US Shipyards Seek Business From Japanese Competitors
AS America's shipbuilding industry struggles to convert from defense to commercial production, help may come from an unlikely source: Japan.Skip to next paragraph
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United States shipyards are striking agreements with their Japanese counterparts that promise to bring both jobs and productivity gains to the US.
Across the Pacific, a Clinton administration loan guarantee and research program, passed by Congress last year, aims at averting shipyard closures and layoffs.
According to a 1994 report by the Shipbuilders Council of America -- ''The Transition of American Shipyards to Commercial Markets'' -- there will be only 35 naval ships under construction by 1999. In 1994, there were 89.
Without a successful conversion to commercial production, employment at American shipyards could plummet. Already employment has fallen by 111,000 since a peak of 186,700 in 1981. And, according to the council, US industrial capacity still exceeds Navy requirements by 300 percent. ''U.S. shipbuilders must build 30 to 50 commercial ships per year to support present physical capacity,'' the report says.
Japanese shipbuilders, who are looking overseas in hopes of cutting costs, may provide much needed commercial opportunities to US shipyards. Several Japanese companies have already signed a handful of cooperative agreements with US shipyards, including the National Steel and Shipbuilding Company (NASSCO) in California, Newport News Shipbuilding (NNS) in Virginia, and Bath Iron Works in Maine.
NASSCO has a long friendship with Japan's Kawasaki Heavy Industries (KHI), notes a KHI spokesman. Their relationship began more than 10 years ago when NASSCO began to purchase equipment and parts from KHI. Now KHI will reciprocate with technological know-how in the form of production engineering, fabricating metal works, assembly, designing, and materials procurement.
''By assisting NASSCO, we can further our global manufacturing strategy,'' explains the KHI spokesman. ''With our help, they will become a stronger company. And, at some point in the future, we can collaborate in ... procurement matters.''
Over the past 33 years, NASSCO has built 87 vessels, of which 40 were for the military. Kawasaki, nearly 100 years old, has produced 1,500 ships.
Newport News Shipbuilding is hoping to produce commercial ships in cooperation with Japan's Ishikawajima-Harima Heavy Industries (IHI). Already the Japanese company has extended NNS a license for the production of liquefied natural gas (LNG) tankers. ''We find the Japanese very cooperative,'' says Jack Schnaedter, a corporate communications officer at NNS.
''Newport News Shipbuilding made contact with IHI about four years ago expressing an interest in their technology,'' Mr. Schnaedter says.
IHI has developed a new technology for the production and design of LNG tankers. To improve the marketability of this technology, IHI created a family of producers abroad. An IHI spokesman says his company does not have the capacity to produce several of the ships quickly and inexpensively.
''If a customer ordered six ships, for instance,'' he says, ''IHI might produce a couple and ask our [overseas] partners to produce one or two each.''
''We hope to win some large orders for LNG tankers soon,'' adds the IHI spokesman. ''Cooperation with NNS and the other family members allows us to meet all of our customers' needs.''
Like NNS, Bath Iron Works is hoping to jointly produce ships with a Japanese company. Mitsui Engineering & Shipbuilding Co. reports that it has signed a deal with the American company to make barges that are equipped with electric power generators.
Mitsui will build the generators, while Bath Iron Works will build the barges and install the generators.