VSM: Dramatic safety risk!

Association news from the German Shipbuilding and Ocean Industries Association cites shrinking shipyard landscape as a dramatic safety risk

Dr Reinhard Lüken, VSM Managing Director, is clear in his editorial for the 85th edition of the VSM Association News: he criticises the misguided focus of daily reporting and makes it clear that the security policy situation must be a focal point. The shipbuilding industry plays a key role in this context. Here is the text:

"The boom in topics in the news and talk shows on the second anniversary of the Russian invasion remind us once again that there is a war in Europe. We are dealing with an opponent who, after initially putting up unexpectedly strong resistance, is now focussing all its energy on this issue. We, on the other hand, are indulging in endless debates about farmers' protests, railway strikes and supply chain laws. Russia spends a third of its national budget on the military, which equates to almost 8% of its GDP. The German government is proud to have finally met NATO's 2% target once again. Whether we will succeed in doing so year after year from now on, as promised by the Federal Chancellor, seems very doubtful again.

The sometimes seemingly abstruse contributions to the debate from the far left and far right should not distract us from pursuing the turnaround with the necessary seriousness despite all the difficulties. The German Navy is doing this in an exemplary manner. With the "target picture from 2035", the naval command has defined the requirements in clear language and chosen a realistic timeframe for their realisation. What is missing is an understanding of the resulting industrial requirements. After all, no army or navy can fulfil its mission without an efficient industry.

The Wall Street Journal recently presented a remarkable analysis of this and came to a simple conclusion: China's shipyards are ready for a protracted war. America's aren't. The reason is industrial capacities that serve commercial markets in peacetime but can fulfil military requirements at any time. In the US, the Navy is the only notable customer of the American shipbuilding industry. China, on the other hand, has virtually overrun the global shipbuilding market in a decade and a half and is now also pushing South Korea to the wall: in 2023, Chinese shipyards won 60% of all civilian newbuilding orders, while Korea still won 23%. Europe's market share was a meagre 2%, that of the USA 0%. The VSM has been pointing out this tsunami for 20 years - a tsunami that is largely financed by the West: by shipowners and banks and even with the friendly support of the German treasury.

The flood of Chinese shipyards, but above all the endless number of skilled workers, not only ensures the rapid expansion of the Chinese navy, which has long since overtaken that of the USA in terms of numbers, but can also be mobilised at any time for rapid resupply in the event of a conflict. The Ukraine war didn't even have to make us realise how important this is.

The German Navy's "Target Vision 2035" also puts it in a nutshell: "... This goes hand in hand with powerful weapons systems from potential opponents, some of which are extremely difficult to defend against. There is less and less time for defence reactions. Because additional losses in combat are to be expected as a result, this emphasises the value of quantity - it's the mass that counts."

The decades-long trend of a shrinking shipbuilding industry in Europe is a dramatic safety risk. It will take a long time to stop it. All the more reason for us to finally start!"

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