Chapter 352: Integration and Monopoly

Although Spain's five-year shipbuilding plan was proceeding very smoothly, the cabinet government began discussing the current status of the Spanish shipbuilding industry.

As a former empire on which the sun never set, Spain's shipbuilding industry was, after all, a camel that is thinner than a horse is big; even in its weakest period, it could still rank among the best in Europe.

Up to now, in addition to Spain's four major official shipyards, there were dozens of medium-sized shipyards of a certain scale and hundreds of small-scale shipyards.

The development of private shipyards was also quite rapid; as Spain's colonies expanded to Africa, maritime transport between the Spanish mainland and Africa also promoted the development of the domestic shipbuilding industry.

But no matter how it developed, the domestic shipbuilding industry in Spain still presented a dilemma of having sufficient manufacturing capacity but insufficient research and development.

Letting these medium-sized shipyards build cruise ships and cargo ships of several thousand tons was not a difficult task for them. The same logic applied to smaller shipyards; they could also easily build commercial coastal vessels of several hundred tons.

But to have them design a brand-new cruise ship or cargo ship completely from scratch, most of these shipyards would be unable to complete the task.

Technological upgrades do not happen naturally; they are accumulated through the efforts of hundreds or thousands of experts over many years. This also means that every upgrade in related technology requires a massive investment of time, human resources, material resources, and financial capital.

Clearly, the role played by those hundreds of small shipyards in terms of technological upgrades was not as significant as that of the dozens of medium-sized shipyards.

Although monopoly does not necessarily mean a good thing, rather than having hundreds of small shipyards competing internally over small civilian vessels, it would be better to integrate them into fewer medium-to-large enterprises, enabling them to possess the capability to independently research and design new types of ships.

In December 1890, the Spanish Cabinet Government's Minister of Industry, Jovelar Soler, introduced the situation of Spain's shipbuilding industry to all the ministers of the cabinet government and to Carlos, who was participating in the meeting.

"Your Majesty, gentlemen. Currently, the development of our shipbuilding industry has achieved great results following the development of our domestic industry and economy, as well as the construction of our colonies."

"According to statistics from the industrial department, our country has a total of 322 shipyards that are approved and operating legally, with an annual construction volume exceeding 1, 00 ships."

"However, among these 322 shipyards, 275 are small shipyards, possessing only 200-500 shipyard workers. The proportion of small shipyards reaches 85. %, and these 275 shipyards can only build small private vessels under 800 tons."

"There are approximately 32 shipyards with a total of over 500 workers. As for shipyards with a total of over 1, 00 workers, there are only 11 in all of Spain."

"As for shipyards with over 5, 00 workers, we currently have only 4: the Royal Guarnizo Shipyard, the Valencia United Shipyard, the El Ferrol Royal Naval Shipyard, and the Cartagena Shipyard."

"Currently, our country has approximately 134, 00 shipyard workers, an increase of about 6% compared to last year. After the release of our five-year shipbuilding plan, it is expected that the growth rate of shipyard workers will remain above 5% over the next five years," Minister Jovelar Soler explained in detail to the cabinet ministers and Carlos regarding the current situation of the Spanish shipbuilding industry.

Overall, Spain's shipbuilding industry was quite good. The 134, 00 shipyard workers reflected the massive scale of Spain's shipbuilding industry, and a 5% annual growth in shipyard workers was equivalent to an increase of 6, 00 shipyard workers each year.

To summarize such data in one sentence, Spain's current shipbuilding industry was thriving and booming.

Of course, praising first and then criticizing was also a common tactic for cabinet ministers when reporting the situation.

Minister Jovelar continued: "Although our shipbuilding industry is expanding rapidly every year, apart from the four official shipyards, the remaining expansion is mainly concentrated in small shipyards with fewer than 500 people."

"In the last two years, the number of small shipyards with fewer than 500 people has increased by 9 and 11 respectively; the increase in the number of these small shipyards alone has brought us an increase of several thousand shipyard workers."

