Turkey: A dim outlook on the horizon for shipyards

A very tough year awaits the maritime construction industry. Many shipyard owners say they have received phone calls to cancel orders. Employment provided by the industry has contracted significantly. The government has also shut out the industry, according to some. Complaining about the high cost of boutique production, shipyards request incentives to help them focus on mass production
Some players in the maritime construction industry in Turkey may have to fight for their lives in 2010.
Shipyards spent most of 2009 worrying about canceled orders. This trend is expected to continue well into 2010. Most of 2009 was spent on constructing back orders, and the industry received no new orders during this year. Therefore, 2010 is expected to be the year of “survival” for the maritime construction industry.
“The crisis in the sea is expected to prolong,” said Birol Üner, board member of the Turkish Shipbuilders’ Association, or GİSBİR. “This year we completed jobs delayed from a year earlier. 2010 will be a dark year,” he said during a meeting held in Istanbul over the weekend.
Foreign ship owners find boutique production costly, he said, adding that Turkey has to focus on mass production.
Distress over the industry has increased significantly as it has failed to attain support from the government, said Üner. “As a private sector, we do all that we can, but we receive no support from the government. We have never before been so distant from the government.
“Are we supposed to deal with the crisis, create employment or deal with the government?” he asked. “The government called off incentives it was providing us. Employment declined to 8,000 from 35,000 in the industry. Structural reform is a must,” said Üner. “We have to jump in the same ship as countries in the Far East, where ship construction industries are focused on mass production.”
The crisis has significant psychological effects, according to Salih Zeki Çakır, chairman of the board of Sefine Tersanesi, a shipyard in Yalova. “Businesspeople got cold feet for this industry. We have not received any new orders. The phone calls we get are to cancel orders,” he said. “Four out of six orders to the Sefine shipyard have been canceled.”
Trust in management of the economy has declined significantly, according to Doğan Cansızlar, former chairman of the Capital Markets Board. "Economy management is the management of expectations,” he said.
“If you cause an increase in uncertainties related to the future, you are unable to manage correctly. The government has been engaged in talks with the International Monetary Fund for the past year or so. I have never seen such a long period of talks,” he said. “We have become the fastest contracting country of the world. We turned a blind eye to the global crisis and declared a 2008 end-of-the-year budget growth of 4 percent. The perception was all wrong.”
Even layoffs could not prevent fatal accidents*
With the Dec. 6 death of contract worker Ercan Sancar, the number of workplace fatalities in Tuzla shipyards rose to 10 this year, and the total number rose to 14, despite dramatic downsizing in the sector.
The total number of deaths this year has surpassed the total number of fatalities in 2007, 2006 and 2005, when the sector employed more than 40,000 workers, as opposed to roughly 10,000 workers today.
According to data from the Turkish Shipbuilders’ Association, or GİSBİR, the entire shipbuilding sector employed 25,923 workers as of November. The figure stood at 33,490 in August, but the real number of workers was predicted to be way above these figures.
According to Murat Bayrak, the GİSBİR chief, around 8,000 workers were employed at Tuzla shipyards in December, while the number of workers for the whole sector retreated to roughly 10,000.
Despite these numbers, 14 shipyard workers died in workplace accidents this year, 10 of them in Tuzla, two in Kocaeli and the others in Zonguldak and Aliağa. All of them were contract workers.
According to data from the Limter-İş labor union, 12 workers died in 2007, while 10 died in 2006 and 13 died in 2005. Only last year surpassed all previous numbers of deaths, with 29 workplace fatalities, 19 of them in Tuzla.
“In the past, the deaths were justified by overproduction, lack of space or lack of training,” said Kamber Saygılı, the Limter-İş secretary-general. “With the crisis, all of these justifications have disappeared. The number of workers is down. They were saying 17,000 workers had received training certificates. If the number of workers is down to 10,000, this means there are no untrained workers. But the deaths are rising.”
Saygılı said the real reason for the escalation was the abolishment of safety codes due to the crisis.