Page 35: of Maritime Reporter Magazine (November 1978)

can companies, or their affiliates, have had nearly 2,000 merchant ships built in foreign shipyards.

In the same period of time, Amer- ican shipyards have constructed only 600 merchant vessels — less than one-third of the number built abroad. Last year, Ameri- can companies ordered 13 vessels from U.S. shipyards but almost twice that number — 25 total — from Japanese shipyards. This unbalanced trend hardly contrib- utes to a strengthening of the national security shipbuilding in- dustrial base.

Currently, at the Multilateral

Trade Negotiations in Geneva,

U.S. trade negotiators are be- lieved to be responding favorably to moves by several European trading nations which seek re- moval of certain U.S. non-tariff measures, including the Jones

Act. The worldwide shipping and shipbuilding depression no doubt accounts for these initiatives from abroad to disable the do- mestic effectiveness and poten- tials of the Jones Act to the detriment of U.S. national inter- ests and employment. The moti- vation, of course, is to develop ship construction opportunities for shipbuilders in other lands and to develop job opportunities for foreign shipyard workers.

But, the development of ship- building and job opportunities here does not receive comparable emphasis. There is virtually no official acknowledgement of the coming unemployment in domes- tic shipyards. There is virtually no official acknowledgement that many shipyards abroad are today offering prices which have little or no relationship to actual costs.

There is virtually no official ac- knowledgement that this contra- diction of basic economic princi- ples is taking place with either overt or implicit blessing by in- volved governments. With public funds, shipbuilders' losses are indemnified. The declared ration- ale is to uphold essential national activities and to minimize the so- cial costs of unemployment.

By reason of such below-cost pricing and other disparate eco- nomic factors, U.S. shipbuilders are foreclosed from world mar- kets. With products other than ships, below-cost marketing would be regarded as "dumping" sub- ject to governmental scrutiny and reaction. No such recourse is available to U.S. shipbuilders, who as a consequence, are losing de- sirable contracts to their foreign counterparts.

But, at no level of U.S. govern- ment does there appear to be suf- ficient appreciation of the reali- ties of today's world shipbuilding environment. Shipyards in one country are not competing with shipyards in another country.

Governments are competing with governments to capture ship con- struction opportunities — where- ever and at whatever price — to serve what is considered to be

November 1, 1978 their own self-interests. The seeming illogic of prevailing U.S. policy is to abandon an essential industrial base.

In plain truth, there is not now, and there has not been for some while, the degree of cohesion of purpose and coordination among and within agencies of the Fed- eral Government which is basic to enunciation, enhancement and effectiveness of a shipbuilding in- dustrial strategy in support of the national interest. Only last month, Adm. Isaac C. Kidd, USN,

Commander-in-Chief of the U.S.

Atlantic Fleet and Supreme Allied

Commander, Atlantic, warned that the United States has about one-half of the needed naval ca- pacity to guarantee safety to the huge merchant fleets which would be required to supply and re- inforce NATO armies in the event of a major conflict. Earlier this year, the Navy Department la- mented the absence of a national shipbuilding policy, but that same lament was voiced during the years of previous administrations under both major political parties, but to no avail.

It seems clear that without a coordinated national policy on na- val and commercial shipbuilding, the downward trend will continue and inevitably lead to an irre- trievable loss of capability in this (continued on page 32)

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