Author: Rong Ping Source: official account: Rong Ping (ID: rongping898) has been authorized to reprint
We have opened another gap in the high-end manufacturing industry in the West. Just yesterday, the first domestically produced large cruise ship, “Aida Modu”, built by China Shipbuilding Corporation Waigaoqiao Shipbuilding Co., Ltd., successfully undocked in Shanghai and docked at the pier at the mouth of the Yangtze River.
Taking this as a sign, the domestic large-scale cruise ship project has fully entered the stage of dock mooring debugging, and is expected to be completed and delivered by the end of this year. And it was only 10 months since the State Council released the “Implementation Opinions on Accelerating the Development of Cruise and Yacht Equipment and Industry” in August last year.
Damn it! The pearl on the crown of human manufacturing has been touched by us again
Independence from globalization
The luxury cruise manufacturing industry is an absolute highland in Europe, and even the established power of the United States and the rising East Asian countries are completely incomparable! Before China, there were only four companies that could build large luxury cruise ships, including Italy’s Fincantini Shipyard, France’s Atlantic Shipyard, Germany’s Mayer Shipyard, and Finland’s Aker Group.
These four enterprises have a market share of up to 95%, which is basically a monopoly situation. Among them, Fincantini Shipyard is a well deserved industry leader, accounting for more than half. At the same time, it is also the fourth largest marine defense supplier in Europe. Since 2002, Fincantini has delivered more than 50 naval ships.
In terms of organizational logic, there is a clear difference between the luxury cruise manufacturing industry and other high-end industries. Taking commercial airliners as an example, due to the impact of global division of labor, Airbus’ localization rate is only 50%, and many of the remaining components are built in more than 30 non European countries, such as China providing Airbus with electronic doors, wings, emergency doors, rear boarding doors, etc.
However, the luxury cruise manufacturing industry is highly concentrated within Europe from final assembly to supply chain, with a localization rate even exceeding 85%.
What is 85% an adverse concept?
The supply chain of large LNG liquefied natural gas transport ships has 1 million components, high-speed rail has 2 million components, cars have 20000 components, large passenger planes have 5 million components, and 150000 ton luxury cruise ships have 25 million components, which is 250 times that of regular cars, 10 times that of high-speed rail, and 5 times that of airplanes. If various pipelines inside the cruise ship are laid flat, their length is 4200km, which is equivalent to the distance from Beijing to Kashgar, Xinjiang.
Calculating 25 million components at an 85% ratio means that Europe will have to bear the manufacturing of at least 21 million components, which is quite terrifying in today’s globalized world.
To this end, Europe has built a huge industrial chain at home, including 300 shipyards, 22000 maritime equipment companies, and about 1 million technical staff. In a sense, the luxury cruise manufacturing industry is completely independent of the New World outside globalization, which can be described as a whole
.
As a result, the shipbuilding industry has become the absolute mainstay of European industry, with an industrial share of nearly 40% involved in its industrial chain.
On the other hand, thanks to the fact that the luxury cruise manufacturing industry has not been deeply integrated into the international division of labor system, the barriers to this industry are very strong. It is difficult for China, Japan, and South Korea to enter the market through traditional industrial upgrading models: first enter the supply chain, then gradually accumulate experience in the form of matching manufacturers, wait until the time is ripe, and finally attack the terminal assembly.
People always say that breaking through from 0 to 1 is very difficult, but how can we break through without even 0?
The luxury cruise manufacturing industry is like this, and non European countries cannot even touch the scraps.
Of course, it makes sense for Europe to dominate the luxury cruise manufacturing industry!
Jump out of the Three Realms
Aircraft carriers, LNG liquefied natural gas carriers, and luxury cruise ships are collectively known as the three jewels in the crown of the shipbuilding industry. The manufacturing of luxury cruise ships is even more difficult than the previous two, as aircraft carriers and LNG transport ships are at least still within the “ship” industry. Luxury cruise ships are a combination of shipbuilding and construction industries, belonging to the product of cross-border integration.
In other words, the difficulty of building a luxury cruise ship lies not in the ship itself, but in the things on board.
