Does Your Country Subsidize its Shipbuilding?

[VetLegion]

Here in Croatia we build very good ships, better than Korean or Chinese. However, we spend about $1.10-$1.20 on every $1.00 earned by selling the ship.

The industry has faced strong competition from the far east and is raking in debts every year. All the big shipyards are owned by the state and every year the government bails them out and commences "the last reconstruction which will make shipyards profitable".

We've spent tons of money so far.

The usual justifications are:

- shipbuilding employs lots of people directly and indirectly and this has a big multiplier effect on the economy

- we don't want to become a country of waiters roommaids like Greece, some industry is needed

- all other countries subsidize their shipbuilding too


Well, it's the last one I'm most curious about. I know that European response to the competition from the far east has been to move into niches and build increasingly sophisticated ships. I know that they build huge luxury cruisers in Finland. Good move.

Anyway, throw your knowledge about shipbuilding my way.

[Japher]

doubtful

I know that the yachts are actually taxed as luxury items, and this has scared a lot of ship builders out of the US

no idea really
though

[Lonestar]

In effect. For example, Trent Lott forced the USN to buy a $1Bil Amphib the Navy didn't want, or need, so INgalls wouldn't lose work between the completion of the Wasp production cycle and the new LHA(R) class.

[Grandpa Troll]

Re: Does Your Country Subsidize its Shipbuilding?

Originally posted by VetLegion
Here in Croatia we build very good ships, better than Korean or Chinese. However, we spend about $1.10-$1.20 on every $1.00 earned by selling the ship.

The industry has faced strong competition from the far east and is raking in debts every year. All the big shipyards are owned by the state and every year the government bails them out and commences "the last reconstruction which will make shipyards profitable".

We've spent tons of money so far.

The usual justifications are:

- shipbuilding employs lots of people directly and indirectly and this has a big multiplier effect on the economy

- we don't want to become a country of waiters roommaids like Greece, some industry is needed

- all other countries subsidize their shipbuilding too


Well, it's the last one I'm most curious about. I know that European response to the competition from the far east has been to move into niches and build increasingly sophisticated ships. I know that they build huge luxury cruisers in Finland. Good move.

Anyway, throw your knowledge about shipbuilding my way.

Not being ugly here, but thats one of the problems in basic business economics, you cant sell for less than a profit and stay in business.

Maybe your country shouldnt be building ships?

If it is a necessity than your country needs to reduce costs somewhere, the two big ticket items being manpower and materials.

If its manpower, I think about the United Staes manpower issues, price themselves out and outsource labor.

If its raw materials maybe an alternate source of either the actual material or changing materials?

I can get into specifics here, but I am in charge of a wide variety of positions and responsibilities. I have to operate a "budget" and if I dont I get called out for it.

Possible manpower issues could be staggering start times and less dead weitght in management. Deaad weight not across the board mindless labor cuts.

In the Rady Mix Concrete Industry one of the most impoortant benchmarks is efficiency of manhours per cubic yard.

That could be easily rectified in the ship building, maybe putting ports a johns nearers work stations to stop hemmoraging of wasted time spent back and forth.

Breaks, how many are given in aday and how far do workers go to get to a break station say at lunch?

Just sharing some very superficial views is all.

Just curious, How many people make a ship?

If a 5% wages decrease were put into effect how would that reflect on bottom line?

Some say "I cant afford that kind of cut"

Think about how much your losing on revenue now, what if the company had to close doors, where would that labor force end up?

Gramps

[Kassiopeia]

Re: Does Your Country Subsidize its Shipbuilding?

Originally posted by VetLegion
I know that they build huge luxury cruisers in Finland. Good move.

The Finnish shipbuilding industry is still hemorrhaging money and existing on government subsidies.

[:) Smiley]

Governments have been subsidizing shipbuilding since there were ships, both to lower the cost of transport and also for national defense.

In the case of your country, it may make more sense to make ships and lose some money than to have lots of people unemployed and collecting welfare.

[Barnabas]

My country doesnt have a sea! curse chili!

[Barnabas]

My understanding was that South Korea subsidizes her shipping industry so much, that it screwed the shipping industry worlwide.

[Q Classic]

Subsidies might be the case, but Croatia's shipbuilding stinks in comparison. Nobody else currently matches the abilities of the Koreans in terms of specialized shipbuilding, such as LNG tankers.

Of course, I'm talking out of my ass, just like you guys, so.

[Pekka]

You guys can't compete with our ships. It's just a tradition going back to hundreds of years. Talking about of course the big cruisers.

[Wernazuma III]

Originally posted by Brachy-Pride
My country doesnt have a sea! curse chili!

But you sure do subsidize your Lake Titicaca armada.

Honestly, is the Pilcomayo shipable (for the next war over Chaco)?

[Gangerolf]

I was under the impression that subsidies to shipbuilding wasn't allowed under the OECD treaty. But I haven't really read or heard anything about this in a year or so.

[Gangerolf]

Yep.
But I see that Croatia is not an OECD member. Good for you.

[Lawrence of Arabia]

the last big ship put out by my country.

[Gangerolf]

that's not a ship, it's a boat, you silly person