THE SHIPBUILDING INDUSTRY OF HUNGARY 1946-60

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• Document Page Count: 60
• Document Creation Date: December 27, 2016
• Document Release Date: May 31, 2013
• Sequence Number: 2
• Publication Date: July 31, 1957
• Content Type: REPORT

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teRE.L
N? 2
ECONOMIC INTELLIGENCE REPORT
THE SHIPBUILDING INDUSTRY OF HUNGARY
1946 - 60
CIA/RR 94
31 July 1957
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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ECONOMIC INTELLIGENCE REPORT
Ellis SHIPBUILDING INDUSTRY OF HUNGARY
1946-60
CIA/RR 94
(ORB Project 35.517)
. CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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FOREWORD
This report traces the achievements of the shipbuilding industry
of Hungary during 1946-56 and attempts to project the capabilities of
this industry through 1960. The report also examines the impact of
the Hungarian rebellion of October 1956 on the shipbuilding industry
and the effects of the demands of the USSR for the products of the
Industry.
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Summary
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CONTENTS
I. Introduction
A. Economy of Hungary
B. Shipbuilding Industry
Page
1
3
3
11.
II. Production 6
A. Facilities 6
B. Technology 8
C. Value and Volume 9
III. Distribution of Production 13
IV.
A. Integration of the Soviet Bloc 13
B. Hungarian Exports 16
Inputs 16
A. Supply of Materials and Components 16
B. Labor 17
V. Intentions, Capabilities, and Limitations
17
A. Intentions 17
B. Capabilities 19
C. Limitations 19
Appendix A.
Appendix B.
Appendixes
Locations of Shipyards and Ship Repair Yards
In Hungary 21
Major Suppliers of Inputs for the Shipbuilding
Industry of Hungary
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Appendix G. Statistical Tables
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Page
27
Appendix D. Individual Shipyards and Ship Repair Yards
In Hungary 33
Appendix E. Methodology 47
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Tables
1. Percentage Distribution of the Value of Production
by the Shipbuilding Industry of Hungary, 1947-55 . . 7
2. Production by the Shipbuilding Industry of Hungary,
by Type of Vessel, 1947-55 10
3. Indexes of the Gross National Product, the Industrial
Sector of the Gross National Product, and Production
and Repair by the Shipbuilding Industry of Hungary,
1950-55 12
4. Estimated Imports of Maritime Vessels by the USSR
from Poland, East Germany, and Hungary, 1951-55 14
5. Estimated Value of Imports of Inland Self-Propelled
Vessels by the USSR from the European Satellites,
1950-55 15
6. Distribution of Labor in the Shipbuilding Industry
of Hungary, 1955 18
7. Estimated Maximum Capability for Annual Production
of Selected Types of Vessels by the Shipbuilding
Industry in Hungary, 1956-60 20
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8. Production by the Shipbuilding Industry of
Hungary, by Shipyard, in Tonnage and Horsepower,
1946-55
Page
28
9. Production by the Shipbuilding Industry of
Hungary, by Shipyard, in Number of Vessels,
1946-55 29
10. Value of Production and Repair by the Shipbuilding
Industry of Hungary) 1946-55 30
11. Value of Exports of Production by the Shipbuilding
Industry of Hungary, 1946-55 31
12. Input Requirements for Production by the Ship-
building Industry of Hungary, 1950 and 1955 . . 32
13. Reported Capital Expenditures at the Gheorghiu-
Dej Shipyard in Hungary, 1948-53 34
14. Costs Used to Value Production by the Ship-
building Industry of Hungary, 1946-55 49
Illustrations
Following Page
Figure 1. Hungary: Organization of the Ship-
building Industry, 1956 (Chart) 6
Figure 2. Hungary: Value of Production by the
Shipbuilding Industry, 1946-55, and
Projected Value, 1956-60 (Chart)
Figure 3. Hungary: Layout of the Gheorghiu-Dej
Shipyard, Budapest 36
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(ORB Project 35.517)
llib SHIPBUILDING INDUSTRY OF HUNGARY*
1946-60
Su_Lnia_yar
The shipbuilding industry of Hungary has grown considerably since
World War II because of the demands of the USSR upon the industry,
and almost all Hungarian production of ships during this period has
gone to the USSR. The over-all effect of the rebellion of October 1956
on the shipbuilding industry of Hungary cannot yet be evaluated, but
it seems evident that the previous objectives of the industry for 1960
now must constitute at best the maximum capabilities of the industry.
During and after the rebellion of October 1956, although indus-
trial,facilities were damaged, the flow of material resources was
curtailed, and over-all production was interrupted, the primary effect
on industry in Hungary was the irreplaceable loss of skilled and semi-
skilled manpower. This loss will limit the future industrial develop-
ment of the country. The center of shipbuilding activity in Hungary
Is Budapest, the city most seriously affected by the rebellion.
Administrative control of the shipbuilding industry is exercised
by the Ministry of the Metallurgy and Machine Building Industry. The
shipyards constitute a national shipbuilding trust and are under the
direct control of the Administration of the Shipbuilding Industry,
but indirect control seems to lie with the USSR, the primary consumer,
through a commercial mission to Hungary.
The gross value of production and ship repair by the shipbuilding
Industry of Hungary in 1955 was more than 400 million 1955 forints
(1955 US $31 million),** which constitute roughly 1 percent of the
* The estimates and conclusions contained in this report represent
the best judgment of ORB as of I May 1957.
** Forint values are given in 1955 forints, and dollar values are
given in 1955 us dollars throughout this report unless otherwise indi-
cated. A forint-dollar ratio of 13 to I was used for the shipbuilding
Industry. For an analysis of this ratio, see Appendix E.
