Shipbuilding: Reorganization Programme. Communication from the Commission sent to the Council on 9 December 1977. Supplement 7/77 Bulletin of the European Communities

Bulle in o he Eu opean Communi ies Supplemen 7/77 Reo ganiza ion o he Communi y Shipbuilding Indus y Communica ion om he Commission, sen o he Council on 9 Decembe 1977 COM (77) 542 inal 6 Decembe 1977 Co e i le: Shipbuilding: Reo ganiza ion P og amme Commission o he EUROPEAN COMMUNITIES This publica ion is also a ailable in Danish, Du ch, F ench, Ge man and I alian. A bibliog aphical slip can· be ound a he end o his olume. A icles and ex s appea ing in his documen may be ep oduced eely in whole o in pa so long as hei sou ce is men ioned. P in ed in Belgium 19 78 Ca alogue Numbe : CB-NF-77-007-EN-C con en s Page P oblems o Communi y shipbuilding 5 The c isis . . . . . . . . . . . . 5 Causes o he c isis . . . . . . 5 The consequences o he c isis o he Communi y 5 Cu en measu es aimed a p o iding wo k o ya ds 6 The na ional app oach 6 The in e na ional app oach 8 The Communi y app oach 8 The objec i es o Communi y in e en ion 9 Adap a ion o p oduc ion s uc u es 9 Redeploymen o labou 9 S imula ing demand 10 Communi y ac ion 11 Reo ganiza ion o he shipbuilding sec o 11 Ac ion o coo dina e aids 12 Ac ions in he social sphe e 12 Financing 12 S imula ing demand 13 In e na ional ac ion 14 Conclusions 14 Annex 17 Cha ac e is ics o he c isis in shipbuilding . . . . . . . 1 7 In en o y o inance equi emen s o eo ganizing he ship- building indus y . . . . . . . . . . . . . . . . 19 P oposal o a Council decision se ing up a Shipbuilding Commi ee . . . . . . . . . . . . . . . . . . . . . . 20 J-4 P oblems o Communi y shipbuilding The c isis 1. The di icul ies in new shipbuilding esul om a wo ld-wide s uc u al imbalance be ween p oduc ion capaci y and demand; hey a e ela- i ely wo se o he Communi y indus y on ac- coun o he compe i i e weakness o Communi- y shipya ds in compa ison wi h non-Eu opean compe i o s.' Causes o he c isis 2. As a esul o op imis ic o ecas s o he g ow h o he wo ld economy, oge he wi h specula i e demand, o de books swelled unp e- ceden edly be ween 1960 and 1973. In o de o mee his demand wo ld-wide p oduc- ion po en ial inc eased o such an ex en ha o e capaci y would p obably ha e occu ed e en wi hou he oiJ2 and economic c ises. To mee o de s ecei ed in 1972-1973, annual wo ld p oduc ion in he pe iod 1974-76 g ew o app oxima ely 33 million g 3 (equi alen o some 20 million cg 4 ). New o de s, which de e mine he u u e le el o ac i i y, ha e allen since 1975 o 13 million g (and he same in cg ).5 Gi en he ex en o o e - capaci y in exis ing lee s, new o de s will no e en each his le el in he coming yea s. Japan- ese ya ds ha e o some ime expe ienced a si- mila all in ac i i y, and, in hei u n, a e acing compe i ion om ya ds in new shipbuilding coun ies (o en es ablished wi h he aid o Japan- ese capi al). 3. Communi y shipbuilde s ha e been subjec o he same phenomena as o he s bu , by de- p essing selling p ices, he wo ldwide o e ca- paci y b ough Communi y ya ds down o hei limi o compe i i eness much ea lie han hei compe i o s. Al hough p oduc ion acili ies in some Membe S a es ha e been mode nized, Communi y ship- S. 7177 building is handicapped by unsui able s uc u es and by uncompe i i e ope a ing cos s- he la ge numbe o ya ds in he Communi y p e en la ge-scale p oduc ion as in he Japanese ya ds, which a e i ually new and o m pa o in e- g a yd indus ial g oups, enabling hem o wi h- s and he haza ds o he economic cycle. The need o s uc u al adjus men is all he mo e u - gen since Communi y ya ds ha e no hope o e- ducing social secu i y cha ges which, in compa - ison wi h ce ain coun ies wi h a ecen ly de el- oped ·shipbuilding indus y, a e a handicap. The consequences weigh pa icula ly hea ily on he Communi y. 4. A he same ime he p ospec s o se e al sec o s o he shipping indus y a e gloomy, gi - ing li le hope o he se ious imbalance be ween a ailable onnage and· ma ke equi emen s being aken up be o e 1982; his is especially ue o he anke ade, bu