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The social and labour impact of globalization in the manufacture of transport equipment

Report for discussion at the Tripartite Meeting on the Social and
Labour Impact of Globalization in the Manufacture of Transport Equipment

Geneva, 8 - 12 May 2000

International Labour Office   Geneva

Copyright ©2000 International Labour Organization (ILO)

Part 5

Cover photographs: ILO/J. Maillard

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4. Other TEM industries

4.1. Shipbuilding and repair

4.1.1. Shipbuilding

Employment in shipbuilding has been declining steadily. Table 4.1 shows employment levels over the past 25 years in shipbuilding countries which paint a fairly bleak picture for the future of shipbuilding in Europe and North America. However, despite losses the United States still employs the most, followed by the Republic of Korea, Japan, Germany and Poland. Employment is down everywhere except in the Republic of Korea, where it has almost doubled over the period. Western nations complain, however, that the latter is only able to maintain its competitive position thanks to loans from international agencies to modernize its shipyards (which must in their opinion be viewed as an unfair subsidy in this age of globalization). China and other Asian countries such as India and Viet Nam have also recently entered the shipbuilding business, but on a small scale. Viet Nam’s Bach Dang shipyard (a joint venture with the Republic of Korea)[1] is more likely to supply its own local needs than global markets. Table 4.2 shows that Asia as a whole (Japan, Republic of Korea, China) accounted for between two-thirds and three-quarters of all ships built in 1998, depending on the size, followed by Europe with between 20 and 30 per cent. Brazil and the United States accounted for a few percentage points each.

Subcontracting and international outsourcing, as in the rest of the TEM industries, is also prevalent in the shipbuilding industry, with countries such as Poland and Romania building components such as bridges and decks and then floating them to Hamburg for final assembly. Also, since as much as 60 per cent of the components of a ship are from suppliers, the overall employment effect of the maritime industry is understated if only direct employment figures are looked at. Table 4.3 shows where new ships are being built. These figures give a good indicator of where employment will also be located in the foreseeable future. From this it is clear that more than half of all new ships ordered are being built in Asia, the vast majority of which (nearly 50 per cent of the total) will be built in Japan and the Republic of Korea, which account for almost 80 per cent of the deadweight tonnage (dwt), once again confirming the trend away from Europe. Japan’s position cannot be due to the low cost of labour, which certainly plays a role in the advance of the Republic of Korea and Taiwan, China, and perhaps in the decline of the shipbuilding industry in Europe, where wage rates are generally higher than in the United States.

Table 4.4 further shows those countries which have ordered the new ships. The top countries ordering are Japan, the countries of Western Europe and the United States, which means that they are in a position to specify the characteristics according to which the ships are built (for example, using material which can be recycled and is safe to dismantle).

4.1.2. Future developments

Ship repair, and especially ship conversion,[2] represent a niche market that permits shipyards to use their capacities in a flexible way to maintain their workforces in periods of slack demand for new vessels.

The development of megaports[3] will increase the demand for even newer megaships and involve large employment opportunities in construction of infrastructure in and around these ports. Furthermore, RR Aero Engines has been asked to develop jet engines for ships which will cut travel time across the Atlantic in half. This capability will also be strengthened by its purchase of Vickers, a leading specialist in systems which stabilize and guide vessels.[4] In connection with the popularity of SUVs (sport utility vehicles), cargo ships from Japan, which exports the vehicles to the United States, will have to be redesigned to accommodate these higher vehicles between decks.

Table 4.1. Shipbuilding workforce, 1975/98 (number of employees, % change)

4.2. Ship breaking

By any standards, the demolition of ships is a dirty and dangerous occupation. The feasibility of ship breaking is largely determined by the price of scrap metal. The recent introduction of environmental and safety laws in China – once the major breaking nation – has made this industry unprofitable in that country. There is a race to the bottom to find countries where occupational health and safety standards are not enforced.

Despite earlier attempts in resolutions[5] of the ILO Metal Trades Committee (the predecessor of the current Meeting) to draw attention to the hazards of ship breaking, ship scrapping, demolition or decommissioning, as it is also known, little has been done until recently to improve the working conditions of those involved.