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gross national product (GNP. The values of production, ship repair,
and exports -Co the USSR during 1946, 1950, and 1955 were as follows:
Activity
1946
1950 1955
Million Million Million Million Million Million
Forints Dollars Forints Dollars Forints Dollars
Production
33
2.5
134
10.3
358
27.5
Ship repair
22
1.7
31
2.4
43
3.3
Exports to the USSR
16
1.2
124
9.5
281
21.6
Maritime and inland* vessels produced by the Hungarian shipbuilding
Industry in 1946, 1950, and 1955 comprise the following, measured in
gross register tons (GRT),** horsepower (hp), or deadweight tons
(DWT),*** as applicable:
Type of Vessel
Unit
1946
1950
1955
Maritime****
GRT
3,490
13,800
15,600
Inland, self-propelled
hp
0
2,400
26,400
Inland, non-self-propelled
DWT
0
0
2,000
The term inland as used in this report refers to inland water-
ways, which include rivers, canals, and lakes.
** Gross register tonnage is a measure wherein the entire internal
cubic capacity of the vessel is expressed in register tons (100 cubic feet
to the ton). Certain items are not included in the measurement, such as
peak tanks and other tanks of water ballast, open forecastle, bridge and
poop, hatchway excess, certain light and air spaces, anchor gear, steering
gear, wheelhouse, galley, cabins for passengers, and other minor spaces
specified by law.
*** The deadweight tonnage of a vessel is the carrying capacity (in tons
of 2,240 pounds) of the vessel. It includes the crew and their effects
and all items of consumable or variable load such as stores, fuel, and
cargo. The deadweight tonnage is the difference in tons between full load
displacement and light ship displacement. Light ship displacement is the
weight (in metric tons) of the vessel, complete, ready for service in every
respect, including permanent ballast and liquids in the machinery at oper-
ating levels but excluding the crew and their effects and any items of
consumable or variable load such as stores, fuel, and cargo.
xxxx Including floating cranes.
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I. Introduction.
A. Economy of Hungary.
Hungary is a landlocked country exceeded in area by every
other European Satellite except Albania. Its 93,000 square kilo-
meters comprise about 9 percent of the total area of the European
Satellites. The Hungarian economy developed rapidly from an essen-
tially agricultural economy before World War II to its present in-
dustrialized state. The following tabulation of population and the
labor force is indicative of the change in the economy from agricul-
tural to industrial:
1948 1954
Category (Million Employees) (Million Employees)
Population
9.1
9.6
Labor force
3.6
4.3
Agricultural
2.0
1.9
Nonagricultural
1.6
2.4
In 1938 the GNP of Hungary was $2.5 billion; by 1954 the GNP
had reached $3 billion. Agricultural production accounted for 36.5 per-
cent of the GNP in 1938 but only 19.3 percent in 1954. In contrast, in-
dustrial production accounted for 32.5 percent of the GNP in 1938 and
50.7 percent in 1954. 1/*
During and after the rebellion of October 1956, although
Industrial facilities were damaged, the flow of material resources
was curtailed, and over-all production was interrupted, the primary
effect on industry in Hungary was the irreplaceable loss of skilled
and semiskilled manpower. This loss will limit the future industrial
development of the country.
The three major industrial renters of Hints:nary are ennrentrated
In Budapest, Oyor, and Miskolc.
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are on the Danube River) which provides the main water route of Hun-
gary and an outlet to the Black Sea. Miskolc is located on the Sajo
River, an unnavigable tributary of the Tisza River. The two major
Hungarian shipyards) the Gheorghiu-Dej and the Obuda, are in Budapest,
the center of the heaviest fighting and destruction during the rebel-
lion of October 1956.
B. Shipbuilding Industry.
1. General.
Since World War lithe Hungarian shipbuilding industry
has been primarily a supplier for the USSR. Virtually all production
by this industry has gone to the USSR as reparations or export com-
mitments. As a result of the rebellion of October 1956, the USSR is
reported to have removed from Hungary to the USSR those vessels which'
the Hungarians were constructing for the USSR. 2/
Since the middle of the 1930's, Hungary has had a qmall
merchdnt fleet, *which engages in trade chiefly with countries of the
Near East. The small volume of foreign trade carried in Hungarian
vessels obviates the need for a large merchant fleet, and the entire
Hungarian merchant fleet is planned to comprise only 14 maritime ves-
sels by 1960.
The principal inland waterways in Hungary are the Danube
River, the Tisza River, and several smaller rivers. The inland water-
ways are an important means of transportation even though railroads
and highways carry more traffic. About 10 percent of all internal
freight and passenger traffic is hauled on the inland waterways. 3j
Consequently, there is a need to replace and modernize the old and
low-powered vessels of the inland fleet. In large measure, however,
this replacement and modernization has not been accomplished, because
of the overwhelming demand of the USSR for production of vessels of
all types. This policy has left Hungary with extremely limited facil-
ities for replacement and repair.of its inland fleet.
2. History.
The shipbuilding industry of Hungary was established
principally because of the Danube River, and the two major shipyards
were located in Budapest, the capital, principal port, and leading
Industrial area of the country. The first inland vessel built by the
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Industry was launched in 1839; and) for nearly 100 years, sporadic
production of inland vessels) mostly tugs and barges, continued. The
first maritime cargo vessel was built in 1934; and, during the late
1930's) three additional maritime vessels were produced. These four
vessels constituted the Hungarian maritime fleet until 1955.
After World War II the industry resumed production of ?
maritime vessels, inland vessels) and floating cranes; and production
of these vessels continued through 1956. Other production now under-
taken by the industry comprises inland patrol craft, inland survey
vessel, smAll river and lake passenger vessels) various types of
sailing craft, "spray boats" for agriculture, and some consumer goods
such as refrigerators and motorcycle sidecars.
