Interviewing a foremost shipbuilder

I was Chairman of The Society of Naval Architects and Marine Engineers’ Panel SP-2 when I was asked to interview Dr. H. Shinto, then the recently retired President of Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI) of Japan. Dr. Shinto and I had no prior notice, not even time to prepare notes, thus the questions I asked in behalf of Panel SP-2 and the responses recorded in a nominally edited transcript, were extemporaneous. (For the complete transcript, click on the ‘Read More’ link at the end of this blog.)

Dr. Shinto’s statements continue to be timely, even now more than 20-years later, because they counter myths such as: Japanese shipyards were destroyed during World War II and rebuilt with U.S. government money, IHI builds only standard series ships, and IHI’s approach is not applicable to overhauls and naval-ship construction.

However, another of Dr Shinto’s responses remains especially timely because it proposes that ship-owner/shipbuilder partnerships should compete for government subsidy rather than have ship owners and shipbuilders separately lobby for subsidies. His idea was meant to stimulate innovation. An example he gave was a ship that carries both iron ore and wood chips from South America to Japan.

The need to identify vessel designs that they can build in series in sufficient numbers to reach adequate economies of scale, as often urged by the U.S. Maritime Administration, would accomplish nothing toward improving competitiveness of U.S. shipbuilders on the world market. The same economies of scale would also work for the Chinese and other competitors. What is needed is reward for innovation leading to ships for new trades such as the Pasha Hawaii Transport Lines/VT Halter partnership for a Pure Car Truck Carrier service between California and the Hawaiian Islands.

One wonders what it is about the combined innovative capabilities of Austral and its customer that resulted in the design and construction of the 417-foot trimaran aluminum ferry BENCHIJIGUA for operation on the other side of the world from Australia.

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TRANSCRIPT OF INTERVIEW OF DR. H. SHINTO

FORMER PRESIDENT

ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD. (IHI)

BY L. D. CHIRILLO

AT THE UNIVERSITY OF MICHIGAN, 28 OCTOBER 1980

Prepared by
C. S. Jonson, Science Applications, Inc.

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1. Mr. Chirillo: Dr. Shinto, during our work for the Nationa1 Shipbuilding Research Program, when we introduced innovations, particularly the modern shipbuilding methods developed by IHI, U.S. shipbuilders often said, “The Japanese had to reconstruct their shipyards after WW II; they did it with our money.” What was the condition of the shipyards in Japan after WW II?

Dr. Shinto: I don’t know why, but all shipyard facilities in Japan, whether private or government, were not damaged by the war. So, since just after the surrender we could operate our shipyard facilities. The damage we received was to the human element, not the physical facility. The physical facility was quite sound.

2. Mr. Chirillo: I also understand that the post-war occupation government banned building large ships and that the ban was in effect until the Korean War started in 1950. Then there was a relatively fast restart of Japanese shipbuilding due to a market created by Nationa1 Bulk Carriers (NBC). Can you tell me more about NBC leasing the Kure shipyard?

Dr. Shinto: As I explained in my paper (presented at the short course on modern shipbuilding, University of Michigan, 27-31 October 1980), that venture was really the starting point of modernization of the Japanese shipbuilding industry since World War II, from a technical viewpoint.

3. Mr. Chirillo: Was there any Japanese government aid for that venture?

Dr. Shinto: Nothing. Only the government leased the Kure shipyard on a ten-year basis to NBC.

4. Mr. Chirillo: Mr. Elmer Hann of NBC told me that one of the conditions imposed by the Japanese government was that NBC had to let other shipbuilders in Japan observe the methods that he introduced and that you later further developed. Can you give me an idea of the number of people that came to Kure?

Dr. Shinto: I think within the ten years, while I was there, over 2,000 people.

5. Mr. Chirillo: So, it was a school about modern shipbuilding?

Dr. Shinto: Yes, an NBC school, it certainly was.

6. Mr. Chirillo: I have heard that other shipbuilders in Japan still learn from IHI.

Dr. Shinto: Yes, but sometimes we learn from them.

