Greed On the High Seas: "Poop Cruise" & Concordia Cruise Executive Cashes $395,000,000 of Carnival Stock

Last week I wrote an article about Royal Caribbean CEO and President Adam Goldstein cashing in over $2,300,000 worth of Royal Caribbean stock, still leaving him with around $19,000,000 worth of his company's stock. 

It's difficult to justify the enormous wealth of the cruise executives given the fact that the cruise business is rigged to create gigantic profits free of U.S. taxes. Cruise lines like Royal Caribbean (Liberia) and Carnival (Panama) incorporated in foreign countries in order to avoid U.S. taxes, labor and wage laws, and safety regulations. The cruise lines pay dirt cheap wages to laborers from India and the Caribbean islands. They provide no benefits at all to their loyal crew members.

Cruise executive compensation isn't tied to whether the line's ships sink or catch on fire. One of the Micky Arison Carnival CruiseRoyal Caribbean cruise ships, the Grandeur of the Seas, caught on fire for two hours last year yet cruise CEO Goldstein still raked in millions. Cruise executives are rewarded for squeezing blood out of the stone. 

Tax-fee Royal Caribbean pays a salary of only $50 a month to its waiters and cabin attendants who it works like dogs, relying on the tax-paying cruise passengers to pay tips so the employees can try and make a living.  Yet Royal Caribbean is stealing, some say, some of the passenger money intended for tips and using the "tips" to pay the salaries of the non-tip earning crew members. Last year Royal Caribbean fired over one-hundred employees in its corporate offices here in Miami because of "tough economic times." Yet the cruise line executives like CEO Goldstein and chairman Richard Fain still pocketed millions and millions and millions at the end of the year.

No doubt the cruise employees are getting the shaft. The crew is getting poorer while the fat cat executives are getting richer and richer.  

The greediest cruise executive in my opinion is, hands down, no doubt-about-it, by-far Micky Arison. He makes Goldstein look like chump change. Arison is the news this weekend after agreeing to sell up to 10 million shares of Carnival Corporation stock. At $39.50 per share, that's $395,000,000. 5 million shares were sold on Friday and the remaining shares will be sold over the next 15 months, After the sale is complete, the Arison family will still own 188,000,000 shares worth over $7,426,000,000.

What will multi-billionaire Arison do with the $395,000,000? Build medical clinics in Goa, India where most of his crew members come from? Fund the retirement benefits for his hard working Filipino crew members who have slaved away far-from-their-children for decades on his ships?  Create schools in Nicaragua where thousands of family members of Carnival crew members reside? No, no, no. The nearly $400 million in cash will be solely for his own tax and estate planning.

CEO Arison paid himself a $90,000,000 bonus in 2002 - the same year of the Costa Concordia disaster. In my assessment, he seems like a money hoarder without a social conscious. Here are some of the infamous incidents involving Carnival Corporation and its brands over the last few years:

It is an amazing spectacle to watch Arison enrich himself irrespective of the Concordia capsizing and the Triumph engine room fire. 

Just last week we commented on Carnival's press release, issued during the middle of the Triumph "poop cruise" trial here in Miami. Carnival characterized the cruise passengers, who endured four days in the Gulf of Mexico after the negligently maintained old ship caught fire, as greedy.

I suppose it's business as usual for Carnival to malign its Triumph cruise guests while chairman Arison is cashing in a fraction of his cruise stock during the middle of the Triumph trial for $395,000,000. 

 

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"Old Bag of Bolts" Ruby Saga Breaks Down in Canary Islands

Last week, I received a tip about the Saga Ruby cruise ship (ex - Vistafjord), which is on her last cruise for Saga to the Caribbean from Southampton, that the ship is stranded in Canary Islands due to generator problems.

I had mentioned that the old cruise ship is already apparently sold to Chinese investors and is under International Shipping Partner management. 

The following day, Cruise Critic carried the story which contained what I thought was some rather interesting information. 

Cruise Critic confirmed that there as a "faulty generator" affecting the ship's air conditioning system.

