EU shipbuilding activity 'must resume'

João Ferreira lays out the conditions for providing renewed stimulus to the once great European shipbuilding industry.

By João Ferreira

23 Feb 2015

The ship building, repair and maintenance industries have always been of huge importance in Europe, as they constitute the basis for maritime and waterways transportation of goods and passengers. Historically, such activities and the scientific and technical knowledge which leveraged them were the foundation for the process which enabled maritime expansion. They can also be credited for globalisation, first in the 15th and 16th centuries, led by Portugal and Spain, and later in the 17th and 18th centuries, led mainly by the Netherlands and the United Kingdom.

The shipping construction industry in Europe - which in 1950 was 70 per cent of worldwide production - lost its global importance from the 1970s onwards. Two out of every three shipyards in the community area closed, as the centre of gravity shifted to the far east - in particular Japan, South Korea and China - which had a profound and negative economic and social impact on our countries. However, the effects of this loss of activity did not have the same consequences in all member states. For example, my country, Portugal, suffered the most, with an 83 per cent reduction in activity, compared to the European average which was 70 per cent.

As energy consumption evolves along with the different ways of transporting goods, merchant shipping has accentuated its increasingly strategic nature, and therefore, so has the shipbuilding industry. This has been heightened by the creation of new routes and new and larger ships, especially with the opening of the expanded and modernised Panama canal and the new Nicaragua canal. The dynamic cruise ship industry and associated shipbuilding, with the example of Finland, where the maritime cluster employs more than 40,000 people and generates an annual revenue of around €15bn, have also fuelled considerable interest.

"The bulk of the shipbuilding workforce, as well as merchant, cruise liner and naval fleets must be protected and built in European shipyards"

Although the EU coastal countries present a number of success stories and the economic activities associated with the sea - the ‘sea cluster’ - have become increasingly dynamic over the years, the truth is that this trend is neither general nor uniform in all EU countries built upon a maritime tradition On the other hand, the various documents which the EU authorities have produced and approved on the sea and the blue economy severely undervalue activities with historical weight, such as the shipbuilding industry.

Faced with this scenario, this industrial activity must resume and must be granted additional stimulus. It presents added value, and the bulk of the shipbuilding workforce, as well as merchant, cruise liner and naval fleets must be protected and built in European shipyards. This must be supported by clear and unequivocal legislative positions expressed by the parliament and commission, and which will have to focus on a number of points.

First, the relaunching and modernisation of the shipbuilding industry - in all its branches and all related activities - must receive specific financial support. Second, we need investment in research, development and innovation, looking to enhance the design and construction of ships, in particular for the transportation of goods, specifically in the areas of diversification of primary energies and energy efficiency, materials and environmental protection. Third, previously existing specialisations in certain member states must be reinforced, with a view to exploit the value chains of this activity. Fourth, the work and workers associated with these activities must benefit from a social, economic and financial valorisation (maintaining an artificial price, but also adding value to employment through training), with the aim of recovering part of the lost labour force. Finally, one matter which will have to be resolved within this general scenario, is that of the profound imbalances between the shipbuilding industries of the various countries involved. Obviously such imbalances are not exclusively to do with local authorities - national governments’ political orientation is frequently the determining factor.

Such is the case in my native Portugal, where the destruction of large, medium and small shipyards has reached a horrifying level, and where state owned merchant shipping has been reduced to almost nothing.


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