Can Japanese shipbuilding succeed in following Korea?

Will the Japan that lost the No. 1 position in the world shipbuilding industry succeed in catching up with Korea?

According to the Korean shipbuilding industry on Feb. 27, Hitachi Zosen Corp., and NKK Corp. recently agreed to merge. This merge will give birth to the fifth largest shipbuilding company in the world, and the second largest in Japan with 180 billion yen, following Mitsubishi. Also IHI Corp., Kawasaki Corp., and Mitsui Heavy Industries are under way to merge, leading to three big shipbuilding groups, just like in Korea. Korean experts explained these restructurings as "final decisions" to recover the competitiveness of the Japanese Shipbuilding industry.

In fact, Japan's reputation as a shipbuilding country was desperately scattered last year. Japan lost its No.1 position in shipbuilding orders to Korea in 1999, and the year 2000 made the gap unrecoverable between the two countries. For instance, last year Korea and Japan received 41 percent and 30 percent of worldwide orders, respectively, leaving an 11 percent gap.

Korean shipbuilding industry experts predicted gloom for Japan's efforts to recover lost competitiveness. Even if the mergers proceed along with effective streamlining, cooperation, and cost savings, it will not be a final solution for the out-of-date Japanese workforce and high personnel expenses. They also insisted that Korea leads Japan in terms of flexibility for fitting ship owner's demand and shipbuilding skills.

The Japanese shipbuilding industry has had some strength in being equipped with professional and cooperative systems through production system restructurings. Through these restructurings, it was pointed out, Japan could possibly become competitive again.

A Daewoo shipbuilding official said that their recovery totally depends on how thoroughly they streamline and maintain their professionalism. He also added that the Korean shipbuilding industry has to do its best to improve productivity and invest in research and development, to widen the gap with Japan.