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Europe to lose three historic ship yards yards

This week has brought bleak news for Europe's shipbuilding industry. As Japan and South Korea continue to increase their share of the world market, three major European yards have gone under in two days.

On Monday, Copenhagen's last shipbuilder, Burmeister and Wain, announced that it had given up the fight to stave off bankruptcy and would close its 153-year-old yard on the capital's Refshale Island.

Then, the death knell was sounded over two other shipyards. Bremer Vulkan, Germany's largest shipbuilder, opened bankruptcy proceedings yesterday. In Poland, the deadline for new investors to save Gdansk shipyard, the mainspring of the Solidarity movement in the 1980s, ran out on Tuesday.

Many European shipbuilders are being out-classed in the global race for trade. Cheaper prices, due to low labour costs and state subsidies, are attracting buyers to the East. The market leader is Japan, with 41 per cent of the market in 1994, compared with 37 per cent in 1976. South Korea has 16.7 per cent of market share compared with only 1.6 per cent in 1976, and China has 3.8 per cent.

The European Union had 20 per cent of the market in 1994, compared with 26.8 per cent in 1976. Germany is Europe's industry leader with 7.6 per cent of the world market, while Britain, which had 4.5 per cent of the market in 1976, saw a fall to 1.1 per cent in 1994.

While the EU's overall loss of market share may look undramatic, the loss of jobs during the same period gives a more worrying picture. In 1994, 120,000 people were employed in shipbuilding in the EU, compared with 219,000 in 1976.

Cheaper labour costs have meant buyers now look to Asian shipbuilders for vessels such as super-tankers, which are labour intensive and demand a lower level of skill to construct. European yards now build more sophisticated vessels, with many concentrating on roll-on roll-off ferries, ice breakers and cruise vessels. Poland has maintained 3.2 per cent of the world market. A would-be member of the EU, it is ditching debt-ridden companies but has re-structured where it can.

Even with restructuring, Europe has seen a slump in jobs. Bremer Vulkan had 23,000 workers last year. Most of the 1,400 people employed at the Copenhagen yard have already been laid off, and the closure of Gdansk could lead to the loss of 7,000 jobs.

A paper on Europe's maritime future, published by the European Commission in March, warned that the loss of jobs meant Europe was "running out of properly trained and qualified seafarers". Furthermore, said the paper, "As a result, opportunities are being lost and the future of Europe's maritime industries and services is being jeopardised, and the high quality of European shipping compromised."

The longer term outlook is not all bad. The Commission is backing efforts to develop new high-tech shipbuilding methods which can cut down a ship's design and building time, and could put the Europeans back in business. The battle to abolish state subsidies in the industry is already joined. And as standards for shipping - particularly passenger shipping - are increased, buyers might once again favour quality vessels produced in European yards.

Orders for goods shipping has remained fairly constant in recent years. A large proportion of the world fleet is reaching the end of its life, and orders are expected to increase as ships are re-fitted or replaced.

Nevertheless, Commission analysts predict that with the relentless drive for productivity, the loss of jobs in EU shipbuilding will continue.