The following address was presented by Neil Baird, Director Baird Publications, at the AIMS Conference, Hobart.

"Captains, Chiefs, Ladies and Gentlemen and, particularly Captain Anne Rutherford who invited me to give you my views on this very important subject, thank you for listening to me today.

Historically, my first interaction with marine surveyors was not very promising. In the early seventies my brother and I were thinking about launching what would have been the first Australian sailing yacht charter business. We dutifully approached the Queensland Marine Department where we met a Glaswegian brick wall.

We proposed to base a fleet of 32 foot yachts in the Whitsundays. Well, our Glaswegian former chiefs demanded 4 inch propeller shafts; 5 watertight bulkheads; and, among other impossibilities, 2 huge buckets of sand to be kept on deck in case of fire. Our successors in the yacht charter game simply ignored the Department for years and largely got away with it.

We went on to bigger and better things in more realistic industries and, I have to say, found the Queensland Department much more positive and helpful in my dealings with them 20 years later.

Since then, I have come across numerous marine surveyors and have found them to be positive, interesting and informative people with usually a great love of the maritime industry and a willingness to explain what they are about – rather different from many professionals!

One in particular is Mike Wall from Hong Kong. Many of you will probably know him. Mike wrote a brilliant book “Running a Marine Survey Company” that was published by Petrospot earlier this year. I commend it to you as not only a marine surveying text but as probably the best guide to running a small business I’ve ever read.

Anyway, I’ll now focus on the subject which I will illustrate with a series of pictures to briefly remind you of where we have come from and where I think we are heading.

When Anne, the organiser of the conference, approached me to speak on The Future of Australian Shipbuilding my first thought was, “Does it have a future”? The answer to that came in a nano-second. Of course it does. Why else would my family persist with an Australian based maritime publishing company that focuses mainly on new ships and boats?

And, despite the best efforts of state and federal governments of both stripes as well as all the various unions that inflict their avaricious demands on the industry, we need it to survive and thrive. As an island continent with a massive maritime task, it is imperative that Australia maintains some sort of ship building capability.

Thinking a little further, I added the sub-title “An Historical Approach”. This was because I reviewed my fifty year connection with this industry and the changes I have seen over that half century. They have been dramatic. I suspect they will be equally dramatic over the next five decades. So, I am sure the industry has a future but that life in the industry will be quite different from what any of us have so far experienced.

While I can recall a strong interest in ship and boatbuilding from the age of five or six – Indeed, my father and I built a number of small sailing yachts throughout my teenage years – it was not until I gave up on Law at the University of Tasmania at the end of 1966 and went lobster fishing at Dongara in Western Australia, that I began to mix with real ship and boat designers and builders. I quickly realised I had found my true spiritual home with them.

It was there I met hard-driving pioneers like Michael Kailis and Fred Connell who both knew they needed faster, safer, more durable and larger boats. I also got to know a fellow university “drop out”, John Fitzhardinge, who has gone on to much bigger and better things in fishing, offshore oil and gas, naval architecture and ship building as well as civic and industry affairs. All three contributed enormously to fishing, ship building and education. “Fitzy” still is contributing and recently launched an impressive new pilot boat that was, very bravely, built on spec.

They were exciting times. A boom-bust-boom industry attracted a lot of energetic, imaginative and innovative people. It also inspired a thirty year burst of dramatic progress in vessel design and construction. I think it’s fair to claim that our fast ferry, crew boat, patrol boat and super yacht sectors all had their origins in the fishing industry, most particularly in the West Australian lobster fishery.

Two years after that, in April 1969, and still fascinated with the fishing industry, I secured a berth on the Northern prawn trawler ‘Karumba Norman’. She was a brand new, state-of-the-art vessel that taught me a lot about vessel design and construction as well as the fishing and shipbuilding industries. Later, I enjoyed  a brief voyage on the ‘Pathfinder K’ where I learnt something of the Michael Kailis approach to business. That is to keep it simple and cheap.

I joined the ‘Karumba Norman’ at the late and unlamented Bundeng Shipyard in Bundaberg. There, even to a twenty-one year old, it was obvious why the shipbuilding industry of the 1960s was on its deathbed. Inefficiently managed and irrationally union dominated, Bundeng, like practically all of its competitors, was doomed. Indeed, the ‘Karumba Norman’, which was a very good fishing machine, was the last vessel built there.

