Friday, Oct. 15, 1965
Radical Reform
Weighed down by the world's highest taxes, labor and construction costs, the U.S. merchant fleet survives only by dint of vast Government subsidies:
$416 million yearly. Any attempt to pare the handouts or change the fleet's special-treatment laws is usually torpedoed by the industry and its combative unions. Last week a Government task force headed by Commerce Under Secretary Alan Boyd bravely launched a drastic program for shipping reform.
Key proposals:
>> End all U.S. passenger service by 1977 simply by not replacing the 13 luxurious but mostly money-losing U.S. liners as they wear out. Estimated ultimate saving: $47 million yearly.
>> Permit U.S. flagships to be built and repaired in less expensive foreign yards, but maintain a fixed amount of subsidized building in U.S. yards for national security needs. Saving: $44.5 million yearly.
>> Eliminate laws requiring at least 50% of all Government cargoes to be shipped in U.S. vessels. Eventual saving: $400 million yearly.
>> Use the savings from these cutbacks to subsidize the building and operation of 65 modern and highly automated ships, which presumably could be run by much smaller crews.
Predictably, the industry's politically powerful shipping lines, builders and unions opposed the program or large chunks of it. Said James Farrell, chair man of Farrell Lines: "Some of the proposals will get through, some day but about as immediately as peace in Viet Nam."
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