Find a Security Clearance Job!

Military


Greek Shipbuilding Industry

A seafaring nation for millennia, the resilience of the Greek shipping industry is being tested seriously for the first time since it rose to modern prominence in the 1960s. As the global economic crisis continues, and the demographics of international trade shift, the Greek shipping industry is straining to maintain its global status. 2. Greece controls the world's largest merchant fleet in terms of dead weight tons (DWT), with 4960 vessels-33 percent of which are Greek-flagged. Greek-flagged vessels make up approximately 6 percent of the world total. The industry employs 250,000 individuals (though few Greeks), and includes 25,000 seafarers and 1200 shipping companies. Second only to tourism, shipping contributed 18 billion Euro to the Greek economy in 2008, and shipping receipts account for approximately 6-8 percent of Greece's GDP. As a result of the recent global economic crisis, Greece's shipping income fell 31.3 percent in the first eight months of 2009, and shippers were bracing for the situation to get worse before it gets better.

Beijing-based China Ocean Shipping Company (COSCO) has secured a 35-year concession to manage one of two existing terminals and to rebuild a third terminal at Piraeus, Greece's largest port and the top container port in the eastern Mediterranean. This controversial 4.3 billion Euro deal between COSCO and the Piraeus Port Authority (OLP), which will expand Greece's role in Mediterranean shipping and transport, sparked a series of recent strikes by Greek dockworkers that cost businesses and the Greek government tens of millions of Euro in lost revenue.

As demand for drybulk and other cargo declined alongside global GDP, the world-wide industry faced an oversupply of global shipyard capacity. With the decline in available credit, and most shipping companies over-leveraged, many were seeking to cancel or renegotiate the price of previously ordered ships. More than 50 percent of deliveries scheduled for 2010 and later were without secured financing as of 2009. At that time, some 77 percent of the world order book would need to be cancelled to bring supply and demand to the ideal equilibrium (with a 10 percent difference). Shippers were concerned that even without financing, shipyards will continue to fill all outstanding orders to maintain shipyard employment. Though politicians do not agree, shippers argue that industry representatives should pressure governments to cut shipyard capacity.

The Hellenic Shipyards and the Eleusis Shipyards, which employed 3,150 and 2,350 workers in 1995, respectively, were privatized in the mid-1990s. The Hellenic Shipyards at Piraeus on the Gulf of Saronikos is the largest shipbuilding, ship-repairing, and rolling-stock operation in the eastern Mediterranean and one of the largest in Europe. In the first thirty-five years of the firm's operation, its two dry docks and three floating docks accommodated repairs for over 8,200 vessels of all types and sizes. Its two slipways had seen the construction of 110 commercial vessels and warships, including frigates, fast-patrol missile boats, replenishment tankers, and fast-attack boats, up to 40,000 deadweight tons. At the end of 1994, the Hellenic Shipyards were completing the first Greek-built MEKO-200H (Hydra-class) frigate. Two additional frigates were in earlier stages of construction for the Hellenic Navy, and Hellenic Shipyards had designed three offshore-patrol vessels for delivery to a foreign customer in 1996. The yards also build railroad freight and passenger cars and electrically powered trains.

Greece's second major shipbuilding firm, the Eleusis Shipyards (also located on the Gulf of Saronikos near Athens), had a wide range of activities, including shipbuilding, ship repairs and conversions, and industrial construction. In late 1994, the major military contract at Eleusis was for five large LST landing craft for the Hellenic Navy.

The European shipbuilding industry has been in severe crisis for several decades because of competition with low labor cost countries and, more recently, because of the high exchange value of the euro. In Greece, additional challenges included an ageing workforce and inflexible labor relations. Over a twenty year period the number of employees in the whole Greek shipbuilding industry dropped from about 10,000 employees to 3,500.

Only 400 permanent employees remained at the Neorion Shipyard in Syros while around 1,000 workers were employed at Elefsis/Eleueis Shipyards. During peak periods, temporary workers are taken on, bringing the Syros workforce up to a maximum of 600 employees and that of Elefsis to 1,500. The average age of the workers is high, averaging 50 years of age for both production workers and whitecollar workers. The proportion of white collar workers is relatively high, with 150 administrative workers for every 250 production workers. The production workers typically have a low educational level, with between six and nine years of schooling. A typical employee of the company can therefore be characterised as a 50-year-old male worker with few qualifications.

On 29 July 2010 the European Commission accepted a solution regarding the illegal state subsidies to Hellenic Shipyards in Skaramanga, under which sections of the shipyard would be sold off and it would be confined only to military-related activities for the next 15 years. The civilian activities at Skaramangas would be taken over by another company, while non-military activity could also be developed by the shipyards at Elefsina and Neorio for which the restrictions did not apply.



NEWSLETTER
Join the GlobalSecurity.org mailing list