The old order was rapidly changing. While in the Gulf of Carpentaria, I got to know some of the people who would bring about that change. People like Sid Faithfull of Cairns and Tasmania’s own Robert Clifford. They could clearly see what was wrong with the old ways and where opportunities lay.

Of course, as you would all know well, over the next fifteen years to the mid-eighties, virtually all of the traditional steel cargo ship builders died out. While Bundeng was first, it was soon followed by the likes of Walkers, Evans Deakin, BHP, Adelaide, Carringtons, Williamstown, Newcastle State Dockyard and South Mole Slipway. All those traditional, subsidy dependent steel builders went the way of their counterparts on the Clyde, in Scandinavia and the United States. The only survivors of their ilk were NQEA and Ross Roberts’ Harwood Slipway. They survived by adapting to contemporary realities.

Alas, even NQEA is no longer with us as a shipbuilder. The land it was built on was worth too much and the boss,  Don Fry,  reached retirement age.

Simultaneously, though, the designers and builders of high speed aluminium craft were establishing themselves. Robert Clifford, John Rothwell, Don Dunbar, Don Fry, Toby Richardson, Ron Devine,Mark Stothard, John Fitzhardinge, Phil Hercus, Phil Curran, Loch Crowther, John Szeto and Stuart Ballantyne and a number of others were coming to prominence as builders and designers. Indeed, they soon came to dominate the world market for fast aluminium vessels.

Having closely watched and studied the global shipbuilding industry for half a century I have observed some dramatic, unexpected and unprepared for changes. During that time I have visited more than 1,000 shipyards and talked with even more shipbuilders.

My travels have taken me from the traditional shipyards of north western Europe, Scandinavia and North America to Russia, Turkey, Italy, Spain, Greece and Croatia as well as my native Australia. I have visited dhow builders and modern shipyards around the Persian Gulf, junk builders in China and yards where Bugis “schooners” are still built in Sulawesi in Indonesia. I’ve toured naval and commercial shipyards in Argentina and Brazil and I have been to small shipyards in Papua New Guinea and New Zealand. Even Bangladesh, that prolific source of deadly ferries, has not escaped my eagle eye. As the sixties song title says: “I’ve been everywhere, man”.

During the latter half of that period, I have tended to concentrate more on Asia visiting many yards in Japan, South Korea, Taiwan, China, Vietnam, the Philippines, Indonesia, Singapore, Malaysia, Thailand and India. They have built both commercial and naval vessels.

Those shipbuilders have taught me a lot over the years and I thank them for their patience and interest. What I have particularly learnt is that the biggest, most established and most prominent operators get too close to government and so are rarely the most innovative, efficient or profitable. Indeed, apart from one or two notable examples such as the Damen Group and Japan’s Tsuneishi, the opposite usually applies.

My long “stretch” as a director of the Australian Shipbuilders Association convinced me of the evils of government subsidy or other “support” of the industry. I’ve seen it close to hand in the publishing and printing industries also. Any government involvement is simply a dead hand that gradually chokes out all innovation and enterprise from any industry. It corrupts both morally and financially.

For sixty years until the mid-eighties, the Australian shipbuilding industry was the “beneficiary” of considerable government support in many forms. Of those, the “Bounty” was the most notorious and most destructive. Because it effectively eliminated competition for most of that period, the local industry became bloated and lazy.

A remarkable change came over the industry when the Hawke Labor (read socialist) government amazingly abolished the Bounty and practically all other forms of assistance. The old protected ship builders such as BHP, Adelaide, Walkers, Bundeng, Carrington and Evans Deakin closed down. They simply weren’t viable without substantial government assistance. Even the government owned yards such as Cockatoo Island, Newcastle State Dockyards and South Mole Slipway faded away. They had essentially become “sheltered workshops” for some greedy, grasping unionists.

Simultaneously, though, a shipbuilding renaissance came over Australia. Essentially without government assistance, save for some very limited Export Market Development Grants, we saw the development of a whole new and world leading sector in aluminium fast vessels that developed out of the West Australian lobster fishing industry. The newer builders such as Incat, Austal, Richardson Devine Marine, Strategic and Geraldton Boat Builders quickly became the globally competitive leaders in their field. Innovation, enterprise and, even, profitability had arisen from the ashes.

