Blog: In defence of commercial shipbuilding

Dr Paul Stott lecture: November 2017

In defence of commercial shipbuilding: opportunities ‘should be correctly evaluated’, says lecturer Dr Paul Stott

Shipbuilding consultant and lecturer Dr Paul Stott has spoken out strongly in defence of commercial shipbuilding in the UK. In a wide-ranging lecture at Newcastle University, he told his audience that there are opportunities for commercial shipbuilding in the UK, those opportunities should be correctly evaluated and the industry should not be written off on the basis of its historical 20th century difficulties.

“We need to properly quantify the value of commercial shipbuilding work to the UK – both tangible and intangible,” he said.

The industry needs ‘appropriate’ government support, he said. “That doesn’t mean going back to the bad old days of handouts and 35% subsidies – but it is common in Europe to have innovation aid and national content requirements.”

The RRS David Attenborough, the research vessel being built at Cammell Laird’s Birkenhead yard for the British Antarctic Survey, is an example of what can be achieved in the UK, said Dr Stott – it is a relatively small vessel, but highly sophisticated technically and of high value.

However, by their nature these types of vessels are ‘their own prototype’, so part of the effort to drive forward commercial shipbuilding should include funding for research & development, as well as training.

He described the United States policy of insisting any vessel of national significance is built in a US shipyard as ‘a competitive disaster for the US’, but gave examples of other countries which have successfully ensured a certain proportion of a domestic order should be domestic content.

“Typically, only 30% of the value lies with the shipyard; the rest, 70% of the value, lies in the supply chain – and we have a very good supply chain in the UK,” he said.

Dr Stott, a naval architect, shipbuilder and senior lecturer at Newcastle University, addressed the question ‘Whatever happened to our shipbuilding industry?’ in his lecture. His own career began at sea as a cadet deck officer; he came ashore to work in shipyards and gain a degree in naval architecture and shipbuilding at Newcastle, and then worked for North East Shipbuilders in Sunderland, later becoming a consultant shipbuilder in a career which took him to 40 countries.

Most people on Tyneside have a relation who worked at a shipyard, or some connection with a shipyard, he said, so the end of shipbuilding on the Tyne is like a personal loss.

In addressing his question, he looked back to 1892, when the UK held 82% of the global market for shipbuilding. In contrast, the 20th century saw a long slow decline, as first Japan, then South Korea, then China took over as the major shipbuilding nation.

“We lost the industry. Was it something we did or didn’t do? If we had taken a different set of decisions, could we have saved the industry? The answer is no, we couldn’t have saved it, for different reasons.”

The decline and loss of large-scale shipbuilding in the UK tends to be blamed on poor industrial relations, poor management, lack of government support, privatisation and even the grammar school system which creamed off all the best brains and sent them not to the shipyards but to the professions of law, teaching or medicine, said Dr Stott. However, he said, while these factors didn’t help and were symptoms of the decline, they were not the baseline reasons. Similarly, the attribution of the end of the shipbuilding industry to Margaret Thatcher did not stand up to scrutiny, he added.

“The final decline was felt throughout Europe; all of Europe went through the same catastrophic decline.”

Key reasons for the UK’s dominance in shipbuilding in the 19th century were a very strong home market – merchant and war ships were needed to serve the British Empire – and the Industrial Revolution, which saw the UK developing its technical supremacy in iron/steel shipbuilding and steam propulsion. “So our dominance was economic necessity and technological lead; we would eventually lose both those factors.”

Dr Stott also tackled the nostalgia for shipbuilding and the tendency to look back through rose-tinted spectacles on a dirty, dangerous and demeaning industry which provided no job security.  The loss of life when the Titanic went down is well documented – little is ever mentioned of the eight fatalities, 28 severe injuries and 219 ‘slight’ accidents that happened at the yard during the vessel’s construction.

Prior to the welfare state, accidents could be personally catastrophic – there was no safety net if a man couldn’t work. There were chronic and debilitating industrial illnesses. The industry was extremely volatile from year to year – sometimes workers would be laid off for years at time with no pay and no way to feed their families.  That culminated in more than 80% of Tyneside’s shipyard workers being unemployed at the time of the Jarrow March in 1936.  Interesting, Dr Stott quoted a November 2017 headline in Lloyd’s List, stating that more than 80% of South Korea’s shipbuilding workers are concerned about job security as yards there stand empty.

The nostalgia, he said, was more for the Tyneside region’s global economic importance, and for the very strong communities that developed out of large numbers of men engaged in a joint enterprise and struggle against a ‘common foe’ (the shipyard owners and the difficult, dangerous and demeaning job).  Those strong communities lived in workers’ housing which was developed up to the shipyard gate – a pattern of development which would later contribute to the industry’s difficulties.

The Second World War and beyond brought rapid developments in technology, not least the move from riveting to welding, paving the way for investment in deskilling and automation to improve efficiency. But the British industry spent the next 40 years ‘trying to shoehorn the new ways into the old system’, while the new world order – starting with Japan – adapted without problems.

Huge investment was required for the new technology and the rapidly increasing size of ships. Even where the right investment was made in Europe in the 1970s, it was very difficult to compete and there was no guarantee of survival, said Dr Stott.

The new yards in Asia were built on the massive scale required – the UK’s small riverside yards were too constrained to expand, including by the social housing built for the workers directly outside.

However, the Tyne, for example, should be proud not only of its shipbuilding heritage but also its shipyard expertise, he said; South Korea’s shipbuilding industry was developed with North East England expertise.

In summary, the UK’s shipbuilding dominance faded because of the loss of its home market, the loss of technical lead as others caught up, changing technology and processes, globalisation and the pursuit of economies of scale, shipyard sites being too small for modern large ships, and an investment requirement which was too risky and beyond private capital.

The end was inevitable, said Dr Stott, but he had an important message: “We did possibly throw the baby out with the bathwater in closing everything. Others in Europe have maintained a market presence and taken economic benefits, albeit predominantly from relatively small ships.”

The pain of the 20th century still colours the political view of the shipbuilding industry, he said. “But we need to look forward, not back. We are in danger of missing the opportunities and value inherent in commercial shipbuilding.”

The Government’s National Shipbuilding Strategy, published in 2017, discusses the future of naval shipbuilding but treats commercial shipbuilding at arm’s length, he said. “The potential for the commercial sector remains blighted by the events of the 20th century. Having been the dominating market leader is an albatross around our neck. As long as our industrial strategy is predicated on defence, shipbuilding will be the Ministry of Defence’s problem. It also misses the potential opportunities available form commercial work to support the defence strategy.”

The UK is not about to return to global dominance, he said. “But that doesn’t mean there is nothing to be gained from the commercial sector. We need at least to evaluate this opportunity correctly rather than simply writing it off on the basis of the difficulties of the 20th century.”