also o o he ades such as bulk ca go. The s a is ics show6 ha he Com- muni y's sha e o he wo ld lee has allen om 25.1% in 1970 o 20.7% in 1976. I is ue ha he Communi y's shipping indus y and i s ship- ya ds mus emain, o be made, compe i i e in he wo ld ma ke . Communi y shipowne s a e no bound o he shipya ds o he Membe S a es; ne e heless, in p ac ice ou shipowne s gene ally place hei o de s wi h ou ya ds, hence he impo ance o hese o he Communi y's ha - ing a compe i i e lee . The consequences o he c isis o he Communi y 5. A he p esen ime, he Communi y indus- y accoun s o 20% o wo ld p oduc ion. As- suming ha he es o he wo ld's sha e emains cons an , and ha he sha es o he wo ld ma ke held by he a ious coun ies in 1975 emain he See Cha ac e is ics o he c isis in shipbuilding, page 17. The oil c isis has mainly a ec ed new building o anke s. 1 g is a measu e o olume ic capaci y. 4 cg (compensa ed g oss egis e ed on) akes accoun o he amoun o wo k pe g . 5 The olume is he same whe he exp essed in g o cg because he e has been a d as ic all in o de s o simple es- sels ( anke s and bulk ca ie s). 6 Tables I; 2 and 3. 5 Table 1 -P oduc ion in g as a pe cen age o wo ld o al 1955 1960 1965 1970 EEC 70.0 51.1 31.3 25.6 AWES I 80.0 73.8 50.8 40.5 Japan 12.0 21.4 41.5 48.1 Res o he wo ld 8.0 4.8 7.7 11.4 1975 1976 23.3 22.6 38.5 37.5 50.6 46.7 10.9 15.8 1 AWES = Associa ion o Wes Eu opean Shipbuilde s (Communi y coun ies + No way, Sweden, Finland, Spain and Po ugal). Table 2 - Flee s in g as a pe cen age o wo ld o al 1955 1960 1965 1970 EEC 35.4 33.5 28.6 25.1 AWES 47.5 46.9 43.0 37.9 Japan 3.7 5.3 7.4 11.8 Res o he wo ld 48.8 47.8 49.6 50.3 1975 1976 .22.9 20.7 35.9 32.9 12.2 11.2 51.9 55.9 Sou ces: P oduc ion: o 1955, 1960, 1965- DAFSA s udy; o 1970, 1975, 1976 -Lloyd's Annual Summa y. · Flee s : Lloyd's S a is ical Tables. NB: Nei he he I ish no he Po uguese lee was included in 1955, 1960, 1965 and 1970. same,1 A WES2 expe s o ecas ha Communi y ya ds will deli e 2.4 million cg in 1980, com- pa ed wi h 4.4 million in 1975-i.e. a educ ion o 46%, while wo ld p oduc ion o he same pe iod will d op by only 40%. To he unce ain ies inhe en in any o ecas mus be added wo con adic o y ac o s, namely he low compe i i eness o some shipbuilde s (a ac o . becoming mo e impo an as he down u n in wo ld demand sha pens compe i ion) and he high deg ee o compe i i eness o Communi y shipya ds in building ce ain pa icula ly sophis i- ca ed ypes o essels. Bu in his sec o o he indus y we mus expec he Japanese, in pa ic- ula , o launch an o ensi e-acco ding o he Japanese Minis e o T anspo and Indus y, ' he Japanese shipbuilding indus y, which has depended on anke s o 0 mo e han 70% o i s p oduc ion, will ha e o shi mo e and mo e o special-pu pose ships such as lique ied gas ca - 6 Table 4 - 1975 p oduc ion and 1980 p oduc ion o ecas based o eseeable demand 1975 ol980 g cg gn cgn EEC 7.8 4.4 2.4 Res o AWES 5.3 3.2 1.5 AWES 13.1 7.6 3.9 Japan 17.0 7.7 3.9 Res o he wo ld 4.2 4.2 4.0 To al, wo ld 34.3 19.5 10.4 11.8 ie s, e c .... ha ing highe echnology and g ea e alue added. Consequen ly shipbuilding in Japan would each 14.7 million g in 1985, eco e ing o he 1975 le el'.3 In his con ex de elopmen s in Communi y p o- duc ion mus necessa ily a ec he wo k o ce in he shipya ds and allied indus ies. I is al eady es ima ed ha 15 000 o he 180 000 jobs in he shipbuilding indus y in 1975 ha e been a ec ed by he undown o p oduc ion. 0 Cu en measu es aimed a p o iding wo k o ya ds 6. Awa e o he c isis in he indus y, bu hop- ing o a eco e y, he au ho i ies a e eso ing o e e y possible app oach o p o ide wo k o ship- ya ds. So a , howe e , hese measu es ha e me ely been cos ly pallia i es wi h no medium- e m p ospec s. The na ional app oach 7. Many i ms ha e cu ou i ually all o e - ime, in oduced sho - ime wo king, educed wo king hou s, encou aged employees o lea e 1 See Annex, Table 4. 2 AWES: Associa ion o Wes Eu opean Shipbuilde s (Com- muni y coun ies + No way, Sweden, Finland, Spain and Po ugal). J Long- e m ision on Japan's indus ial s uc u e, Tokyo 1976, Chap e 7. s. 7/77 _! 