Box 4.1 lists the identifiable hazards associated with ship breaking, as well as a number of existing ILO Conventions, Recommendations and codes of practice which can provide guidance. The International Occupational Safety and Health Information Centre (CIS) also maintains a database of relevant literature on the subject.

The debate culminated in 1999 with the first international conference[6] on ship breaking, which failed to reach agreement on the points for discussion.[7] Proposals aimed at producing a solution included the following:

• Improved design of vessels that would make scrapping ships not only less labour-intensive, but also environmentally friendly and profitable.
• Consideration of international duration limitations on vessel life cycles.
• The establishment of a “Global Scrapping Endowment Fund”, whereby shipbuilders would include as part of the construction costs a cash payment to the fund in the amount of the expected costs for the ships’ eventual demolition.
• A “Global Scrapping Tax Fund”, whereby taxes would be levied on every ship (according to size and weight) in operation worldwide.
• Requiring manufacturers of ships to regain control of a vessel when it is due to be demolished and to accept responsibility for the safe and environmentally sound scrapping of each ship.

In all of these and other existing or proposed guidelines (such as the United States draft guidelines for compliance with environmental, health and safety regulations during ship scrapping[8] and the Norwegian proposal before the International Maritime Organization (IMO)), [9] much of the emphasis is placed on environmental concerns and the prevention of pollution. (The Basle Convention on the export of toxic waste also goes in the same direction, but it refers to OECD countries and was not drafted with ship scrapping in mind.) Many of the proposals also focus on the IMO as the competent agency, although it is unclear what jurisdiction they would have over working conditions in and around vessels once they have been beached.

There is a broad spectrum of problems facing workers involved in ship breaking (most of whom are migrants), ranging from poor conditions of employment and work[10] to a total absence of any collective bargaining or industrial relations procedures. The ILO’s previous concerns (consistent with earlier resolutions of the Metal Trades Committee) have focused more on the occupational safety and health (OSH) issues surrounding the demolition of ships and the prevention of accidents and injuries. Even when environmental disasters occur affecting a wider population, the workers scrapping the ships are the first to be exposed. A status report on conditions at Alang, India, by the Directorate General Factory Advice Service and Labour Institutes (DGFASLI) provides useful insights on how factory inspection can be strengthened to improve basic safety training for accident prevention. Over 300 ships a year are now being processed at Alang, which has demolished over 2,000 ships since its inception in the early 1980s. [11] Figures on ship breaking in India and other countries are given in table 4.5.

Given that some ships must be scrapped after 20 to 25 years for safety reasons, the supply side for these vessels is easy to calculate. In 1998 – a bumper year – a total of 673 ships or 27,254,525 dwt were scrapped, and there are indications that 1999 will be about the same.

There can be no doubt that scrapping a ship that has been run up onto a beach qualifies as unsafe and dangerous work. On the other hand, given the fact that this work is carried out in low-income countries, one would not want to deprive these workers (many of whom are migrants) of what little income they can earn (even if it appears meagre by Western standards). To the 25,000 or so who work at Chittagong in Bangladesh and the 40,000 reportedly in Alang in India must be added all those indirectly affected by or benefiting from the industry, which could multiply these figures by a factor of five or ten. Nevertheless, minimum levels of protection must be afforded to these workers.

Obviously, the only safe way to demolish a ship would be in a shipyard, as was previously done in the industrialized countries. However, the last ship was scrapped in the United Kingdom over a quarter of a century ago. Usable facilities still exist in Spain and Turkey, and Australia has undertaken a feasibility study with a view to establishing a facility. The EU is also carrying out a feasibility study. China, which until 1993 undertook half of the scrapping in the world, dropped out of the market when stricter environmental laws were introduced. Although a ship can be scrapped in two weeks in a yard as opposed to over six months on a beach, it is unlikely that industrialized countries will move back into the business, as the breaking up of ships also presupposes a market for scrap steel near the shipyard.

