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Annual Meeting, Shipbuilders Council of America, Washington, DC, March 4, 1970
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Annual Meeting, Shipbuilders Council of America, Washington, DC, March 4, 1970
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The original documents are located in Box D28, folder "Annual Meeting, Shipbuilders
Council of America, Washington, DC, March 4, 1970" of the Ford Congressional Papers:
Press Secretary and Speech File at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. The Council donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box D28 of the Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
ANNUAL MEETING OF THE SHIPBUILDERS COUNCIL
OF AMERICA, MADISON HOTEL, WASH, D.C.,
12 NOON, MARCH 4, 1970.
1
PERHAPS LONGER THAN MOST OF YOU
IN THIS ROOM, I HAVE KNOWN YOUR PRESIDENT --
ED HOOD. I REMEMBER HIM WHEN HE WAS JOHN
MARSHALL BUTLER'S RIGHT HAND ON CAPITOL
HILL, AND HAVE SINCE OBSERVED MANY OF HIS
ACTIVITIES HERE IN WASHINGTON ON YOUR BEHALF.
THINKING OF HIM, I ALSO REMEMBER
AN EVENT, SEVEN OR EIGHT YEARS AGO, IN
WHICH I HAD A PART, WHICH VITALLY AFFECTED
OUR NATION'S PRIVATE SHIPYARD INDUSTRY.
AT THAT TIME, I WAS SERVING AS A MEMBER OF
THE DEFENSE APPROPRIATIONS SUBCOMMITTEE OF
THE HOUSE APPROPRIATIONS COMMITTEE, AND
THE MATTER OF DISTRIBUTION OF NAVAL SHIP
attenation 4 Conversion
REPAIR, WORK BETWEEN NAVY YARDS AND PRIVATE
YARDS CAME BEFORE US.
-2-
IF I RECALL CORRECTLY, THE NAVY
YARDS WERE THEN RECEIVING 80 PER CENT OF
THIS WORK, AND THERE WAS CONSIDERABLE
FEELING AMONG MEMBERS OF THE SUBCOMMITTEE,
AS WELL AS WITHIN YOUR INDUSTRY, THAT AN
80/20 PER CENT SPLIT WAS DISPROPORTIONATE
Joynes
AFTER MUCH DEBATE, A 65/35 PER CENT RATIO
WAS ENACTED BY THE CONGRESS, AND I AM TOLD
THAT FORMULA HAS BEEN FOLLOWED VERY CLOSELY
EVER SINCE.
THIS EPISODE CLEARLY ESTABLISHED
THE ADVANTAGE OF LOWER COSTS IN COMMERCIAL
SHIPYARDS -- AN ADVANTAGE WHICH HAS
SUBSEQUENTLY BEEN TRANSLATED INTO ADDITIONAL
REVENUES FOR YOUR INDUSTRY, NOT ONLY IN
TERMS OF NAVAL SHIP REPAIR WORK BUT ALSO
IN TERMS OF A MUCH GREATER VOLUME OF NEW
NAVAL SHIP CONSTRUCTION.
THAT SINGLE EVENT, MORE THAN
ANY OTHER UNTIL RECENTLY, DID MUCH TO
-3-
REESTABLISH A PEACETIME DIRECTION FOR OUR
PRIVATE SHIPYARD INDUSTRY, AT A TIME WHEN
A NEW DIRECTION WAS NEEDED. THIS FACT, I
AM AFRAID, IS NOT GENERALLY APPRECIATED.
BUT, I CAN TELL YOU, THE ADVOCATES OF NAVAL
SHIPYARDS, EVEN TODAY, SHUDDER AT THE
MENTION OF 65/35.
2 mind you This history to indicate
so AS IT IS I AM NO STRANGER TO
YOUR INDUSTRY, AND YOU MIGHT SAY THAT WE
GATHER HERE TODAY AS OLD FRIENDS.
I VERY MUCH APPRECIATE THIS
OPPORTUNITY TO ADDRESS YOUR 1970 ANNUAL
MEETING FOR IT SEEMS TO ME THAT YOUR INDUSTRY,
YOUR WORKERS AND YOUR SUPPLIERS ARE ABOUT
TO EXPERIENCE A NEW ERA OF ATTENTION AND
ACTIVITY.
FOR TOO LONG, THERE HAS BEEN
NO COHESIVE OR INTELLIGIBLE NATIONAL POLICY
ON SHIPBUILDING. THERE HAS BEEN NO LONG-
RANGE COMMITMENT ON THE PART OF THE NATIONAL
-4-
ADMINISTRATIONS. THERE HAS BEEN NO
LEADERSHIP AT THE TOP.
few if any instances,
IN THE RECENT PAST, THE JOHNSON
AND KENNEDY YEARS COULD HARDLY BE CITED AS
ILLUSTRATIONS OF NATIONAL LEADERSHIP IN
THE DEVELOPMENT OF EFFECTIVE PROGRAMS TO
PRODUCE THE SHIPS OUR COUNTRY SO URGENTLY
NEEDS FOR COMMERCE AND NATIONAL DEFENSE.