In 1952, Hungary purchased 14 cargo barges and 2 tank
barges from France and, in 1953, was reported to have ordered 3
tank barges from Austria. .5/ These barges, which are for use on the
Inland waterways, have cargo carrying capacities ranging from 500 to
1,000 metric tons and are the only reported examples of vessels being
Imported for the inland fleet. No maritime vessels have been imported
by Hungary.
3. Organization.
Administrative control of the shipbuilding industry of
Hungary is exercised by the Council of Ministers through the Ministry
of the Metallurgy and Machine Building Industry. The Hungarian Heavy
Industry Export Trade Enterprise (Nehezipari Kulkereskedelmi Nikex),
which controls all foreign trade, is believed to be on the same ad-
ministrative level as the controlling Ministry. Although information
on the relationship between Nikex and the Ministry of the Metallurgy
and Machine Building Industry is not available, it must be assumed
that over-all requirements for production of vessels for export, about
95 percent of all production of merchant vessels, are submitted through
Nikex to the Ministry for general approval.
Detailed orders for production of vessels for export are
received from Nikex, probably through the Administration of the Ship-
building Industry) by the shipyards. The shipyards then are required
to submit to Nikex an estimate of costs of production based on the
cost of materials and labor. Nikex pays the shipyards for work per-
formed. _?./ The shipyards which produce vessels are under the direct
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control of the Administration of the Shipbuilding Industry and con-
stitute a national shipbuilding trust) whereas ship repair yards and
other repair facilities probably are under the administrative control
of the General Administration of the Hungarian Navigation Company
(Magyar Hajozasi Reszveny Tarsasag Mahart).
Vessels complet&L by Hungary for the USSR* V are accepted
by a Soviet commercial mission stationed permanently in Budapest.
This mission is assumed to be on the same administrative level as
Nikex. The tentative organization of the shipbuilding industry of
Hungary is shown in the accompanying chart, Figure 1.** Names of
the Minister of the Metallurgy and Machine Building Industry) of de- '
partment heads) and of shipyard directors, when known, are shown on
this chart.
II. Production.
A. Facilities.
1. General.
Included in the shipbuilding Industry of Hungary are the
Gheorghiu-Dej, the Obuda, the Balatonfured, and the Danube Shipyards)
which engage in production, and possibly eight ship repair yards.***
The Gheorghiu-Dej and the Obuda Shipyards are considered major ship-
yards because almost 90 percent of the value of production is carried
out in these shipyards. In terms of value of production, the four
shipyards have accounted for the percentage distribution during 1947-55
shown in Table 1)**** which is based on Tables 8, 9, and 10./ The
figures indicate that the Gheorghiu-Dej Shipyard was the leading ship-
yard by value during 1947-52. The Obuda Shipyard was the leader dur-
ing 1953-55. The Mahart Ship Repair Yard is considered the only major
ship repair yard. The Gheorghiu-Dej and Obuda Shipyards and many of
the ship component plants,// which produce the various parts and ma-
terials required by the shipbuilding industry, are in Budapest.
* See 1, p. 40 above.
** Following p. 6.
*** For locations of shipyards and ship repair yards, see Appendix A.
For detailed information on the individual shipyards and ship repair
yards, see Appendix D.
**** Table 1 follows.on p. 7.
/ Appendix C, pp. 28, 29) and 30, respectively, below.
For a list of major suppliers of inputs for the shipbuilding
industry, see Appendix B.
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ORGANIZATION OF THE SHIPBUILDING INDUSTRY, 1956
COUNCIL OF MINISTERS
MM shy
of the Metallurgy and Machine building Industry
CSERGO, Janos
Heavy Industry
Export Trade E te p 'se
(Nikex)
Figure 1
General Administration of the
Hungarian Navigation Company
(Mahar?
Department 5
RATAK!, Mihaly
Navigation
Branch
%Mak
Repair Yard
25866 6.57
State Danube
Sea Navigation
Company
Seagoing
Merchant Fleet
Ship Repair
Branch
Ma hart
Repair Yard
Visegrad
Repair Yard
Baia
Repair Yard
Tape
Repair Yard
Csepel Floating
Repair Shop
Dunapentele
Floating
Repair Shop
Admini tration
of Wooden Construction
Department 12
TOMRA, fnu
Sopron Plant
Administration
of the Shipbuild ng Industry
Departm nt 14
BONCZOL, Sandor
Gheorghlutlei
Shipyard
KISS, Istvan
Soviet
Commercial Mission
Obuda
Shipyard
BORKA, Attila
Balatonfared
Shipyard
JARTASS, friu
Danube
Shipyard
nnnenn Most Important shipyard
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Table 1
Percentage Distribution of the Value of Production
by the Shipbuilding Industry of Hungary
1947-55
Percent
Shipyard
1947
1948
1949
1950
1951
1952
1953
1954
1955
Gheorghiu-Dej
66
56
69
73
73
58
48
42
38
Obuda
34
44
31
27
27
37
49
44
51
Balatonfured
0
0
0
0
0
5
3
7
4
Danube
0
0
0
0
0
0
0
7
7
Total
100
100
100
100
100
100
100
100
100
Hungarian shipyards are used to produce maritime cargo
vessels of about 1,200 GRT, floating cranes with lift capacities of
100 metric tons and 5 metric tons, inland passenger vessels of 450
hp, inland tugs of 400 hp, inland patrol craft, inland barges, and
other nms11 miscellaneous inland craft.
2. Gheorghiu-Dej Shipyard.
The Gheorghiu-Dej Shipyard is at present the only ship-
yard in Hungary which produces maritime vessels and floating cranes.
