Trade war, cash crisis, management shambles mean a BLITZ on jobs in shipyards

avowedly pessimistic.

The most optimistic of five strategic alternatives the report places before the government envisages the sacking of 14,000 shipyard workers by 1977; the most pessimistic says that 25,000 must go by 1982.

Almost all of these redundancies would take place in areas of already high unemployment, the so-called 'development areas.

Meanwhile, the report says, to reach the current best European standards of industrial performance, an increase of more than 50 per cent in each individual worker's productivity will be needed.

To equal Japanese performance the required speed-up would be well over 100 per cent.

Booz, Allen and Hamilton, a prestigious firm of management consultants, received their commission to study the industry during the continuing crisis over Upper Clyde Shipbuilders early last year.

The Department of Trade and Industry wanted a factual examination of shipbuilding technology, finances, organization, management and competitive position on which to base its future policy decisions.

From the outset it was clear that the industry was in a mess.

Between 1967 and 1971 the tonnage of British ships launched remained static, while the British share of total world launchings had fallen from 8.2 per cent to 5 per cent.

By comparison the Japanese industry had been growing by 20 per cent a year. The end of 1971 had found it controlling 46 per cent of the world market.

It was not the Japanese alone who expanded, however, since the consultants found that Britain was in fact the only leading shipbuilding country which did not achieve growth during this period.

Now the situation for British capitalist shipbuilding is even more serious.

As Chataway said in introducing the report: 'There are no grounds for complacency.

COMPETITION

'The consultants' report shows that British shipbuilding has not generally been competitive or profitable and that it is likely to be exposed to increasingly fierce competition on the world market if, as the consultants forecast, capacity continues to grow much more rapidly than demand.' Although the consultants include a ritual complaint about the shipyard workers' strike record, which they say 'compares badly with the national average', their general conclusions after surveying Britain's 12 shipbuilding companies point an accusing finger at management.

They slam the 'lack of general management skills', which, they say, is due to the industry's 'insular attitudes' and 'neglect of effective internal management development'.

Typically, the report comments, the industry has lacked any orientation towards marketing. No detailed strategy has been mapped out, no consideration has been given to which types or DAVID MAUDE, our examines Hamilton repo shipbuildi sizes of ships are the best commercial proposition and market information is always difficult to come by.

Little design work tends to be done advance assist marketing.

Estimates are often given, even for prototype ships, without full knowledge of the cost and technical implications of the tender. An analysis of cost estimates showed that they were consistently too low.

During, preparation of their review, the report team visited most of the major shipbuilding facilities in Britain--finding many of them 'less than adequate'.

The increase in ship sizes which has taken place steadily in recent years has aggravated this situation. The report team found that it had caused severe problems, particularly as regards berth craneage, steel shops and storage.

SLOW Financial performance the report found to have been poor.

Merchant sales revenue in real terms has risen slowly due to fixed price contracts signed in the late 1960s, while costs have risen rapidly.

In addition the mix of costs has changed, with both labour and overheads assuming an in. creasing share of the total.

Over the five years to 1971 labour costs in Britain averaged labour correspondent Booz, Allen and rt on the British ng industry 26 per cent and overheads almost 15 per cent of the total-compared with 25 per cent and 10 per cent in Europe.

Says the report: 'With deteriorating margins and additional costs on ships delivered late, the industry has suffered enormous losses, over £15m in 1969 and over fl1m in 1970.

'As a result, many individual companies have had liquidity problems in recent years and have become more dependent on government grants and loans to fund their shipbuilding operations.

'Only f54m, a third of the total assistance provided to the industry, has been devoted to capital expenditure, despite the Geddes recommendation assistance to modernize and redeploy resources in the industry.

'Almost all of it has gone to the three government-supported land and Wolff and Govan, HarThe report draws attention to further, haphazard characteristics and the British industry.

It says that management control procedures are under-developed in comparison to similar Budgetary control systems do exist but they are generally limited.

systems suffer from failure to measure the state of completion of ships under construction.