THE WATCHWORD OF THOSE TIMES SEEMED TO BE:
LET SOMEONE ELSE HANDLE THIS LATER;
MEANWHILE, CREATE THE ILLUSION THAT SOMETHING
IS BEING DONE.
THE ACCRUAL EFFECTS OF SUCH A
DECEPTIVE POLICY CAN BE MONUMENTAL, AND, IN
THE CASE OF SHIPBUILDING, THE IMPACT HAS
BEEN BOTH SHORT AND LONG RANGE. SHORT
RANGE, THE EVIDENCES ARE NOT HARD TO FIND:
OUR NAVAL AND MERCHANT FLEETS ARE LARGELY
COMPOSED OF VESSELS 20 YEARS OF AGE OR OLDER
AND REPLACEMENT PROGRAMS HAVE BEEN GROSSLY
-5-
INADEQUATE. ON A LONG-TERM BASIS, THE
OMISSIONS OF THE PAST HAVE CREATED A MUCH
LARGER PROBLEM FOR TODAY AND HAVE MULTIPLIED
THE COST OF SOLUTION.
BY COMPARISON, IF WE LOOK AT
JAPAN WE SEE A DRAMATIC EXAMPLE OF THE
CONTINUOUS EMPLOYMENT OF A CLEAR DIRECTION
IN SHIPBUILDING IN PURSUIT OF A FIRMLY
STATED NATIONAL POLICY.
IN THE LATE 1940'S AND EARLY
1950'S, WE EXPORTED TO JAPAN A SHIPBUILDING
TECHNOLOGY WHICH HAD BEEN DEVELOPED UNDER
THE PRESSURES OF A WAR EMERGENCY OF
STAGGERING PROPORTIONS. DURING WORLD WAR II,
WE LEARNED HOW TO PRODUCE SHIPS IN
QUANTITY THROUGH THE APPLICATION OF GOOD
OLD AMERICAN INGENUITY. THE MERCHANT AND
NAVAL SHIPS BUILT IN OUR SHIPYARDS, NOT
ONLY FOR OUR OWN PURPOSES BUT FOR THOSE OF
OUR ALLIES, WERE THE MEDIUM TO VICTORY.
-6-
BUT, FLUSHED WITH THE JOY OF
VICTORY, WE WERE APPARENTLY NOT SMART ENOUGH
OR VISIONARY ENOUGH TO APPLY THE BODY OF
SHIPBUILDING TECHNOLOGY EVOLVED IN THOSE
DIFFICULT YEARS UNDER DIFFICULT CIRCUMSTANCES
TO OUR OWN PEACETIME PURSUITS. ON THE OTHER
HAND, THE JAPANESE TOOK THE CONCEPTS WE
DEVELOPED, AT GREAT COST TO OUR OWN TREASURY
AND SUBSTANCE, AND "RAN WITH THE BALL."
A NATION VIRTUALLY ANNIHILATED
IN 1945, ITS MANUFACTURING CENTERS LITERALLY
DESTROYED, ITS MERCHANT MARINE RUINED, ITS
SPIRIT SHATTERED, JAPAN HAS REESTABLISHED
ITSELF IN THE 1960 DECADE AS ONE OF THE
WORLD'S LEADING INDUSTRIAL POWERS. ITS
SHIPYARDS TODAY PRODUCE HALF THE WORLD'S
SHIPPING TONNAGE, NINETEEN TIMES AS MUCH
ANNUALLY AS DO THE AMERICAN YARDS WHICH
BUILT THE FLEET THAT ONCE DESTROYED THEM.
TO REACH THIS PROMINENCE IN WORLD SHIPBUILDING,
-7-
JAPAN HAS PERFECTED AND EXPANDED TECHNIQUES
WHICH WERE AMERICAN BORN AND BRED.
THIS POINT, TOO, I FEAR, IS LITTLE
APPRECIATED.
MANY TIMES IN RECENT YEARS, I
HAVE HEARD THE CHARGE MADE THAT AMERICAN
YARDS SHOULD COPY THEIR JAPANESE COUNTERPARTS,
WHEREAS, IN POINT OF ACTUAL FACT, IT IS THEY
WHO HAVE COPIED OUR SHIPBUILDING KNOW-HOW
AND MADE GOOD USE OF IT. HOW UNFORTUNATE
IT IS THAT THERE HAVE BEEN -- AND STILL
ARE -- THOSE, IN AND OUT OF GOVERNMENT,
WHO HAVE EITHER NOT TAKEN THE TIME TO
DISCERN THIS FACT OR WHO JUST PLAIN DON'T
WANT TO RECOGNIZE ANYTHING GOOD ABOUT
AMERICAN SHIPBUILDING. THESE MISGUIDED
SOULS -- AND ALL OF US -- COULD LEARN MUCH
FROM WHAT HAS TAKEN PLACE IN JAPAN.
