ABSTRACT
It is not going too far to say that at the beginning of the 1970s the likes of the NICs were beneath the notice of Japan in the shipbuilding field. In fact, Japan’s ascendancy was so overwhelming that Western Europe, the traditional heartland of the industry, was struggling to retain both its composure and its substance as a producer of major proportions. It was being trounced, indeed, by a competitor which not only had grown remorselessly since the early 1950s, but which had contrived to capture the lion’s share of a market that had expanded by leaps and bounds and had yet to reach its climax. Of course, that agreeable state in which orders abounded for Japan, and were even plentiful for those European producers astute enough to grasp them, was soon to be truncated, rudely overturned after 1973 when the actions of the oil suppliers of the Third World dealt a shattering blow to shipping markets in general and the tanker trades in particular. Overtaken by events and cushioned only by the hasty application of government bail-out measures, the established shipbuilding producers underwent a straitened period of retrenchment, rationalisation and restructuring during which many succumbed to outright closure. Adverse conditions, tantamount to wholesale depres sion, usurped growth for the succeeding 15 years. In constituting the normal environment for engaging in shipbuilding, these conditions succeeded in circumscribing the surviving firms in the AICs, dashing the hopes of their managements and instilling in them attitudes detrimental to the long-term revival of the industry. More alarming still, this uncongenial environment gradually sobered Western governments to the futility of sustaining activities for which the writing seemed to be on the wall. By the early 1980s the inauspicious outcomes of state support were becoming readily apparent everywhere in the West and governments, resigned to the inevitability of cutbacks, were finding cause for retreating from the industry. Nor was Japan spared. The solid foundation of past achievement which had hitherto accounted for its
mastery was unable to detach shipbuilding from the global downturn, and the results of a major reorganisation and rationalisation of the industry appeared less than promising. Desperate to salvage a significant shipbuilding industry, the Europeans bandied together and claimed the assistance first of the OECD and then of the EEC in their endeavours to impose order on their own vulnerable establishments and the chaotic market at large. With a view to stabilising global competition, they leagued with the Japanese and tried, fruitlessly in the event, to manage ship supply. Much to their dismay (and latterly, to the discomfort of the Japanese as well), the NIC producers demurred at these machinations, refusing to adhere to globally managed production. Only as the 1980s came to a close was there the first appearance of harmony between Japan and the NIC champion, South Korea, and this tentative understanding was regarded with something approaching suspicion by the European producers (although both Japan and South Korea have sought to quell any disquiet felt on this score).
