Note that we see a big difference in costs for Arleigh Burkes between Japan and the USA.
071 LPD thread
- Thread starter sumdud
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Note that we see a big difference in costs for Arleigh Burkes between Japan and the USA.
I dug out this old cost estimate of the Type-54 Frigate
So if you strip a 25000tonne Type-71 LPD to the bare essentials, I guess it could cost 1billion RMB (approx $150M)
Type-54 cost breakdown estimate
Brumby
Major
The notion that the US Military Complex is making significant profits on the contracts is just not supported by the facts. Yes commercial companies in a free market exist to profit from its enterprise. The ones engaging in military contracts are within the norm of any profitable sector because free market forces dictate its overall behaviour. For example, Huntington's recent financial disclosure shows an operating income in the region of 10 % - hardly the 100 % plus as in your speculation.
The problem with SOE's in China and with a cost plus profit approach is that invariably efficiency suffers due to lack of competition and overall incentive to be efficient. An inefficient enterprise with a cost p[us 5 % business model will inevitably lead to financial ruins because such business model and the associated cost structure is simply not long term sustainable. An enterprise has other cost such as administrative overheads; financing charges; et al and a 5 % margin will be insufficient to cover. You just have to look at any financial statement of any industry.
What is most likely happening is the enterprise is building debt load to sustain ongoing operations. In China, SOE debts no matter the degree of performance are just rolled over rather than recognising that there is an issue. This can go on indefinitely as long as the State is prepared to bank roll or until the State itself runs out of money. Somebody pays for it - eventually. . .
The Makassar is simply a commercial vessel build for military purpose.
I had a similar conversation with Jeff Head many years ago in this forum. I questioned why was the French Mistral cost about 35 % of the San Antonio. In my view French labor would unlikely be that far off from US rates. Jeff's typical reply and to the point is that the Europeans build to commercial standards and the US to mil specs.
Survivability of a ship is not transparent until something happens to test it and for that we have a recent example with the Norwegian frigate and compare that with the two outcomes with the Burke collision. . .
In other words you get what you pay for - eventually.
CSSC made money, and in fact, it was one of the profitable and shining stars among the SOEs. CSIC on the other turned out to be a major loser, which is why it got management purged and looks to get merged into CSSC.
There are other shipyards out there, private and SOE. Status not clear but there is a global downturn in shipbuilding due to the lowering of global trade.
If you want the highest safety and survivability standards for any ship in the planet, the crown goes to the LNG carriers. You have to understand the nature of these ships to understand why, and why they are considered the highest end of ship building. Currently the South Koreans are top in this, with Japan the second and China the third.
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manqiangrexue
Brigadier
So that's going to be a hypothetical "problem" that is not reflected in real life. In reality, Chinese military ship-building is the most efficient in the world, both in terms of time and resources spent. I agree that paying 5% plus cost is technically incentive to be very inefficient and expensive in the way things are built but clearly, that is not happening. The only way to argue that would be to just assume, for the sake of your following statement, that these new Chinese ships look shiny, modern and maintained but are just terrible in quality.
That's one of the wrongest often repeated phrases in the world. It's wrong in daily shopping, wrong in business deals, wrong in global economics, and wrong in military spending. The whole reason for which people shop around, negotiate deals and research manufacturing advancement is that this statement is wrong and the same amount of money can go very far or nowhere at all and everywhere in between depending on how it is used. "You get what you pay for" is what non-competitive shops sling around hoping to dissuade costumers from making comparisons.
The prices went up because the US military complex has far less competing companies in this decade back to compared in the 1950s. How many shipyards were still there in 1955? How many aircraft companies were still there in 1955? Compared to now.
Commercial companies compete in the free market means reduced profits and even losses. Although there is now a clear trend to consolidation, the big fish eating the small fish, like what happened to the military industry. You can expect ship prices to go up once there are few fish left.
The US shipbuilding industry has another problem. It does not have a commercial shipping industry to live on. That means all the cost of the military contracts have to include all the costs to keep that shipyard surviving. That raises your cost entirely.
The Chinese shipbuilding industry doesn't need military contracts to live, and in fact it was said they prefer doing commercial contracts because it makes more money --- apparently the Chinese government dictate to the SOEs the profit margins the shipbuilders can put on the military contracts.
The same can be said of the S. Korean, Japanese, and European shipbuilding companies, except they can dictate profits on the military contracts on their own. They do not need military contracts to survive but its an added bonus to their income. The shipbuilding business is cutthroat enough with bidders constantly undercutting each other, so any contract to keep the company working is welcome.
Then there is to a certain extent that their governments support these shipbuilding industries, despite WTO rules. US shipbuilding companies don't have such government support.
Those ships were also 6+ times the displacement of the ships they hit, and they hit them with their strongest point. Most of the damage was done by the bulbuous bow below the waterline, concentrating all that mass on a small area. No real surprise there. If a 40t semi truck slammed into a Humvee from the side, I wouldn't be surprised if the outcome was similar.
In case of modern naval combatants survivability means not just structural strength, but also redundant systems (surplus buoyancy, propulsion, electronics, robust power distribution), damage control systems, etc.
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Should be no surprise if that Norwegian frigate sank, not because of some nonsense about 'commercial quality' --- after all its a frigate that is a much smaller ship than a Burke --- getting rammed by a tanker. It is also said that many watertight doors were left open so the ship flooded quickly.
This day and age, a freighter that is around 20 to 50,000 tons in displacement is considered to be a runt and the small side of things. One of the ships that rammed a Burke was only a 30,000 tonner. In World War 2, that's battleship displacement, today, that's a runt of a freighter. The bigger the cargo ship, the greater its structural strength, which is what it needs after it can be loaded with as much as 200 to 400,000 tons of weight in some cases. In the case of modern commercial ships, specialized ships like tankers and LNG carriers --- which is the most dangerous and highest end of all --- require extensive robotic systems that constantly monitor the entire ship for leaks, temperature changes, and so on. These ships are also extensive automated --- the tanker that Iran seized, only has 23 people on board. The crew is only there to watch over the robot. These ships are also heavy in bulkheads all around and no one likes an Exxon Valdez happening in yours or any countries waters.