Build Cruise Ships in the UK or US

[chengkp75]

The nature of what is done in the US has changed but not the amount of work.

 

As complicated as cruise ships are, building them does not involve a great deal of creativity. Sure having a US based cruise ship builder would employ a few tens of thousands skilled workers. On the other hand, designing components and systems including software, producing entertainment content, etc. for all cruise ships can employ just as many or more higher paid people.

 

Meyer Werft, the third largest shipyard in the world, has a combined 3300 employees at its three yards, and builds at least a third of the cruise ships built every year.

[chengkp75]

Looks like it bought MV Werften which became/combined into Lloyd Werft. Only small and river ships for now.

 

https://www.dw.com/en/genting-and-its-very-own-german-shipyards/av-39240120

 

Yes, a world of difference between Meyer Werft and even the Lloyd Werft group. Lloyd Werft hasn't built a cruise ship to my knowledge since the Pride of America fiasco. The other yards in MV Werften build cargo ships and river vessels, and the only cruise vessels they built were Russian, and the last was in the 90's. I'd say Tan Sri Lim of Genting Group has big expectations for these yards, they may just end up like the SS United States project he so dearly wanted.

[Heidi13]

As for the U.K., ship building capacity has long gone. De-industrialisation by neglect due to the laissez-faire policy of a government that reigned throughout the '80s.

 

Government policy of the time had impact, but in my experience, many other factors were involved, including the inflexibility of the shipyard workers. While UK yards were renowned for quality construction, the employee inflexibility and lower productivity, compared to foreign yards, didn't help themselves. UK didn't only lose shipbuilding, it lost a substantial portion of the ship repair/dry-docking business.

 

In the 70's, the P&O ships Oriana & Canberra drydocked for about 3 weeks every year in Southampton. I completed many of these dockings, with my first being Oriana in 1977, as a young cadet. Down in the drydock I was amazed to see the paint being applied by roller, as all other shipyards I experienced used sprayers. Being young & innocent I asked the foreman why they use rollers and not spray guns. This initiated a length tirade about how I was trying to put half his men out of work.

 

Up on the Bridge we also required a new gauge installed. You would think the Electrician would do the entire job, but No. It required a Shipwright to drill the hole, a helper to pull the wires and then the Electrician to complete the connections. During the entire job the Electrician stood around and watched.

 

The UK yard wage rates probably weren't much different from the European competition, but they had a huge gap in productivity. Haven't been in a UK yard for many years, but unless the flexibility and productivity is addressed you will never see a return to competitive ship building and repair.

 

For US yards, I have only drydocked once and that was 9 days in San Pedro, during which I spent the entire time in the dock bottom overseeing the hull blasting/coating. Possibly Cheng could discuss experiences with flexibility and productivity in US yards.

[chengkp75]

Heidi

 

Yes, I remember well those problems with job differentiation in UK shipyards, and I agree that that was the major impediment to continued shipbuilding or repair in the UK. In the US, that kind of thing is still around, not as pronounced as in the UK, and it is getting better as yards start to add cross-training incentives for the workers (if a fitter takes training as a rigger, so that he can rig his own lifts to complete his job, then he gets a buck or so per hour more), and as the workers watch their jobs disappear, they have changed with the times and gotten more flexible. Productivity is fair to poor, about mirroring most manufacturing sectors in the US, as again, workers don't want to work out in the rain, in a cold, stinky drydock floor, scraping barnacles off a ship's hull. The US problem is wages and benefits. Costs of health insurance, costs of occupational safety requirements (OSHA), and environmental protection costs have put us out of competition.

[Floridiana]

Costs of health insurance, costs of occupational safety requirements (OSHA), and environmental protection costs have put us out of competition.

 

Aren't they as high in Germany, Finland and Italy where cruise ships are being built? All three countries have health insurance, safety regulations and environmental protection costs. There must be other factors that enhance productivity.

[chengkp75]

Aren't they as high in Germany, Finland and Italy where cruise ships are being built? All three countries have health insurance, safety regulations and environmental protection costs. There must be other factors that enhance productivity.