At the same time, one or two of the smaller, less conspicuous builders like NQEA and Harwood Slipway kept their heads down, adapted and ploughed on into the new era.

Much the same thing happened in the UK, the Netherlands, Sweden, Denmark and Norway. It has taken longer in Germany, France, Italy and Spain where government support has been something of an art form. However, it is slowly happening and, apart from Navantia and Fincantieri, which are government owned sheltered workshops of the worst kind, the survivors are globally competitive. Indeed, some such as Dutch based Damen and the French group Piriou have successfully thrust into Asia.

Of the United States, however, the less said the better. Apart from a few smaller yards that are globally competitive, most are bedevilled by the Jones Act that protects them to death – and costs the American taxpayer zillions! The “Land of the Free” is far from free in a maritime sense and its citizens continue to suffer accordingly as Lobbying 101 prevails.

Inevitably, of course, as we are already seeing with Japan, even Asian countries will eventually become less competitive. While there will always be pockets of the world where ships can be built cheaper, I expect that in the long run, the iron law of comparative advantage will gradually become less relevant. The shipbuilding playing field will become almost level. Except, that is, for the United States where the Jones Act has become something of a state religion.

To me, as you have probably gathered, government support whether in the form of subsidy, bounty, protection, R&D grants, payroll assistance or whatever, is wasteful, counter-productive and often corrupting. From personal observation globally over the last fifty years, I am convinced that shipbuilding, like all industries, flourishes when real free enterprise prevails. Competition, particularly global competition, improves the breed. In the maritime industry that means better ships and boats at lower prices.

The world works much better when innovation, energy and enterprise are allowed to prevail. Thankfully, that is starting to happen.

In all the recent raucous debate over the future of Australia’s naval shipbuilding it is usually forgotten that Australia is home to a number of very capable and, most importantly, globally competitive commercial ship builders, designers and materials and equipment suppliers.

Unlike their notably inefficient, mostly foreign owned, and uncompetitive naval shipbuilding compatriots, our commercial ship builders are unsubsidised and generally avoid dealing with governments of any stripe or level. They have better things to do than to waste time dealing with bureaucrats and junior naval officers and completing the endless wasteful documentation that dealing with government currently entails.

If the whole process of naval ship purchasing were to be reformed to be more practical, economical and commercial, the Navy, taxpayers and Australian ship builders would all benefit. Even though it flies in the face of tradition and would undoubtedly make legions of public servants redundant, reforming the process would be simple and easy to achieve except, probably, politically.

The fact is that Australia does not manufacture diesel or gas turbine engines, propulsion systems, significant marine electronics, or weapon systems. So, our shipbuilding essentially involves design, fabrication of metal plate and installation of components manufactured overseas.

That said, however, there are a number of Australian companies that are world leaders in vessel design, construction and outfitting. Designers such as Incat Crowther, One2Three, AMD ( which designed the “platforms” for China’s large fleet of supersonic cruise missile attack boats), Sea Transport Solutions and Southerly Designs, among others, are all both experienced and competitive across a range of vessel types and construction materials.

There are a number, also, of Australian ship builders such as Incat, RDM, Austal, Evolution Commercial and Harwood Slipway that have competitively constructed a range of different sized and kinds of vessels of varying complexity. All could build naval vessels if they could be motivated to do so. All are globally recognised and, importantly, profitable without subsidy.

Australia also benefits from having numerous suppliers of materials and equipment that could easily adapt to naval requirements. Even our electronics manufacturers could do a lot more if it were worth their while to gear up to do so. To a large degree the Canberra “cultural cringe” discourages that.

The naval shipbuilding problem in Australia is not one of lack of capability. Rather, it is one of the “dead hand” of government ship purchasing processes discouraging our globally competitive ship builders and their suppliers from wanting to deal with government.

While many of the pioneers of the seventies and eighties, who I mentioned earlier, have retired or died, their children or people they trained have or are taking over from them. Those second generation companies are still leading the world in their field. And that, really, is the point. Australians are adaptable. They are innovative and they perform much better when not reliant on government handouts like the “Shipbuilding Bounty” on which our long gone steel shipbuilders were dangerously overly dependent.

