based on extensive experience and visits to international yards, knowledge of technical exchange agreements between U.S. and international yards, and the committee's workshop and literature review.

The committee must make the sober observation that no industry in a position similar to the position of U.S. shipbuilding has become internationally competitive in less than ten years, if at all. Given the current position of U.S. industry, with labor hours twice the international level in some market segments, the industry confronts an enormous task.

This committee urges a broader examination—focused on more than technology—to determine what is required for the success of the industry. In particular, this 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 much more important than technology in determining the competitive position of shipbuilders, and this will probably be true in the future. The proposed broader examination could be led by the industry, with cooperation from the federal government. In taking this broad view, such an examination should ensure that total support for U.S. shipbuilding leads to a total change in the industry and not a continuation of past practices. This broader examination should also include the need for the United States to formulate a public policy approach that creates organizational, structural and financial incentives. The range of incentives may be essential for building a viable industry in the United States.

Specific Conclusions

The following summarizes the committee's conclusions for U.S. industry, government, and education to regain an international market position for U.S. shipbuilding.

Conclusion 1: U.S. industry is behind other shipbuilding nations in all four categories of commercial technology: business-process, system, shipyard production, and new products and new materials technologies. Although U.S. shipbuilders are the best warship builders in the world, they have had almost no experience in commercial shipbuilding for the last 15 years and no significant international commercial experience for the last 50 years.

Conclusion 2: U.S. shipbuilders are at a serious disadvantage in business-process technologies, including marketing, preliminary design, estimating, and sourcing. Having been absent from the commercial markets for large ships for many years, U.S. yards do not understand customers well, do not have libraries of product designs, and are unaccustomed to rapid, accurate parametric cost estimating based on recent commercial ship production. U.S. builders must acquire better technical capabilities corresponding to preliminary design, estimating, sourcing,

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