The internal structure of most ships only has some relatively simple cabins, as long as they can meet the daily needs of seafarers, such as storage rooms, rest rooms, and cargo holds. But the essence of a luxury cruise ship is a small maritime city that can be moved, with thousands of cabins and varying sizes. The larger ones include opera houses, cinemas, and restaurants; The smaller ones include guest rooms, KTV, chess and card rooms, and elevators. These all need to be designed in a narrow space to achieve a reasonable layout, after all, luxury cruise ships belong to the high-end service industry, and comfort and safety are equally important.
Since it is a mobile maritime city, various pipelines and cables also need to be inserted into it. How can circuits, networks, and hydraulic systems be laid to every deck and corner? If a fire or other safety accident occurs, how can the fire protection system and escape routes be laid out in an orderly manner throughout the entire ship without affecting the tourist experience. Therefore, for a 100000 ton luxury cruise ship, there are over 60000 design drawings alone, and the workload is no less than designing a small city.
This is just the first step!
The second challenge within luxury cruise ships lies in the sense of art. The user positioning of luxury cruise ships is at least that of the middle class and above, who pursue both material and spiritual satisfaction. This satisfaction cannot be achieved solely through service, and needs to be filled by the sense of art in the cabin. We ordinary people feel that cruise ships produced in Europe are neither good nor bad, but their users like to eat that set, which is something we have long lacked.
There is also the choice of interior decoration. The working environment of luxury cruise ships is in the ocean, and their requirements for onboard furniture not only need to be moisture-proof and corrosion-resistant, but also have characteristics such as fire resistance, sturdiness, compactness, and collision resistance.
Finally, safety is the key. Warships can increase their resistance to sinking and damage by adding watertight fire compartments or even sacrificing comfort. However, cruise ship passengers strive for comfort and leisure, which is difficult to achieve. Moreover, in the event of any accident, the waiting time for rescue often starts for several hours. The warships are filled with soldiers with excellent combat qualities, while the cruise ships are filled with men, women, and children of all ages. The ability to self rescue cannot be whispered in the same day, which requires higher standards for cruise ships.
In short, it is not wrong to say that the construction of luxury cruise ships is more difficult than aircraft carriers, but the difficulty is not in the shipbuilding industry itself. In terms of architectural design, artistic aesthetics, spatial management level, cost control, and construction progress, these are two completely different tracks. In history, Japan and South Korea have also launched attacks on the track of luxury cruise ships, but without exception, they all ended in failure.
From Japan and South Korea to China
In 2002, Mitsubishi Heavy Industries, which is also the leader in the global shipbuilding industry, began to launch an attack on the luxury cruise manufacturing industry by undertaking the construction project of the Carnival Diamond Princess. At that time, Mitsubishi Heavy Industries had as much confidence as possible. Isn’t it just a slightly wealthy ship? Why haven’t you seen big winds and waves before? Come at your fingertips! However, during the construction process, due to inadequate welding control and neglect of the fire speed of luxury cruise ships and ordinary civilian ships, the fire quickly spread to the entire ship before the fire department could react, causing 70% of the hull to be burned and resulting in losses of up to 250 million US dollars. After a one-year delay in completing the handover of the project, Mitsubishi Heavy Industries immediately announced that it would no longer undertake the construction of luxury cruise ships!
Eight years after the Diamond Princess, the board of directors of Mitsubishi Heavy Industries was reorganized, and the new owners who did not believe in evil wanted to squeeze into the luxury cruise manufacturing industry and share a piece of cake. At this time, AIDA Cruises also wanted to expand its business. In order to win this order, the Board of Directors bypassed the private commitment of the Shipping Department to deliver the first cruise ship in 23 months. If it could not be delivered on time, it would be willing to pay huge losses in days. This can exasperate the shipping department. Even if it is better than the Italian Fincantini Shipyard, the cycle of building large luxury cruise ships is about 3-5 years.
No way, who made the boss sign all the contracts? So, the shipping department can only force themselves to rush to the deadline.
But this time, the entire system has had a major problem!
First of all, in terms of design, the original design drawings were classified according to different systems and submitted to the shipowner for review in different links. However, in order to catch up with the construction period, Mitsubishi Heavy Industries left nearly 100000 drawings to AIDA Cruises for review at one time, which delayed the review cycle.