HISTORICALLY, THERE HAS BEEN A
CLOSE RELATIONSHIP BETWEEN THE JAPANESE
-8-
GOVERNMENT AND THE MARITIME INDUSTRY OF
JAPAN. SINCE 1950, THERE HAS BEEN AN EVEN
CLOSER RELATIONSHIP BETWEEN THE JAPANESE
GOVERNMENT AND THE SHIPBUILDING INDUSTRY
OF JAPAN. THIS HAS MEANT THAT THERE HAS
BEEN WHAT SOME MIGHT CALL A "PATERNALISTIC"
ATTITUDE ON THE PART OF THE GOVERNMENT
TOWARD THE SHIPYARD INDUSTRY, AND, IN TURN,
THE INDUSTRY HAS BEEN, AND IS, VERY
RESPONSIVE TO THE VIEWS OF GOVERNMENT EVEN
THOUGH THOSE VIEWS ARE OFTEN NOT EXPRESSED
IN LAWS AND SANCTIONS.
IN CONSEQUENCE, THE INTEGRITY
OF GOVERNMENT AND THE INITIATIVE OF PRIVATE
INDUSTRY HAVE BEEN COMBINED TO ASSURE THAT
SHIPBUILDING REMAINS A STRONG FACTOR IN
THE NATIONAL ECONOMY AND TRADE BALANCE OF
JAPAN. IN MATTERS RELATING TO WORLD SHIPPING,
EVERY MOVE, EVERY ACTION OF THE JAPANESE
GOVERNMENT IS POINTED TOWARD INCREASING
-9-
MARKET PENETRATION FOR JAPANESE SHIPYARDS.
THERE HAS BEEN NO MEANINGLESS PALAVER, NO
DELIBERATE PROCRASTINATION, NO TIME-
CONSUMING CHARADES SUCH AS TOOK PLACE IN
THIS COUNTRY DURING THE DECADE OF THE 1960'S.
THERE IS A FIXED NATIONAL PURPOSE THAT JAPAN
WILL TAKE A BACK-SEAT TO NO OTHER COUNTRY
WHERE SHIPBUILDING IS CONCERNED.
JAPAN HAS LONG HELD TO THE POLICY
THAT PROGRAMS TO EXPAND DOMESTIC SHIPPING
RESOURCES AS WELL AS EXPORT OPPORTUNITIES
SHOULD BE PURSUED FOR THE SPECIFIC PURPOSE
OF PROMOTING DOMESTIC SHIPBUILDING AS A
FUNCTION OF NATIONAL AFFLUENCE. THIS
POLICY HAS BEEN FORMULATED AND EXECUTED WITH
A HIGH DEGREE OF COOPERATION BETWEEN
GOVERNMENT AND SHIPYARDS -- COOPERATION
WHICH DOES NOT NOW EXIST ON THE SAME SCALE
ANYWHERE ELSE IN THE WORLD. THE MARKETING
FORD
OF SHIPBUILDING CAPABILITIES IS ACCOMPLISHED
-10-
WITH SUBSTANTIAL PROMOTION, ENCOURAGEMENT
AND SUPPORT FROM THE JAPANESE GOVERNMENT.
THAT SUPPORT, IT SHOULD BE NOTED, TAKES
MANY FORMS -- DIRECT AND INDIRECT -- ALL
POINTED TOWARD THE MARKETING, FINANCING AND
COMPLETION OF SHIP CONSTRUCTION CONTRACTS
IN JAPANESE SHIPYARDS.
THE UNITED STATES HAS A LONG
WAY TO GO IN THIS DIRECTION. BUT,
FORTUNATELY, A MEANINGFUL AND PROMISING
BEGINNING HAS BEEN MADE BY PRESIDENT NIXON.
HE HAS PROPOSED THAT, IN THE
NATIONAL INTEREST, OUR NAVAL FORCES SHOULD
ALWAYS BE SECOND TO NONE.
HE HAS PROPOSED THAT, IN THE
NATIONAL INTEREST, OUR MERCHANT MARINE
SHOULD BE REHABILITATED AND CAPABLE OF
CARRYING A SUBSTANTIAL PORTION OF OUR
NATION'S TRADE AND COMMERCE.