70% ' EEC J p oduc ion P oduc ion 50% ..1. L ~ ~ -- 4 -- -- Flee s 1-------- " -- l Thi d coun ies I - -- lee s . j ly_ I EEC II lee s 40% ·-. ~.,l -- c.. 1-'. '•~ ....... ..... c::-.. 30% ~~ Japanese j -~ p oduc ion -. ~ ,l ~ I 20% I Japanese J I, I lee _.)j ++-+-++- ~ ~ ~~ ""++~,. Thi d coun ies 10% 5% p oduc ion 955 60 .65 70 75 76 8 0 1977 9 mon hs Table 3 - P oduc ion and lee s in g as a pe cen age o wo ld o al S. 7/77 7 and cu ec ui men o he ba e minimum, bu · hese s eps a e inadequa e and, wha is mo e, hey a e a ely pa o a long- e m s a egy. Le o hei own de ices he shipbuilding indus- ies end jus o keep going, wi hou a emp ing o adjus o he new ma ke condi ions. The Membe S a es hemsel es encou age his a i ude by suppo ing hei shipya ds in a ious ways, mainly in o de o keep he le el o em- ploymen as high as possible. Na ional in e en ion o his ype may ake se e al o ms: in some shipya ds wo k is main- ained by placing o de s o na al essels, when such a e no ese ed o na al dockya ds, bu in mos cases in e en ion is inancial. Compa ed wi h he le el o employmen , he sums in ol ed a e conside able: Aid now being g an ed, mainly o o e come he p ice ad an age o Japan and o he shipbuilding coun ies, is es- ima ed a nea ly 600 million u.a. annually (in- cluding aid o shipowne s in he Fede al. Republic o Ge many and in he Ne he lands, bu no ak- ing in o accoun he hidden o unquan i iable help gi en in some Membe S a es). To al aid, which in i s , a ious o ms, is essen ial- ly aimed a main aining employmen in he ya ds, will necessa ily inc ease since he le el o ac i i y will ine i ably con inue o d op be ween now and he 1980s, and compe i ion om non- membe coun ies will p obably g ow. In mos Membe S a es inancial help o he shipbuilding indus y is supplemen ed by measu es o suppo hei own- lag lee s, and hese may a y widely om one Membe S a e o ano he . The in e na ional app oach 8. Unde he auspices o he OECD, he Mem- be S a es, oge he wi h he o he AWES coun- ies and Japan, signed on 12 May 1976 he 'Gene al guidelines o go e nmen policies in he shipbuilding indus y' whose i s p io i y is he educ ion, in an app op ia e manne , o p o- duc ion capaci y in o de o es o e in he medi- um e m he balance be ween supply and de- mand; he p inciple adop ed is ha o main ain- ing ai compe i ion. 8 This ac ion unde he OECD is coupled wi h ap- p oaches o Japan. The Membe S a es wa ned hei pa ne s agains he possibili y o Japan's ailing o bea a su icien sha e o he conse- quences o he c isis, and h ea ened o adop unila e al p o ec i e measu es. These p essu es ha e led Japan o aise i s expo p ices by 5% and in oduce some measu es o olun a y es- ain is-a- is some Eu opean coun ies. Bu hese measu es seem insu icien o b ing back balance in o he ma ke . The Communi y app oach 9. The Communi y's in e es in he p oblem o shipbuilding has wo aspec s: -compe i ion: so a Communi y ac ion on he indus y has been almos en i ely limi ed o suc- cessi e di ec i es coo dina ing aids o shipbuild- ing. Thei main objec i e was o ha monize pu- blic in e en ion in he sec o and educe he le- el o hose aids mos damaging o in a-Com- muni y compe i ion; - inancial: since i s incep ion, he Eu opean Regional De elopmen Fund (ERDF) has paid ou an es ima ed 78.65 million u.a. in egions whe e he e is a high concen a ion o shipbuild- ing. The sum co e s 225 p ojec s in ol ing a o- al in es men o 1 470 million u.a. and he c ea- ion o p ese a ion o 34 112 jobs in F ance, Ge many, I aly, and in he Uni ed Kingdom whe e, in addi ion, 111 indus ial-in as uc u e p ojec s ha e been aided in he said egions. In e en ion by he Social Fund o bene i wo k- e s in he indus y has been modes and he Council did no ake up he Commission's p op- osal o applying A icle 4 o he decision on he use o he .Social Fund, 1 submi ed in Janua y 1974.2 1 OJ L 28 o 4.2.1971. 