How Is the Collapse of GM et al Like the Demise of the Merchant Marine?

Matt Welch | June 1, 2009

Here, let's let Richard Bank tell you:

[T]he U.S. maritime industry [...] began its death spiral in the 1970s, a time when it was massively subsidized by the federal government and when laws guaranteed that U.S.-flag vessels would carry all government-related cargo. Yet even with these subsidies and guarantees, the dozen or more U.S. companies -- including such once well-known names as American Export Lines, Grace Lines and Pacific Far East Lines -- failed, one after another, in the face of competition from more efficient carriers as more and more countries entered the international shipping market.

Initially, the unions and their congressional supporters pointed to "cheap foreign competition" as the source of their troubles. But those cries persisted even into the late '70s and '80s, when European and Japanese carriers were paying higher total wages per seafarer than U.S. flag vessels. It's widely believed that along with less-than-stellar management, union demands for ever-higher wages and excess manning levels -- such as insisting on crews of 35 or 40 when crews of 18 are sufficient to operate safely -- doomed the U.S. flag industry. Even with all the subsidies, even with technical innovations, containerization and other pioneering cargo advances, U.S. companies couldn't survive the financial burdens of the union demands.

I was frustrated watching all this unfold when I served in the State Department's Office of Maritime Affairs. Instead of fixing the problem and meeting the competition, industry officials offered excuse after excuse and repeatedly trekked to Capitol Hill in search of more money. They sought protectionism as a remedy. [...]

The only U.S.-owned liner shipping company that did well during those times, SeaLand, was the one carrier that held out longest without taking subsidies and sought out profitable trade lanes.

Whole thing here.

Comments

24AheadDotCom|6.1.09 @ 3:47PM|#

Another brilliant - i.e., libertarian - post! I see absolutely no reason why the U.S. should have a maritime industry. Instead, we should simply let China deal with those messy matters. It's called "division of labor", look it up if you aren't familiar with how great libertarian thought is.

Let a million flowers bloom!

|6.1.09 @ 3:54PM|#

Matt,

You are an idiot. Isn't it obvious that the maritime industry has nothing in common with the auto industry?

I mean, cars travel on land and ships travel on sea. Even a blind man can see those two industries have nothing in common.

Warty|6.1.09 @ 3:58PM|#

Shut the fuck up, Lonewacko.

Tim Cavanaugh|6.1.09 @ 5:11PM|#

Why can't we just start impressing foreign crews and making them crew U.S. ships? Who can stop us: a bunch of our former protectorates?

Either we protect our maritime industry or I'll have to stop greeting every man I meet with a flirty "Hey, Sailor!"

Warty|6.1.09 @ 5:16PM|#

Don't worry, Tim. We can retrain the unemployed sailors as police, construction workers, and Indians.

|6.1.09 @ 5:34PM|#

Short answer -
It isn't.

Rex Rhino|6.1.09 @ 6:19PM|#

The maritime shipping industry is vital to our nation, and should be protected at all costs!!!

Well, all costs, except having a competitive market driven maritime shipping industry... that is too high a price, hand it over to the Chinese.

|6.1.09 @ 6:21PM|#

Ixnay on this edthray. I make a shit-ton of money as an Able Seaman working through the Sailor's Union of the Pacific. Don't fuck me.

No Name Guy|6.1.09 @ 6:24PM|#

Eastern Airlines:

Pilots union said "Full Pay until the last day." Yup...precisely what they got.

Precisely what the UAW will get. Precisely what the merchant seamen got.

|6.1.09 @ 7:16PM|#

An industry driven to the ground by unionism? I am shocked, SHOCKED!

|6.1.09 @ 9:48PM|#

Yup. When workers control the means of production, the workers offer shitty substandard products (and services) at inflated prices, and then use the state to ban all competition so consumers are forced to buy them.

|6.2.09 @ 4:39AM|#

The article makes good points, but it's totally irrelevant. We can stop pretending that reason and history and experience matter the least fucking bit to Obama. He's going to nationalize things, he's going to hand them over to the Unions, and he's going to let them be run in to the ground. It does not matter what evidence you provide that this is not a good idea. It does not matter what arguments you make. It doesn't matter.