders, pipefitters, steelworkers, crane operators, engineering technicians, a lot of very skilled, very well-paid trades. In Bangladesh they might make $3/day, but in the USA they make $300/day or more. I think the shipyard is going to be very savvy indeed to make a profit on this, overall.

Or, I suppose another possibility is that they know they are going to lose money, and the Navy has made a secret deal with them to make it up by giving them some repair work over the next few years.

As far as the other ideas.... this ship is 62 years old. It probably would need a monumental amount of repair and modernization to continue on duty. At some point, it's cheaper to build a new one than to keep fixing the old one. Anybody who has ever owned an old car will understand this.

As far as selling it to some other country... who? The countries that can afford this (basically, the USA, Russia, and China) are not interested in old clunkers. They are building new ships for the high-tech wars of the future. The other countries that have aircraft carriers can't afford anything this big. Spain, Turkey, France, Japan, etc., all operate carriers that range from half the size of the Saratoga to one-quarter of the size of the Saratoga. Their budgets couldn't take a hit like this. Remember, the Forrestal-class carriers like the Sara cost $145,000,000/year to operate when they were in service. That's just for the ship. It doesn't include the planes. And it's just operating cost, not capital cost. Nobody who can afford a boat like that wants one that old, and nobody who would be willing to take a boat that old (ranging from DoomYoshi to Tunisia) could afford it.

As far as museums go, the U.S. already has 5 aircraft carrier museums. None of them turn a profit. Even when taken out of active duty, these ships cost a lot to operate. All of the museums depend heavily on donations to supplement ticket sales. Apparantly there was a movement to turn the Sara into a museum, but according to the Navy statement...

It was available for donation to a state or nonprofit organization for public display as a museum or memorial for 12 years, but no viable applications were received.

by **BigBallinStalin** on Mon Aug 04, 2014 10:21 am

If shipbreaking was as unprofitable as you suggest, then why do they even exist in the US? (because they're profitable, so we can dismiss a large chunk of your post). It's not surprising that the ship wasn't put up for bidding among US or even international shipbreakers, so it's pretty obvious that this process is rigged. The carrier wasn't put on the open market, so you're making stuff up about no nation or organization willing to buy it. Selling it for $0.01 is absurd, and to see you constantly say otherwise is odd.

by **GabonX** on Mon Aug 04, 2014 10:38 am

How much does it cost to operate an aircraft carrier per day?

I'm seeing numbers ranging from 6 to 7 million dollars per day to operate one of these ships. For one this old I could see it being less, or much more because of maintenance costs and larger crew requirements. It's hard to tell...

I do know that anyone who's taking a firm stance on this without an extensive knowledge of how much it costs to operate an aircraft carrier is speaking in ignorance. Would it cost more to operate, dock, transport, deconstruct, etc. this ship for an indeterminable amount of time than the steel it's made of is worth?

I don't know for sure, and neither do any of you.

by **2dimes** on Mon Aug 04, 2014 10:57 am

Ok I'm trapped. Now what?

by **DoomYoshi** on Mon Aug 04, 2014 2:30 pm

BigBallinStalin wrote:If shipbreaking was as unprofitable as you suggest, then why do they even exist in the US? (because they're profitable, so we can dismiss a large chunk of your post). It's not surprising that the ship wasn't put up for bidding among US or even international shipbreakers, so it's pretty obvious that this process is rigged. The carrier wasn't put on the open market, so you're making stuff up about no nation or organization willing to buy it. Selling it for $0.01 is absurd, and to see you constantly say otherwise is odd.

They didn't sell it for $0.01. They paid the company to take it.

Also, me and Nigeria were working on a joint plan to buy it and keep it in Lake Ontario until Boko Haram decided to kipnap the Cameroonian's president's wife (and her monkey).
So, the twenty bucks he had went to buying a security force.

by **DoomYoshi** on Mon Aug 04, 2014 2:31 pm

2dimes wrote:Ok I'm trapped. Now what?

That got me thinking... we could turn one into a general aviation airport for the super-rich!

by **Dukasaur** on Mon Aug 04, 2014 2:38 pm

BigBallinStalin wrote:If shipbreaking was as unprofitable as you suggest, then why do they even exist in the US? (because they're profitable, so we can dismiss a large chunk of your post).

No. Shipbreaking is done at the same facilities as shipbuilding and ship repair. The facilities exist because the ship repair is profitable, and the ship repair is only made profitable by military contracts, which have to be done within one's own country for political reasons. All civilian shipbreaking, as well as most civilian shipbuilding and even a good part of civilian ship repair, is farmed out overseas to countries with lower labour costs. If military contracts didn't exist, almost all saltwater shipyards in G7 countries would close.

The carrier wasn't put on the open market, so you're making stuff up about no nation or organization willing to buy it.

Just reasonable assumptions. But you want to argue... :roll:

Selling it for $0.01 is absurd, and to see you constantly say otherwise is odd.

Haven't you ever had some rusted-out old junker that you finally had to put down, because it cost more to keep it running than it was worth? That's the process at work here.

With cars, at least there's a more-or-less automated process for putting them in the crusher that involves very little labour, so scrapyards can afford to pay you $250 for an old rustbucket. Ships can't just be put into a crusher. Scaffolding has to be built, and highly-skilled men have to go and dismantle pieces. It's not cheap, and at G7 labour rates it's not profitable. Read the link I posted earlier, or do your own search if you don't trust me.

by **tzor** on Mon Aug 11, 2014 10:57 am

For me this is very ironic. I'm working on a novel where a fictional island nation is looking to the United States to supply them with used naval vessels that they can scrap for a profit. Mind you the time line of this novel is in the late 1920's through the 1930's. They wanted really big ships you know, so the Admiral could sail around it for a while and feel important before they moved it to the decommissioning factory.