Secondly, in terms of construction, as the interior suppliers of luxury cruise ships are all concentrated in Europe, Mitsubishi has adopted local suppliers on a large scale to save costs. They plan to use a simple Japanese style for decoration, directly infuriating Aida. Their customer base is mostly Europe and Americans, and their routes either go through the Caribbean or the Mediterranean. Your Japanese style is neither suitable for the scenery nor popular with the user group, it is simply neither fish nor fish.
The customer is not satisfied, and Mitsubishi will naturally have to dismantle and rework. The construction period will be extended and compensation for breach of contract fees will be paid. They will also have to pay a high salary to hire a European company for supporting services. As a result, the cost of two cruise ships soared from $800 million in the contract to $2.3 billion, resulting in a blood loss of 1.6 billion for Mitsubishi. From then on, Mitsubishi completely withdrew from the track of large-scale luxury cruise ship manufacturing! The situation in South Korea is similar, thanks to my grandmother not knowing each other anymore.
Japan and South Korea are the top three shipbuilding powers in the world, and their successive downfalls have cast a shadow over the breakthrough of luxury cruise ships in Asia. With the example of Japan and South Korea, the manufacturing of China’s first luxury cruise ship is clearly much more cautious.
In November 2018, China Shipbuilding Group signed a contract with Carnival of the United States and Fincantini of Italy to build the first domestic large cruise ship, Aida Mordor, by Shanghai Waigaoqiao Shipyard, a subsidiary of China Shipbuilding Group, with Fincantini providing technical support for construction and supporting manufacturers in Europe.
Frankly, the localization rate of the whole ship is not high. The design drawings and management documents of the Aida Mordor cruise ship are mainly provided by Italian Fincantini, with a total of more than 150000 pages and a weight of 2 tons; 25 million components come from 4000 suppliers, mainly from European shipbuilding industry supporting manufacturers, with domestic components accounting for about 10%, which is truly incomparable to the C919.
But it can also be understood that before the C919, China’s commercial airliners already had the heritage of the Xinzhou 60 and ARJ21 regional airliners, and many things could be moved in with a slight upgrade. Large luxury cruise ships are not enough, after all, the industry chain is too closed, without European technology and supporting facilities, China is likely to repeat the mistakes of Japan and South Korea.
As the saying goes, without accumulating small steps, one cannot reach a thousand miles, without accumulating small streams, one cannot form rivers and seas. Learning from Europe is not a shame. What’s important is that we have successfully entered the lucrative luxury cruise manufacturing industry through the Ida Modu cruise ship. It’s only a matter of time before we can replicate the success of the C919.
Leading Asia to forge a bloodline
In recent years, it has been said on the internet that East Asians have been too tired, completely in a hellish mode. Have you ever thought about why?
The answer is simple: the industry track is too narrow!
Broadly speaking, East Asia includes China, Japan, South Korea and Southeast Asia. Up, China, Japan and South Korea, including Taiwan Province, are crazy about rolling the electronics industry; Downward, China, Vietnam, and Malaysia have entered the crazy textile industry, with over 2 billion people crowded into these low value-added tracks. If they want to avoid being eliminated, they must rely on piling up workload to reduce production costs, and the sense of happiness will naturally be consumed.
On the contrary, the scenery in Europe and America is unique, with over 300 days of vacation a year and over 100 days of work off at 4 or 5 pm. There is even less so-called overtime culture, which all stems from their monopoly on high-end manufacturing.
Why should China go all out to launch an attack on industries such as large airplanes and luxury cruise ships, with the aim of expanding Asia’s industrial track and leading the Asian people to break through the high industrial barriers built in the West? Once we succeed, other Asian countries that provide us with accessories can also get a valuable piece of cake from it.
Taking luxury cruise ships as an example, with 25 million components and the derivative impact of consumer entertainment industries such as hotels and KTV, the entire industry chain will drive the country’s economic development at a staggering ratio of 1:14. According to predictions, by 2035, the contribution of cruise ships to China’s overall economy is expected to reach nearly 550 billion yuan.
So, the breakthrough of China’s high-end industry is not only the survival breakthrough of the Chinese nation, but also the survival breakthrough of 2 billion East Asian yellow people.
I would also advise Japan and South Korea: You are not blocking China, but the future of East Asia, including yourself!