STARKVILLE — The numbers are full of contradictions when one considers the future of U.S. Navy shipbuilding and the impact that industry has on our nation and state.

Let’s dive in, so to speak. First, let’s look at the global merchant fleet. What is that? Oil tankers, container ships, general cargo carriers, and other so-called “bulk carriers.”

In 2019, some 93 percent of global shipbuilding took place in China, South Korea and Japan. About 52 percent of the global merchant fleet was owned by Asian companies with 41 percent owned by European nation. North American firms owned just six percent of the global merchant fleet.

In essence, America since the Reagan years has been in steep decline in commercial shipbuilding as the market share of East Asian and other global competitors have soared. The U.S. decision to stop government subsidies to the nation’s shipyards doomed the industry in the face of competing governments that were only too happy to subsidize their shipbuilding industries.

Brookings Institution economic studies fellow Aaron Klein documented that from the end of World War II until the 1970s, the U.S. shipbuilding industry built most of the world’s shipping fleets during a time when countries around the world subsidized their national shipbuilding industries – a practice the U.S. abandoned in 1981.

Yet at the same time as the U.S. role in global commercial shipbuilding has become almost invisible, the United States still maintains the largest and strongest navy in the world.

With 11 active aircraft carriers (with two more under construction and two more ordered after that through 2034), 69 destroyers, and 70 nuclear submarines – all supported by about 3,700 aircraft – the U.S. Navy can effectively project American military might anywhere on the planet.

China is America’s top naval competitor, but with two carriers and 14 nuclear subs, the U.S. advantage is steep. Close behind China is Russia, a nation with the largest and most powerful nuclear ballistic missile submarine in the world.

Trailing the Chinese and Russian navies are, in order, Japan, Great Britain, France and India.

Hence, the paradox – the U.S. is no longer a significant player in global commercial shipbuilding, but the nation needs the naval superiority America enjoys to keep the peace and maintain the balance of power in the face of phenomenal growth both economically and militarily by China and the continuing threat from post-Cold War Russia.

With some 14,000 of the state’s highest-paying jobs on the line, one would think that the state’s shipbuilding industry would garner more attention in statewide politics. State subsidies to Ingalls have in the past drawn bitter political fire from conservative politicians, but state lawmakers have continued to do the same thing that lawmakers in other states with substantial shipbuilding industries have done – keep the subsidies in place to protect the jobs.

In 2011, Mississippi had the second largest share of U.S. shipbuilding and ship repair jobs in the country, trailing only Maine. The industry had 23,450 direct, indirect and induced jobs. That same year, Mississippi had just under 10 percent of all the private shipbuilding and ship repair jobs in the U.S. with 13.8 percent of the total national payroll.

Shipbuilding and ship repair in the U.S. have declined over the last decade.

But Ingalls in Pascagoula in June 2020 was awarded a $936 million U.S. Navy contract to build another destroyer equipped to launch guided missiles. This comes in addition to a $5.1 billion defense contract signed in 2018 to build six Arleigh Burke-class destroyers. In 2019, VT Halter Marine in Pascagoula in April won a $746 million Navy contract to build three heavy polar icebreaker cutters for the Coast Guard.

In the Biden administration, Mississippi’s congressional delegation – on both sides of the aisle – should do everything in their power to keep the nation’s shipbuilding industry vibrant.

There’s an economic and jobs component for Mississippi, sure. But what’s the nation to do if we lose that industry – order our next naval destroyer from China?

 

Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.

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