2 OJ c 13 o 12.2.1974. S. 7177 The objec i es o Communi y in e en ion 10. The Communi y, as he wo ld's leading ading powe , 90% o whose ade is seabo ne, has a majo in e es in conduc ing a ma i ime policy which makes i comme cially compe i i e. Comme cial compe i i eness depends pa ly on a compe i i e Communi y lee . Such a lee is po - en ially a ma ke o Communi y ya ds i hey can supply i on e ms compe i i e wi h hose o e ed by o he s. The i s objec i e o Communi y policy on ship- building mus he e o e be o make ou ya ds compe i i e in he wo ld ma ke . The Communi y's a en ion should be di ec ed chie ly o he new building o seagoing non-na al ships,1 since his is he segmen o he indus y in which he s uc u al p oblem o o e capaci y and compe i i eness is acu e. The o he sub-sec- o s, while less a ec ed by he s uc u al p ob- lem, a e mo e sensi i e o he sho - e m econ- omic si ua ion. Communi y s a egy should conce n i sel wi h coo dina ing he means a p esen a ailable o he Communi y and concen a ing hem on achie - ing a p ede ined objec i e. The aim should be o eo ganize Communi y shipya ds, so ha hey a e compe i i e in he wo ld ma ke and conse- quen ly able o p o ide a signi ican p opo ion o he Communi y lee . Independence o Commu- ni y shipowne s om ya ds in hi d coun ies is essen ial o he secu i y o he Communi y's supply in iew o he impo ance o sea anspo o i s ex e nal ade-and o he main enance o he Communi y's sha e o wo ld ade. ' As he cos o anspo is a e y impo an ac o in he Communi y's economy, he Commission does no conside ha he in e es s o he ship- ping indus y should in any way be subo dina ed o hose o shipbuilde s. The Commission consid- e s ha ac ion by he au ho i ies in a eas o in- e es common o bo h indus ies is an essen ial elemen in implemen ing an o e all s a egy o ' shipbuilding. Reo ganiza ion o he indus y should be based on he eali ies o he ma ke , and he expec ed s. 7/77 le el o demand should be he da um poin o any ac ion a Communi y o na ional le el. On he basis o he in o ma ion quo ed in Pa One abo e, he le el o demand should be ap- p oxima ely 2.4 million cg in he ea ly 1980s; · his es ima e mus be checked wi h he Membe S a es and egula ly adjus ed o ma ke de elop- men s. In iew o he p esen imbalance be ween supply and demand o ce ain ypes o ships, he a ain- men o a gene al p oduc ion aim gea ed o o e- seeable demand is con ingen on he adap a ion o p oduc ion s uc u es, he edeploymen o la- bou and he s imula ion o demand. Adap a ion o p oduc ion s uc u es 11. The e should be a quan i a i e and quali a- i e adjus men o s uc u es o o eseeable de- mand; his should also ex end o di ec ly ela ed indus ies. -Quan i a i ely, i will be necessa y, in he in- dus y's own in e es s as well as in he in e es s o he wo ke s whose jobs in he shipya ds will o he wise disappea en i ely, o adjus p oduc ion capaci ies o ma ke p ospec s in an o de ly ash- ion. -Quali a i ely, mo es o adap p oduc ion ca- paci ies quan i a i ely mus be accompanied by e o s o imp o e p oduc ion acili ies so ha hey may su i e wi hou aid and become com- pe i i e in he wo ld ma ke . Redeploymen o labou 12. As i is impossible o main ain he p esen le el o employmen o some 165 000 pe sons any ac ion o eo ganize he indus y ha does no ake in o accoun he social aspec s o he 1 A his s age i does no seem app op ia e o include wa - ships because he building o hese highly sophis ica ed es- sels is no a ec ed by he c isis. 9 exe cise and seek o limi he e ec s on he labou o ce will be doomed o ailu e. 13. Once he objec i e o eo ganiza ion has been de ined o he indus y, he consequences o employmen mus be d awn; hese will be o wo kinds: - he e aining o wo ke s wi hin ya ds whe e he la e unde ake in e nal con e sion as pa o he quali a i e adap a ion o p oduc ion acili ies; - edeploymen ou side he indus y: he e he Communi y should . b ing in o play all i s e- sou ces o c ea ing jobs ou side shipbuilding, bo h wi hin he ya ds hemsel es and, mo e pa - icula ly, o hose made edundan , e e y e o being made o si e he ac i i ies in he same dis- ic o egion as he a ec ed ya ds, so ha hese new ac i i ies may bene i om. he skills o he wo ke s conce ned; his p ocess o c ea ing new job mus be accompanied by sui able social measu es. In iew o an expec ed le el o demand o abou 2.4 million cg in he ea ly 1980s, he Commis- sion es ima es ha an e ec i e es uc u ing ope a ion in his sec o could a ec app oxima ely 75 000 jobs,1 15 000 o which i is es ima ed will be aca ed by na u al was age. I he ope a ion is ex ended o di ec ly ela ed indus ies, hese would be a ec ed in he same p opo ion which would make app oxima ely 30 000 pe sons edundan . 