Yes, that headline is correct.
But before I start ranting about the U.S. Navy/federal government’s use and misuse of our tax dollars, let me offer some context.
There was a story on the news the other night that posed the question,
“Can you collect unemployment if you’re fired for refusing the COVID-19 vaccine?”
The short answer is,
“Probably not, because being fired for refusing the COVID vaccine could be considered being fired ‘for cause.’”
I was happy to hear it.
The story cut to a man-in-the-street interview and this whiny doofus:
“I think that the state should pay for their unemployment benefits…even if they don’t get vaccinated. Because it’s the right of the individual – that’s what our country is about.”
Some people just can’t get it through their thick heads that the “state” doesn’t pay for anything.
Local, state and federal governments derive their incomes from us taxpayers, so whether it’s a new storm drain, a new state highway, or a new aircraft carrier, all – and I mean all – of it was paid for with our….
Which brings us back to the above headline about the Navy selling two aircraft carriers.
For one cent each.
Let’s talk about the two aircraft carriers.
They’re the USS Kitty Hawk and USS John F. Kennedy.
Both went into service in the 1960s.
I found cost estimates for the Kitty Hawk ranging from $265 million to $400 million. I couldn’t find a cost estimate for the Kennedy, but since they were both aircraft carriers built around the same time, I’ll use those figures.
Let’s meet in the middle and say each ship cost $330 million to build.
That $660 million translates into around $5.5 billion today.
Here’s what the aircraft carriers looked like in their glory days:
But ships get old, as all machinery does, and according to the above Insider article,
“The Kitty Hawk was decommissioned in 2009 and the John F. Kennedy in 2017. Both have spent their time since being maintained in naval yards.”
The Navy decided it was time for the old ships to go to their final resting place.
In this case, that place is International Shipbreaking Limited (ISL), based in Brownsville, TX, formally known as EMR International Shipbreaking Limited, LLC:
You’ll notice the red arrow pointing to the “Sell to Us” option.
Click on that, and we learn this:
ISL also provides helpful, illustrated links of “What we Buy,” including “Marine Structures and Vessels”:
Vessels like the USS Kitty Hawk and USS John F. Kennedy.
On the “Sell to Us” page ISL talks about how they “guarantee you a fair price.”
How, I wondered, was ISL paying one penny per vessel a “fair price”?
These are big ships, each more than 1,000 feet long, and they must contain a lot of “scrap metal and items containing metal.”
And the Navy said, “One penny each, and their yours”?
Wait – it gets worse.
According to this article:
On previous occasions, it hasn’t been the Navy selling old ships to the salvage company.
It was the Navy (i.e., us taxpayers) paying the company:
“…often the Navy is the one paying millions more to contractors to take decommissioned vessels away for scrapping, which can be a very complex affair.
“For instance, the service is looking at a bill of more than $1.5 billion to dismantle the former Enterprise, its first nuclear-powered supercarrier. The total estimated cost to dispose of the hulk of the ex-USS Bonhomme Richard, a Wasp-class amphibious assault ship that was ravaged by a massive fire last year, was pegged at a more modest $30 million.”
And in the situation with ISL, according to this article:
“The navy previously paid ISL to have the company tow and dismantle decommissioned vessels, including the USS Constellation and USS Independence.”
So – why did ISL let the Navy (i.e., us taxpayers) avoid paying millions with the Kitty Hawk and John F. Kennedy?
Again, according to the Independent:
“A spokesman for Naval Sea Systems Command, Alan Baribeau, confirmed that ‘The contract values reflect that the contracted company will benefit from the subsequent sale of scrap steel, iron, and non-ferrous metal ores.’”
I’ll just bet the “contracted company” will “benefit.”
The contracted company – ISL – is going to make so much money from salvaging the USS Kitty Hawk and the USS John F. Kennedy that they apparently don’t even need those millions the Navy (i.e., us taxpayers) has paid in the past.
I suppose, to some, charging only two cents instead of millions makes ISL heroes.
I suppose, to some, spending only two cents instead of millions makes the Navy heroes.
Not to me.
Let’s scale this back a bit – from thousand-foot-long ships to something we can all relate to:
The world is full of companies like this, practically begging us to sell them our old, junky cars:
The arrangement is very simple:
“Our junk car removal team buy and picks up junk cars across the state of California, paying cash for cars and typically picking up within one to three business days…our junk car buyers in California will drive to wherever your vehicle is located to pick it up free of charge. That’s the Clunker Junker promise.”
This and other companies do the same thing as International Shipbreaking Limited, just on a smaller scale. The companies pay us, they take the car away, they process it, and make money selling what they’ve salvaged.
But in the case of the Navy, it’s been we, the people, paying the salvage company to take away old ships, process them and then make more money.
This makes no damn sense to me.
Well, perhaps brighter days are ahead.
Perhaps in the future when the Navy decides to junk a ship, they – I mean, we – will get paid more than a penny for it.
For years there’s been talk of getting rid of the penny, and good arguments made for that, like in this 2020 article:
“Each penny costs about 2 cents to produce, according to a 2019 report by the U.S. Mint…The Mint manufactured more than seven billion pennies in the 2019 fiscal year, at loss of nearly $70 million.”
If the goverment decides to phase out pennies, ISL will have to cough up more than one cent to take a decommissioned ship away and scrap it.
Maybe ISL will pay something closer to that “fair price” they talk about: