SHIPBUILDING TRADE

Manawatu Standard, Volume XLV, Issue 124, 29 April 1925, Page 10

SHIPBUILDING TRADE

ORDERS PLACED ABROAD. BRITISH FIRMS CANNOT COMPETE. At the annual meeting of the Gulf Shipping Line, Ltd., in London in March, reference was made by the chairman (Sir Frederick Lewis) to the high cost of shipbuilding at Home, and the reasons for placing orders abroad were explained. The following extract from the report of the meeting published in the Daily Mail, a copy of which has been forwarded to us by Mr Jas. Wallace, one of our prominent business men who is returning from a trip to England, should bo of interest to our readers:—-

“Whilst on the subject of Continental competition,” said Sir Frederick Lewis, “I would like also to refer to shipbuilding. Within the past few weeks one of our Associated Companies has placed an order with Continental Shipbuilders for five large motor ships, a fact which lias attracted considerable attention. I need not assure you that the whole matter received most anxious consideration, and the final decision to place the order abroad was come to with very great regret. It was known to many British shipbuilders that we needed the vessels, and. in fact, nearly a year ago .1 stated that we would he in the market for now vessels when circumstances permitted. The alternatives with which we were then laced were

(1) To build in this country at uneconomical prices; (2) To build abroad at lower figures; (3) To defer building until we could do so on a commercially sound basis. So far from shipbuilding prices falling since that time, as we had hoped, they have advanced, and the prospect of being able to place the orders in this country fell further into the background. At intervals we asked British shipbuilders for prices, always with the same result, but a few weeks ago a Continental shipyard gave us the first indication of the possibility of building the vessels which we required at a price which we were justified by the trading prospects in giving serious consideration to. FURTHER OPPORTUNITY GIVEN TO HOME YARDS. Still we decided to give home yards a further opportunity, and the contracts were offered to several of our principal shipbuilding companies at a cost of £IO,OUO per ship, or a total of Lot), 000 more than the foreign quotation, on precisely the same specification and to Lloyd’s highest classification. I dare say we would have gone even further than that had there been the slightest possibility of coming within reasonable distance of making a bargain, hut the difference between the prices was altogether too great to bo bridged, as in no single ease did the British figures come within £60,000 per ship of the competitive figure. We are the custodians of our shareholders’ interests, and much as we regret the circumstances we are bound to view these questions from an economic point of view, and we ultimately—but most reluctantly—came to the conclusion that the order should he placed abroad. L am not a shipbuilder, and it is not for me to determine wherein lies the difference in price. No doubt there are many contributory causes, all of which I hope will he examined by those more directly interested in the question, and it may lead to that better understanding, elimination of suspicion, and closer co-operation in the industrial world which the Prime Minister is so earnestly endeavouring to achieve.

NEW VESSELS STILL REQUIRED

New vessels are still required for sonic of our associated trades; specifications are now being prepared, and it is perhaps not out ol place to state that our managers, Messrs Furness, Withy and Company, Ltd., and their associated companies have since the termination of the war built in this country 270,0U0 tons of shipping, in addition to having purchased from the Government 85,UU0 tons of the Standard boats. These vessels were contracted for at a time when conditions were very different from those now prevailing, and nobody can afford in these days to start out in quest of international trade under a handicap of at least 40 per cent, in initial capital cost, which is the situation with which we were faced in connection with the new contracts to which I have referred. INTERNATIONAL CHARACTER OF SHIPPING TRADE. It cannot be too strongly emphasised that the shipping trade is international in character, and in the trade for which these vessels are intended we have to compete with vessels constructed abroad in the cheapest markets and owned by shipowners ol many nationalities, who under existing conditions are in many cases able to operate their vessels more cheaply than we can. Obviously, the first cost of a vessel has an important bearing upon the subsequent operating expenses, and at the price quoted to us by British shipbuilders it would not have been possible for us to have constructed the vessels at all. Me might, of course, still further have deferred the question of building, but we are already falling behind our foreign competitors, and further delay would simply have meant the gradual dwindling away of our goodwill. We aro protecting the goodwill of our trade; we are safeguarding the trust placed in us by our shareholders ; we are providing employment for officers and seamen; we are insuring the vessels in this country, and they will contribute materially to the invisible exports, upon which the country is at present so much dependent in balancing the National Budget.