14. As such esul s can only be achie ed g ad- ually, i will be necessa y o con inue o eso o holding ac ions which a e essen ial o he di ec o indi ec suppo o employmen . The Commission conside s ha , i he objec i e is o be achie ed, Communi y ac ion would be accep able o he gene al public and o he wo k- e s only i i akes ull accpun o he di e en si- ua ions in he indus y in each Membe S a e, and he posi ion he indus y occupies in he economy o he Membe S a e o egion. Whe h- e his ope a ion will be used o demons a e he Communi y's solida i y will depend on he poli- ical will o he Council. 10 S imula ing demand 15. The p ospec s gene ally ag eed upon o shipbuilding in he Communi y p esage he pos- sibili y o he indus y's dwindling away, lea ing he shipbuilde s o non-membe coun ies in a dominan posi ion on he ma ke and capable o aking ac ion o he de imen o he Communi y lee . In addi ion, he ans e o a signi ican p o- po ion o he wo ld lee o lags o con enience has b ough in o he shipping ma ke essels which p esen bo h ope a ing haza ds (subs an- da d ships) and a h ea o he ma ine en i on- men ; and hey a e subjec o social egula ion which a e unaccep able as a as he Communi- y's labou laws a e conce ned. 16. In e na ional bodies a e al eady ying o de- ise means o comba ing his o m o un ai compe i ion. The Communi y should s ep up he ac ion i is al eady aking in his di ec ion by ak- ing s eps owa ds he adop ion o p ac ical mea- su es in he nea u u e. -Ce ain en i onmen al p o ec ion measu es could lead o a pa ial educ ion o he excess ca- paci y in anke lee s and alsQ app eciably s imu- la e he con e sion o exis ing anke s. 2 -Mo e s ingen sa e y egula ions would e- mo e un ai ad an ages enjoyed by ships o non- membe coun ies, pa icula ly hose egis e ed unde lags o con enience, and hus ac o he ad an age o he shipbuilding indus y, ei he di- ec ly (con e sions and epai s), o indi ec ly (ships would be sc apped mo e quickly, and his would speed up he imp o emen o he ans- po ma ke ). Such egula ions could also limi he end o ou shipowne s o egis e hei es- sels unde lags o con enience. 17. Owing o he unshakeable ad an age o ce - ain compe ing shipbuilde s, a leas in he sho e m, ma ke o ces will no ensu e ha ce ain ypes o ship a e compe i i e on he in e na ional ma ke -and his al eady seems o be he case 1 See In en o y o inance equi emen s o eo ganizing he shipbuilding indus y. page 19. 2 See poin 27. S. 7/77 p ices which do less and less o co e cos s, ha e had he e - ec o main aining empo a ily an a i icial le el o demand. Mo eo e , he imp ession is ha no a ew ecen o de s ha e been placed simply because p ices a e so low, hus, in ac , an icipa ing he shipping ma ke 's u u e needs, pa icula ly o bulk ca ie s. Compa ed wi h an annual wo ld p oduc ion in ecen yea s, o upwa ds o 30 million g (app oxima ely 20 million cg ), o de s since 1975 ha e d opped o 13 million g (app oxi- ma ely 13 million cg because he ypes o essel a e di e - en ). I is highly p obable ha o de s will no e en each his le el in 1977, and will all u he in he ollowing h ee o ou yea s. Acco ding o he a ailable da a, demand will p ob- ably be so low up o he beginning o he 1980s ha he ship- ya ds' le el o ac i i y will end o se le a wo- hi ds o hal ha o 1975. Fo ecas s Assuming an a e age GOP g ow h o 4% o he pe iod 1976 o 1985, he ma ke will p obably eco e owa ds 1984. I he g ow h a e is lowe , eco e y will be delay"ed o a ew yea s. Table 4 - P oduc ion o ecas s In he Communi y, his eco e y will b ing an up u n in ac- i i y in shipya ds, bu a wha le el i s ays will depend la gely on he de e mina ion wi h which he indus y and he au ho i ies ace up o compe i ion on he wo ld ma ke . On he subjec o compe i