Use access key #2 to skip to page content.

The solution to the Big 3's problems



November 21, 2008 – Comments (1)

I've come up with the solution to the Big 3 automakers' problems.  All they need to do is load up a few huge ships with a bunch of cars and trucks and send them around the Horn of Africa.  The pirates will take care of the rest and they can collect the insurance money.  This isn't ideal for the insurance industry, but oh well.

$150M in ransoms paid to pirates

Why on Earth do ships continue to travel in that area and why in the heck are companies paying these jerks randsom?  If somebody blew a few of these ships out of the water instead of constantly caving into the pirate's demands the rest of them might think twice about jacking another ship.  The U.S. navy could use them for a little free target practice.


1 Comments – Post Your Own

#1) On November 21, 2008 at 2:42 PM, Schmacko (87.96) wrote:

The ships continue to travel by the horn because it's much faster than sailing all the way around africa... although some companies have decided it is finally becoming too risky and have started taking the longer and tus more expensive way instead.  The companies pay the ransom because it mkae sense from a business standpoint.  The Saudi Oil tanker for instance that got hijacked recently had an estimated $100 million worth of oil.  The super tanker itself is probably worth a good bit of change but lets be conservative and say the saudis value the ship at $50 and the crew members at about $0.50.  That makes a total value of the hijacking $100,000,050.50.  Now let's say the pirates offer to ransom the ship with all it's cargo and crew back for $3 mil.  From a business standpoint it makes more sense to cut your losses, pay the $3mil and get everything back then it does to just write off $100mil+.

Since the pirates are pretty successful and since they're generally pretty good about returning everything the companies tend to pay up.  This has made pirating a relatively low risk/high reward occupation for Somalis and encouraged the growth of the business.

Report this comment

Featured Broker Partners