In many yards, work done is assessed visually and it is diffiWolff, Govan Shipbuilders and Cammell Laird would be maintained, with sufficient revenue support to ensure that all three would break even until 1977.

Output, say the consultants, would remain virtually static at 1.2 million gross tons to 1977. Two-thirds of this would come from the three supported yards.

CUT Situation A would mean a cut in employment from its present level of 50,000 at the nine merchant main shipbuilding yards to 27,000 by 1977.

Beyond 1977, with no special assistance for any yard except for relief from import duty, Booz, Allen and Hamilton say output would probably decline to half the present level.

Employment would be cut to 25,000.

The consultants describe as Situation E a situation under which medium government support would be provided and there would be a medium level of performance similar to the best present European yards.

During the first five years output would increase marginally to 1.4 million gross tons, hampered by necessary yard reconstruction. By 1982 it would rise to 1.6 million tons.

This would maintain Britain's present 5-per-cent share of the world market, at a capital cost to the government of £120m£130m over the next five to ten But improved productivity would cut employment by 18,000, to around 32,000, by 1982.

In Situation I, the most optimistic of the consultants' projected strategies, a high level of support is combined with a high level of performance.

Government assistance, mainly for capital reconstruction, would cost £210m-£250m up to 1977. Output would more than double to 2.5 million tons by 1982, but employment would be cut to 39,000.

The DTI has virtually admitted that this last alternative could be ruled out under Common Market rules on regional aid.

LIMIT CHOICE

If the consultants' report is accepted this would limit the Tories' choice to slashing either 21,000 or 25,000 jobs inside five years-an even greater rate of job loss than the Tories plan in steel.

When he introduced the report, Chataway insisted that the Tories neither accept nor reject the Booz, Allen and Hamilton alternatives. Government policy would be decided only after consultation with all interested parties.

But he would not deny that redundancies of the massive and disastrous order envisaged could be on the cards.

In other words, even with their assumptions of boom, the consultants have made out an urgent case for the nationalization of shipbuilding without compensation and under workers' control.

They have shown that for the working class there is no strategic alternative to removing Chataway and his Tory associates and replacing , them with a Labour government committed to nationalization.

SOCIALIST LABOUR LEAGUE LECTURES Merthyr Tydfil Given by Gerry Healy, National Secretary ocialist Labour Leagu Wednesday May 23 leory and Practice Marxism Wednesday May 30 of the revolutionary par David's Church H urch Street, Mert lyr 7.30 p.m.

Jarrow

SLL Central Committee member Civic Hall, Jarrow 7.30 p.m.

Monday May 21 The Socialist Britain : 3. The state and revolut Reformism and revolution Britain. The fight for democr rights today means preparing working-class power.

Basic reading :

Perspectives for transforming SLL into a revolutionary party. Marxist Analysis of the Crisis. Problems of the British Revolution (Trotsky).

Death Agony of Capitalism and 94t Tasks of the Fourth International, Communist Manifesto.

Council of Action

North London must break off talks Tories No negotiations on Phase Three No capitulation to corporatism Make the Tory government resign TUESDAY MAY 22, 8 p.m. Lord Morrison Hall, Chestnut Grove, Tottenham, N.17 Alliance meetings TEACHERS' MEETING way forward after the NUT conferenc hursday, May 24, 7.30 p.

Conway Small Hall.

Red Lion Square, Holborn (admission 10p)

HOSPITAL WORKERS' MEETING Hospital workers and fight against the Tory government uesday May 29, 7.30 Norfolk Room Caxton Hall, Caxton Street, London SW1 (admission Op)

MEETING TUC must break off talks with Tories!

Build revolutionary party!

Wednesday, May 30, 7.30 p.m.

Tudor Room Caxton Hall.

Caxton Street, SW1 (admission POSTAL WORKERS' MEETING Break off secret talks with the Tories! the Tories to resign! Sunday, June 3, 10.30 a.m Conway Small Hall, Red Lion Square, tolborn (admission 10p)

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