Horizon Lines captures about 40 percent of domestic cargo coming in and out of Guam. This makes Matson Navigation Company the sole shipping line for providing shipping services to Guam.
A source told Variety that the pullout will affect the Port Authority of Guam’s revenue stream, because Horizon Lines pays $85,000 a year in rental fees.
Horizon Guam General Manager Hugh Healey said the 25 employees, including himself, have already been offered severance packages. Healey said employees who stay on with Horizon Lines would have to relocate.
“They are welcome to apply for other jobs within the organization, but that would mean they would have to relocate,” he said.
Healey said employees were aware of the financial situation for a while, but the announcement of the layoff was still difficult for employees to hear.
“We knew the financial situation. You know the dark days are ahead, but you don’t really plan for it or are prepared for those dark days.
Unfortunately for us, those days are on us,” he said.
Healey praised the employees, saying “this team is fantastic. They work extremely hard and we’ve done everything correctly. It’s just an unfortunate situation.” The average service of employment with the company is 13 years, said Healey, with some working 24 years.
Healey said China was the big factor when it came to profitability for the company, and described Guam as “the collateral damage for Horizon Lines.” Because Horizon Lines is a publicly traded company, its financial performance is taken very seriously.
Healey speculated that the closure would also affect the agency agreements with Saipan and Micronesia, but wasn’t sure how.
Healey said the last vessel will arrive on Guam on Nov. 21. On Dec. 9, a small team will be assembled to manage the assets, but “it will be [at] an undisclosed time when we actually shut down operations.”
“The silver lining is when one door closes, a lot of our folks have already been offered positions, and no one has left yet. This is a great team. The customers know us very well and I wouldn’t be surprised if everyone is just fine,” he said.
Bordallo statement
Congresswoman Madeleine Z. Bordallo issued a statement in response to the announcement by Horizon Lines, saying the company cited that delays to the military buildup timeline and increasing budget volatility in the United States and Japan “made Guam trade no longer financially viable.”
Upon learning this, Bordallo spoke with Matthew Cox, president of Matson Navigation Company, to discuss Matson’s ability to meet the needs of the community.
Cox reassured Bordallo that Matson Navigation would continue to provide service to Guam and that the company stands ready to fill the void caused by Horizon Lines leaving the market. Cox also reassured Bordallo that Guam customers would not experience any disruptions in shipping services in the short-term.
“We are losing a good partner in Horizon Lines, and I am disappointed in their decision to discontinue service to Guam,” said Bordallo.
“At a time when our economy can least afford it, this announcement by Horizon is an unintended consequence of delaying the military buildup on Guam. Uncertainty created by the Senate provisions and cuts to military construction do not give businesses and investors confidence to incur further risks. So many jobs depend on a known schedule and pace for the military buildup.”
