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The Shipbuilding industries in advanced countries have been damaged, suffering
mostly from excessive hulls and the depression-stricken shipping market.
Toward the end of March 1978, the worldwide backlog of unfilled orders for
new ship construction dropped to 25% of the peak level at the end on March 1974.
As a result, Japan's share has been falling.
New orders for ships and backlogs of unfilled orders have been falling fast since the high mark in the 1973-74. (See Figure 11). In FY1977, many shipbuilders were in. financial straits, and 23 companies had to appeal for application of the Stock. Company Reorganization and Rehabilitation Law.
The environment surrounding Japan's shipbuilding industry is becoming more
exacerbated:
Shipbuilders who count heavily on the construction of oceangoing vessels
have been driven into a tight corner; to an extent that they feel they cannot
continue their business.
Under these circumstances, in May 1978 the government issued the Law concerning
Temporary Measures for Specific Depression-stricken Industries in a bid to help
depression-hit industries, including the shipbuilding industry. Concerned about
the grave situation, the Ministry of Transport requested the Shipping and Shipbuilding
Rationalization Council to form an opinion on how to stabilize future operations
of the shipbuilding industry. In response to this request, in July 1978 the
Council submitted a report to the effect that some 35% of the existing shipbuilding
facilities should be disposed of.
According to the recommendations in the report, the government identified
heavily injured shipbuilders as in need of public relief. Following this, the
Transport Minister prepared a master plan for stabilization of,the shipbuilding
industry, and shipbuilders identified as heavily injured were obliged to dispose
of their facilities according to the plan.
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