American Classic’s JACKSON, Miss. >> Northrop Grumman Corp. may have hammered the last nail yesterday in American Classic Voyages Co.'s hopes to resume cruise line operations in Hawaii in 2004.
Hawaii return unlikely
Construction of Isle-bound cruise
liners is canceled following a
bankruptcy filing and the
withdrawal of loan guaranteesStaff and wire reports
The Los Angeles-based defense contractor canceled its Project America venture yesterday to build two cruise ships bound for Hawaii, saying financial woes from the terrorist attacks had made it impossible to complete the billion-dollar effort.
The first vessel at the company's Ingalls shipyard in Pascagoula is about 40 percent complete and was scheduled to be delivered to Hawaii in February 2004. The second vessel was scheduled to be delivered the following year.
"We're going to move the ship out of our production area because it's tying up space," said Northrop Grumman spokesman Randy Belote.
The decision marked yet another blow to American Classic, which filed for Chapter 11 bankruptcy protection on Oct. 19, citing a fallout from the Sept. 11 attacks, and ceased operations of the Honolulu-based ms Patriot and Maui-based S.S. Independence the following day. The U.S. Maritime Administration, which holds the mortgage note on the Independence, removed the ship from Honolulu Harbor Tuesday while Holland America Line, which holds the note on the Patriot, is attempting to take back that vessel.
American Classic Chief Executive Officer Philip Calian, who on the day of the bankruptcy had expressed optimism about returning to Hawaii in three years, tried to remain upbeat yesterday in issuing a statement.
"We understand yet are disappointed by Northrop Grumman's decision to stop work on Project America," the statement said. "We are hopeful that the future of this landmark construction project, the first large U.S.-flagged passenger vessels to be built in the U.S. in more than 50 years, will move forward in the future with the support of Northrop Grumman and the U.S. Maritime Administration."
Northrop said it canceled the Project America construction program after the U.S. Maritime Administration decided to end its guarantee of $1.1 billion in loans. The agency said last week that it would not back any further debt without a new financial arrangement to "provide greater protection for taxpayers."
