Zero time for the Shipbuilding Industry
By John Faraclas
Last Friday during my regular SBC TV live shipping markets analysis and world politics, the interviewer presenter Nike Limberakis, given my views on this sector, raised the issue of the shipyards crisis, saying that according to her latest news and info circulating in the news, media and the market, nearly one third of the Chinese Shipyards in the near future will close down. We both agreed on our findings and the causes.
Now, what do you make of the current situ in the world shipping industry? And how about the world’s shipyards?
For a start, there should be a thorough investigation on why it all went so bad… and also each area and sector contributing to the shipyards fall, but also leading to an overcapacity which not only affects the markets, but it is detrimental for the entire transport sector! High commissions led, with all due respect, to this catastrophe.
Europe, for example, has gone so bad, with Portugal, Spain and Greece becoming the biggest victims. Greece is a special case, as always, where it was not only Unionism which led to the collapse of the shipbuilding and shiprepair sector, but also the state – both parties in power after 1974 “democratisation” of the state – that brought down the shipyards, fiddle money, better say milked money in any form, call it subsidies or otherwise, particularly the Socialists throwing good money after bad and keeping an otherwise workforce in the payroll whose leaders were real traitors, as it has been proved! They only had self-interest, and that is being epitomised by two of their leaders recently becoming Prefect and vice-prefect of Piraeus! Nice things eh! The post colonels regimes also have a great share for all this mess, as none of the parties had a clear policy and all the companies to which they awarded the shipyards for sale, management or otherwise, completely and spectacularly failed: Brown and Root, the Germans, you name it. Why? Were they possibly bullied?
Another group to be investigated are the bankers and brokers, mega shipbrokers who “made” a deal with the banks to lend money, in any form you like it, to the yards world-wide and to shipowners to build ships, expensive from a certain stage onwards (2002), totally destroying the world economy.
Even The Economist, who lately – in the last five years – gets “involved” with the shipping industry in its entirety, had last Friday an article on Chinese shipyards: “Too sick to sail.”
The world economy rests on the shipyards, where technology’s baby – the R & D – appears, where unemployment following closures of shipyards will lead to a social upturn with incalculable repercussions. All scandals not only should be aired, but all those responsible should sit on the dock, and if guilty, must face the worst of all punishments. The Chinese saga is unique and I wonder who has accepted this de facto appearance of hundreds of shipyards in the Chinese fields, yes fields! Where were the regulators, the international competition bodies to see these sins?
Back to Greece and the shipyards case has put behind bars the former socialist defence minister of Greece Akis Tsohatzopoulos and many should follow. His crime was accepting millions of bribes for the construction of Greece’s submarines as well as other crimes on military procurement. He is not the only one. Moreover the Greek Prime Minister’s initiative to help the shipyards and make them viable, falls short, as he hasn’t found yet the right person to properly advise him what to do!
Our solution, as it was expressed last Friday, as well as since 1995-6 is that one company should be formed and take under its umbrella all the ailing shipyards of Greece and in this way the unethical competition will stop between the main two rival Greek shipyards and the company will do well given the support from the shipowners fraternity, under the proviso that the unions should stop this orchestrated mess which comes from abroad and particularly for Europe, yes from Europe. I suggest that the most capable person to run this operation is Costas Kokkalas of Neorion and Eleussis Group. Europe too, must realise that if the Pandora’s Box of revelations opens many will end up behind bars! If people think that there was a scandal with Siemens in Greece, Greece’s shipyards scandal is five times bigger… you bet?
At the end of this brief comment/insight on the subject, viewers will be able to read my speech at the IAME** invitation lecture on the 30th of January 1996 at the then London Guildhall University, so you can see why I maintain the views I maintain as well as how correct the prediction has been during these 17 years! It was on purpose titled: “Shipbuilding, a global industry in confusion” or better say “Shipbuilding industry, a global confusion.” The …floor is yours: we welcome your comments and views. Amongst these who support me and impartially referred to the shipyards issue, particularly in Greece, I am indebted to Nigel Lowry and Chris Mayer* of Lloyd’s List, David Glass of Naftiliaki, the late Derek Deere and his son Andrew of MPI Group and in particular the Drydock Magazine, and many others who have unsolicited support my case, and never acted biased towards my cause. Many thanks to all!
N.B. We intend to carry a series of articles, interviews and points of view from all stakeholders.
** IAME: International Association of Maritime Economists.