It is the largest shipyard in the country and has been expanding
continually or improving its facilities, spending about 90 million
forints ($6.9 million) during 1948-53. As late as 1955 the shipyard .
was installing additional facilities as part of a general building
program. fv It is estimated that the shipyard has 14 transverse
building ways, each of which is about 250 feet long and 60 feet wide.
3. Obuda Shipyard.
The Obuda Shipyard, the second most important shipyard
In Hungary, has, it is estimated, 12 transverse building ways used
for production of inland passenger vessels and inland tugs.
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U. Balatonfured Shipyard.
The Balatonfured Shipyard has constructed lake passenger
vessels, inland patrol craft, barges, and small sailing craft.
5. Danube Shipyard.
The Danube Shipyard, at Vac, has no actual building ways
but builds inland patrol craft and cmall inland passenger vessels on
wooden blocks in an open area. The vessels then are transported to
a launching area by truck.
B. Technology.
Technical methods employed by the industry before 1953 were
Inferior to those in use by the West. Since 1953, however, more ad-
vanced techniques for production of vessels, such as welding, pre-
fabrication of materials, and sectional assembly, have gradually been
put into operation. A new aluminum alloy named "Nautal)" which is
impervious to the oxidational effects of sea water) has been developed
by the Hungarian Metal Industry Research Institute. This alloy was
being used in production of both maritime and inland vessels in 1956. 9V
, Up to 1953) vessels built at the Gheorghiu-Dej Shipyard were
assembled by the riveted method of joining plates. Since 1953, most
of the vessels have been built by sectional assembly EV -- that is,
prefabricated parts of the vessel are welded together in sections and
transported to the building way to be welded together to form the
complete vessel. It was late in 1954 before preparations for sectional
construction were completed. 11/
Soviet technicians have aided Hungary in establishing its
shipbuilding industry, and the USSR has provided a large portion of
the machine tools required for shipbuilding. EV Most of this aid
has probably gone to the Gheorghiu-Dej Shipyard. The USSR has pro-
vided general plans for the construction of vessels, but these plans
have been modified considerably by Hungarian designers. 1.31
The vessels built at the Obuda Shipyard are only of fair qual-
ity, and their standards do not compare favorably with those of the
West. These vessels are built according to Soviet shipbuilding doctrine
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set forth in the Hungarian translation of the Soviet publication
Standards of the Registry Bureau of the Soviet State River and Sea
Navigation, which contains about 1,000 pages of basic rules on ship-
bdilding. The Budapest office of the Soviet Registry Bureau main-
tains a staff of about 12 inspectors at the Obuda Shipyard. 111/
C. Value and Volume.
1. Plans and Plan Fulfillment.
Over-all or detailed plans and plan fulfillment for the
shipbuilding industry are not available. Some reports of plan ful-
fillment for the Ministry of the Metallurgy and Machine Building
Industry, however) are available. These reports indicate that the
Ministry fulfilled its plans for selected years as follows:
Plan Year
Fulfillment
(Percent)
1949
107.1 A
V/
1954
100.3 1_
1955
104.9 11/
The Three Year Plan (1947-49) listed among important
planned investments an assembly plant for the Gheorghiu-Dej Shipyard.
The Plan also called for reconstruction and extension of this ship-
yard and refloating and reconditioning of inland vessels. 1Li/ Dur-
ing the plan period) 43 million current forints (current $3.3 million)
were reported as planned expenditures at the Gheorghiu-Dej Shipyard. 19/
The First Five Year Plan (1950-54) stated that the Danube
Fleet would be increased by production of 2 inland passenger vessels,
59 inland barges, 6 inland tugs, and 3 maritime vessels. The two
passenger vessels are the only ones known to have been built. From
the vessels to be built by Hungary during the Second Five Year Plan
(1956-60), Hungary id to retain for domestic use 8 maritime vessels,
8 lake passenger vessels, 50 barges, and 15 tugs. 2_0/ Production by
the shipbuilding industry of Hungary during 1947-55, by type of vessel)
Is shown in Table 2.*
* Table 2 follows on p. 10.
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Table 2
Production by the Shipbuilding Industry of Hungary
by Type of Vessel
1947-55
Type of Vessel
Value !V*
Million 1955 Million 1955
Physical Quantity Forints Dollars
Three Year Plan (1947-49)
Maritime vessel 23,119 GRT h/ 175.9 13.5
Floating crane 2,142 GRT 26.1 2.0
Inland tug 61400 hp 2/ 68.o 5.2
Total
270.0 20.7
First Five Year Plan (1950-544
Maritime vessel
53,576 GRT
4o7.4
31.3
Floating crane
19,710 GRT
217.4
16.7
Inland tug
19,200 hp
204.0
15.7
Inland passenger vessel
10,350 hp
250.0
19.2
Inland patrol craft
21,600 hp
51.0
3.9
Total
1,129.8
86.8
One Year
Plan (1955)
Maritime vessel
10,746 GRT
81.7
, '6.3
Floating crane
4,842 GRT
52.2
4.o
Inland tug
4,800 hp
51.0
3.9
Inland passenger vessel
5,400 hp
132.0
10.2
Inland patrol craft
16,200 hp
38.3
2.9
Barge
2,000 DWT I/
2.7
0.2
Total
357.9
27.5
* Footnotes for Table 2 follow on p. U.
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Table 2
Production by the Shipbuilding Industry of Hungary
by Type of Vessel
1947-55
(Continued)
Value W
Million 1955 Million 1955
Physical Quantity Forints Dollars
Type of Vessel
Total (1947-55)
Maritime vessel
87,441 GRT
665.0
51.1
Floating crane
26,694 GRT
295.7
22.7
Inland tug
30,400 hp
323.0
24.8
Inland passenger vessel
15,750 hp
382.0
29.4
Inland patrol craft
37,800 hp
89.3 .