Table 4.2. Ship completions, 1998 (number of ships and market share)

4.3. Locomotives

The pressures of globalization and mergers and acquisitions can also be felt in this segment of the transport equipment manufacturing industry, where “the four leading manufacturers are a patchwork of national suppliers stitched together into multinationals over years”.[12] Adtranz – formed out of a merger of ABB and AEG and now owned by DaimlerChrysler – is the world’s largest producer of locomotives, followed by GEC-Alstom (United Kingdom, France), Bombardier (Canada), Siemens (Germany), General Motors (United States) and Fiat (Ferroviaria), Ansaldo and Breda (Italy). Though characterized by inertia in the past, when it enjoyed comfortable relationships with customers that were state-owned monopolies, the industry is having to respond to a new clientele as a wave of privatization and cut-throat competition begins to sweep the transport industry.[13]

One of the biggest emerging markets is for high-speed trains that whisk people from city centre to city centre. The first of these was the TGV in France, followed by Germany’s InterCity. The major players are in stiff competition to provide services to Spain, North America and Asia (for example, Taiwan, China). An alternative to high-speed trains is the passive-tilt, articulated train set, such as that developed by Talgo of Spain, that allows higher speeds on conventional tracks.

In addition to subways, which have existed for years, there is increasing interest in vehicles which run on electromagnetic fields and driverless trains: “The attraction of a driverless system is its flexibility and reliability. Extra trains can be introduced into service at a few minutes’ notice to meet surges in demand, and driver absenteeism is not a problem.”[14]

The recent acquisition of Matra (the transportation arm of the French defence and aerospace group) by Siemens will give Siemens a foothold on the French market, while providing Matra (previously confined mainly to France) with Siemens’ worldwide marketing and sales network. It will also put the new group in a position to challenge Alstom.

The far-reaching effects of globalization can be seen in the following examples of four producers of railway equipment (all involved in other areas of TEM manufacturing) which have embarked on a programme of international expansion through mergers and acquisitions similar to those observed in the other subsectors of the industry.

4.3.1. Bombardier

The railroad equipment manufacturers in the former German Democratic Republic were concentrated in 1958 into the VVB Schienenfahrzeuge (nationalized state industry for rail vehicles); it comprised 20 sites with some 20,000 employees. By 1978, it had been reorganized into a socialist combine which mainly focused on the market in the communist States of Eastern Europe. After the fall of the Berlin Wall, the Deutsche Waggonbau AG (DWA) was formed in 1990 with 20 plants, in a first attempt to privatize the state-owned company. In 1996 the DWA was reduced to seven sites with some 4,000 employees. In the same year the DWA acquired the majority of the shares of the Czech company Vagonka Ceská Lipá. In 1998, the Canadian company Bombardier acquired DWA in a move to consolidate its activities in continental Europe. In 1995, Bombardier had already acquired Waggonfabrik Talbot, a railroad equipment manufacturer concentrating on passenger cars in the former East Germany.

Bombardier is now one of the global transportation companies able to build aircraft and provide systems solutions in the railroad equipment sector. Bombardier has 41,000 employees worldwide and last year generated Can.$8 billion in sales in sectors such as aerospace, recreational products and transportation. The railroad sector has manufacturing sites in Germany, Canada, the United States, Austria, the Czech Republic, Switzerland, Belgium, Mexico, France and the United Kingdom. It has also entered into an agreement with the United States Federal Rail Administration (FRA) to develop a prototype high-speed non-electric locomotive.

4.3.2. Siemens

Siemens Verkehrstechnik (Siemens Transportation Systems) produces railroad equipment, signalling systems and services. Founded during the reorganization in 1989, since then it has acquired several smaller German railroad equipment manufacturers; including DUEWAG AG in Düsseldorf and Uerdingen, Krauss-Maffei, MaK in Kiel and Moers (before selling it to the Vossloh AG) and the former factory of Krupp in Essen.

Siemens Verkehrstechnik is a complete provider of high-speed trains and all-purpose locomotives, diesel and electric multiple units, metros, light rail systems and operational control systems, as well as complete signalling systems, power supplies, and solutions for cashless fare management. The world market leader in turnkey rail systems, Siemens Verkehrstechnik tries to maintain its leading role in the industry with innovative components and products. New developments include radio-based automatic train control systems, the use of lightweight fibreglass reinforced plastics for mass-transit trains, new information systems giving passengers a simpler, more convenient overview of rail services, and train-set families focusing on passenger comfort, as well as low life-cycle costs.

Siemens increased its share in the transport equipment arm of the French Matra group to 95 per cent in an attempt to gain a foothold in the more protected French market, as well as acquiring the technology of Matra’s driverless trains. Matra saw this as an opportunity to obtain a more substantial sales network for an international breakthrough.