ion, i is o be expec ed ha Japan- ese shipya ds will make e e y e o o adap hei ad anced p oduced echnology (de eloped o se ies p oduc ion o ech- nically a he simple essels) o he building o mo e sophis- ica ed ships. Coun ies which ha e ecen ly de eloped shipbuilding indus- ies will p obably keep he ad an age o e y low wage a es o a conside able ime o come. As a esul , hey will be able o win o de s du ing he pe iod 1976-1985 a p ices unaccep - able o Communi y shipya ds, and he e o e consolida e hei posi ion. Consequen ly any es ima e o he limi s o which hei shipbuilding indus y can expand in unce ain. Finally, o de s o anke s, e en a e he cu en su plus has been abso bed, can ne e be expec ed o egain he a i icially high le el, based on a g oss o e es ima e o he expansion o equi emen s, o he yea s p eceding 1973. In he ligh o hese commen s, he o ecas s in Table 4 should be ega ded as a he uppe limi : (in million g lcg ) Fo ecas o p oduc ion Es ima ed p oduc ion Modi ied es ima e in 1985, based 1975 p oduc ion in 1980, based o 1985 on some op imis ic on o eseeable demand assump ions (AWES) p oduc ion g cg g cg g cg g cg EEC 7.8 4.4 2.4 3.9 3.1 Res o AWES 5.3 3.2 1.5 2.6 2.1 -- -- -- -- -- AWES 13.1 7.6 3.9 6.5 5.2 Japan 17.0 7.7 3.9 6.5 5.2 Res o he wo ld 4.2 4.2 4.0 7.2 5.8 -- -- -- -- -- -- To al, wo ld 34.3 19.5 10.4 l1.8 20.2 16.2 No es I. These o ecas s a e consis en wi h s udies ca ied ou by AWES in mid 1976. They a e based on an assumed 496 g ow h in GDP du ing !976-85. 2. The o ecas o wo ld p oduc ion in column IV is modi ied in line wi h he assump ion ha GDP will g ow by 3.596 p.a. du ing 1976·85. 3. The geog aphical dis ibu ion o wo ld p oduc ion is he e o e based on he ollowing assump ions: -coun ies o he han AWES and Japan ( he es o he wo ld), will no inc ease he le el o hei ac i i ies un il a e !980, bu will do so he ea e bo h by be e use o exis ing capaci ies, and by some expansion; ·· -AWES ya ds, and he Japanese, will, as in he ecen pas , ha e equal sha es, measu ed in cgn.; i is hoped ha in e na ional coope a ion wi hin OECD will b ing his abou ; -sha es wi hin AWES be ween he Communi y and he es will, as be o e, be 60/40. 18 s. 7/77 In en o y o inance equi emen s o eo ganizing he shipbuilding indus y Financial ins umen s a ailable o he Communi y should make a eal con ibu ion owa ds p o iding he inancial s i- mulus needed o adap o con e p oduc ion acili ies. In iew o he p esen su plus o p oduc ion capaci y, how- e e , i is ou o he ques ion ha hese inancial ins umen s should be used o p oduc ion suppo schemes. Any es uc u ing o he shipbuilding indus y will mean hea y in es men o a ionalizing and he mode nizing equipmen ,. p oduc ion echniques, managemen and sales and, abo e all, o he edeploymen o he labou made e- dundan by he c isis ei he in he same o ano he indus y. I is he e o e ·necessa y o es ima e L-e en o a i s app oxi- ma ion om he o e all da a now a ailable- he possible cos o he scheme and hen ou line how i can be inanced. Cos o eo ganiza ion schemes Gi en he unce ain y in he sec o and he need o check all he ac o s and da a wi h he Membe S a es, he indus y and ade unions, i is pa icula ly di icul o p oduce an es ima e amoun ing o any hing mo e han a i s app oxima ion o he o de o magni ude. The di icul ies a e all he g ea e since he es ima es co e a la ge numbe o people who, i is ealized, will be encoun e - ing di icul ies in hei wo king li e wi hou he Commission being able o do much a p esen beyond displaying i s i m in en ion o seek solu ions causing he leas possible di icul- ies. In e en ion will a y in amoun acco ding o he ype o scheme and he indus y a ac ing i . -In he shipya ds hemsel es: • O e i e yea s es ima ed na u al was age will educe em- ploymen by 15 000, b inging he o al labou o ce down o !50 000. I p oduc ion le els ou a a ound he expec ed o- lume o demand (2.4 million cg ), a 45% educ ion in p o- duc ion capaci y would esul ; his would p obably mean an e en g ea e educ ion in employmen owing o he hoped- o inc ease in p oduc i i y. Consequen ly, i is ha d o see how he (by hen) sound