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From The Notebook, International Socialism (1st series), No.33, Summer 1968, p.4.
Transcribed & marked up Einde O’Callaghan for ETOL.
Peter Bain writes: The decision of Upper Clyde Shipbuilders to run down their Sinthouse division (formerly Alexander Stephen’s) reflects the general decline of British shipbuilding in a world situation of intense competition and substantial surplus building capacity.
Britain’s share of the world market has fallen from 50.2 per cent in 1947 to 7 per cent in 1967 and now ranks fourth in terms of annual tonnage launched – behind Japan, Sweden and West Germany. In the Glasgow area ten shipyards have closed since 1957, while the number of workers employed has fallen from 27,000 to 13,000 in the same period. Britain’s decline as the world’s dominant shipbuilding nation, to some degree inevitable as the post-war demand for ships grew, was accentuated by the short-sighted, penny-pinching, policies pursued by the shipbuilding companies. Investment in the yards between 1951 and 1954 averaged £4 million per year, while equipment written off as worn out, etc., amounted to £9 million per year. In 1958, the shipbuilding industry, with exports valued at £60 million, spent £282,000 on research and development. As recently as 1964, a survey revealed that over 50 per cent of the machinery in John Brown’s yard was over 40 years old. In a lengthy survey of world shipbuilding The Economist (2 March) estimated that by 1971 there will be anything between four and ten million tons of surplus capacity. When Britain’s annual output over the last five years of just over one million tons is measured against the estimated surplus capacity, the seriousness of the situation is apparent.
Even the growth sectors of the industry (oil tankers and container ships) bring further problems in their wake. The increase in size of oil tankers (given further impetus by the closure of the Suez Canal) will make the existing smaller tankers uneconomic. Shipowners, confronted with intense competition (9 container ships on the Europe to Australia run will do the work of 80 ships at present), will prefer to convert the smaller tankers for merchant use rather than build new ships. Thus, companies like Upper Clyde Shipbuilders whose future is dependent on securing orders for merchant ships will find themselves in an extremely precarious position. These companies which have built, or are planning to build, docks large enough to take 500,000 and one million ton tankers of the near future will discover that even their large investments (Harland and Wolff of Belfast are spending £51 million on one dock) provide little respite from the realities of world competition. In Europe there are at present eight docks large enough to build ships of this size, with another eight planned, while Japan has seven at present with another two planned. Given the rate of increase in oil shipments expected over the next three years, and supposing that no further orders for tankers were placed between now and 1970, there would still be 25 million tons of surplus tankers floating around.
Much of the investment taking place in the shipyards is at the behest, and with the help of Governments embroiled in a spiral of competitive subsidies. The British Government, apart from sponsoring the Geddes Report which highlighted the problems of British shipbuilding, also makes the following concessions: investment grants and £200 million in cheap credit to shipowners; export credits, export credit insurance, export rebates, investment rebates, special depreciation allowances, waived duty on imported components, research grants, and a rationalisation grant of £37i million to shipbuilders, to say nothing of the incomes policy and wage freeze. It was in response to Geddes’ dictum that only by forming larger groups could British yards hope to compete, that the Upper Clyde and the other mergers took place (on Tyneside, Wearside and the Lower Clyde).
Along with the re-structuring of the British shipbuilding industry has come a sustained effort by the employers to get greater control over the work-force. Flexibility, interchange-ability, measured-day work, and work-study agreements have been sold by the unions in return for wage increases, but the introduction of double-day shift working (a stepping-stone on the way to three-shift working) has been vehemently opposed by the workers whose social life would be disrupted. Last summer, when the management of Fairfield’s informed their boilermakers that there would be 300 redundancies unless they accepted double-day shifts, the workers voted against the proposal (and against the recommendation of their full-time official) with only nine votes in favour of operating double-day shifts. The Upper Clyde group also propose to set up a management-worker–Joint Council,’ a device which is ideally suited to encourage workers to identify with the company, and to divert them away from any thought that there might be an alternative to the prevailing capitalistic organisation of production. Many of these measures have been pushed through on the promise of balmier days ahead, since shipyard workers have little conception of the gravity of the situation confronting the industry. Their present struggles are only the first reverberations of the explosions which will shortly rock world shipbuilding.
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