3 ms·

Doesn't make much sense to revive shipbuilding in the US when you'd have to import the steel. We still wouldn't be competitive on cost.

ijidak 3y ago
National security is my guess. The inability to build ships at scale doesn't bode well during today's return to cold war / inter-war geopolitics.
tekno45 3y ago
The government can help pay for the supply chain growth. US navy orders mean long term contracts. Long time for a plant to come online, upgrade capacity AND still make a profit.
nickelpro 3y ago
These are military shipyards, their establishment is not primarily profit-motivated
- Loughla 3y ago
  Are they not? Why do I believe these are always run by contractors? Is that real life?
  - nickelpro 3y ago
    They are run by contractors because the US government does not have riveting or hull welding in its core competencies. They are operated by those contractors for a profit, profiting from the US government. The US government does not choose to establish and/or invest in yards, and grant operating contracts to those contractors, for the purpose of making a profit. The US government does so in order to have a reliable source of naval construction and repair services in case of a military conflict.
- giantg2 3y ago
  Are they 100% domestic military production? Seem like expanding shipyard capacity would require contractors to run it and accept orders for at least other allied navies or maybe commercial vessels too. Otherwise, I don't see it working out sustainably.
  - nickelpro 3y ago
    Norfolk, Portsmouth, Puget Sound, and Pearl Harbor, are the four entirely domestic military naval shipyards. Newport News, the General Dynamics yard in Groton, and Ingalls Shipbuilding are effectively domestic-military-only shipbuilders. Some commercial shipbuilders, notably NASSCO, do business with the US Navy for smaller classes of ship as well as auxiliary vessels, and potentially could take orders from foreign militaries. But yes, there is a massive domestic shipyard and shipbuilding industry in the US that is military-only. There are almost 300 active ships and another 170 in the reserve fleet, almost all with far more complex maintenance requirements than the typical civilian vessel. Like many government operations, the US government doesn't try to oversee day-to-day operations, and awards those by contract. Same with the operation of national labs, for example.
sandworm101 3y ago
>> when you'd have to import the steel. We still wouldn't be competitive on cost. Just because steel is made locally doesn't make it any cheaper. Transport costs are very small these days, thanks to modern shipping. So a local steel producing isn't going to sell below the worldwide market rate, which is defined by the largest steel producers and consumers on a global scale. I remember similar debates years ago about oil, that if the US produced enough domestically that imports could stop and local prices drop. That isn't how the modern world of free trade works.
- giantg2 3y ago
  Logistics and delays are a bigger issue than price. I'm not sure how well JIT manufacturing works for those products and at that distance.
  - chmod775 3y ago
    So don't JIT. Just because it's cool doesn't mean it's a good fit in every case. Get a buffer stockpile and refill as needed. The stuff you'd need to stockpile is unlikely to deprecate in value and it certainly isn't perishables, so doing so really isn't a big deal. Also once you get an order you already know roughly how much steel you'll need - a bit of lag as you wait for the first batches to arrive really isn't a big deal in such a project.
    - giantg2 3y ago
      Doesn't waiting mean union employees still getting paid and increasing costs in this industry?
      - chmod775 3y ago
        If you don't assume that the drydock is sitting empty while the construction plans for the next ship are being thought up, why would it sit empty while you wait for supplies? Presumably you'd get everything lined up before you finish your previous project. Hardly any construction just simply starts the day someone approaches a manufacturer anyways.
wolverine876 3y ago
In 1993, at the end of the Cold War, Secretary of Defense William Perry [0] summoned contractors to a dinner meeting, now called 'The Last Supper'. Unlike the original Last Supper, this one was the last (or the beginning of the end) for most of the guests: Perry told them that, having no more peer enemies, the US didn't need most of them. They would have to consolidate dramatically. At the end of the 1990s, 107 defense contractors had consolidated to five. That was efficient and a good choice for the situation. Against a peer foe like the Soviet Union, you need lots of extra capacity to supply needs during a war when everything is consumed quickly, from ships to bullets. From the end of the Cold War until recently, that was unnecessary. The Taliban, Iraq, Serbia, Libya, etc. were not going to require so many munitions that there would be a crisis; they weren't going to sink any destroyers or shoot down any planes. China is a 'near-peer' threat. As Russia's invasion of Ukraine has demonstrated, the capability of all of NATO - with combined economies maybe 30x Russia's - to manufacture supplies for Ukraine is insufficient. A war with China could be much larger; the US needs far more capacity. Another, more critical reason is that some weaknesses are escalatory - they encourage escalation by the enemy. Chinese leaders, seeing the US lacks that capacity, are incentivised to escalate peace to conflict, conflict to war, a small war to a large war. Escalation is the bane of international relations - it is systemic and often cannot be controlled, leading to catastrophes that nobody wants but nobody can stop. Any professional foreign policy carefully constructs situations that are systemically de-escalatory. (As an example, the US Space Force is changing from using a few expensive super-satellites to using very many cheap ones, in large part because having a few super-satellites is escalatory - it incentivizes an enemy to conduct a surprise attack, because they can knock out a large amount of capability at once.) [0] OT: also a mathematics Ph.D. Do such people still rise to leadership in government? Or are they all maximizing click-thru for SV companies?
- awskinda 3y ago
  There’s a very big difference between what the USA does in proxy wars vs direct conflicts. Ukraine doesn’t have air superiority, and is basically getting shipped leftover or soon-to-be disposed equipment. You have some really good points, but I would be cautious about extrapolating over Ukraine. As a counter-point, you can look at what happened in Iraq when it was basically a large military power entering the Gulf War (and stealth fighter/bombers were in their infancy).
jjk166 3y ago
Buy steel, sell ships is a hell of a value add.