7. Mr. Chirillo: We had a great deal of acceptance of your outfitting methods when we published the booklet “Outfit Planning” in December of 1979 for the National Shipbuilding Research Program, and one of the questions that often came up is, “Do you build different ships?” How do you respond to this? People say, “The Japanese are always building the same ship; they are always building standard series ships.”

Dr. Shinto: No. Always we are building to a different design. Very seldom are we able to repeat the same design.

8. Mr. Chirillo: So, during the golden period of shipbuilding in Japan, that is, the decade before the Arab-oil shock, what would be the variations?

Dr. Shinto: Even then there were very big variations. Even during the golden period we very seldom repeated a design; most building schedules were for different owners and different types of ships.

9. Mr. Chirillo: What size variations? What type variations did you encounter?

Dr. Shinto: From 400,000 (DWT) down to 250 (DWT), from bulk carriers to tankers to container carriers, we changed accordingly.

10. Mr. Chirillo: Since 1974, that is, in the aftermath of the oil crises, is your market also characterized by very different-type ships and ship sizes. What are the approximate ranges in sizes?

Dr. Shinto: Under our present backlog we have a 270,000 tanker and also 20,000- and 30,000-ton product carriers. And, also from 16,000-deadweight general cargo ships up to the 17,000-ton high speed container carriers. So, it is very mixed. Under the present situation, the present market, we have no choice.

11. Mr. Chirillo: And the 5,200-displacement ton, SHIRANE, the helicopter destroyer is included?

Dr. Shinto: Oh yes, of course, if we include defense ships the variation is even greater.

12. Mr. Chirillo: Is your logic, the IHI philosophy, applied to defense ships without change?

Dr. Shinto: Yes. Of course, when design changes from a helicopter destroyer to a warship with a missile system, the big change is in the weapons portion.

13. Mr. Chirillo: I also understand from earlier conversations that the philosophy that could be expressed as zone-by-stage control, is also applicable to large overhauls and conversions?

Dr. Shinto: Yes, very effectively.

14. Mr. Chirillo: And you are already applying such control?

Dr. Shinto: Yes, we are already applying zone-by-stage control. Particularly in cases such as a re-engining from steam to diesel.

15. Mr. Chirillo: Since all U.S. shipbuilders are involved to some degree with ship repair as well, then the IHI philosophy is applicable to the U.S. shipyard industry?

Dr. Shinto: Of course! For normal repair, voyage repairs, it is not so effective. But, for the big conversions that need engineering involvement, it is very effective.

16. Mr. Chirillo: We have many naval overhauls that are larger in scope, that is, man-hours required and materials required, than ship construction contracts. In these cases would it be wise to apply zone-by-stage-control?

Dr. Shinto: Yes. From my experience, the more complicated the job, the more effective are these controls.

17. Mr. Chirillo: The more outfit intensive, the more effective?

Dr. Shinto: Oh yes. Particularly in such cases as warship construction where the weapons arrangement is so concentrated within limited space, our method and idea is applicable.

18. Mr. Chirillo: How important is the cooperation of owners, shipbuilders, and the government?

Dr. Shinto: Beg your pardon?

19. Mr. Chirillo: How important is the need for cooperation between owners, shipbuilders, and the government?

Dr. Shinto: In most of our cases, the government is not involved. Most cooperation is between owners and shipbuilders.

20. Mr. Chirillo: And this then addresses basic design?

Dr. Shinto: Sometimes ship owner and shipbuilder get together very quietly, very secretly, in order to achieve the best design for some trade. For example, the specialty between Brazil and Japan for development of the new iron-ore mining in Brazil, and also for development of the forestry industry in Brazil, to bring back wood chips and iron ore in the same ship.

21. Mr. Chirillo: So then, you regard a shipyard having its own design department as a very critical need?

Dr. Shinto: In the stage of Basic Design we cooperate closely with the ship owner so that we can work out the basic design more competitively against any competitor of the ship owner. So the ship owner and shipbuilder get together and develop the best design for some certain trade for the ship owner.

22. Mr. Chirillo: Dr. Shinto, what about the cooperation of owners with shipbuilders?

Dr. Shinto: In a boom condition this type of cooperation is not so necessary. But in a stable condition or in a slack market condition, this cooperation between owner and shipbuilder is very essential in order to create a most efficient ship for certain trades for which a ship owner is trying to get a charter contract. So, we work together, sometimes very secretly, spending a long time concerning such projects. There are many examples where we achieved very unique designs that have been successful against very strong competition. Sometimes, such kinds of new designs become very important, epoch-making design for the development and improvement to ship designs.