companies could employ mo e han 90 000 pe sons a he end o he i e-yea pe iod, which means ha abou 60 000 jobs o edundan shipya d wo ke s would ha e o be c ea ed; in addi ion, unde egional econ- omic policies, p o ision should be made o eplacing he 30 000 jobs los since 1975 h ough na u al was age. Whe e employmen in he shipya ds is conce ned, i can be es ima ed om expe ience ha he a e age cos o c ea ing a new job ou side will be 50 000 u.a. The 60 000 jobs o be S. 7177 c ea ed o edundan shipya d wo ke s, hen, would cos 3 000 million u.a. • On he basis o in es men in ecen yea s, bo h in Mem- be S a es and Sweden (whe e i has been pa icula ly hea y) i is possible o es ima e he cos o shipya d es uc u ing and in e nal con e sion a 900 million u.a. (10 000 u.a. x 90 000 jobs). - In he allied indus ies, i is di icul o es ima e he spli be ween con e sion inside and ou side an indus y, as i will depend pa ly on he indus y o which hey a e con e ed. Ne e heless, he cos o con e ing hese indus ies may well be p opo iona ely lowe owing o a g ea e ease o con e sion o o he ac i i ies. using a cos o 25 000 u.a. pe job c ea ed as a basis, he es ima ed cos o con e ing app oxima ely 30 000 jobs will be 750 million u.a. O e a pe iod o i e yea s om 1978, he e o e, he cos o con e sion and es uc u ing schemes would be o he o de o 4 650 million u.a., i.e. abou one housand million u.a. pe yea . Me hods o inancing The cos o inancing hese schemes mus be sha ed be ween he au ho i ies' ·budge a y esou ces and companies' own e- sou ces o such unds as he la e can aise on he ma ke . A p esen he Membe S a es suppo he shipbuilding sec o o he une o 600 million u.a. pe yea . Mo e migh be needed o e he nex ew yea s. Mo eo e , he ou look is such ha in e en ion by S a es should p og essi ely be di ec ed owa ds a ainmen o he common objec i es o eo ganizing he shipya ds. Whe e Membe S a es apply o he Regional Fund o he c ea ion o jobs o employ labou made edundan by he shipya ds, Communi y esou ces would be added o na ional aids. Again a he eques o he Membe S a es, he Social Fund could help wi h oca ional aining. The es ima ed con ibu ion om public-au ho i y budge s. o he c ea ion o jobs ou side shipya ds and allied indus ies will a e age some 30%, en ailing expendi u e o 1150 million u.a. sp ead o e i e yea s. The con ibu ion om public unds o in e nal schemes would be a a highe a e in iew o he i- nancial di icul ies o he indus y. The inancial con ibu ion o which he shipbuilde s a e e- . sponsible canno be signi ican in iew o hei liquidi y po- si ion and hei conside eable bu den in main aining p oduc- ion acili ies bu i is o be hoped ha hey can pa icipa e in inancing a hi d (300 million u.a.) o he es ima ed expend- i u e necessa y o b ing abou o e a pe iod o i e yea s hei mode niza ion and in e nal econ e sion o o he ypes o 1 All es ima es a e based on 1977 alues. 19 p oduc ion, he balance (9()()-300) o 600 million u.a. being bo ne by he S a es. Taken as a whole, he e o e, he con ibu ion om he public pu se o he a ionaliza ion o he sec o may be es ima ed a abou I 750 million u.a. The inancial con ibu ion made in he companies may be as- sessed, by deduc ion, a 2 900 million u.a. supplied by hei unds. The Communi y could pa icipa e in his ca ego y o inan- cing by u ning o he inancial ma ke , bo h h ough he EIB,l wi h i s own p ocedu es and me hods, and by ecou se o 'communi y bo owing. I The in e en ions o he EIB would be made on he basis o p ojec s which a e echnically and inancially iable and in acco dance wi h a ailable gua an ees and he way in which exchange isks can be co e ed i necessa y. 20 P oposal o a Council decision se ing up a Shipbuilding Commi ee The Council o he Eu opean Communi ies, Ha ing ega d o he T ea y es ablishing he Eu opean Econ- omic Communi y, Ha ing ega d o he p oposal om he Commission, Whe eas on .............................. 