So, now that it is a free, globally competitive industry with minimal interaction with government, the Australian shipbuilding industry, has, in my opinion, a very bright long-term future.

Thank you for your interest." 

 

*Neil Baird is one of the founders and the chairman of Baird Maritime. He is a director of the World Ocean Council and a joint Facilitator of the Federal Advisory Council of the Navy League of Australia and has held many other board positions in the global and Australian maritime industry. They include a very lengthy “stretch” as a director of the Australian Shipbuilders Association.

His almost fifty year career, mostly in international maritime publishing, has enabled him to visit and study more than 1,000 shipbuilders on all continents except Antarctica. He has reviewed more than 4,000 ships and boats and has experienced all known forms of propulsion from oars to nuclear and from paddles to waterjets.

In his “semi”-retirement he is undertaking a PhD on Passenger Vessel Accidents and How to Prevent Them.

Illustrations for The Future of Australian Shipbuilding Presentation.  August 13, 2015.

1.  A View of Sydney Cove, engraving by Francis Jukes, London, 1804, from a drawing by E. Dayes

2.  Replica of “William the Fourth’. First steamship built in Australia. Original built at Clarencetown, NSW in 1831 by Marshall & Lowe

3.  ‘Enterprise’, 19 metre ketch built Hobart 1902

4.  ‘Reemere’. Built in Hobart in 1909 as a steamship. Converted to diesel and still working after 106 years

5.  ‘Biloela’, naval collier built at Cockatoo Island. Completed 1920. First ship to be built of steel plates rolled in Australia by BHP

6.  ‘Iron Monarch’. Bulker. First ship built by BHP at Whyalla. Completed 1943

7.  HMAS ‘Albatross’. Austrlaia’s first aircraft carrier. Actually a seaplane tender. Built at Cockatoo Island. Completed 1928. Exchanged for the cruiser HMAS’Hobart’ in 1938

8.  HMAS’Pirie’. One of a series of four Bathurst Class Corvettes built at Whyalla by BHP during 1942

9.  HMAS ‘Arunta’ a Tribal class destroyer, one of three fast (36 knots) ships built at Cockatoo Island

10. A Kailis 20 metre tropical prawn trawler built in Fremantle by and for the M.G.Kailis Group. Simple and very effective. Some still working 40 years after launching.

11. ’John Sainsbury’ and ‘Denis O’Malley’. The final two ‘ships’ built by BHP at Whyalla. Completed 1978

12. ‘Accolade II’ a cement carrier built by Carrington Slipways, early 1980’s

13.HMAS ’Tobruk’. A Landing Ship Heavy built by Carrington in 1982. Decomissioned 2015

14. ’Wato’. One of a series of ‘modern’ tugs built in the early eighties by Carrington Slipways.

15. ’Sea Flyte’. One of the first of the fast ones. Designed by Phil Curran. Built by SBF Engineering in 1983. Still going strong in Singapore

16. HMAS ‘Anzac’. First of a class of 9. Built in Williamstown by Tenix. Completed 1996

17.’Munna’. First of a unique class of bulk ore carrier/ transhipment vessels designed by Stuart Ballantyne’s STS

18. ‘Tuhaa Pae IV’,  a truly multi-purpose ship- tanker, container and passenger – built by Ross Roberts’ Harwood Slipways at their Cebu, Philippines, yard.

19. An Austal USA built littoral combat ship being launched from the company’s Alabama yard.

20. ‘FastCat’ a recent Stuart Ballantyne STS Ro-Pax catamaran ferry built in China for the Philippines.

21. A large, high speed catamaran crew/supply vessel built in the USA to Incat Crowther’s design.

22. ‘Lopez Mena’. The world’s fastest (58 knots) ship. Designed and built in Hobart by Incat.

23. ‘Muslim Magonlayev’. Another Incat masterpiece. A 78 metre fast, wave-piercing, crew/supply boat. Now operating in the Caspian Sea.

24. HMAS ‘Canberra’. Australia’s latest and biggest warship. Assembled in Australia by BAE et al from mostly Spanish components.

25. ‘Kilimanjaro V’. The fifth in a series of ferries built in Hobart for the Dar-es-Salaam to Zanzibar route by Richardson Devine Marine to Incat Crowther designs.