TO ACCOMPLISH THESE OBJECTIVES,
-11-
A GREAT MANY NEW SHIPS MUST BE BUILT, AND
HE HAS SAID THEY WILL BE BUILT IN AMERICAN
SHIPYARDS BY AMERICAN WORKERS -- IN THE
NATIONAL INTEREST.
I AM CERTAIN ED HOOD HAS REPORTED
TO YOU ON THE DETAILS OF LEGISLATION TO
IMPLEMENT PRESIDENT NIXON'S PROPOSALS, WHICH
IS NOW BEFORE THE CONGRESS. I WILL
THEREFORE NOT GO INTO THIS FACET OF THE
CURRENT SITUATION ON CAPITOL HILL OTHER
THAN TO SAY THAT THE LEGISLATION HAS
CONSIDERABLE BI-PARTISAN SUPPORT AND A GOOD
CHANCE OF BEING PASSED BY BOTH THE HOUSE
OF REPRESENTATIVES AND THE SENATE IN THE
VERY NEAR FUTURE. THE CONGRESS IN 1970
HAS AN OBLIGATION TO ACT BEFORE ADJOURNMENT.
ON THE HOUSE SIDE OF THE CAPITOL,
CONGRESSMAN EDDIE GARMATZ, DEMOCRAT FROM
MARYLAND, AND CONGRESSMAN BILL MAILLIARD,
REPUBLICAN FROM CALIFORNIA, ARE ACTIVELY
-12-
SUPPORTING THE PRESIDENT'S PROGRAM AS
RANKING MEMBERS OF THE COMMITTEE ON MERCHANT
MARINE AND FISHERIES. WITHIN THE
APPROPRIATIONS COMMITTEE, CONGRESSMAN JOHN
ROONEY, DEMOCRAT FROM NEW YORK, AND
CONGRESSMAN FRANK BOW, REPUBLICAN FROM OHIO,
SHARE SIMILAR SENTIMENTS WITH RESPECT TO
THE URGENCY OF IMPROVING OUR NATION'S
MARITIME/SHIPBUILDING POSTURE.
ON THE SENATE SIDE, SENATOR
WARREN MAGNUSON FROM WASHINGTON, AND SENATOR
RUSSELL LONG FROM LOUISIANA, BOTH DEMOCRATS,
ARE WORKING TOWARD THIS SAME GOAL ALONG WITH
SENATOR NORRIS COTTON OF NEW HAMPSHIRE AND
SENATOR JOHN TOWER OF TEXAS, BOTH REPUBLICANS.
THERE ARE MANY OTHERS, ON BOTH
SIDES OF THE POLITICAL AISLE, AND I AM
ENCOURAGED BY THE FAVORABLE REACTIONS OF
VIRTUALLY ALL OF MY CONGRESSIONAL COLLEAGUES
TO PRESIDENT NIXON'S PROPOSED MERCHANT
-13-
MARINE PROGRAM. I AM TOLD IT INCORPORATES
COST-SAVING FEATURES WHICH YOU, THE
SHIPYARDS, HAVE ADVOCATED FOR MANY YEARS. I
ALSO UNDERSTAND THAT YOUR INDUSTRY HAS
ACCEPTED SOME VERY HARD CHALLENGES IMPOSED
BY THIS PROGRAM, AND IT IS REFRESHING TO
KNOW THAT AMERICAN SHIPYARDS ARE WILLING
TQ STAND UP AND BE COUNTED.
white present advise
I FULLY REALIZE THAT THE PROPOSED
NIXON PROGRAM WILL NOT BECOME A REALITY
OVERNIGHT -- OR IN A MATTER OF A FEW MONTHS.
EVEN AFTER THE PENDING LEGISLATION IS
ENACTED, THE NEEDED MONEY MUST BE FORTHCOMING
FROM BOTH GOVERNMENT AND PRIVATE SOURCES.
THE ARRANGEMENT OF SHIPYARD CONTRACTS AND
THE ACTUAL CONSTRUCTION OF SHIPS WILL TAKE
MORE TIME. BUT, IT IS IMPORTANT TO RECOGNIZE
THAT, UNLIKE HIS PREDECESSORS, PRESIDENT
NIXON IS PROVIDING THAT QUALITY OF TOP
LEADERSHIP SO ESSENTIAL IF THE UNITED STATES
-14-
IS TO HAVE, ONCE AGAIN, A MERCHANT SHIPPING
CAPABILITY COMMENSURATE WITH OUR STRATEGIC
AND COMMERCIAL REQUIREMENTS.
