The United States (U.S.) shipbuilding industrial complex -- ship manufacturing, maintenance and repair, and component suppliers -- builds, delivers, and services the world's most capable, most technologically advanced sea-going military vessels. As capable as the U.S. shipbuilding industry is in responding to the world's most demanding National Security Strategy, the same cannot be said in the global commercial marketplace. The combination of heavy subsidies in shipyards by foreign governments, U.S. labor rates that are as high as 20 times that of other international shipbuilders, a lack of economies of scale, inefficiencies from excess shipyard capacity, and less than optimal manufacturing and management practices leaves the U.S. commercial shipbuilders incapable of competing in the global commercial marketplace, especially in the case of large ships. Accepting this reality, the question then becomes what can and should be done through national policies and practices to foster commercial shipbuilding and help retain U.S. global sea power projection capacities. In a 5-month long study, the 2004 Shipbuilding Industry Study Seminar of the Industrial College of the Armed Forces at the National Defense University was tasked to determine the status -- the strengths and weaknesses -- of this key strategic industry. Representatives of the U.S. Navy, U.S. Coast Guard, commercial industry, labor, congress, and lobbying groups presented their views, concerns, and recommendations. Throughout the visits and briefings, it became quickly obvious that there were three major areas that warranted attention: (1) infrastructure, to include the tremendous facilities and large capital investment for dry docks, enclosed areas for erection of sections of vessels, automated steel cutting, welding, and bending machines; (2) personnel, including demographics, unions, and attracting and retaining skilled labor; and (3) physical security at facilities with large waterfronts.


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