$42 million from PA to shipyard

Discussion in 'Philadelphia Business' started by billy ross, Aug 12, 2013.

  1. billy ross

    billy ross Well-Known Member

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  2. jslader

    jslader Well-Known Member

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    The $42 million was an "investment". Basically, the state bought some of the equipment from the shipyard, which the shipyard then leases from the state. As for the state making money, how much in wage taxes, sales tax, income tax both from the shipyard, it's suppliers, and their suppliers have been received since the construction of the first two ships the "investment" was made for? How much will they receive over the course of this deal?
     
  3. NickleDimer

    NickleDimer Well-Known Member

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    So can they tear that SOB down and lengthen the airport runway now?
     
  4. jslader

    jslader Well-Known Member

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    Going to have to wait a little longer to tear down that crane; Aker's backlog of newbuildings now extends into 2018.

    New Aker ship order at $418 million

    Still wondering how many years it would take for the city to recoup the $42 million investment from the shipyard. What's more, the ships mentioned in the article are going to take so long to be delivered in part so that Aker can go after more contracts for tankers, which now are in high demand.
     
  5. Fishtown Phan

    Fishtown Phan Well-Known Member

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    The 42 million was to build two product tankers on spec according to the article. They have since signed a deal to sell both ships so presumably the state is no longer on the hook for the money. Also as far as I know 8/26 can't get any longer without moving the Girard Point bridge.
     
  6. billy ross

    billy ross Well-Known Member

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    I'm pretty sure the money was used for working capital, but it showed up on the books as the state 'buying' capital goods from the shipyard. I'd like to know whether there are any lease payments for the capital equipment at the shipyard which is now owned by the state. I think the state has poured something like $500 million into that shipyard.
     
  7. Sean

    Sean Well-Known Member

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    The money has run out. WSJ reported last week that the Philadelphia Shipyard has no new orders and will be laying off 20% of its workforce.

     
  8. eldondre

    eldondre Well-Known Member

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  9. phillyaggie

    phillyaggie Well-Known Member

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    It can't compete in an open market, and the closed market isn't large enough for it... but state govt wasting good money after bad.
     
  10. eldondre

    eldondre Well-Known Member

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    Inthe end it really shouldn't be on the state to keep it afloat. The market is closed because uncle sam says it is important to have shipbuilding capacity....but the closed market has put most shipbuilders and the shipping market out of business (domestic shipping has been in almost terminal decline). If uncle sam believes its propaganda on the Jones act it needs to subsidize shipbuilding not the state. Other closed markets like Japan have found it necessary to subsidize shipbuilding. Or we could follow the UK which abandoned its cabotage laws in 1848 without much detriment to itself
     

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