In Siemens, it is clear that the trend towards higher qualifications, more valuable products and modern production and administration technologies is impacting on the employee structure. Between 1970 and 1998 the share of engineers and foremen grew from 22 to 45 per cent, that of skilled workers in industrial activities grew from 36 to 49 per cent and that of skilled workers in commercial activities from 15 to 20 per cent. In contrast, the share of blue-collar workers fell from 63 to 35 per cent, that of semi-skilled blue-collar workers from 40 to 18 per cent and the number of blue-collar workers per 100 white-collar workers from 170 to 50.

4.3.3. Adtranz

Adtranz is the railroad equipment manufacturer belonging to the DaimlerChrysler group and the result of a merger of AEG-Daimler Benz with ABB Henschel. These groups were themselves created through the mergers of eight manufacturers (Thyssen-Henschel in Kassel, Waggon Union in Berlin, Siegener Eisenbahn Bedarf AG, BBC in Mannheim, LEW in East Berlin, MAN in Nuremberg, MBB in Donauwörth and Kiepe in Düsseldorf). Altogether Adtranz can trace its origins back to 46 companies from 13 different countries. Adtranz restructured and shed 1,100 jobs in the last two years, and plans to cut another 1,400 jobs in Germany in the next years, bringing its workforce in Germany down to 6,000. It also plans to restructure most of its Scandinavian production facilities. Adtranz is represented in 60 countries and employs 23,800 employees worldwide (1998).

The Adtranz portfolio includes people movers, light rail vehicles and metro trains; regional, intercity and high-speed trains; electric and diesel locomotives; and major involvement in freight, signalling, fixed installations, customer support and total rail systems.

4.3.4. General Motors

Not to be outdone, the General Motors Locomotive Group (GMLC) increased productive capacity by 50 per cent and employment by 15 per cent through integrating associate manufacturing partners in four countries.

Table 4.3. New ships ordered, by type and country where they are being built

4.4. Aircraft manufacture

4.4.1. The major companies

There are scarcely half a dozen major aircraft manufacturers left in the world today, only two of which – Boeing and the European Airbus consortium (of which DaimlerChrysler owns 37 per cent through Dasa)[15] – make large passenger planes for the civilian market. Figure 4.1 details the steady reduction of producers of military aircraft from 19 in the United Kingdom and 13 in the United States (just after the Second World War) to five major ones today, one of which – Boeing – also makes civilian aircraft (figure 4.2).[16] There are three main manufacturers of smaller passenger planes: Bombardier (Canada), Embraer (Brazil) and Fairchild (United States). On the aircraft engine side there are only three large producers: BMW Rolls-Royce GmbH, General Electric and Pratt & Whitney, none of which makes a single component.[17] All work is contracted out, with the companies themselves only assembling and marketing the product.

International competition is fierce. In the past, much of the design and avionics which went into the production of civilian aircraft benefited from initial R&D spending and testing by the military. With the end of the cold war these benefits are less likely to be forthcoming today and companies must either pay for their research themselves or pass the costs on to their customers. In the past, most countries developed their own defence industries for reasons of national security, which facilitated the growth of national aircraft manufacturing industries.

4.4.2. Industry determinants

International airlines and armed forces, which are the primary customers of the aircraft industry, are sophisticated and demanding, with rigorous safety, quality and performance requirements. Moreover, airlines are relatively few in number. In 1993, for example, of the approximately 640 worldwide airlines, the 25 largest accounted for over 60 per cent of all air passenger traffic. Because they operate over 5,000 aircraft (almost 40 per cent of the world airliner fleet) these few airlines dominate the demand side of the market for commercial jet transport.

Along with a handful of key freight forwarders, these major airlines also control the international air freight industry. Aircraft orders from individual customers are infrequent, and the relatively large volumes of a single model that are involved in many orders typically allow these purchasers to extract very favourable terms. Major air carriers tend to exert buyer power through demands for price and financing concessions, whereas military buyers focus more on superior performance, with cost as a secondary consideration. There are also vast differences in the corporate culture required to successfully serve the conflicting priorities of commercial and military markets. This, together with Department of Defense regulations in the United States, has led aircraft manufacturers such as Boeing, Bell Textron and McDonnell Douglas to maintain almost completely separate business organizations for their military and civil aircraft operations.