I FURTHER REALIZE THAT THE
DEVELOPMENT OF A U.S. SHIPBUILDING INDUSTRY
EQUAL TO THAT OF JAPAN DEMANDS FAR MORE
THAN UPGRADING OF SHIPYARDS, STANDARDIZATION
OF BUILDING PRACTICES, INSTITUTION OF
AUTOMATION AND OTHER CONDITIONS. IT REQUIRES
A FIRM POLICY DETERMINATION THAT THE
SHIPBUILDING INDUSTRY OF THE UNITED STATES
WILL BE INTEGRATED WITH OTHER NATIONAL
ENDEAVORS TO TAKE PROPER ADVANTAGE OF
GEOGRAPHY, INGENUITY, TECHNOLOGY, MANPOWER,
ORGANIZATION AND RESOURCES TO GUARANTEE
THE WELL-BEING AND SECURITY OF ALL OF OUR
PEOPLE. THAT IS THE THRUST OF PRESIDENT
NIXON'S COMMITMENT. AND THAT IS ALSO THE
THRUST OF MY COMMITMENT AS I TRANSMIT MY
LIBBARK
THOUGHTS TO YOU AT THIS, YOUR ANNUAL MEETING.
-- END --
Distribution 20 copies Mr: Ford
House Galleries
a offia Copy
AN ADDRESS BY REP. GERALD R. FORD, R-MICH.
REPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES
AT THE ANNUAL MEETING OF THE SHIPBUILDERS COUNCIL OF AMERICA
AT THE MADISON HOTEL, WASHINGTON, D.C.
AT 12 NOON, MARCH 4, 1970
FOR RELEASE IN WEDNESDAY PM's
Perhaps longer than most of you in this room, I have known your President --
Ed Hood. I remember him when he was John Marshall Butler's right hand on Capitol
Hill, and have since observed many of his activities here in Washington on your
behalf.
Thinking of him, I also remember an event, seven or eight years ago, in
which I had a part, which vitally affected our nation's private shipyard industry.
At that time, I was serving as a member of the Defense Appropriations Subcommittee
of the House Appropriations Committee, and the matter of distribution of naval
ship repair work between Navy yards and private yards came before us.
If I recall correctly, the Navy yards were then receiving 80 per cent of
this work, and there was considerable feeling among members of the Subcommittee,
as well as within your industry, that an 80/20 per cent split was disproportionate.
After much debate, a 65/35 per cent ratio was enacted by the Congress, and I am
told that formula has been followed very closely ever since.
This episode clearly established the advantage of lower costs in commercial
shipyards -- an advantage which has subsequently been translated into additional
revenues for your industry, not only in terms of naval ship repair work but also
in terms of a much greater volume of new naval ship construction.
That single event, more than any other until recently, did much to
reestablish a peacetime direction for our private shipyard industry, at a time when
a new direction was needed. This fact, I am afraid, is not generally appreciated.
But, I can tell you, the advocates of naval shipyards, even today, shudder at the
mention of 65/35.
So as it is I am no stranger to your industry, and you might say that we
gather here today as old friends.
I very much appreciate this opportunity to address your 1970 Annual Meeting
for it seems to me that your industry, your workers and your suppliers are about
to experience a new era of attention and activity.
(more)
BERALD FORD LIBRARY
-2-
For too long, there has been no cohesive or intelligible national policy on
shipbuilding. There has been no long-range commitment on the part of the national
Administrations. There has been no leadership at the top.
In the recent past, the Johnson and Kennedy years could hardly be cited as
illustrations of national leadership in the development of effective programs to
produce the ships our country so urgently needs for commerce and national defense.
The watchword of those times seemed to be: let someone else handle this later;
meanwhile, create the illusion that something is being done.
The accrual effects of such a deceptive policy can be monumental, and, in
the case of shipbuilding, the impact has been both short and long range. Short
range, the evidences are not hard to find: Our naval and merchant fleets are
largely composed of vessels 20 years of age or older and replacement programs have
been grossly inadequate. On a long-term basis, the omissions of the past have
created a much larger problem for today and have multiplied the cost of solution.
By comparison, if we look at Japan we see a dramatic example of the con-
tinuous employment of a clear direction in shipbuilding in pursuit of a firmly
stated national policy.
In the late 1940's and early 1950's, we exported to Japan a shipbuilding
technology which had been developed under the pressures of a war emergency of
staggering proportions. During World War II, we learned how to produce ships in
quantity through the application of good old American ingenuity. The merchant and
naval ships built in our shipyards, not only for our own purposes but for those of
our allies, were the medium to victory.
But, flushed with the joy of victory, we were apparently not smart enough
or visionary enough to apply the body of shipbuilding technology evolved in those
difficult years under difficult circumstances to our own peacetime pursuits. On
the other hand, the Japanese took the concepts we developed, at great cost to our
own treasury and substance, and "ran with the ball."