6.8
Barge
2,000 DWT
2.7
0.2
Grand total
1,757.7 135.0
a. A forint-dollar ratio of 13 to 1 was used for the shipbuilding
industry. For an analysis of this ratio, see Appendix E.
b. Gross register tons.
c. Horsepower.
d. Deadweight tons.
2. Value.
The value of production and ship repair in Hungary in 1950
was 164.7 million forints ($12.7 million). By 1955 this figure had
risen to 400.9 million forints ($30.8 million -- roughly 1 percent of
the Hungarian GNP)) an increase of 143 percent compared with 1950.
During this same period the value of production by the' shipbuilding
industries of the European Satellites as a whole increased about 95 per-
cent. In comparison with a small Western country, Belgium, the value
of production by the shipbuilding industry of Hungary during 1955 was
42 percent of the value of production by the shipbuilding industry of
Belgium in the same year.
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The growth of the shipbuilding industry of Hungary has
been more rapid than that of the GNP as a whole and of the industrial
'sector of the GNP. Index figures for 1950-55 are shown in Table 3,
which is based on Table 10.*
Table 3
Indexes of the Gross National Product
the Industrial Sector of the Gross National Product
and Production and Repair by the Shipbuilding Industry of Hungary
1950-55
1950
= 100
Category
1950
1951
1952
1953
1954
1955
Hungarian GNP -IV
100
109
118
127
128
135
Industrial sector of the
Hungarian GNP
100
116
135
145
152
161
Production and repair by the
shipbuilding industry
100
95
144 '
224
234
243
a. Gross national product.
The Gheorghiu-Dej Shipyard was the leading producer of
vessels in Hungary until 1953.N During 1953-55 the value of produc-
tion at the Obuda Shipyard surpassed that of the Gheorghiu-Dej Ship-
yard because the Obuda Shipyard produced a greater number of smaller
river vessels with a relatively higher value per vessel. The more
important type of vessel produced in Hungary, the small maritime
cargo type, however, probably will continue to be produced at. the
Gheorghiu-Dej Shipyard because of the facilities and experience of
this shipyard. Production by the shipbuilding industry of Hungary
during 1946-55, by shipyard, in tonnage and in horsepower, is shown
In Table 8.**
* P. 30, below.
** P. 28, below.
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3. Production Projected for 1956-60.
Before the Hungarian rebellion of October 1956 it was esti-
mated that in 1960 the value of production by the shipbuilding industry
of Hungary would have been 507.1 million forints ($39.0 million)) an
Increase in value of production of 42 percent over that during 1955.
This increase would have amounted to about 7.2 percent per Plan year.
During the First Five Year Plan. (195O-5) the increase in value of
production during 1954 was 200.6 percent of that during 1949, or about
14.9 percent per Plan year. The larger increase in production during
the First Five Year Plan is probably a result of (a) the postwar build-
up of the industry with its attendant increase in productive facilities
and (b) increased production of inland vessels. The industry having
been built up during the First Five Year Plan, the rate of increase
during the Second Five Year Plan (1956-60) is expected to be lower.
The projected estimated increase in production would have
been 42 percent during the Second Five Year Plan, based on the Plan
announcement of an increase of 40 percent in the volume of foreign
trade and on the large planned increase in production for domestic
consumption. This increase of 42 percent may be compared with the
following increases planned for other sectors of the Hungarian econ-
omy: industry, 47 to 50 percent; capital goods, 58 to 60 percent;
rolled steel, 58 percent; and crude steel, 38 percent. The projected
increase in value of production might have been poasible if more effi-
cient use were made of available productive facilities and if planned
increases in the productivity of labor were achieved. As a result of
the Hungarian rebellion, it seems evident that the previous objectives
of the industry for 1960 now must constitute at best the maximum capa-
bilities of the industry. Because the October rebellion took place
during the period of the year when outdoor shipbuilding activity is
at a minimum, the effect on production may have been less serious than
if the rebellion had taken place during the summer months of maximum
shipbuilding activity. The accompanying chart, Figure 2,* shows the
growth of the shipbuilding industry of Hungary since 1946.
III. Distribution of Production.
A. Integration of the Soviet Bloc.
Small cargo vessels of about 1,200 GRT, imported by the USSR
for use in coastal trade in the Far East, have been constructed only
* Following p. 14.
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by the Hungarian shipbuilding industry. (A few vessels of the same
general type but of Slightly less tonnage also have been imported by
Rumania from Hungary.) Maritime vessels of greater tonnage are sup-
plied to the USSR by Poland and East Germany. A comparison of esti.-
mated Soviet imports of self-propelled maritime vessels constructed
by the three leading suppliers among the European Satellites is
shown in Table U.
Table 4
Estimated Imports of Maritime Vessels by the USSR
from Poland, East Germany, and Hungary
1951-55
Satellite
1951
1952 1953 1954
1955
.
Thousand Gross Register Tons
Poland
2.0
21.0 27.7
62.1
68.4
East Germany
0.2
10.1 5.8
40.0
43.9
Hungary
8.4
10.7 9.6
10.7
6.o
Total
10.6
41.8 43.1
112.8
118.3
Percent of Total
Hungary
79
26 22
9
5
The reduction in percentage of GRT supplied by Hungary to the
Soviet Bloc during 1951-55 is not a result of decreased production in
Hungary but reflects an increase in production by the Polish and East
GerMan shipbuilding industries and consequently in the &mount of GRT
supplied by these countries. The GRT supplied the USSR by Hungary in
1955 is lowest, compared with that of previous years, because of other
export commitments (2 vessels to Communist China and 1 coastal passen-
ger vessel to Poland) and retention of 1 vessel for domestic use.