Policy and regulatory decisions by governments can also have a dramatic impact on the demand for civil transport aircraft. The United States Government and its Federal Aviation Administration (FAA) are particularly influential in this regard since they oversee the largest air transport market in the world.[18] Noise abatement regulations by the United States and European governments may prove to be a major driving force for orders for new aircraft and engines in the years to come. Similarly, the deregulation of European airlines, already begun in the early 1990s, holds the promise of expanded market prospects for smaller regional jets. Trade in larger commercial jetliners has been virtually tariff-free since 1979 under the General Agreement on Tariffs and Trade (GATT). Nonetheless, trade and production are heavily influenced by non-tariff barriers, particularly subsidies and government procurement practices. Aircraft markets are truly global, with almost every manufacturer heavily reliant on export sales. The Canadian industry, for example, with a relatively small domestic market, exports more than 70 per cent of its production. The United States market accounts for more than half of Canadian exports.

Large corporations (which are key markets for business aircraft and civilian helicopters) and smaller commuter airlines tend to purchase in lower quantities (sometimes only one or two items at a time). Nevertheless, the prospect of profitable follow-on sales (both spare parts and additional aircraft) and the intense competition in these product segments tend to tip the balance in favour of the buyer.

Aircraft manufacturers rely heavily on subsidies. Because of subsidies which Bombardier and Embraer each allegedly received from their respective Governments, Canada and Brazil have both been embroiled in complaints before the WTO. Government-backed loans to Fairchild, the other manufacturer of small aircraft, which owns Dornier in Munich, are subject to approval by the EU Commission.

4.4.3. Nature of the industry

Aircraft production is extremely complex, involving the coordination of hundreds, if not thousands, of suppliers and the manufacture, assembly and integration of hundreds of thousands of individual parts and components. It remains a relatively low-volume business, with output normally below one unit per week, and few opportunities for large-scale automation and assembly. Testing and integration activities are extremely labour-intensive and individual work assignments are complex, often involving dozens of steps that must be completed with unerring accuracy and precision. With so much complexity and room for error, and with production runs that extend over many years, there are ample opportunities to improve quality and reduce production times and per-unit variable costs, thus yielding “learning economies”. While much of this saving is attainable through the reduction of direct labour hours, it can also come from less rework and materials wastage and lowered managerial and overhead expenditures. Capturing these learning economies can be critical to the profitability of airframe manufacturers.

The Airbus partners – Aerospatiale, Dasa, British Aerospace and Casa – make components in their own factories which they fly to Toulouse for final assembly, much like the modular assembly in the automotive industry, but between countries. Unlike the United States motor vehicle industry, Boeing has not faced pressure to modernize from “lean”, well-organized competitors. Airbus’ manufacturing has long been more capital-intensive than Boeing’s. With only two major aircraft manufacturers, market forces dictate roughly a 50:50 sharing of the world markets, forming what could be termed a duopoly.

4.4.4. Composition of the workforce

In the top aircraft industry groupings, fabricating and machinery workers essentially form the industry’s production workforce, make up approximately half of the industry’s employment, and fall into four specific occupations: aircraft fabricating and assembling; machinists; aircraft mechanics and repairers; and fabrication inspecting and others. These workers produce, assemble and repair metal aircraft components and mechanical systems to tight specifications and tolerances. Generally, these skilled jobs require post-secondary education in addition to apprenticeship or formal on-the-job training. Approximately 30 per cent of aircraft industry employees work in the natural sciences and engineering and managerial and administrative occupations. The science and engineering workforce is dominated by aerospace engineers, engineering technologists, systems analysts and mechanical engineers.

Managerial and administrative employment consists mainly of production managers, general and senior managers, financial officers and purchasing officers. For the most part these occupations require post-secondary education, more often than not a college diploma or university degree. Compared to the overall economy and the manufacturing workforce, the workforce of this subsector is better educated. Workers with less than a high school education comprise only a small proportion of the aircraft industry workforce. Workers with post-secondary education, college diplomas, university degrees or vocational certificates represent a much greater proportion of the workforce in the aircraft industry than in other manufacturing sectors. The proportion of aircraft industry workers with a university degree is only slightly less than that of the labour force in the entire economy (including all professions).