Rather than try and sail over to the Caribbean, Saga announced that the cruise ship will sail in the Mediterranean, where it can operate without air conditioning. 

Cruise Critic quoted a Saga spokesperson, "It was discovered that one of the six generators could not operate properly without a part that needed to be manufactured." Because the air conditioning needs to run at full capacity in the Caribbean, "The Captain decided that for passenger comfort, it would be better to change the itinerary."

That's interesting, a busted generator and they are not even going to spend the money to fix it. 

Of the 557 passengers onboard, around 30 returned to the U.K. and will receive a full refund. Those remaining onboard will receive a 40-percent refund.

As we previously reported, the cruise, which departed from Southampton on December 7th, is the ship's last sailing. 

Saga promised a wonderful time for the passengers who remained.

One knowledgeable maritime expert commented on the situation on my Facebook page: "Good God . . . is this thing still running??? I piloted her 20 years ago and thought she was an old bag of bolts back then. Truly revealing how some owners will literally milk the death out of a ship until she earns her last penny!"  

Saga Ruby

 

Photo Credit: Wikipedia / Holger.Ellgaard

Carnival's CEO Micky Arison: "Unfortunately We Have to Pay for Fuel, Food & Players"

Carnival CEO Micky Arison joined Twitter in 2010. I was curious to see how such a big shot cruise executive would interact with the common man on such a popular social media platform like Twitter.

After the Costa Concordia disaster killed 32 of his cruise guests and crew members, cruise CEO Arison made no public appearances. When he was first seen in public it was at the Miami basketball arena here in Miami to watch his Miami Heat play. His first tweet after Concordia sank was "Let's Go Heat." Even when the world press focused on his insensitive and selfish antics, Arison could have cared less it seems. He tweeted away about his celebrity friends and his star studded Micky Arison Carnival Cruise Twitterbasketball team as if Concordia never sank.     

Yesterday Forbes published an article how Arison's cruise empire avoids U.S. income tax - "Ship Isn't The Only Thing That Stinks At Carnival: Low Tax Rate Stirs Ire".  

Forbes explains that Carnival collects billions of dollars every year, but pays about a 1% tax rate because the Arison family incorporated the cruise line in Panama. Even though the cruise line benefits from being located here in Miami and uses the services of the U.S. Coast Guard, U.S. Customs and many other agencies, it essentially gets a free ride. 

As Forbes states: "While the U.S. Coast Guard patrols the seas for Carnival’s ships – and, in the case of the Triumph, towed them back to safety – Carnival ducks out on most U.S. taxes."

Carnival's CEO Arison is a shrewd businessman. He know how to work the system.  His cruise ships use the ports in the U.S. and foreign countries for free.  Local citizens like you or me pay for the port terminals. If there is a port fee or head tax, the passengers pay it. When it comes to his basketball team, the local citizens pay for that too.

The Arison family have been gaming the system for 45 years. They will say that they are taking advantage of legitimate tax loopholes in the I.R.S. Code.  But that begs the question of why the federal tax code is drafted as if it were written by Carnival's tax lawyers and why it has not been amended to result in Carnival paying a reasonable and fair shore of its share.  The truth is that Carnival and other cruise lines spend many millions of dollars lobbying Congress while hiring high ranking federal directors of federal agencies to keep the cozy status quo exactly like it is.

But how much is enough for Arison? Fifteen years ago a local journalist asked "Is Micky Arison a Micky Arison Carnival Cruise Triumph Tent CityGreedy Pig?"  I repeated the question here a few years ago.

Arison is the richest person in Florida, worth over $5,000,000,000. Two months ago, he paid himself a end-of-the-year bonus of $90,000,000 - in the same year where his Concordia killed 32 people. The stricken cruise ship still lies on its side in the waters of Giglio, and the victims of that terrible ordeal were offered only $15,000 by Carnival, but Arison pays himself a $90,000,000 year end bonus.