In production of self-propelled inland vessels for the USSR,
Hungary has bettered its relative position among the European Satellites
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SECRET HUNGARY
VALUE OF PRODUCTION
BY THE SHIPBUILDING INDUSTRY, 1946-55
AND PROJECTED VALUE, 1956-60
Million Forints
600
500
400
300
200
100
Figure 2
coo
se?
ono
eve
???
1946
1947
1948
Excluding value of ship repair
25867 6-57
1949
1950
1951
1952
1953
SECRET
1954
1955
1956
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1959 1960
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during 1950-55. Of the total value of inland self-propelled vessels
Imported by the USSR from the Satellites, Hungary contributed only
10.2 percent in 1950 but 25.7 percent by 1955. The total value of
inland self-propelled vessels imported by the USSR from the European
Satellites, the value delivered by each Satellite, and the percent-
age of the total Satellite value delivered by Hungary. during 1950-55
are shown in Table 5.
Table 5
Estimated Value of Imports of Inland Self-Propelled Vessels
by the USSR from the European Satellites gj
1950-55 ,
1950
1951 1952 1953
1954
1955
Satellite
Million ,1955 US Dollars
East Germany
0
2.3 4.o 4.8
6.4
5.4
Czechoslovakia
5.9
5.9 IL? 15.8
15.8
15.8
Rumania
11.1
12.3 13.7 15.2
17.3
18.8
Bulgaria
0.7
0.7 .0.7 0.8
0.8
0.8
Hungary
2.0
2.0 5.6 12.4
11.5
14.1
Total
19.7
23.2 35.0 49.0
51.8
54.9
Percent of Total
Hungary
10.2
8.6 16.0 25.3
22.2
25.7
a. The USSR imported no inland self-propelled vessels from
Albania and Poland during 1950-55.
The Hungarian shipbuilding industry has attained its present
high level since World War II because of the importance of the USSR
as its leading customer. At the same time the Hungarian inland fleet
has been badly in need of repair or replacement. These repairs or
replacements have not been accomplished; because of the demand by
?
the USSR for vessels as reparations or exports. During the postwar
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period, Hungary has been allowed to retain only 2 maritime vessels
from its entire production of about 75. Hungary also has retained
a few minor inland vessels.
The bulk of the maritime vessels built by the shipbuilding
Industry of Hungary has gone to the USSR for coastal trade in the
Far East. Lately a few of these vessels have gone to the Baltic,
Black, and Caspian Seas. Inland vessels produced in Hungary are used
on the Soviet system of inland waterways.
B. Hungarian Exports.
An analysis of production and distribution of production by
the shipbuilding industry of Hungary indicates that the bulk of Hun-
garian production has been for export to the USSR, with little going
to other European Satellites. During 1946-55, of a total value of
1,790.8 million forints ($137.8 million) worth of vessels produced
by Hungary, 1,607.9 million forints ($123.7 million), or 90 percent,
was exported to the USSR, as shown in Table 11.* This total included
about 72 maritime vessels totaling 82,320 GRT, 76 tugs totaling
30,400 hp, and 33 passenger vessels totaling 14,850 hp. During the
Three Year Plan (1947-49), 100 percent of the total value of Hungarian
production of vessels (270 million forints -- $20.8 million) was ex-
ported to the USSR. During the First Five Year Plan (1950-54) an
average of 96 percent of the total value produced (1,129.8 million
forints -- $86.9 million) was exported, 92 percent to the USSR and
4 percent to other Satellites. Only 4 percent of the total value pro-
duced was retained by Hungary for domestic use. Under the One Year
Plan of 1955 a change in the pattern of exports began to develop.
During 1955, of the total value produced (357.9 million forints --
$27.5 million), 78.4 percent went to the USSR, 11.2 percent went to
other Satellites, and 10.4 percent was retained for domestic use.
IV. Inputs.
A. Supply of Materials and Components.
Almost all of the materials and components required by the
Hungarian shipbuilding industry are produced in Hungary. Maritime
vessels and floating cranes produced by the Gheorghiu-Dej Shipyard
are equipped with diesel engines supplied by the Ganz Railroad Car
* Appendix C, p. 31, below.
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and Engineering Plant or the "Aprilis 4" Plant (formerly the Lang
Machine Plant) in Budapest. JJ Steam engines required for inland
vessels built by the Obuda Shipyard are made in the shipyard. These
engines are of 2 types, 450 hp for passenger vessels and 400 hp for
tugs. E2/
The bulk of the iron and steel products required by the ship-
building industry is furnished by the Lenin Metallurgical Plant in
Diosgyor and the Metallurgical Plant in Ozd. Many of such important
components and materials as ship plate, castings) and fittings come
from plants located in the Budapest area in close proximity to the
important shipyards.* Some components are installed abroad -- for
example) cargo-handling gear, in Rumania, EL3/ and certain electronic
equipment such as radar and navigational devices) possibly at Odessa
In the USSR. Generally, other components and parts are produced in
the Budapest area. Indigenous production of major components is suf-
ficient to meet the requirements of the shipbuilding industry.
The Inputs shown in Table 12** reflect those required for pro-
duction at all shipyards which construct vessels. Additional inputs
of material and labor for repair facilities are estimated at less than
5 percent of the requirements for production.
B. Labor.
Employment in the shipbuilding industry has risen considerably
since World War II. In 1947 the industry had a total of about 3)800
workers, but it is estimated that by 1955 the total number of workers
reached 8,500, of which 7,200 were employed at shipyards engaged in
new construction and 1,300 were employed at ship repair facilities.
Table 6*** shows the distribution of labor in the shipbuilding indus-
try of Hungary. ELV
V. Intentions, Capabilities, and Limitations.
A. Intentions.
Production: by the shipbuilding industry of Hungary is much
greater than it was before World War II. Because this growth in
* For the locations of major suppliers of inputs for the shipbuild-
ing industry, see Appendix B.