4.4.5. Engines

Building aircraft engines is a risky business; development costs for a new engine programme can run to US$1.5 billion (for firms whose annual revenues are in the $6 billion range) and product cycles span not years, but decades. The United States aircraft engine and engine parts industry employed 75,100 people in 1996, with a total payroll of $3.6 billion. Aircraft engine and engine parts employment accounted for about one-sixth of the 457,800 people employed by the aerospace industry as a whole in the United States. Even though the number of firms in this subsector is large, the bulk of the industry’s employment is concentrated in large establishments. Out of the 442 establishments recorded by the Census of Manufacturers, 301 or 68 per cent were small, employing fewer than 100 employees. Although large in number, these establishments accounted for only 7 per cent of industry employment and are essentially smaller parts and components manufacturers. These firms supply the three integrated firms that design, manufacture and sell complete jet engines for large commercial and military aircraft: Pratt & Whitney, owned by United Technologies Corporation (UTC), and General Electric (GE) Aircraft Engines, both based in the United States, and BMW Rolls-Royce GmbH in Germany.

Although GE is the market leader, winning half of all orders for large engines worldwide in 1995, Pratt’s revenues are greater, thanks to sales of spare parts in the engine business. In the aircraft industry the product life cycle is 20 to 30 years. The demand for engines follows a cyclical pattern, depending upon the financial health of commercial airlines as well as on government expenditures. Sometimes commercial cycles and defence cycles run counter to each other, providing stability in orders. Equally often, as in the post-war period, these cycles have converged and when downturns occurred, the results have been harsh for the industry, resulting in cancellation of orders, shrinking revenues and mass lay-offs.

In the past, the gains from initial orders were particularly great, because of the prevalence of “single source” contracts, whereby only one type of engine was ordered for a given airplane. This gave pricing power to engine manufacturers, generating stability in revenues and allowing development costs to be spread over a large base. Now, most airlines have a choice of engines when they make a purchase. This way, there is competition not only when a new aircraft programme is launched but also every time an airline buys a plane, although this trend is gradually reversing. Similarly to the automobile companies now encouraging their suppliers to share part of the risk in developing new models, GE has reportedly agreed to share part of the development of the Boeing 777X in return for an exclusive contract to supply it with new engines, which might be the start of a new trend as manufacturers of planes and engines face stiffer and stiffer global competition.[19] BMW Rolls-Royce GmbH already has an exclusive contract to supply its BR715 engine for the Boeing 717-200.[20]

4.4.6. Spare parts

The cost of spare parts and maintenance may amount to two or three times the original cost of the engine in one life cycle. This allows for a long-term flow of revenues for the manufacturer even after the initial sale is over. In the past, sales of spares were utilized to finance new projects. In view of the high risk involved in such capital-intensive projects, the three major companies, along with their European and Japanese counterparts, have developed a growing interdependency for all stages of production over the last two decades. This risk sharing could also be an instrument for foreign market penetration.

The aircraft industry also provides repair and overhaul services in addition to spare parts for the world aircraft fleet. While data on the value of these markets are not readily available, it is certain that, as the world fleet continues to expand rapidly, repair and overhaul will be a growth market. While the market for spare or replacement parts is to some extent captive to the original equipment suppliers (and is thus quite lucrative for them), aircraft and engine repair and overhaul services represent a truly global market served by competitors worldwide.

Table 4.4. Main countries ordering new ships, by type

4.5. Motorcycles, mopeds and bicycles

With some 1 million units produced a year, motorcycle production is concentrated in Harley Davidson, BMW, Honda, Yamaha and Suzuki. Italy is the largest producer within the EU and Japan is the largest exporter to Europe. Yet by global standards, even the largest European firms are only moderate-sized compared to their Japanese competitors, and local Japanese-controlled companies in the EU account for 15 per cent of European production. One-third of Spanish production is accounted for by three Japanese companies, while France’s second biggest manufacturer, MBK, is controlled by Yamaha and Honda has a 25 per cent share in Peugeot MTC.