"But the continuous growth in the number of small shipyards is not necessarily a good thing. Because of the insufficient number of workers, the warships built by these small shipyards are often small vessels with low technical content."

"Although the domestic demand for small vessels is constantly growing with economic prosperity and colonial development, compared to the growth in the number of shipyards, the growth in demand for small vessels has certain limitations."

"After the industrial department's statistics on the order volume and profits for civilian vessels under 1, 00 tons, we discovered a relatively thorny problem."

"Compared to five years ago, the order profit for civilian vessels under 1, 00 tons has already fallen by 15%."

"On one hand, this is because our per capita income is constantly growing; on the other hand, it is because, against the backdrop of a surge in the number of small shipyards, the competition for small vessels is also constantly increasing."

"According to the current rate of growth in the number of small shipyards, perhaps in 10 years, these small shipyards will shift from profit to loss, thereby affecting the development of the entire shipbuilding industry."

In fact, to put it plainly, Spain's current shipbuilding industry was at two opposite extremes regarding large ships and small ships.

The market for small ships was experiencing fierce competition for orders due to the excessive number of shipyards; in order to secure orders, shipyards had to lower their prices.

This led to lower and lower profits for small shipyards, which would very likely face a situation where income was less than expenditure in the future, leading to widespread losses or even bankruptcy for small shipyards.

As for medium-to-large warships, Spain's shipbuilding industry presented a situation where there were too many monks and too little gruel.

Besides the four official shipyards that focused more on the military vessel sector, Spain had a total of 43 shipyards with over 500 employees.

Among these 43 shipyards, 32 could only build medium-sized vessels in the thousand-ton class and were unable to build large vessels of several thousand tons.

There were only 11 shipyards truly capable of building large vessels, and these 11 shipyards varied in scale; only a scattered few could build several large vessels simultaneously.

With Spain's development of African colonies, economic exchanges between the mainland and the African colonies had become increasingly frequent.

Every day, a large amount of cargo was shipped from the mainland to Africa, and a large amount of cargo was shipped from Africa to the mainland.

The transport of these goods relied entirely on the participation of large cargo ships, which was why it was said that Spain's shipbuilding industry showed a situation of too many monks and too little gruel regarding large vessels. Large vessels could be said to be in short supply within Spain, and transport companies established by nobles and capitalists even had to purchase large transport ships abroad.

In addition to economic exchanges between the Spanish mainland and its colonies, Spain's foreign imports and exports also required a large number of cargo ships to provide support.

Faced with the disadvantage of an insufficient number of medium-to-large shipyards, it was indeed necessary to consider merging some small shipyards to improve Spain's foundation and quantity in terms of medium-to-large shipyards.

After listening to Minister Jovelar Soler's report, Carlos nodded and asked: "Regarding our problems in the shipbuilding industry, does the industrial department have any ideas?"

Minister Jovelar nodded and replied: "Your Majesty, in my view, we do not need so many small shipyards."

"The construction cost of small shipyards is too low, and one can establish a small shipyard of considerable scale with a certain amount of capital. But for medium-to-large shipyards, even with sufficient capital, one cannot necessarily build one in a short period of time."

"Considering our increasing demand for large vessels, I believe it is necessary to integrate some small shipyards to increase the number of our medium-to-large shipyards to over 50."

"At the same time, the government should introduce certain subsidy policies to help these medium-to-large shipyards better gain a firm foothold. Only after these medium-to-large shipyards stand firm in both the domestic and foreign markets can our shipbuilding industry compete with other European powers in terms of foundation."

"Before that, the government needs to pay a certain financial price, and perhaps also help these shipyards train a new batch of skilled shipyard workers."

The Spanish government was actually no stranger to such methods.

More than a decade ago, Spain had adopted the same method in the field of military shipyards.

Originally, there were more than a dozen Spanish military shipyards; after integration, only the current four major military shipyards remained.

Minister Jovelar's proposal was, in fact, to imitate Spain's experience in integrating military shipyards to integrate some civilian shipyards.

