ABSTRACT
One can be forgiven for assuming that shipbuilding inhabits a world of everlasting crisis. The pronouncements issuing from the industry certainly conspire to give such an impression. A one-time purveyor of gloom, distraught at the impending demise of the US shipbuilding industry, warned that America’s then biggest shipbuilder, Bethlehem Steel Company, rejoicing in half of the industry’s capacity, would soon be forced to close its Sparrows Point shipyard.1 Yet, more than three decades after that solemn proclamation, and a host of emulations also intimating the most dire of outcomes, both Bethlehem and the Sparrows Point yard survive. Admittedly, that survival is predicated on government intervention which takes the form of naval programmes that fill much of the void left by nonexistent demands for merchant tonnage, but its upshot is an assemblage of plant, assets, capital and skills which constitutes a recognisable shipbuilding enterprise and gives sustenance to a community of people that rely on it for their liveli hoods.2 Even so, naval programmes are susceptible to their own brand of instability, replete with periodic and dreaded downturns in demand; downturns which excite outbursts from an industry anxious about the prospect of imminent collapse. As one observer, commenting on the situation obtaining in 1987, so pithily put it: ‘US shipbuilders have weathered many tough business downturns in the past. But this year, analysts say, the Navy’s shrinking budget may deep-six some of them.’3 In due deference to the prediction, a sprinkling of yards actually closed in 1987, but the major players - Newport News, Litton with its Ingalls yard, General Dynamics and Bath Iron Works - discovered that the Navy could find further business to tide them over, while a number of second-rank suppliers, Bethlehem included, succeeded in prising enough contracts from the government to prolong their naval workload and, in some cases, preserve their existence. As perhaps the least competitive of the world’s major shipbuilding industries, survival of the
US industry hints at the perseverance of shipbuilders notwithstanding adverse circumstances of the first order. It hints, for example, at the presence of reasonably bountiful times to leaven the bouts of severe depression: in other words, at the prevalence of a business cycle to which the industry is subjected. More to the point, it conjures up the thought that structural mechanisms must be operating not just to pitch observers of the industry into paroxysms of despair but, paradoxically, to forestall their predictions before they have reaped the grim reward of total industry failure. To be sure, it was a near run thing for the US industry in the mid-1950s, as it was for the UK industry of the early 1960s, the European industry in the late 1960s and the entire global shipbuilding industry for much of the 1970s and a goodly portion of the 1980s to boot. The business cycle characterised by daunting troughs interspersed with episodic crests began to take on a new complexion during those years. Industry depression tended to plumb new depths with each successive crisis, in part as a result of the steady augmenting of capacity in the intervening good times by the existing producers themselves, and partly following from the entry of producers domiciled in countries hitherto devoid of even the appurtenances of a shipbuilding industry. Indeed, the original producers soon perceived themselves as being in a bind: their own problems associated with overcoming the mismatch between supply and demand were compounded by the bursting onto the scene of NIC suppliers who rapidly grasped the ways and means of competitive shipbuilding. Unsurprisingly, the intensity of the vociferous pleas for help emanating from AIC shipbuilders rose in direct proportion to the introduction of new shipbuilding capacity in the NICs. Evaporating demand consequent upon the energy crisis triggered by OPEC in 1973 arrived at the exact moment that this unwelcome addition to capacity was beginning to make its presence felt on the AIC producers. A tenacity, springing partly from desperation and partly from recognition of definite competitive advantages, infused NIC producers and incited them to redouble their efforts to utilise what was essentially brand-new plant. In consequence, unrelenting rivalry between shipyards - and the states championing them - became the order of the day in global shipbuilding.
