United States shipyards build the best military ships in the world. However, the demand for naval vessels is currently very low, and it is unlikely to increase. Large military oriented yards have substantial capacity beyond national security requirements. Historically, political influence has ensured their survival, but future budgetary constraints may supersede this political influence. Several yards are attempting to reestablish themselves in the commercial market, but excessive overhead, lack of market identity, inefficient management, outdated production, and marginal capital investment and foreign subsidies make it difficult for them to compete in the international marketplace. The United States must choose between continued reliance on reduced military procurement and government support or on efforts to create a level playing field. On such a field, U.S. shipbuilders could improve productivity and efficiency as needed to develop a competitive position in a nonsubsidized international environment.
ICAF Industry Studies 1997