A nation virtually annihilated in 1945, its manufacturing centers literally
destroyed, its merchant marine ruined, its spirit shattered, Japan has reestablished
itself in the 1960 decade as one of the world's leading industrial powers. Its
shipyards today produce half the world's shipping tonnage, nineteen times as much
annually as do the American yards which built the fleet that once destroyed them.
To reach this prominence in world shipbuilding, Japan has perfected and expanded
techniques which were American born and bred.
This point, too, I fear, is little appreciated.
(more)
-3-
Many times in recent years, I have heard the charge made that American yards
should copy their Japanese counterparts, whereas, in point of actual fact, it is
they who have copied our shipbuilding know-how and made good use of it. How
unfortunate it is that there have been -- and still are -- those, in and out of
government, who have either not taken the time to discern this fact or who just
plain don't want to recognize anything good about American shipbuilding. These
misguided souls -- and all of us -- could learn much from what has taken place in
Japan.
Historically, there has been a close relationship between the Japanese
government and the maritime industry of Japan. Since 1950, there has been an even
closer relationship between the Japanese government and the shipbuilding industry
of Japan. This has meant that there has been what some might call a "paternalistic"
attitude on the part of the government toward the shipyard industry, and, in turn,
the industry has been, and is, very responsive to the views of government even
though those views are often not expressed in laws and sanctions.
In consequence, the integrity of government and the initiative of private
industry have been combined to assure that shipbuilding remains a strong factor
in the national economy and trade balance of Japan. In matters relating to world
shipping, every move, every action of the Japanese government is pointed toward
increasing market penetration for Japanese shipyards. There has been no meaningless
palaver, no deliberate procrastination, no time-consuming charades such as took
place in this country during the decade of the 1960's. There is a fixed national
purpose that Japan will take a back-seat to no other country where shipbuilding
is concerned.
Japan has long held to the policy that programs to expand domestic shipping
resources as well as export opportunities should be pursued for the specific
purpose of promoting domestic shipbuilding as a function of national affluence.
This policy has been formulated and executed with a high degree of cooperation
between government and shipyards -- cooperation which does not now exist on the same
scale anywhere else in the world. The marketing of shipbuilding capabilities is
accomplished with substantial promotion, encouragement and support from the
Japanese government. That support, it should be noted, takes many forms -- direct
and indirect -- all pointed toward the marketing, financing and completion of ship
construction contracts in Japanese shipyards.
The United States has a long way to go in this direction. But, fortunately,
a meaningful and promising beginning has been made by President Nixon.
(more)
-4-
He has proposed that, in the national interest, our naval forces should
always be second to none.
He has proposed that, in the national interest, our merchant marine should
be rehabilitated and capable of carrying a substantial portion of our nation's
trade and commerce.
To accomplish these objectives, a great many new ships must be built, and
he has said they will be built in American shipyards by American workers -- in the
national interest.
I am certain Ed Hood has reported to you on the details of legislation to
implement President Nixon's proposals, which is now before the Congress. I will
therefore not go into this facet of the current situation on Capitol Hill other
than to say that the legislation has considerable bi-partisan support and a good
chance of being passed by both the House of Representatives and the Senate in the
very near future. The Congress in 1970 has an obligation to act before adjournment.
On the House side of the Capitol, Congressman Eddie Garmatz, Democrat from
Maryland, and Congressman Bill Mailliard, Republican from California, are actively
supporting the President's program as ranking members of the Committee on Merchant
Marine and Fisheries. Within the Appropriations Committee, Congressman John Rooney,
Democrat from New York, and Congressman Frank Bow, Republican from Ohio, share
similar sentiments with respect to the urgency of improving our nation's maritime/
shipbuilding posture.
On the Senate side, Senator Warren Magnuson from Washington, and Senator
Russell Long from Louisiana, both Democrats, are working toward this same goal
along with Senator Norris Cotton of New Hampshire and Senator John Tower of Texas,
both Republicans.
There are many others, on both sides of the political aisle, and I am
encouraged by the favorable reactions of virtually all of my Congressional colleagues
to President Nixon's proposed merchant marine program. I am told it incorporates
cost-saving features which you, the shipyards, have advocated for many years. I
also understand that your industry has accepted some very hard challenges imposed
by this program, and it is refreshing to know that American shipyards are willing
to stand up and be counted.
I fully realize that the proposed Nixon program will not become a reality
overnight -- or in a matter of a few months. Even after the pending legislation is
enacted, the needed money must be forthcoming from both government and private
sources. The arrangement of shipyard contracts and the actual construction of ships
(more)
-5-
will take more time. But, it is important to recognize tha, unlike his
predecessors, President Nixon is providing that quality of top leadership so
essential if the United States is to have, once again, a merchant shipping
capability commensurate with our strategic and commercial requirements.
