“One if by land, and two if by sea …”

This article was just published in a Chosun, South Korea newspaper.

It was headlined as follows:

“HHI Proves Innovative Shipbuilding Method” … and the rest of the story is an eye-opener.

“Hyundai Heavy Industries has successfully built a large LPG cargo ship on land without using dry docks for the first time in the world.

“HHI brought out the 82,000 dwt LPG carrier built for Norway’s Bergesen at Hyundai’s Ulsan factory on Wednesday.

“By completing an LPG vessel which has a complex cargo system, HHI demonstrated that any kind of ship can be built on land without dry docks.

“HHI regards Wednesday’s triumph as a defining event in the history of shipbuilding, firmly establishing the on-ground building method and doing away with dry docks.

“Oh Byung-wook, senior EVP and COO of the company’s Offshore & Engineering Division, said HHI plans to maximize its on-ground facility by doubling capacity from eight ships per year to 16 and stepping up efforts to advance this system.”

That’s how the shipbuilding industry operates overseas. Take special note of the fact that HHI built this vessel and sold it, no doubt at a handsome profit, to Bergesen, a Norwegian firm. South Korean taxpayers didn’t pay for it … that Norwegian company did.

But this is how we operate the shipbuilding industry in this country. Dale Eisman wrote an interesting article for “The Virginian-Pilot” on July 25, 2007. He captioned it this way:

“Cost of shipbuilding still off the mark, government agency says”


“The Navy continues to underestimate the cost of new ships, giving Congress long-term projections that are billions of dollars short of the final price tag and calling on lawmakers to make up the difference, a Congressional watchdog agency reported Tuesday.

“The non partisan Congressional Budget Office said the service will need annual shipbuilding budgets averaging nearly $ 21 billion between 2008 and 2037 to buy the 293 ships in its shipbuilding plan. That’s about one-third more per year than the Navy’s projected shipbuilding budgets, CBO said.

“In a report to a House subcommittee, CBO said the Navy has underestimated the cost of the aircraft carrier Gerald R. Ford, first in a new series of flattops, by about $ 1 billion.

“The Ford, a nuclear-powered ship to be built at Northrop Grumman’s Newport News shipyard, is likely to cost about $ 11 billion, CBO said …”

“Neither the CBO’s new projections nor the Navy’s cost estimates on the Ford include about $ 4 billion already spent on research and development for the new class of carriers.

“CBO said the Navy also has set its cost targets too low on the new Zumwalt-class destroyer, a planned series of cruisers known as CG(X), Virginia-class attack submarines, and a new series of amphibious assault ships, among other ships.

“The CBO report follows warnings in April by Navy Secretary Donald Winter that a “culture of over-optimism” among shipbuilders and bureaucracy within the Navy is fostering distrust between Congress and the service and could jeopardize the Navy’s future shipbuilding appropriations.”

Congress and the Navy, of course, act as though they’re spending their own money on these toys. If the real owners of these funds, the taxpayers, had a say in the matter, however, they’d hire an experienced CEO from private industry to manage the U.S. shipbuilding program.

The first thing this CEO would do would be to outsource the “Ford” to HHI. And why not? We outsource everything else to the Asians, don’t we? HHI could build this vessel for about one quarter of the price, and this would save the taxpayers between $ 10 billion and $ 12 billion.

But that’s only the beginning. With that $ 10 billion, or so, we could reopen our shuttered shipyards and begin construction of Jones Act container ships. And we could sell them! And make a profit!

How many moderately-sized, patented container ships could U.S. yards build for that $ 10 billion? Even if it cost $ 70 million to build each ship, at least 140 profit-making vessels could be produced by our new shipyards, and by the thousands of newly-employed U.S. workers in those yards.

But what about the “annual shipbuilding budgets averaging nearly $ 21 billion between 2008 and 2037 to buy the 293 ships,” etc., etc.? It’s entirely possible that $ 10 billion of that annual amount will also be misspent. In fact, it’s entirely unlikely that it won’t be misspent.

We can do better. We have done better. More than 65 years ago in Hingham, a little town in Massachusetts, determined Americans were called upon to aid in the War Effort by building a shipyard along their attractive shoreline. In a matter of months the project was completed, and we covered that praiseworthy endeavor in our Volume VII, Art. 2 commentary. What we neglected to mention, however, was the fact that almost overnight the folks in that small coastal town also managed to build in that new shipyard the world’s largest steel mill ever contained under one roof.

Those were challenging times. Reopening shipyards in order to build and sell our patented container ships, however, would be relatively easy. We just need to arouse a few Congressmen.