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COM(76)224 Final ARCHIVES HISTORIQUES DE LA COMMISSION COLLECTION RELIEE DES DOCUMENTS "COM" COM (76) 224 Vol. 1976/0075 Disclaimer Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant l'ouverture au public des archives historiques de la Communauté économique européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 (JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit règlement. In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning the opening to the public of the historical archives of the European Economic Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this file have been declassified in conformity with Article 5 of the aforementioned regulation. In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar 1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003 (ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5 der genannten Verordnung freigegeben. COMMISSION OF THE EUROPEAN COMMUNITIES * COm(76)224 final . Brussels , 26th May 1976# ? COMMUNICATION FROM THE COMMISSION TO THE COUNCIL ON SHIPBUILDING 001-1(76 ) 224 final TABLE OP CONTENTS 1 . THE CRISIS IK THE SHIPBUILDING SECTOR 1 1.1 Production trends 1 1.2 Situation as regards the c<3!>cbrir.i fleet 3 1.3 Features of the crisis in the shipbuilding sector 4 1.4 Community aspects 6 1.5 Conclusions 8 2. POSSIBILITY OP SOLVING THE PROBLEM OP EXCESS PRODUCTION ■ CAPACITY IN THE SHIPBUILDING INDUSTRY THROUGH INTERNATIONAL COOPERATION 9 2.1 International cooperation 9 2.2 Framework of cooperation 10 2.3 Progress made within the OECD 11 2.4 Implementation of the OECD, s "General guidelines" 12 2.4.1. Reduction of production ©opacity 13 2.4.2 . Allocation ou new orders 14 2.5 Tì^rtT'ioi.-xriiv' cop-icity 16 2.6 Measures concerning employment 16 2.7 Conclusions ~ 16 3 . POSSIBLE ACTION IP COORDINATED SOLUTIONS AT INTERNATIONAL LEVEL PROVE IMPOSSIBLE 17 3.1 Need to safeguard Community shipbuilding 17 3.2 Need for coordinated action at Community level 17 3.3 Possible measures 18 3.4 Need for a thorough investigation 18 4. CONCLUSIONS AND PROPOSALS 19 ANNEXES COMMUNICATION PROM THE' COMMISSION TO THE COUNCIL On . " SHIPBCJILIXJNS INTROIUCTION Taking as its basis the nature of the situation facing the Community ship­ building sector and prospective developments , the Commission in 1972 pointed to the coming danger of surplus capacity, and in 1973 submitted proposals to the Council to accelerate the improvement of the industry's competitivity before .the situation deteriorates without aggravating the impending imbalance . Since the events of late 1973 in the oil sector, and their repercussions on economic activity, the latent imbalance between supply and demand has rapidly developed and assumed considerable proportions . The threatened problems have , therefore, been acutely realised. To adapt to the effects of the crisis in the short term, the problem of overcapacity must be resolved, and, perhaps , problems connected with the allocation of orders. In the long term, apart from the sheer reduction in capacity, the Community's capacity will have to be considerably re­ structured. The analysis of the orisis facing the sector demonstrates inter alia the Community's interest in supporting resolutely and, if need be, pro­ moting any method of obtaining a solution by means of international collaboration. 1 - 1. THE CRISIS IN THE SIIIPBUTLDDTG SECTCR Although the shipbuilding sector is still maintaining a satisfactory level of activity as a result of work on orders received before 1975 » it is faced with a serious worldwide crises characterized by a structural surplus of production capacity compared with current and foreseeable orders. This imbalance is at present reflected in a decline in new orders accompanied by a wave of cancellations of earlier commitments and a fall of prices . 