After the Carnival Triumph ignited off the coast of Mexico last weekend, Arison made no public statements.  Later that Sunday afternoon, there Micky sat at half-court at the Miami Arena watching his Heat beat the Lakers. His last tweet today was an instagram photo of him and Beyonce'.

Just how out-of-touch is this cruise CEO with the reality of the world around him?  Over 4,000 of his guests and ship employees endured a week-long-cruise-from-hell aboard the urine and fecal stained Carnival Triumph but Arison tweets a photo of him hanging with Beyonce'.

The question arises again. Is Micky Arison a greedy pig? In answering the question, consider Arison's bio on his twitter page:

"CEO of Carnival. Owner of your @MiamiHEAT I do not respond to requests for free cruises or Micky Arison Carnival Cruise Beyoncetix. Unfortunately we have to pay for fuel, food & players."  

"Unfortunately we have to pay for fuel, food and players?" What a cynical mantra for his luxurious life.

How much greed does it take to turn Arison's enormous prosperity into petty bitterness over having to pay for food for his cruise guests and pay for the salaries of basketball players who bring him so much wealth, power and prestige?

So if you are just arriving home today from Arison's disgusting & disabled cruise ship after another cruise-from-hell, whatever you do, don't ask Micky for a free Heat ticket or a free cruise. He's too busy hanging with Beyonce' to even consider such a request.        

Profits Over People: Carnival's Exploitation of Crew Members is Standard Industry Practice

A dozen newspapers in the U.K. have reported on P&O Cruises' decision to pay its crewmembers a basic salary of 75 pence an hour (around $1.20 an hour) which turns out to be approximately $400 a month. Cash tips are being phased out with automatic gratuities being added to the passengers' bills. But rather than forwarding the passengers tips to the crew, the cruise line has threatened to withhold tips if the crewmember's rating falls below 92 percent.

In grade school, a 92 is an "A-."  So if a waiter who works a minimum of 11-12 hours a day (330-360 hours a month) receives a 91 (a "B+"?), management will pocket the tips?  

The Guardian newspaper reports that P&O Cruises justifies the move claiming that it is actually "good" for the crewmembers because many tourists don't tip.  It quotes David Dingle, CEO of Carnival UK, in charge of P&O cruise lines, saying that the crew were allegedly "much happier" and P&O's pay scale is "standard for the industry."

Some passengers reported that many of the crewmembers on a P&O cruise ship, mostly Indians, were India - Impoverished Crew - Exploitationat the point of tears upon hearing the news.

Carnival U.K. CEO Dingle tells the Guardian that "we have a manning office in Mumbai. There are queues out on to the street."  Ah, the desperate lining up, praying that Mr. Dingle will bestow them with the opportunity to work 350 hours a month for $400.

This no reason to exploit people.  But it is a revealing insight into why Carnival and P&O exploit their employees. They can and therefore they will. 

The U.N. reports that over 410,000,000 people from India are living below the poverty level.

Dingle is also right about low pay being what he calls "standard for the industry."

Carnival and Royal Caribbean in the U.S. pay cleaners from Jamaica as little as $545 a month. They expect them to grind out 12 hours days for 6 to 8 months straight.  For a 31-day-month, that's 372 hours for $545, less than $1.50 an hour.  And when the crewmembers' bodies break, the cruise lines dump them back home without medical care and treatment. 

Corporate Watch has an interesting article which characterizes the low P&O pay as shameful.  Fares for the Carnival Legend range between $2,798 and $6,458 per passenger for a 12 day cruise around northern Europe. Yet, P&O workers would need to work for 500 days straight to pay for a cruise themselves, assuming that they did not spend a single penny of their wages.

Carnival Corporation has annual revenues of $15.8 billion in 2011 and profits of $2.2 billion.  Micky Arison is Florida's richest person with a net worth of many billions.  But Arison is no Gandhi.  You will find him counting his billions on his 200' super-yacht or on the front row of the AA arena in Miami watching his hundred million dollar super-star basketball players.  Trust me, he's not worried about Indian waiters getting their tips.   