 

It's the cost of those things along with the wages that puts the US out of competition. US average wage is nearly 50% higher than Germany, and 60-70% higher than Finland and Italy. Also, those countries are smaller, so the overall cost of social programs is less than the bloated and inefficient US bureaucracy. US blue collar workers have also been historically resistant to technological advances. As an example, in Europort, a portion of the port of Rotterdam, there are virtually no longshoremen present at the docks while millions of containers are being handled at one of the world's largest ports. Where are the longshoremen? Inside, monitoring the self-driving container trucks, and straddle lifters that actually move the containers around and get them to and from the ships. I asked a port pilot how the longshoremen felt about the modernization of the operation, and he said, "why would they complain? They've gone from working a blue collar job in all weather to a white collar job in air conditioning, with no loss of jobs." When the ports on the West Coast of the US tried to modernize the port operations a few years back, proposing a start to a program that would lead to a Europort type operation, the longshoremen went on strike, and nearly crippled the US economy.

 

We have also lost the skill set necessary for efficient shipbuilding. The Merchant Marine Act of 1936 (not the Jones Act as many believe) is what condemned the US Merchant Marine and shipbuilding to failure. This act, enacted to ensure the US was prepared for WWII by supporting the building and operating of US flag merchant ships, provided subsidies that covered the cost differential between building foreign and building in the US, and operating as a foreign flag or operating as a US flag vessel. At the time, it did what it was supposed to do. As time went on, the shipowners, shipbuilders, and maritime labor learned to "game the system". If a shipyard wanted to increase the price of a ship built in the US, for whatever reason, the shipowner said, "fine, we don't care, the government subsidy will cover the increase", the same with labor contracts, and so building costs and mariner wages inflated out of control. Rather than investing in new technology to build ships at reduced cost, or operate them with reduced crew costs, the US simply forked over subsidies, and the European shipyards, which started the modular construction of ships, and were the first to have enclosed building docks to allow better quality control without weather interference, invested in these new technologies and widened the gap in building costs. When Reagan stopped the subsidies, US shipbuilding and US flag ships went down the toilet, and we are still trying to recover. I have never been a fan of the operating/construction subsidies, and applauded when they went away, but it is still painful for the industry to try to realign itself with the rest of the world.

[broberts]

Aren't they as high in Germany, Finland and Italy where cruise ships are being built? All three countries have health insurance, safety regulations and environmental protection costs. There must be other factors that enhance productivity.

 

US medical costs per capita are almost double those of most other developed countries.

 

The economic model is also quite different. Most of Europe tends to spread socially beneficial costs across a wider population. Medical insurance, for example is often single payer or highly subsidized by the government. Significant modernization programs often have heavy government participation. As do industries that are deemed of value to the general population.

 

Profit margins in the cruise ship construction business are not that high. So it doesn't make economic sense in a highly advanced economy. Probably why it doesn't exist in the US. Other economies are not as tightly tied to profit margins.

[Heidi13]

Heidi

 

Yes, I remember well those problems with job differentiation in UK shipyards, and I agree that that was the major impediment to continued shipbuilding or repair in the UK. In the US, that kind of thing is still around, not as pronounced as in the UK, and it is getting better as yards start to add cross-training incentives for the workers (if a fitter takes training as a rigger, so that he can rig his own lifts to complete his job, then he gets a buck or so per hour more), and as the workers watch their jobs disappear, they have changed with the times and gotten more flexible. Productivity is fair to poor, about mirroring most manufacturing sectors in the US, as again, workers don't want to work out in the rain, in a cold, stinky drydock floor, scraping barnacles off a ship's hull. The US problem is wages and benefits. Costs of health insurance, costs of occupational safety requirements (OSHA), and environmental protection costs have put us out of competition.

 

Our Canadian yards are similar. However, when I managed one of our West Coast yards, while cross-training wasn't common, at least the fitters did their own rigging. All the riggers did was re-certify their year every year.

[ontheweb]

This is not about building cruise ships in the USA; rather it is about building yachts. It seems the industry is now about to be severely damaged by the trade war tariffs.

 

https://apnews.com/6a75521f5ba6493c9baee68b2a1fc7f5

[iancal]

There are very substantial subsidies attached to cruise ship builds. Hidden and otherwise. Some countries are more predisposed than others to complete in this environment.