Ships & Shipping editorial – April 2010
A full page advertisement was published in a competing magazine last month by Korean shipbuilder Samsung Heavy Industries. It is a very ominous advertisement indeed if you are a shareholder in or employee of a European cruise ship builder.
Samsung invites applications from experienced cruise ship building engineers (presumably European, as it was a European magazine) for positions at its shipyard in Geoje, South Korea.
Having soundly out-competed the European "experts" in complex ships such as drillships, gas tankers, AHTS and fast container vessels, it seems the Asian "primitives" are now very close to the holy grail.
If I were on the board of Meyer Werft in Germany, Fincantieri in Italy or STX in Finland and France, I would be shivering in my shoes. Despite the remarkable ability of governments in those countries to support their local shipbuilding industries with barrels of taxpayer money, I suspect the gravy train is about to grind to a halt.
I clearly remember arguing with some German shipyard directors at SMM in Hamburg in 1994. They had ridiculed my suggestion that it was only a matter of time before Asian yards were producing "complicated" ships of the types mentioned above.
Well, the Japanese, Korean and Chinese shipbuilders have been building all those vessel types for some years now. They have been building them very well and building them competitively. Very competitively. The EU shipbuilders say "too competitively".
My German friends were absolutely convinced that their Asian competitors could never build to European quality and reliability standards. Well, they have and they do. They sometimes even exceed those standards.
So, it was no surprise to see, first STX and, now Samsung scouting the European market for talent and technology. The STX purchase of the Aker Yards in Finland, Norway, France and Germany always looked more of a short term "Trojan Horse" manoeuvre than a long term investment to me.
I am sure that the Community of European Shipyards Association (CESA) will say that I'm hopelessly wrong, if not completely mad. However, I am quite confident that by 2014 Asian yards will have a significantly larger share of large passenger vessel orders than will have their European competitors. This will happen no matter how much support individual EU governments give their shipyards.
In the end, like the British, who were the world's biggest shipbuilder only just over half a century ago, all governments eventually realise they can't continue flogging dead horses forever.
The total failure of protectionism, socialism and endless feather bedding eventually sinks in to even the thickest of doctrinaire politicians. I suspect that the current economic troubles in Greece and its fellow PIIGS will hasten this awakening. It certainly should everywhere in Europe except for Italy and Spain whose governments seem prepared to continue to bale out their government owned yards indefinitely.
Even there, taxpayers will, as they did in Britain, tire of the selective support or feather bedding of the chosen in minor industry sectors like shipbuilding. In the long run commercial, economic and political reality prevails. I'm sure that it will in passenger shipbuilding also.
Neil Baird
Editor-in-Chief