I have always opposed every form of protectionism. But at the recent APEE meetings in Guatemala City my friend Young Back Choi suggested that there might be circumstances when protectionist policy is justified. One circumstance in particular gives me pause for thought. If a technology is important for national defense, arguably the most important justified function of government, then it might be justified if necessary to maintain U.S. access to a key defense technology. For instance, a recent WSJ article, quoted below, suggests that the U.S. capacity to quickly and efficiently build naval ships has been compromised by the attrition of the U.S. shipbuilding industry.
I believe further thought and research is justified.
(p. A10) The Navy complains U.S. shipyards don’t invest enough in staff and equipment.
McKinsey analysts in a recent report on U.S. shipyards found equipment, including metal casting machines, cranes and transport systems, that was decades old, some harking back to before WW2.
The report said equipment broke down, causing delays to contracts. In some cases, it was so old that replacement parts had to be fabricated from scratch because they were no longer commercially available.
Some shipbuilding executives said European naval yards typically have more modern equipment than those in America.
Some investments have made improvements. In the so-called panel-line at Fincantieri’s Wisconsin yard, where major ship sections are joined together, the addition of robotic welders means that there are now six workers as opposed to the 24 previously needed.
That is important because the U.S. industry has a dearth of experienced older shipyard workers—with the skills necessary for the complex fabrications. A third of workers in Fincantieri’s U.S. shipyard are over 50, compared with almost 40% in Italy. Last year, the Navy blamed inexperienced new hands at a Huntington Ingalls Industries shipyard in Virginia for faulty welding on 26 vessels.
For the full story see:
(Note: the online version of the story has the date March 20, 2025, and has the title “The Warship That Shows Why the U.S. Navy Is Falling Behind China.”)