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Monday, 6 December, 1999, 11:09 GMT
Yards staying afloat

launching a ship Britain launched the world's biggest ships

The UK had the world's biggest shipbuilding industry before the first World War, and contributed much to the country's war effort. But is facing a hard time competing against Far Eastern yards, as BBC Business Correspondent Nik Wood explains.

The yards that made the UK the world's leading shipbuilder were more than just places of work.

A Century of British Industry
In Belfast, Liverpool and along the rivers Tyne, Wear and Clyde, the mighty constructions stretched for mile after mile, providing the heart for their communities.

UK shipbuilding The UK dominated world shjipbuilding
At the industry's peak, 100,000 worked on Clydeside; in 1908 alone, 500 ships were launched there.

During both world wars, British shipyards were a vital part of the country's military effort, and as recently as 1950, more than half the world's ships were built in the UK.

"Anyone who has ever been to Wallsend on the Tyne will know Swan Hunter has a physical presence that dominates the town, even in its diminished state today, so you can very much imagine what it must have been like in its heyday," says David Osler of Lloyd's List shipping journal.

Inevitable decline

From such a heady position, decline was perhaps inevitable. As countries such as South Korea and Japan began to build their own state-sponsored industries, Britain's market share fell.

Clydside in Glasgow Docks used to line the Clydeside
By the time the UK sector was nationalised in 1977, the 30 remaining yards employed just 85,000 people. Japan was now the world leader, with Britain contributing 6% of output.

As in many other industries, it was political events that were to have an impact. The UK signed a deal with the European Union in 1985, agreeing to reduce merchant capacity in return for 140m.

However, it became clear only afterwards that a clause made it impossible for yards building warships to seek subsidies for merchant work.

As a result, some yards could not compete with foreign rivals and went out of business.

That, coupled with reduced military demand after the Cold War, saw the industry decline further. Yards such as Cammell Laird - where the original Ark Royal was launched in the 1930s - were forced to close.

Only specialised yards remain

Today UK output is down to just 1% of the global total, but the industry has been working hard to reinvent itself.

boatbuilding Now specialised vessels are being constructed
Harland & Wolff, Cammell Laird and Swan Hunter are now back in business specialising in ship repair work. A move towards modernising older vessels rather than ordering new ones - and tougher maintenance regulations on ageing cargo fleets - have boosted the sector.

And the employees themselves, having been to the brink with the old shipyards, have proved a flexible workforce, willing to adopt new practices and showing big improvements in productivity.

Some shipbuilding work goes on. Vosper Thorneycroft in Southampton now specialises in naval vessels for the UK and other countries. Appledore in Devon is also thriving.

"What's left of the ship industry should not be underrated," says David Osler.

He believes that despite problems in the European industry and South Korea's voracious appetite for growth, Britain can prosper.

"We have the expertise to build technically advanced types of vessels in a way that the Far East competitors still don't. They are competing on the level of basic container ships or bulk carriers," he says.

"It is Britain that is building offshore production platforms and very high-tech ships. That way lies the future of the industry in Britain."

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