Bicycle production has not been studied much, but China and India must, by far, be the largest producers. In the EU, Italy had overtaken Germany by the mid-1990s (combined output of over 9.2 million units, accounting for two-thirds of EU production) followed by France and the United Kingdom. Imports came mainly from Taiwan, China, and other Asian countries, often as a result of European relocations. Shimano of Japan dominates the components market in Europe. The major European producers include Kynast and Derby Cycle Werke (Germany), Bianchi and Rizzato (Italy), Peugeot and MBK (France), Raleigh and Dawes (United Kingdom), BH and Orbea (Spain) and Gazelle and Batavus (Netherlands). Here again, joint ventures and strategic alliances are being formed.

Not surprisingly in this age of globalization, a number of bidders (ranging from General Electric to Benetton, the Texas Pacific Group and several banks) lined up when Italy’s Vespa maker Piaggio was up for sale.[21] As in other branches of the transport equipment manufacturing sector, brand name recognition is important.

Table 4.5 Ship scrapping by country, 1996-98 (million deadweight tonnes – dwt)

[1] “Vietnam begins to build”, in Fairplay, 21 Jan. 1999, p. 47.

[2] See, for example “Mighty Servant I jumboisation increases her capacity 125%”, in Lloyd’s List, 15 Dec. 1998.

[3] “Giant freighters troll for American harbor: New ‘megaships’ too big for ports to handle”, in International Herald Tribune, 23 Nov. 1998.

[4] “Rolls-Royce agrees to acquire Vickers: Deal will create giant in marine propulsion”, in Wall Street Journal, 21 Sep. 1999, p. 3.

[5] Resolutions Nos. 100 and 111, respectively, of the 12th (1988) and 13th (1994) Sessions of the Metal Trades Committee.

[6] Raising awareness, considering action, Background paper, First Global Ship Scrapping Summit, Amsterdam, 23 June 1999.

[7] Alan Dickey: “Scrapping accord dumped at summit”, in Lloyd’s List, 24 June 1999.

[8] United States Environmental Protection Agency, Occupational Safety and Health Administration (EPA OSHA): Self-audit and inspection guide for facilities conducting ship scrapping (Dec. 1998).

[9] IMO, Marine Environment Protection Committee, 43rd Session, Future work programme: Scrapping of ships, submitted by Norway (Feb. 1999).

[10] In the words of the ILO’s Senior Specialist on OSH (South Asia Multidisciplinary Advisory Team (SAAT), New Delhi) who visited Mumbai port (in India): “It is impossible to make an assessment ... In fact, there are no ‘working conditions’ at all ... without any safety measures ...”.

[11] Ministry of Labour, Government of India: Status report on occupational safety, health and welfare of workers in shipbreaking industry at Alang (Mumbai, 1998).

[12] Haig Simonian: “Adtranz challenged to get back on track by 2001”, in Financial Times, 15 Nov. 1999, p. 28.

[13] See ILO: Symposium on the Social and Labour Consequences of Technological Developments, Deregulation and Privatization of Transport, background document, and Labour relations in a changing industry; The impact of the privatization of public sector enterprises on labour relations and conditions of work and employment in the air and land (rail) transport sector; Transport services in the twenty-first century: Seamless market or choiceless churning?; and Regulation, deregulation or re-regulation of transport?, discussion papers for the Symposium, Geneva, 1999.

[14] Charles Batchelor: “Siemens lines up expansion into French railway business”, in Financial Times, 14 May 1999, p. 25.

[15] DaimlerChrysler Aerospace AG (Dasa), which just merged with the French Matra to form the European Aeronautic, Defence and Space Company (EADS).

[16] Cyrus Freidheim: The trillion dollar enterprise: How the alliance revolution will transform global business (Reading, Mass., Perseus Books, 1998), pp. 78-79.

[17] Beth Almeida: Are good jobs flying away? US aircraft engine manufacturing and sustainable prosperity, (mimeographed document, 1999).

[18] Major market opportunities were created for turboprop/commuter transport by the deregulation of United States airlines in 1979, which led to the start-up of numerous regional and commuter airlines.

[19] “How GE locked up that Boeing order”, in Business Week, 9 Aug. 1999, p. 61.

[20] BMW Annual report 1998, p. 92.

[21] Paul Betts: “Piaggio race nears finish line”, in Financial Times, 25 Aug. 1999, p. 16.

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