I can't imagine working 350 hours a month for $400, hoping that the guests I slaved away for would reward me a score higher than a 92.  An "A" or no tip?  You would think that a company earning billions a year (tax free to boot) wouldn't jack up a crew member for $150 in tips. But there is no satisfying this type of corporate greed.   

But who cares?  There are many young Indian men in line at the hiring agency in Mumbai hoping to be the next one to be hired to work aboard a P&O cruise ship.  

Oasis of the Seas - A Vision of All Consuming Hell

The San Francisco Chronicle is a great newspaper.  Like the L.A. Times, it has an endless staff of intellectually curious, bright journalists instilled with an ethic of investigative journalism of the likes Miami Herald - Cruise Line Fanof super-journalist Douglas Franz.  All qualities which our newspapers here in South Florida are  sorely missing.

Miami Herald - An Enabler of the "Greed of the Seas" 

I have commented before on how the Miami Herald is basically the cruise line's bitch, if you excuse my French.  

Which brings me to today's blog.  The Miami Herald is attending a press frenzy today in Port Everglades on Royal Caribbean's mega-monster Oasis of the Seas. Tomorrow, the increasingly few Miami residents who subscribe to the Miami Herald can expect the usual puff piece with its usual "wow! look-at-how-big-it-is" stories. 

Where are the free thinkers questioning the madness of this monster?  The "journalists" surrounding this beast of a ship more resemble groupies thronging for attention around a 1980's metal band.  

So I felt redeemed today when I read a column from talented journalist Mark Moford of the San Francisco Chronicle about Royal Caribbean's monster of the seas.  I have attempted a couple of similar insights such as Royal Caribbean's "Monster of the Seas" - a Cruise Ship Only Gordon Gekko Could Love but my article falls well short of Mr. Moford's straight-to-the-jugular writing. 

Oasis of the Seas - Monster of the SeasHis feelings today about monster cruise ships are so spot on that I will just repeat them verbatim:

Mark Moford and Dante's Inferno

"If you're anything like me, you can't help but be completely overwhelmed by one devastating, all-encompassing thought whenever you see any of those insane floating nightmares known as monster cruise ships.

You think of sewage. 

Right? Don't you? It's all I can do not to imagine the mountains of waste these ungodly leviathans produce on your average oceanic journey: The heaps of garbage, sewage, toilet paper, plastic, chemicals and leftover food from the gluttonous buffets, all that clammy shrimp, rotting lettuce and industrial prime rib uneaten by 6,000 largely unhealthy people agreeing to be trapped aboard a floating ring of Dante's inferno for two solid weeks.

A Terrifically Ugly Floating Vomitorium

I fully believe cruise ships are one of man's most nefarious inventions, an extremely sad, low-vibrating form of evil, cleverly disguised as desirable luxury but which, if you spend more than a few hours wandering the decks by yourself, will subtly and calmly urge you to jump overboard and end it all. Which is exactly why they're all based in Florida.

Mark MofordHence, it was utterly impossible for me to stifle a bone-deep shudder when fresh images of the world's largest cruise ship, the Oasis of the Seas, upwards of 225,000 gross tons and several times larger than the Titanic, recently lumbered across my jaded retina. This nefarious colossus is not merely terrifically ugly, not merely a bizarre testament to man's voracious desire to build the absolutely silliest, most ginormous things he can possibly imagine, not merely greed and PR and unchecked capitalism run amok. Oh wait, that's exactly what it is. And I'm not afraid to admit: It frightens me deeply.

I suppose the good news is, whenever tacky cruise ships make the news - usually because of a nasty flu outbreak on board that turns the entire vessel into a floating vomitorium - I'm wont to recall the late David Foster Wallace's pitch-perfect, all-time classic piece from Harper's (PDF here) years back that set the standard for brilliant literary takedowns. Far as I'm concerned, anything that re-ignites an appreciation for DFW can't be all bad."

 

Credits:

Miami Herald's Business Monday   Miami Herald

Oasis of the Seas    Royal Caribbean Cruises, Ltd., a Liberian Corporation

Mark Moford   SFGate / San Francisco Chronicle