23. Mr. Chirillo: This means that you regard a basic-design department as part of the shipyard organization as something that is very important?

Dr. Shinto: It is the core of the activity of shipbuilders.

24. Mr. Chirillo: It is really the core?

Dr. Shinto: Core! On a commercial basis, the vital core!

25. Mr. Chirillo: If you had to apply IHI methods in U.S. shipyards, what would be your approach? That is, what are your recommendations to U.S. shipbuilders?

Dr. Shinto: I think in this case, I am not familiar with the government policy concerning shipping in this country, but if the government allowed competition between the various U.S. shipping companies for certain projects for trades, then ship owners would start to study with somebody who has a capability in design, in order to compete with the competition. Such kind of a system, I think, is applicable. Because, by doing so together with a shipyard they will be able to find out the minimum subsidy (that) is necessary. The amount of the subsidy, of course, becomes a competition point I think. To fix a price from the government side is always losing the chance for competition. So the government should create a bid system from the ship owner. This is for a specific trade, what kind of a ship you are going to propose, and what amount of a subsidy do you need. And basically, this is my private opinion, very dangerous, but my private opinion, basically I don’t want the government to give the subsidy directly to the shipyard. I would hope the government would give the subsidy only to the ship owner. The ship owner could then select the shipyard that is the most competitive. In your case you are giving direct subsidy to the shipyard as well as to the ship owner so there is no competition. Between shipyards there is no competition. Between ship owners no competition. That is why everything is losing.

26. Mr. Chirillo: That’s a good old-American philosophy. Dr. Shinto, IHI’s shipbuilding methods that were developed under your directorship, are now being applied by Avondale Shipyards. You have knowledge of Avondale. You have knowledge of other American shipyards. What is your opinion about how the others will respond?

Dr. Shinto: The behavior of the worker is excellent. The only thing necessary is to change the mind of management, that’s all.

27. Mr. Chirillo: Particularly from what you told us today, the re-orientation of design people?

Dr. Shinto: And, the re-orientation of the production-control system, that’s all you need.

28. Mr. Chirillo: I understand that there has to be a closer connection between production control and material procurement.

Dr. Shinto: Yes. Basic design must be incorporated with production system and production control system and the situation of the material procurement. And, in the engineering development must be based upon a realistic environment and the engineering department must control, cost wise, procurement, manpower distribution, and so on. So, basic design doesn’t touch the production system. The engineering division must make liaison between basic design and production-control system. And, in order to make the production system simple and more realistic, our proposal is so and so based upon our history.

29. Mr. Chirillo: Do you have any other specific recommendations for American shipyards? Notice when IHI consultants went to Avondale, one of the first subjects addressed was palletization. Other subjects were accuracy control and line heating. These are all interconnected, all necessary. Do you have other suggestions for U.S. shipbuilders to address?

Dr. Shinto: I think you need to try to pick out some several zones for a particular building program and begin to implement an overall system for such zones. This is for working out that special zone for the starting point. Then, if things go properly, everybody will notice big improvements by changing the methods, changing the basic idea. Then, the next zone and next zone you will be able to extend easily. Most complicated spaces are a lot better.

30. Mr. Chirillo: The lower arrangement in a machinery space perhaps?

Dr. Shinto: Oh yes, yes, something like that. Or a pump room, a cargo-pump room in a tanker. Something like that.

31. Mr. Chirillo: That, I understand, is Avondale’s approach.

Dr. Shinto: Yes. Or some special zone within a Navy ship.

32. Mr. Chirillo: Dr. Shinto, thank you very much. Many people wonder why IHI has no reservations about teaching Americans, potential competitors, your shipbuilding philosophy.

Dr. Shinto: I am pressing IHI people concerning this consultation because I think this country is very hopeful for changing over.

33. Mr. Chirillo: We already have some change in trade cognizance. Thank you very much for your opinion, Dr. Shinto. We hope to see you again here in America.

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