1,1 Production trend During the last fifteen years , i/orld ship production has increased rapidly, at an average rate of around 10 % per year, rising from 7.9 million grt in i960 to 34*8 million grt in 1975 * This trend has led not only to the appearance of new shipbuilding countries , in particular the developing countries and Southern Europe, but also to a considerable difference between the Japanese rate of expansion and that of most of the other shipbuilding countries . Shipbuilding capacity has been developed most intensively in Japan, where production rose from 1.7 million grt in i960 to 17 million grt in 1975 ,whereas during the same period in the Community countries it increased only from 4 million to 7.8 million grt . The difference between these expansion rates has brought about a great change in the relative share of the industries of those oountries in world produotion: during this period the Community's share fell from 51 % to 22 $ whilst Japan 1 s rose from 22 % to 50 % SHIPBUILDING - Breakdown of .. world production D million grt % of world total i960 1970 | 1974 ( 1975 . i960 1970 1974 1975 I L OCDE 7,234 20,705 31,867 31,419 92,1 9l»4 : 91,0 90,2 of which 3,996 22,9 Community 6,305 3,032 7,754 50,9 27,8 ; 22,3 [ Japan 1,637 10,539 17,720 17,173 1 21,6' 46,5 50,6 49,4 j Sweden 0,727 , 1,678 2,102 2,178 --9,3- 7,4 \ 6,0 6,3 ! Spain 0,170 0,826 1 ,7 61 1,508 < 2,2 - 3,6 5,0 4,3 Kozvav 0,238 , 0,654 0.917 1,021 - 3,0 - 2,9 2,6 2,9 I United States 0,338 0,442 0,928 0,950 | 4,3 2,0 2,6 2,7 I I Yugoslavia 0,182 0,669 ' 0,672 0,623 2,3 3,0 1,9 1,8 1 South. Korea 0,005 0,320 0,420 0 0,9 1,2 J Brazil 0.012 i ■■ 0,056 0,297 0,346 0,2 0,2 0.8 1,0 I ! World 7,858 22,643 35,766 34,766 100,0 100,0 100,0 100,0 * . ·.··· Ν ·· ' Source: Lloyd's Register of Shipping ... !) production - sMpa CQmPmccd + ships délirerai million grt = million gross registered tons ( see Annex I for the definition of the units used). This trend was accompanied by a -tendency for, production to become more ; , specialized. This was caused mainly by the need to rationalize in order to deal, with a demand which was growing both in respect of quantity and quality. Thus a number of undertakings in Japan and the western European countries adapted their production facilities to conoentrate' on the building of certain types of vessels ,; in particular, large tankers . In addition, shipyards specially designed for constructing such vessels were created, particularly in Japan. The production of tankers currently plays an important part in the shipbuilding sector throughout the world. ■ . i : . · . ■ · ,· , . : - - ' ' » ■ . ' .. ί Brealedown of world total of ships delivered, by type of > vessel in thousand grt and # ! 1 , • ) ; » i , _ ? , Year , Bulk carriers j Others i ' - Total' | Tankers • i I s [ : grt j *?<> grt i % ! ; . ' ! grt i % . 1 i î i 1 1970 : 10 033 .| 47 . 8 | 5 373 j 25,ô j 5 575 26.5 20 981 • 100 1974 \ 20 854 62.2 , | 7 458 j 22.2 5 239 15.6 33 541 100 ' 1975 2Ï 725 66.4 j 6 248 - j 18.3 5 230 15.3 ; 34 203 100 1 v I . ■* ; I ; ' ! r , - J ■ i! • ' i j * r 1 Il h I I II (l ) ïlirthe*' détails in Anne:: II ' 1.2 Situation of the merchant fleet .<■ The trend described above can be explained by the spectacular increase in oil transport requirements which began in the 1960's and led to a m^re marked demand for tankers and large combination carriers ^ oompared with that for other types of vessels . Despite the fact that signs of ex­ cess transport capacity to appear as early as 1972-73 » many ship- owners pursued a feverish buying policy, encouraged by the considerable expansion in public and private credit, thus leading the shipyards in their turn to increase capacity considerably. Following the events of 1973 in the energy sector, the growth of the . trade in oil was halted, indeed, abruptly and the demand for its transport declined. In the medium term, any revival of such requirements (l) Bulk carriers capable of carrying both dry bulk cargoes and oil - 4 - will be influenced "by new developments in the trade in energy of the in­ dustrialized countries , such as , a relative decline in consumption due to more rational utilization, the tendency to shorten transport routes e.g. "by the opening and probable widening of the Suez Canal , the working of new sources , especially in the North Sea, and the development of pipelines , etc. Although the energy policies of the oil-producing and -consuming countries cannot yet be fully appreciated, the medium-term forecasts are for a less sustained development of oil transport by sea than here before .
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