TIIE MORNING OREGONIAN, TUESDAY, FEBRUARY 4, 1019.
IPWQIRKER
M
STIR.
Statement Number 2
A Colossal Business Mistake
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The future of the shipbuilding industry lies with the men and
the management. It is as much the problem of one side as of
the other. Increased output and lower costs can be secured by
more intelligent direction and effort without sacrifice to either side
But it can be done onl by sympathetic and intelligent co-operation between the shipworkers
and the yard owners; never by strike and strife.
The strike is not only a breach of an agreement with the Government, but, with the future
of the industry hanging in the balance, it is a colossal' business mistake.
Congress authorized the President of the United States to spend three billion five hundred
million dollars ($3,500,000,000) for the construction of ships and the President selected the Emer
gency Fleet Corporation for his agent to carry out this programme. The German submarine
was at that time sinking vessels from four to five times as fast as English and American yards
were producing them.
It was America's job to beat the submarine. Old shipyards were extended and new ones
were built on both the Atlantic and Pacific coasts. 1
Contracts were placed for wood ships, composite ships, concrete and steel ships for any ship
that would float, propel itself and serve any kind of a useful purpose because we were building a
fleet for emergency.
Wages were increased. Overtime and Sunday work were ordered. Carloads of necessary ma
terial were sent by express. Three hundred thousand men were added to the fifty thousand ship
workers, and the Government bore the expense of transporting them and training them. The
Government paid these beginners high wages while they were acquiring skill and experience, for
the Nation needed ships and was willing to pay the price.
The yards of the Pacific Coast and the Great Lakes responded nobly, for they had been longer
in the game and had a larger number of experienced shipworkers to draw from. Even the new
yards created since the war was declared began deliveries.
Then the armistice was declared and the building situation was changed over night. The Na
tion began figuring the cost.
And the Emergency Fleet Corporation was asked: "If you were building a lot of ships for an
emergency, why don't you quit now that the emergency is over?
"Ships are costing the Government from two and a half to three times what they cost three
years ago, and 50 per cent more than they can be bought for in England at the present time.
So quit building till the costs go down to where we can compete."
The Emergency Fleet Corporation thereupon took account of stock. It found that it was build
ing more wood ships than it could use or sell, and so it canceled those that had not been begun.
It was found that a merchant marine was something more than an aggregation of ships. It
had to be a well-balanced fleet that provided a certain proportion of fast passenger ships, or slow
er going passenger and cargo carriers, and of many ships built especially for certain lines of trade.
And upon review of the numbers and types of vessels building under the emergency pro
gramme, the Emergency Fleet Corporation decided to suspend work on a portion of it so in case
Congress decided to permit us to spend the money authorized, it could substitute more desirable
and necessary types of ships for those suspended.
It is impossible to build a perfect "ready-to-use" merchant marine. Part of it at least must
be built to suit the needs of business that will develop through the effort and enterprise of the
future.
It is necessary, therefore, to proceed more slowly than Heretofore in the completion of the
present programme. Overtime and Sunday work and other expenses due to speed have there
fore been cut out. j
And we are calling on the managements and the shipworkers to co-operate in such a way as
to make high wages and low labor cost possible in the shipyards as it has been made possible in
the automobile- industry.
Let me cite three examples of how high wages and reduced output per man have increased the
labor costs of vessels. One of the best producing yards on the Pacific Coast shows that the aver
age output per man is 70 per cent of that of ten years ago, and the average rate of pay 70 per cent
higher. This means a labor cost two and four-tenths times greater than two years ago.
Three Atlantic Coast yards show labor cost from two and a half to three times higher than
two years ago.
We can look for more output per man as the new men in the yard grow in experience, but in
the meantime the future of the industry is in the balance.
. Foreign orders cannot be secured until costs go down and even the Government cannot con
tinue shipbuilding indefinitely if every ship shows a heavy loss.
I am presenting the facts as they are before the United States Shipping Board and the Emer
gency Fleet Corporation, and my advice to the men is: Go back to work and get together with the
owners to see what can be done to put the shipyards in shape to compete for the world's business
in shipbuilding.
(signed) CHARLES PIEZ,
Director General United States Shipping Board Emergency Fleet Corporation.
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