educational infrastructure by becoming involved with research that can support the industries.

Shipbuilders should also develop detailed plans to reenter targeted world markets. This is a lesson that management in many other threatened U.S. industries learned quite late. Moreover, all of the ships recently constructed by U.S. yards were for U.S. owners and were competitively priced only among U.S. shipbuilders. The committee must make the sober observation that no industry in a position similar to that of U.S. shipbuilding has become internationally competitive in fewer than 10 years—if at all. Given U.S. industry's current position and the fact that labor hours are twice the international level in some market segments, the industry confronts an enormous task. No other substantial industry with such a low market share has achieved a turnaround in similar circumstances.

This committee urges a broader examination—focused on more than technology—to determine what is required for the industry's success. The charge to the committee limited the scope of the present study to technology; therefore, the committee did not address some issues that could be more important than technology for becoming competitive in shipbuilding. In particular, the proposed examination should cover financing of all kinds, with a close look at U.S. government regulations and subventions by other governments through training programs, port and area development subsidies, and the like, which are not directly tied to shipbuilding but clearly influence its economics. In the past, financing has been far more important than technology in determining the competitive position of shipbuilders, and this will very likely be the rule in the future. The broader examination proposed by the committee could be led by the industry in cooperation with the federal government. The examination should cover the need to meet established goals and to formulate a U.S. public policy approach that creates organizational, structural, and financial incentives. This range of incentives may be essential for building a viable U.S. shipbuilding industry.

Policy Recommendations

For the present, a number of the measures discussed above could provide valuable support in reestablishing U.S. commercial shipbuilding:

  • The Department of Defense should acquire all noncombatant ships, including the ships for the Sealift Program, using totally commercial specifications and commercial procurement practices.
  • The Advanced Research Projects Agency should continue its current effort in Maritime Systems Technology, concentrating on the "front end" of the process, including business-process and simulation technologies, in addition to those related to product design.

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