** Appendix C) p. 32, below.
*** Table 6 follows on p. 18.
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Table 6
Distribution of Labor
in the Shipbuilding Industry of Hungary
1955
Employees
Shipyards,
and Ship Repair Facilities
Direct Labor42/
Total Labor
Gheorghiu-Dej
Obuda
Balatonfured
Danube
Mahart Ship Repair Yard
Other repair facilities
Total
2 ,400
2400
,
640
320
560
350
6,67o
3,000
3,000
800
400
800
500
8,500
a. Direct labor represents workers employed in actual
production work. Indirect labor represents workers em-
ployed in an auxiliary capacity such as that of crane
operators.
production has resulted from Soviet demand, the industry is dependent
upon Soviet orders for its economic life and literally has outgrown
the internal need for a shipbuilding industry. Any sudden termina-
tion of Soviet orders would cause an economic standstill in the indus-
try. E2/ This peculiar position has necessitated attempts by Hungary
to find markets in the Far East and in underdeveloped areas for the
products of its shipbuilding industry. These attempts have been partly
. successful and indicate one or more of the following:
1. a decrease in the Soviet demand for vessels,
2. an attempt to penetrate underdeveloped areas (for
example, tugs for Syria),
3. evidence of integration of the Sino-Soviet Bloc, and
4. an expected Increase in capacity for shipbuilding.
Present evidence seems to point to 1, 2, and 3, above, as the most
likely current possibilities, with 4 as a future possibility.
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This policy for production and export) probably undertaken with
the approval of the USSR) is considered a trend in the shipbuilding in-
dustry of Hungary that will continue during the Hungarian Second Five
Year Plan (1956-60). Future production for domestic consumption will
show a decided increase over the past although the number of maritime
vessels involved will represent only 1.6 vessels per year during 1956-60.
Repair of the inland fleet will probably continue at the Mabart Ship
Repair Yard, the one major repair facility in the country. Replacement
of the inland fleet will be accelerated during 1956-60, with 50 barges,
15 tugs, and 8 lake passenger vessels scheduled for construction.
B. Capabilities.
Before the Hungarian rebellion of October 1956 the shipbuild-
ing industry of Hungary probably possessed the capability necessary to
carry out successfully the plans for production and export.* The de-
struction of industrial facilities and material resources and the ex-
patriation of skilled workers may affect adversely the capability of
the shipbuilding industry to carry out its plans. Estimated maximum
capability for annual production on a one-shift basis of selected types
of vessels is shown in Table 7.**
C. Limitations.
The shipbuilding industry is limited to production of small
maritime vessels up to admaximum size of about 2,500 GRT because of
restrictions imposed by low water levels on the Danube. Foreign or-
ders are required in order to keep the industry at its present or at
an increased productive level, domestic demand being insufficient for
these purposes.
* See Al p. 17, above.
** Table 7 follows on p. 20.
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Table 7
Estimated Maximum Capability for Annual Production
of Selected Types of Vessels
by the Shipbuilding Industry in Hungary 2./
1956-60
Shipyard
Type of Vessel
Capability
Physical
Quantity
Value
(Million 1955
.Forints
Gheorghiu-Dej
Maritime cargo vessel
25,000 GRTy
190
Obuda
Inland passenger vessel
8,100 hp d
Obuda
Inland tug
7,200 hp
275
Balatonfured
Inland patrol craft
21,600 hp
50
Danube
Inland patrol craft
10,800 hp
25
a. Based on maximum production estimated for 1955 and on the assump-
tion that all facilities at each shipyard were used to construct the
types of vessels listed in this table. For example, it was assumed
that, of the 12 building ways at the Obuda Shipyard, 6 were used for
construction of inland passenger vessels and.6 for inland tugs.
b. A forint-dollar ratio of 13 to 1 was used for the shipbuilding
Industry. For an analysis of this ratio, see Appendix E.
c. Gross register tons.
d. Horsepower.
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APPENDIX A
LOCATIONS OF SHIPYARDS AND SHIP REPAIR YARDS IN HUNGARY
1. Shipyard*
Location
Gheorghiu-Dej Budapest
Obuda Budapest
Balatonfured Balatonfured
Danube Vac
2. Ship Repair Yard
Mahart Budapest
Csepel** Budapest
Dunapentele** Dunapentele
Siofok Siofok
Visegrad Visegrad
Baja Baja
Tape Tape
Sopron*** Sopron
* All these shipyards were in operation during 1956.
** A floating repair shop.
*** This yard does not engage in ship repair but builds pontoons for
the Hungarian army. Eg
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APPENDIX B
MAJOR SUPPLIERS OF INPUTS FOR THE SHIPBUILDING INDUSTRY OF HUNGARY 21/
Plant
Component or Material
50X1
City
A Ike
Aluminum plant
Ingots, billets, plate,
sheet, pipe rods, and
the like.
50X1
Byrnndnatinsd Metallurgical
Sheet metal.
plant
50X1
Budapest,
Lorinci Rolling Mills
Boiler and ship plate.
.50X1
Ganz Railroad Car and
Engineering Plant
Marine diesel engines,
propeller castings,
and pumps.
Aprilis 4 (formerly
Lang Machine)
Marine diesel engines)
motors, and castings.
Industrial chain
plant
Klement Gottwald
(formerly Ganz Elec-
trical Engineering)
Plant
Matyas Rakosi Metal
Plant
Crude oil pump plant
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Anchor chains and ca-
bles.
Electric motors and gen-
erators.
Welding electrodes, pro-
peller castings, pipes,
and marine boiler tubes.
