ABSTRACT
Despite the patent anguish of shipbuilders and the internecine bickering between them that has typified international exchanges in global shipbuilding in recent years, the real villain of the piece is the protracted condition of oversupply. Like it or not, all shipbuilders and their protective governments have been obliged to come to terms with this villain because they have all played a part first in cultivating it and latterly in perpetuating it. Long after the energy crisis of 1973 pitched shipbuilders into persistent problems which could only be overcome through concerted actions aimed at redressing the excess supply situation, shipbuilders continued to assure themselves that natural forces would effect a return to equilibrium between demand and supply. They arrived at the conviction that it behoved them in the meantime to engage in cut-throat competition on the understanding that the competitors would be the ones to fall by the wayside while their particular facilities would somehow avoid the pitfalls so glaringly abroad in the world. Any shipbuilder capable of coercing governments to forge an artificial demand for ships through price-support schemes, credit measures and downright conjuring up of orders on national account would clearly benefit in the new, competitively charged environment, and soon all shipbuilders were calling for government aids as a matter of course. While rationales steeped in unemploymentmitigation platitudes were invoked, the hard-headed approach investing such entreaties resorted to justifying public intervention on the grounds of countercyclical short-term expediency. In other words, the crisis could only be made intelligible to policy-makers and the world at large as a temporary upset in the business cycle and, adorned with a multitude of plausible submissions each bound up with the peculiar local circumstances of the time, shipbuilders leapt to defend their competitive positions through political means. In practical terms, the shipbuilders were lobbying for - and receiving - an industrial policy
which hinged on three types of clauses: those reserving domestic markets for domestic suppliers, those offering subventions to underwrite export contracts and those dedicated to forgiving tax liabilities. Quite frequently, the upshot was a package forthcoming with elements of all three. Of course, support was only won at a price, and that price was increasingly exacted by politicians and bureaucrats who took on the roles of paymasters and salvors of last resort. This levy assumed the form of obtrusion into the affairs of shipbuilders, effectively removing decisions regarding rationalisation, diversification and general restructuring out of the reach of the builders themselves. Ultimately, shipbuilders came to resemble powerless bystanders, buf feted by forces unleashed by governments initially determined to cushion them from global downturns but latterly set on forcibly adjust ing them to government-concocted programmes geared to extricating public bodies from such intervention. Political intervention, perforce, lent itself to government interpretations of which yards were deserving of bail-outs and which not; an outcome not always in tune with the restructuring moves propounded in logical adjustment plans. What is more, government intervention really pitted state against state, with the winnings falling to the country either blessed with the deepest pockets or imbued with the keenest ideology and the longest staying power in favour of state support for the industry.