ijidak 3y ago

National security is my guess. The inability to build ships at scale doesn't bode well during today's return to cold war / inter-war geopolitics.

tekno45 3y ago

The government can help pay for the supply chain growth. US navy orders mean long term contracts. Long time for a plant to come online, upgrade capacity AND still make a profit.

nickelpro 3y ago

These are military shipyards, their establishment is not primarily profit-motivated

Loughla 3y ago
Are they not? Why do I believe these are always run by contractors? Is that real life?
- nickelpro 3y ago
  They are run by contractors because the US government does not have riveting or hull welding in its core competencies. They are operated by those contractors for a profit, profiting from the US government. The US government does not choose to establish and/or invest in yards, and grant operating contracts to those contractors, for the purpose of making a profit. The US government does so in order to have a reliable source of naval construction and repair services in case of a military conflict.
giantg2 3y ago
Are they 100% domestic military production? Seem like expanding shipyard capacity would require contractors to run it and accept orders for at least other allied navies or maybe commercial vessels too. Otherwise, I don't see it working out sustainably.
- nickelpro 3y ago
  Norfolk, Portsmouth, Puget Sound, and Pearl Harbor, are the four entirely domestic military naval shipyards. Newport News, the General Dynamics yard in Groton, and Ingalls Shipbuilding are effectively domestic-military-only shipbuilders. Some commercial shipbuilders, notably NASSCO, do business with the US Navy for smaller classes of ship as well as auxiliary vessels, and potentially could take orders from foreign militaries. But yes, there is a massive domestic shipyard and shipbuilding industry in the US that is military-only. There are almost 300 active ships and another 170 in the reserve fleet, almost all with far more complex maintenance requirements than the typical civilian vessel. Like many government operations, the US government doesn't try to oversee day-to-day operations, and awards those by contract. Same with the operation of national labs, for example.

sandworm101 3y ago

>> when you'd have to import the steel. We still wouldn't be competitive on cost. Just because steel is made locally doesn't make it any cheaper. Transport costs are very small these days, thanks to modern shipping. So a local steel producing isn't going to sell below the worldwide market rate, which is defined by the largest steel producers and consumers on a global scale. I remember similar debates years ago about oil, that if the US produced enough domestically that imports could stop and local prices drop. That isn't how the modern world of free trade works.

giantg2 3y ago
Logistics and delays are a bigger issue than price. I'm not sure how well JIT manufacturing works for those products and at that distance.
- chmod775 3y ago
  So don't JIT. Just because it's cool doesn't mean it's a good fit in every case. Get a buffer stockpile and refill as needed. The stuff you'd need to stockpile is unlikely to deprecate in value and it certainly isn't perishables, so doing so really isn't a big deal. Also once you get an order you already know roughly how much steel you'll need - a bit of lag as you wait for the first batches to arrive really isn't a big deal in such a project.
  - giantg2 3y ago
    Doesn't waiting mean union employees still getting paid and increasing costs in this industry?
    - chmod775 3y ago
      If you don't assume that the drydock is sitting empty while the construction plans for the next ship are being thought up, why would it sit empty while you wait for supplies? Presumably you'd get everything lined up before you finish your previous project. Hardly any construction just simply starts the day someone approaches a manufacturer anyways.

wolverine876 3y ago

In 1993, at the end of the Cold War, Secretary of Defense William Perry [0] summoned contractors to a dinner meeting, now called 'The Last Supper'. Unlike the original Last Supper, this one was the last (or the beginning of the end) for most of the guests: Perry told them that, having no more peer enemies, the US didn't need most of them. They would have to consolidate dramatically. At the end of the 1990s, 107 defense contractors had consolidated to five. That was efficient and a good choice for the situation. Against a peer foe like the Soviet Union, you need lots of extra capacity to supply needs during a war when everything is consumed quickly, from ships to bullets. From the end of the Cold War until recently, that was unnecessary. The Taliban, Iraq, Serbia, Libya, etc. were not going to require so many munitions that there would be a crisis; they weren't going to sink any destroyers or shoot down any planes. China is a 'near-peer' threat. As Russia's invasion of Ukraine has demonstrated, the capability of all of NATO - with combined economies maybe 30x Russia's - to manufacture supplies for Ukraine is insufficient. A war with China could be much larger; the US needs far more capacity. Another, more critical reason is that some weaknesses are escalatory - they encourage escalation by the enemy. Chinese leaders, seeing the US lacks that capacity, are incentivised to escalate peace to conflict, conflict to war, a small war to a large war. Escalation is the bane of international relations - it is systemic and often cannot be controlled, leading to catastrophes that nobody wants but nobody can stop. Any professional foreign policy carefully constructs situations that are systemically de-escalatory. (As an example, the US Space Force is changing from using a few expensive super-satellites to using very many cheap ones, in large part because having a few super-satellites is escalatory - it incentivizes an enemy to conduct a surprise attack, because they can knock out a large amount of capability at once.) [0] OT: also a mathematics Ph.D. Do such people still rise to leadership in government? Or are they all maximizing click-thru for SV companies?

awskinda 3y ago
There’s a very big difference between what the USA does in proxy wars vs direct conflicts. Ukraine doesn’t have air superiority, and is basically getting shipped leftover or soon-to-be disposed equipment. You have some really good points, but I would be cautious about extrapolating over Ukraine. As a counter-point, you can look at what happened in Iraq when it was basically a large military power entering the Gulf War (and stealth fighter/bombers were in their infancy).

jjk166 3y ago

Buy steel, sell ships is a hell of a value add.