Vessels reported launched since progress report of June 1, 1953

Vessels reported delivered since progress report of June 1, 1953

NOTE.-No new contracts have been reported since progress report of June 1, 1953.

Source: Shipbuilders Council of America, New York 6, N. Y.

Owner

492

MERCHANT MARINE STUDIES

Mr. SANFORD. Exhibit H is a tabulation of naval combatant and large auxiliary vessels under construction or on order in private yards. The scheduled delivery dates indicate 14 deliveries in 1953, 13 in 1954. 7 in 1955 and 2 in 1946, so that what naval construction there is in private yards stretches out over a somewhat longer period, as may be expected. Even so, the workload for 1955 is very light. The present percentages of completion of these vessels is restricted and hence is not shown.

Exhibit I is a tabulation of the naval combatant and larger auxiliary vessels under conversion in private yards. This tabulation is of interest merely to show the somewhat limited volume of this type of work in private yards.

Earlier in this statement, it was pointed out that the expenditure of $200 million annually by the Government on a pay-as-you-go basis over the years not only would have curtailed the war shipbuilding programs of the two World Wars, thus saving some billions of dollars now a part of our national debt, the annual interest on which becomes part of the national budget, but we would have been much better prepared initially, with the probability of a war of shorter duration. The measure of that saving is beyond estimation.

If it be assumed that private industry would have expended a like annual amount on replacements and additions, as a joint venture with the Government, and, if it be further assumed that the average cost, at today's price level of the vessels that now might be involved in a replacement program, is in the order of $8 million each, the result would be some 50 vessels per annum (based on a $400 million total expenditure). Such a program is substantially the annual program contemplated by the Maritime Commission prior to World War II as far as the number of vessels is concerned.

A program of 50 ships per year, when spread over available shipyards would provide a reasonable level of activity and should allow for replacement of tonnage at an appropriate annual rate to offset obsolescence. At present 40 merchant ships are scheduled for delivery this year by American shipyards and 33 next year.

Fifty ships a year of the type used as a measuring stick, would involve a minimum of 50 million man-hours per year, depending upon what other types of ships might be included in the total, which would be the approximate equivalent of 25,000 men on a single shift, 5-day

week basis.

To this figure would have to be added any employment on naval construction in private shipyards which might raise that figure to 35,000 men.

In its presentation to the President's Advisory Committee on the Merchant Marine in 1947, the Council conservatively estimated the minimum employment on new ship construction necessary to preserve an essential level of specialized knowledge and skills at between 35,000 and 40,000 men. Estimates from other sources ran much higher, up to 100,000 men by the CIO.

Average employment for the quarter ending March 31, 1953, on new construction in the principal shipyards of the United States,

MERCHANT MARINE STUDIES

493

based on returns to the Council, including both naval and merchant contracts, was 57,807. Returns for the quarter ending June 30, 1953, are not yet available.

By September 30 of this year the indications are that shipyard employment on new construction, both merchant and naval, will have passed the peak, to which it has been building up since the middle of 1950, will commence to fall off at a rapid rate.

I think that was shown on that chart that I showed you awhile ago. By June 30, 1954, the end of the fiscal year 1954, and a date before which any legislation in the next Congress looking toward a longrange shipbuilding program could hardly be expected to become effective, employment on new construction will probably have fallen from 12,000 to 15,000 men. By the end of the year, it will probably have fallen off another 10,000 men, and, by June 30, 1955, another 10,000.

It appears to be a reasonable prediction that, without additional new orders for ships, of which there now appears to be little prospect in the foreseeable future, employment in the industry on new ship construction will have fallen off to possibly 20,000 men by the end of 1955, mostly in naval construction concentrated on the comparatively few private yards specializing in the construction of the large naval vessels. Yards handling merchant work only would probably be manned only with skeleton organizations including maintenance forces.

It has previously been pointed out herein, that the authorization of any ship-construction program in the next session of the Congress cannot be expected to produce much in the way of actual shipyard activity before the beginning of 1955, so that the downward trend of employment is not likely to be arrested as a result of such a program before the middle or latter part of that year and a normal sequence of operations, and the level and distribution of employment appropriate thereto, will not be fully realized until the beginning of

1956.

This may sound unreasonable, but it took us 3 years to build up to our present employment. There is ample capacity in the presently existing private shipbuilding yards to handle such a program, together with whatever naval construction work may develop. Only in the event of a shipbuilding program of wartime proportions would it be necessary to reactivate the yards now held in reserve-both maritime and naval-or, beyond that, if such a program seems to justify it, to construction of additional yards. Even though some old-line shipbuilding capacity that was available during the war has been lost since the war by the closing down of several major yards, the remaining capacity is ample to serve as the necessary nucleus for any expansion that some day might be required. The problem is not one of capacity, but one of a program to utilize existing capacity.

There has been much loose talk of mass production of ships during wartime. There never has been mass production of ships, and it is most unlikely that there ever will be. There was multiple production of similar ships in various emergency shipyards during the late war.