1977,1 he Council adop - ed a Resolu ion conce ning he eo ganiza ion o he ship- building indus y, Whe eas i is necessa y o ensu e he implemen a ion o com- mon objec i es by coo dina ing na ional and Communi y ac- ion in his ield, and o es ablish a s anding conce a ion p ocedu e on ma e s a ec ing shipbuilding, Whe eas a Shipbuilding Commi ee is equi ed o his pu pose, Has decided as ollows: A icle 1 A Shipbuilding Commi ee, he eina e e e ed o as he 'Commi ee', is he eby es ablished o ad ise he Council and he Commission and o con ibu e owa ds he coo dina ion o na ional and Communi y policies. A icle 2 I. Pu suan o he Council Resolu ion adop ed on ........ . he Commi ee shall moni o ends in he le el o demand and con ibu e owa ds o ganizing he adjus men o p oduc- ion capaci ies o ha le el and inp o ing p oduc ion s uc- u es. 2. A he eques o he Council o he Commission, and wi hou p ejudice o he au ho i y con e ed on o he bodies by he T ea y o ac s de i ing he e om and pa icula ly he compe ences o he Commission unde he ules on compe- i ion, he Commi ee shall also unde ake s udies ela ing o: (a) ends in he economic, social and inancial si ua ion in he Communi y shipbuilding indus y; his s udy shall be con inuous and comp ehensi e; (b) any c i e ia likely o pe suade he Membe S a es o p ac- ise solida i y in ca ying ou he equisi e educ ion o capac- i ies and o ensu e ha ma ke ends and he ele an guid- ing p inciples laid down by he Council a e aken in o accoun in he p ocess; (c) na ional and Communi y means and me hods o enhan- cing he compe i i eness and esilience o he sec o and o I See poin 31 o he Communica ion. s. 7177 p omo ing he edeploymen o pe sonnel ha ing o be di ec - ed o ac i i ies ou side he sec o ; (d) de elopmen s in o he ields ha may in luence p oduc- ion. 3. The Commi ee shall epo i s indings o he Commis- sion and he Council. A icle 3 I. Membe S a es and he Commission shall each nomina e one ull membe and one al e na e. Membe s o he Commi - ee and hei al e na es shall be chosen om among senio o - icials esponsible o shipbuilding policy; he ull membe e- p esen ing he Commission shall be a Membe o he Com- mission nomina ed by he la e . 2. Unless o he wise decided by he Commi ee, membe s may call on he assis ance o quali ied pe sons ep esen ing he in e es s conce ned. Rep esen a i es o he Commission depa men s may ake pa in mee ings o he Commi ee o i s wo king g oups on subjec s wi hin hei esponsibili ies. 3. The Eu opean In es men Bank may appoin an obse e . A icle 4 I. The Chai man o he Commi ee shall be he Commis- sion ep esen a i e. 2. The Commi ee may emi speci ic ques ions o wo king pa ies comp ising ce ain o i s membe s assis ed by al e - na es o expe s. 3. The Commission shall p o ide he sec e a ia o he Com- mi ee. 4. The Commi ee shall lay down i s own ules o p oce- du e. A icle 5 On speci ic ques ions, and in acco dance wi h i s ules o p oCedu e, he Commi ee may seek he opinion o he in e es s conce ned. Done a B ussels, Fo he Council s. 7/77 21 Eu opean Communi ies -Commission Shipbuilding -Reo ganiza ion P og amme Supplemen 7/77 - Bull. EC Luxembou g: O ice o O icial Publica ions o he Eu opean Communi ies 1977- 24p.- 17.6x25.0cm DA, DE, EN, FR. IT, NL Ca alogue numbe : CB-NF-77-007-EN-C BFR 25,- DKR 4,- DM 1,70 FF 3,50 LIT 600 HFL 1,75 UKL 0.40 USD 0,70 The ou look o he Communi y shipbuilding indus y's ou pu is gloomy. Because o he wo ldwide s uc u al imbalance be ween p oduc ion capaci y and demand, he Commu- ni y's shipya ds a e likely o su e a d op in p oduc ion o app oxima ely 46% be ween 1975 and 1980. This end is bound o a ec employmen . I en ails he edeploymen o some 60 000 pe sons. The Commission's p og amme o eo ganizing he shipbuilding sec o emphazises he need o all ac ion o be based on he eali ies o he demand si ua ion and hence on he need o adjus p oduc ion capaci ies quan i a i ely and quali a i ely. As his kind o adjus men is bound o ha e social epe cussions, he Commission ad oca es a concu - en p og amme o inding new jobs o wo ke s a ec ed by he eo ganiza ion. Ca e mus also be aken o ensu e ha ends in demand a e no a ec ed by dis o ions in wo ld compe i ion and ha he Communi y is ensu ed o a minimum o independence in shipping so ha i can ca y ou i s economic and ading ac i i ies.