I further realize that the development of a U.S. shipbuilding industry
equal to that of Japan demands far more than upgrading of shipyards, standardization
of building practices, institution of automation and other conditions. It requires
a firm policy determination that the shipbuilding industry of the United States
will be integrated with other national endeavors to take proper advantage of
geography, ingenuity, technology, manpower, organization and resources to guarantee
the well-being and security of all of our people. That is the thrust of President
Nixon's commitment. And that is also the thrust of my commitment as I transmit my
thoughts to you at this, your annual meeting.
# # #
Distribution: 20 copily mr. Ford
House Halleries 4:40p.m. 3/3/70
moffice Copy
AN ADDRESS BY REP. GERALD R. FORD, R-MICH.
REPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES
AT THE ANNUAL MEETING OF THE SHIPBUILDERS COUNCIL OF AMERICA
AT THE MADISON HOTEL, WASHINGTON, D.C.
AT 12 NOON, MARCH 4, 1970
FOR RELEASE IN WEDNESDAY PM's
Perhaps longer than most of you in this room, I have known your President --
Ed Hood. I remember him when he was John Marshall Butler's right hand on Capitol
Hill, and have since observed many of his activities here in Washington on your
behalf.
Thinking of him, I also remember an event, seven or eight years ago, in
which I had a part, which vitally affected our nation's private shipyard industry.
At that time, I was serving as a member of the Defense Appropriations Subcommittee
of the House Appropriations Committee, and the matter of distribution of naval
ship repair work between Navy yards and private yards came before us.
If I recall correctly, the Navy yards were then receiving 80 per cent of
this work, and there was considerable feeling among members of the Subcommittee,
as well as within your industry, that an 80/20 per cent split was disproportionate.
After much debate, a 65/35 per cent ratio was enacted by the Congress, and I am
told that formula has been followed very closely ever since.
This episode clearly established the advantage of lower costs in commercial
shipyards - an advantage which has subsequently been translated into additional
revenues for your industry, not only in terms of naval ship repair work but also
in terms of a much greater volume of new naval ship construction.
That single event, more than any other until recently, did much to
reestablish a peacetime direction for our private shipyard industry, at a time when
a new direction was needed. This fact, I am afraid, is not generally appreciated.
But, I can tell you, the advocates of naval shipyards, even today, shudder at the
mention of 65/35.
So as it is I am no stranger to your industry, and you might say that we
gather here today as old friends.
I very much appreciate this opportunity to address your 1970 Annual Meeting
for it seems to me that your industry, your workers and your suppliers are about
to experience a new era of attention and activity.
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GERALD .FORD LIBRARY
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For too long, there has been no cohesive or intelligible national policy on
shipbuilding. There has been no long-range commitment on the part of the national
Administrations. There has been no leadership at the top.
In the recent past, the Johnson and Kennedy years could hardly be cited as
illustrations of national leadership in the development of effective programs to
produce the ships our country so urgently needs for commerce and national defense.
The watchword of those times seemed to be: let someone else handle this later;
meanwhile, create the illusion that something is being done.
The accrual effects of such a deceptive policy can be monumental, and, in
the case of shipbuilding, the impact has been both short and long range. Short
range, the evidences are not hard to find: Our naval and merchant fleets are
largely composed of vessels 20 years of age or older and replacement programs have
been grossly inadequate. On a long-term basis, the omissions of the past have
created a much larger problem for today and have multiplied the cost of solution.
By comparison, if we look at Japan we see a dramatic example of the con-
tinuous employment of a clear direction in shipbuilding in pursuit of a firmly
stated national policy.
In the late 1940's and early 1950's, we exported to Japan a shipbuilding
technology which had been developed under the pressures of a war emergency of
staggering proportions. During World War II, we learned how to produce ships in
quantity through the application of good old American ingenuity. The merchant and
naval ships built in our shipyards, not only for our own purposes but for those of
our allies, were the medium to victory.
But, flushed with the joy of victory, we were apparently not smart enough
or visionary enough to apply the body of shipbuilding technology evolved in those
difficult years under difficult circumstances to our own peacetime pursuits. On
the other hand, the Japanese took the concepts we developed, at great cost to our
own treasury and substance, and "ran with the ball."
A nation virtually annihilated in 1945, its manufacturing centers literally
destroyed, its merchant marine ruined, its spirit shattered, Japan has reestablished
itself in the 1960 decade as one of the world's leading industrial powers. Its
shipyards today produce half the world's shipping tonnage, nineteen times as much
annually as do the American yards which built the fleet that once destroyed them.
To reach this prominence in world shipbuilding, Japan has perfected and expanded
techniques which were American born and bred.
This point, too, I fear, is little appreciated.
