Cruise Ship Deal Long in the Making

The two ships Ingalls agreed to build for American Classic Voyages were to be the first cruise ships to be built in the U.S. in the last 40 years, and they were designed to carry up to 2,000.

In March, 1999, Ingalls sealed the deal to build the two luxury liners at a price of nearly $900 million. At that ceremony former Ingalls President, Jerry St. Pe said, "It will give us the unique opportunity to put in place in Pascagoula, Miss., the kinds of commercial processes that are going to yield millions and millions of dollars in savings associated with shipbuilding, whether they're commercial or whether they're ships for the navy."

The contract included an option to build a third ship, with the first one ready to sail to the Hawaiian Islands in 2003.

"Project America enables us to provide more passengers a Hawaiian vacation experience aboard US owned, US built and US crewed cruise ships," Phil Calian of American Classics Voyage said at the contract signing. "We're proud to be doing our part to expand the US flag cruise industry."

Construction kicked off in October 2000 with a keel dedication for the first ship. In June, 2001, as more than 1,200 Ingalls workers were building the first of the two huge vessels, changes were brewing in Washington. President Bush proposed cutting several programs, including the one that helped finance the construction of the ships. Without the funding, it was unlikely that American Classic's vessels would ever set sail.

Republican Sen. John McCain urged the President to slash the program. Sen. Trent Lott and Congressman Gene Taylor quickly defended it.

"I'm a John McCain fan but he's wrong on this one," Rep. Taylor said. "He has not taken the time to think this all the way through. He's a human being and I'm going to say he's wrong on this one."

"We have not built a commercial ship at Ingalls in 25 years," Sen. Lott said. "A cruise ship hasn't been built in America in 35 to 40 years, and there is no reason we shouldn't be in that international market."

One month ago, Ingalls' parent company announced a new agreement with American Classic to keep construction on track. The agreement raised the price of both ships by $19 million and pushed back all completion dates by one year.

Then one a week ago, American Classic filed bankruptcy and cut 2,100 jobs. Even still, Ingalls parent company said work on the two cruise ships would continue.