Small shipyards did not provide much improvement to the country, but medium-to-large shipyards provided a certain improvement and also possessed strategic value.

Civilian shipyards could completely transform into military shipyards during wartime, and this speed of transformation was far faster than building a military shipyard from scratch.

If Spain could build dozens of medium-to-large shipyards, it would mean that Spain would have dozens of military shipyards capable of building warships during wartime.

At that time, the four major shipyards could be allowed to focus entirely on building battleships, while these medium-to-large shipyards converted into military shipyards could be tasked with building cruisers of several thousand tons and other types of warships.

Carlos nodded, but did not directly agree to Minister Jovelar's proposal; instead, he turned his gaze to Prime Minister Cánovas and asked: "What does the Prime Minister think? Does anyone else have any ideas?"

At this time, Prime Minister Cánovas was no longer the political newcomer who needed Grand Duke Serrano to stand on stage to stabilize his position. Since officially becoming the Prime Minister of Spain in 1877, Prime Minister Cánovas had already spent 13 years in the position of the highest leader of the Spanish government.

Being re-elected as Prime Minister of the cabinet government three times in a row reflected, on one hand, Carlos's trust in Prime Minister Cánovas, and on the other hand, it also reflected Prime Minister Cánovas's ability and influence.

The current Prime Minister Cánovas was the undisputed person with the highest influence in Spanish politics; his influence was no weaker than that of the former Prime Minister Primo, only his control over the military was slightly lacking.

Hearing Carlos's inquiry, Prime Minister Cánovas shook his head and said with a smile: "I approve of Minister Jovelar's proposal. Regarding the problems that have already appeared in the shipbuilding industry, perhaps this approach is the best solution."

Since Prime Minister Cánovas had no objections, others naturally would not stand up to put forward their own views.

After all, neither Carlos nor Prime Minister Cánovas had expressed opposition; standing up to oppose at this time would be openly slapping the King and the Prime Minister in the face, wouldn't it?

Seeing that no one expressed opposition, Carlos nodded and then issued an order: "Since there are no objections, then let us adopt the method mentioned by Minister Jovelar."

"The industrial department should come up with a plan as soon as possible, and the issues involving subsidies for shipyards can be communicated and resolved with the finance department."

"Once there is a complete plan, your cabinet can vote on it yourselves."

Regarding his twenty years of life as a King, Carlos's greatest experience was not to express too much opinion during cabinet meetings.

As long as the King did not have a clear attitude, the final responsibility had nothing to do with the King. If this matter succeeded, the credit would not be short of Carlos's.

Because this method had already been used once in military shipyards, Carlos was not worried that such a plan would fail.

Even if integrating small shipyards gave birth to a few medium-to-large shipyards with considerable strength, these shipyards would be unable to achieve a monopoly position.

Even if there were enterprises capable of achieving a monopoly position, they were destined not to affect Carlos's power in Spain. The biggest difference between Spain and other European countries was that official enterprises backed by the royal family and the government had become behemoths among Spanish capital.

Coupled with the capital of the nobility as assistance, it was difficult for domestic or foreign capital to acquire the power of the Spanish government.

The benefit of state capitalism was just like this; capital could indeed have an impact on the government. But the greatest capital was the royal family and the government, which ensured that the only thing that could have an impact on the government was the royal family, and other capital was just small fry in front of official capital.

Among Spain's four major shipyards, the royal family held a certain amount of shares. The largest, the Royal Guarnizo Shipyard, was completely controlled by the royal family; this was a super-large shipyard with nearly ten thousand employees. How could other shipyards compete with this behemoth?

In these twenty years, the royal family's capital had long since permeated every industry in Spain. In some important industries, such as heavy industry, chemical industry, military industry, oil, and agriculture, the presence of royal capital could be found.

Let alone a monopoly enterprise in a certain industry, even if several monopoly enterprises united together, they were destined to be unable to compare with the capital power of the current royal consortium.

Whether comparing influence over the government or pure capital, looking at the whole world, there were not many capitals that would be the opponent of the Spanish royal family.

(End of chapter)