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Many times in recent years, I have heard the charge made that American yards
should copy their Japanese counterparts, whereas, in point of actual fact, it is
they who have copied our shipbuilding know-how and made good use of it. How
unfortunate it is that there have been -- and still are -- those, in and out of
government, who have either not taken the time to discern this fact or who just
plain don't want to recognize anything good about American shipbuilding. These
misguided souls -- and all of us --- could learn much from what has taken place in
Japan.
Historically, there has been a close relationship between the Japanese
government and the maritime industry of Japan. Since 1950, there has been an even
closer relationship between the Japanese government and the shipbuilding industry
of Japan. This has meant that there has been what some might call a "paternalistic"
attitude on the part of the government toward the shipyard industry, and, in turn,
the industry has been, and is, very responsive to the views of government even
though those views are often not expressed in laws and sanctions.
In consequence, the integrity of government and the initiative of private
industry have been combined to assure that shipbuilding remains a strong factor
in the national economy and trade balance of Japan. In matters relating to world
shipping, every move, every action of the Japanese government is pointed toward
increasing market penetration for Japanese shipyards. There has been no meaningless
palaver, no deliberate procrastination, no time-consuming charades such as took
place in this country during the decade of the 1960's. There is a fixed national
purpose that Japan will take a back-seat to no other country where shipbuilding
is concerned.
Japan has long held to the policy that programs to expand domestic shipping
resources as well as export opportunities should be pursued for the specific
purpose of promoting domestic shipbuilding as a function of national affluence.
This policy has been formulated and executed with a high degree of cooperation
between government and shipyards -- cooperation which does not now exist on the same
scale anywhere else in the world. The marketing of shipbuilding capabilities is
accomplished with substantial promotion, encouragement and support from the
Japanese government. That support, it should be noted, takes many forms -- direct
and indirect -- all pointed toward the marketing, financing and completion of ship
construction contracts in Japanese shipyards.
The United States has a long way to go in this direction. But, fortunately,
a meaningful and promising beginning has been made by President Nixon.
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He has proposed that, in the national interest, our naval forces should
always be second to none.
He has proposed that, in the national interest, our merchant marine should
be rehabilitated and capable of carrying a substantial portion of our nation's
trade and commerce.
To accomplish these objectives, a great many new ships must be built, and
he has said they will be built in American shipyards by American workers -- in the
national interest.
I am certain Ed Hood has reported to you on the details of legislation to
implement President Nixon's proposals, which is now before the Congress. I will
therefore not go into this facet of the current situation on Capitol Hill other
than to say that the legislation has considerable bi-partisan support and a good
chance of being passed by both the House of Representatives and the Senate in the
very near future. The Congress in 1970 has an obligation to act before adjournment.
On the House side of the Capitol, Congressman Eddie Garmatz, Democrat from
Maryland, and Congressman Bill Mailliard, Republican from California, are actively
supporting the President's program as ranking members of the Committee on Merchant
Marine and Fisheries. Within the Appropriations Committee, Congressman John Rooney,
Democrat from New York, and Congressman Frank Bow, Republican from Ohio, share
similar sentiments with respect to the urgency of improving our nation's maritime/
shipbuilding posture.
On the Senate side, Senator Warren Magnuson from Washington, and Senator
Russell Long from Louisiana, both Democrats, are working toward this same goal
along with Senator Norris Cotton of New Hampshire and Senator John Tower of Texas,
both Republicans.
There are many others, on both sides of the political aisle, and I am
encouraged by the favorable reactions of virtually all of my Congressional colleagues
to President Nixon's proposed merchant marine program. I am told it incorporates
cost-saving features which you, the shipyards, have advocated for many years. I
also understand that your industry has accepted some very hard challenges imposed
by this program, and it is refreshing to know that American shipyards are willing
to stand up and be counted.
I fully realize that the proposed Nixon program will not become a reality
overnight -- or in a matter of a few months. Even after the pending legislation is
enacted, the needed money must be forthcoming from both government and private
sources. The arrangement of shipyard contracts and the actual construction of ships
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will take more time. But, it is important to recognize tha, unlike his
predecessors, President Nixon is providing that quality of top leadership so
essential if the United States is to have, once again, a merchant shipping
capability commensurate with our strategic and commercial requirements.
I further realize that the development of a U.S. shipbuilding industry
equal to that of Japan demands far more than upgrading of shipyards, standardization
of building practices, institution of automation and other conditions. It requires
a firm policy determination that the shipbuilding industry of the United States
will be integrated with other national endeavors to take proper advantage of
geography, ingenuity, technology, manpower, organization and resources to guarantee
the well-being and security of all of our people. That is the thrust of President
Nixon's commitment. And that is also the thrust of my commitment as I transmit my
thoughts to you at this, your annual meeting.
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