SHIP BUILDING DRIVEN TO THE WALL

A cut-throat trade war is under way in international shipbuilding which is one of the first victims of the recession in world trade caused by the breakdown of the postwar capitalist monetary The post-war boom in shipbuilding is definitely over. Not only is world trade declining, but the bulk of cargoes are being concentrated on fewer and fewer main routes as the share of the underdeveloped countries in world trade plummets.

A more efficient utilization of capacity is made possible by the development of containerization, and roll-on, rolloft ships which are able to cut turn-round times and thus transport more cargo than earlier ships of similar size. According to the shipbuilding employers within the Common Market there is a fundamental trend towards surplus capacity in sea transport supply. Order books are shrinking throughout the Common Market, they say Much of the European shipbuilding industry is backed by world standards and the ship owners are complaining vehemently about Japanese competition. On present trends, it is estimated, Japan will have cornered 80 per cent of all new ships produced by 1980, driving most of the European yards to the wall.

The European employers are screaming about 'dumping' by the Japanese shipbuilders, but despite the massive yen revaluation in December last year the Japanese producers are still able to undercut European prices with ease. The basic reason for this is that the bulk of Japanese capacity has been built up in the past seven specificary to handle designed even the largest orders at low cost and with maximum speed Japan has also set in motion a grandoise expansion ramme which would enable it to build 65 per cent of all new shipping by 1975. This strikes terror into the European shipbuilders, who are currently bombarding their governments with demands action to prevent Japan winning a monopoly position in the shipbuilding world.

The Association of West European Shipbuilders and the Organization for Economic Cooperation and Development are both sending high-powered delegations to to plead with the Japanese government and shipbuilding employers. The confrontation is likely to be very tense. In a statement issued last month, the AWES accuses Japanese shipbuilders of trying to dominate the world with the aid of their government.

The AWES statement gives the lie to the Communist Party leaders of the upper Clyde work-in who claimed that British bright future in front of it. It shows conclusively that not only are the inefficient and badly-placed Clyde yards doomed, but with them the majority of yards in Europe.

As Workers Press repeatedly pointed out during the UCS work-in, shipbuilding is gripped by a titanic international crisis brought on by the anarchy of capitalist production.

This stand Is amply confirmed by the shipbuilding employers themselves who give chapter and verse for the crisis situation in the industry not only in Britain but internationally.

No capitalist government, let alone the present Tory government, has any power to resolve this crisis. It can only tackled by the nationalization of the yards without compensation and under workers' control This demand is inseparable from a campaign to mobilize the working class as a whole to force the Tories to resign and to elect a Labour government pledged to socialist policies.

The ship-owners themselves have no answer: they end their statement with a plaintive plea to European governments to to stop their expansion. Such pleas are on the same level as the Stalinists' policy of 'pressurizing' the Tory butchers of the UCS consortium to save the yards and the jobs of thousands of workers on the Clyde and the subsidiary industries. The document adopts a desperate tone, it warns that in Europe 'many yards of all sizes have gaps in their order books for deliveries in 1974 and 1975, and in some cases even for 1973'.

The Japanese, it says, 'have demonstrated that they are prepared to offer what amounts almost to dumping prices for medium-sized tankers'. AWES goes on to attack the Japanese for not 'playing the game' by international rules.

It refers to the activities the Sanko Steamship company, which has ordered 50 tankers of 80,000-90,000 deadweight tons from Japanese yards. These are being built for $11m-$12m each-'far below the recent world prices for such ships' according to the European shipbuilders.

To add insult to injury Sanko is then chartering the finished vessels for long periods at low rates to European owners, thus evading international agreements on export credit terms. Similar arrangements are being made for very large cargo vessels, the AWES warns.

It complains that despite repeated assurances by the Japanese shipbuilders that their prices will be kept at 'reasonably acceptable levels', the 1975, nine new yards are Japanese yards have cut their planned in Japan adding a total prices by 10-15 per cent over of 4.6 million tons to the counthe last nine months. try's annual capacity to proThe Japanese are frantically duce new ships. In addition is expected to building up their capacity for production of new ships. existing yards Twelve years ago, their yards add another 1.8 million tons turned out 1,839 million gross to production capacity by 1975. registered tons of shipping A further addition to Japan's against 5,566 million produced shipbuilding capacity is prein western Europe. dicted through increased proBy 1970, however, Japanese ductivity, and could amount output was 10,100 million tons, to as much as 2 million tons a leaving European shipbuilders year. trailing behind with only 'The Japan Times' has esti8,481 million tons. While mated that by 1975 Japanese Japanese output increased shipyards will be able to turn nearly 450 per cent over the out 18.6 million tons of new decade, European output was shipping every year. Total only just over 50 per cent up world production of new shipover the same period. ping in 1970 was just under In addition, from now until 21 million tons and even in the unlikely event of an expansion of demand for new ships, Japan will have at least 65 per cent of the world market by 1975.

Projects which will add at least another 4 million tons to annual production capacity by 1980 are already being planned. The situation_ is bad enough for the European employers overall, but it is if anything even worse at the top end of the market with the very big vessels.

By 1975 Japan will be in a position to build up to 80 ships a year of over 200,000 tons deadweight. West European yards will have the capacity to build about 70 such ships in 1975. But current The European governments, estimates of the market for such vessels are that only it says, should 'take immediate about 100 a year can be sold. steps in a joint action and make it absolutely clear to the To make matters worse, Japanese government that the yards capable of building very financial support given to its large ships are being con- own expanding shipbuilding structed in Korea and behind industry is the basic reason for stringent tariff walls in the the present crisis in the West United States, thus further European shipbuilding indusreducing the eventual market try'. to be divided between Japan and the EEC. The Japanese are hardly likely to be unaware of this The result of this cut-throat obvious fact and it is safe to competition can only be what predict that they will take no AWES describes as notice whatever. 'massive unemployment problem affecting shipbuilding yards Appeals like this from the in most, if not all, West Euro- European employers are likely pean countries'. It calls for to have about as much effect immediate action by European as the appeals of the UCS governments against the Japan- Stalinists to the Tory governese threat. ment.

8 Workers Press, Friday October 27, 1972