Carburetors for outboard
motors and fuel injec-
tion pumps for marine
diesels.
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City and Coordinates
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Plant
Kontakta
Cable and synthetic
materials plant
Electric machine and
cable plant
Electric rotor and
machine plant.
Screw and bolt plant
Storage battery and
dry cell (formerly
Tudor) plant
Automotive electric
appliances plant .
Small pumps plant
Vehicle equipment
plant
Rubber goods plant
Gamma Optical Plant
Small motor and ma-
chine plant
AngyalfOld Iron
Appliances Plant
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Component or Material
Electrical fittings.
Insulated cable, nylon
rope, and insulation
material.
Electric motors, wiring,
and cable.
Electric motors for
pumps.
Rivets, screws, bolts.
Batteries.
Batteries.
Pumps.
Door handles and fit-
tings.
Linoleum.
Mirror parts for signal
lights.
Motors for assault pon-
toon boats.
Outboard motors.
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City and Coordinates
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Plant
Component or Material
50X1
Budapest,
GheorghiuZej Ship-
yard
Marine diesel cylinder
heads and reduction
gears.
(Continued)
Obuda Shipyard
Steam engines, marine
boilers, paddle wheels,
cogwheels, and signal
lights.
Lenin Metallurgical
Plant
Rolled steel) sections,
propeller shafts, and
crankshafts for marine
diesels.
50X1
Inotal
Aluminum Plant
Ingots, billets, plate,
sheet, and pipe.
50X1
sknl
Steel wire and cable
Wire and cable.
plant.
50X1
Metallurgical plant
Ship plate.
?zd
50X1
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APPENDIX C
STATISTICAL TABLES
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Table 8
Production by the Shipbuilding Industry of Hungary
by Shipyard, in Tonnage and Horsepower
1946-55
UnillYerd and Type of Vessel
Unit of
Measurement
Gllecrellu-Dej '
Maritime vessel 02a, 1/
Floating crane (lift capacity -- 100 metric tons) GRT
Floating crane (lift capacity -- 5 metric tons). GRT
Total. GRP
Obude
Maritime vessel ' CRT
Inland tug hPY
Inland passenger vessel hp
Total hp
Balatonflirel y
Inland passenger vessel hp
Inland patrol craft hp
Total hp
Danube
Inland patrol craft hp
grand total of GRP
Grand total of hp
1946
Three Year Plan
First Five Year Plan
?
One Year Plan
(1955)
1647
19145
1649
22Q
12a_.
1952
1953
1954
2,060
5,675
4,500
9,208
11,768
8,358
10,746
9,552
10,746
10,746
1,428
714
714
714
714
214
1,428
4,558
2,856
2,142
0
0
0
0
0
1,600
1,600
2,700
2,700
2,700
a88
6,389
5 214
9,9n
12,482
10,672
13 974
17 250
21,12
15,588
0
1,324
1,058
1,324
1,318
1,088
0
0
0
0 .
0
1,600
2,400
2,400
2,400
2,400
4,800
4,800
4,800
4,800
0
0
0
0
0
0
ROO
4,500
4,050
5,480
0
1,600
2,450
2,400
2,400
2,400
5,700
9,300
8,850,
10,200
0
0
0
0
o
450
450
o
o
0
0
0
0
0
0
0
10,600
5,400 -
0
0
0
0
011252
L2g
10,800
5 400
0
0
0
0
0
0
0
0
10,800
10,800
2 la8
lwall?
f'.1,22I
a6 LS
0
1 boo
2 488
2 480 2 400
2 408
6 150
2,25L0
y_),2 0
L61 is SO
. _15
a Gross register tons.
b Horsepower.
c In 1055 this shipyard produced a total of 2,000 deadweight tens of barges, which vas the total of non-self-propelled vessels produced during
1
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Table 9
Production by the Shipbuilding Industry of Hungary
by Shipyard', in Number of Vessels ..E1/
1946-55
Units
Shipyard and Type of Vessel
1946
Three Year Plan
First Five Year Plan
One Year Plan
(1955)
Total
1947
1948
1949
1950
1951
1952
1953
1954
Gheorghiu-Dej
Maritime vessel
2
4
4
8
10
7
9
8
9
9
70
Floating crane (lift capacity --
100 metric tons)
2
1
1
1
1
1
2
7
4
3
23
Floating crane (lift capacity --
5 metric tons)
0
0
0
0
0
6
6
9
9
9
39
Obuda
Maritime vessel
o
2
2
2
2
2
0
0
0
0
10
Inland tug
o .
4
6
6
6
6
12
12
12
12
76
Inland passenger vessel
o
o
o
o
o
0
2
10
9
12
33
BalatonfUred
Inland passenger vessel
0
o
'00001
1
o
o
2
Inland patrol craft
0
O.
0
0
0
0
0
0
30
15
45
Barge
0
0
0
0
0
0
0
0
0
2
2
Danube
Inland patrol craft
0
0
0
0
0
0
0
0
30
30
/ 60
Total
4
11
11
1/
12
22
22
Lf/
10
22
360
a. Figures represent vessels completed but not necessarily operational.
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Table 10
Value of Production and Repair by the Shipbuilding Industry of Hungary 2/
1946-55
Million 1955 Forints
Shipyard, Ship Repair, and Type of Vessel
1946
Three Year Plan First Five Year Plan
One Year Plan
(1955)
1947 1948
.1919 1950 1951 1952 1963 1954
Oheorell14-41hdY
Maritime vessel
15.7
43.2 .34.2
70.0 69.5 63.6 81.7 72.6 81.7
81.7
Floating crane (lift capacity --
100 metric tons)
17.4
8.7 8.7
8.7 8.7 8.7 17.4 60.8 34.8
26.1
Floating crane (lift capacity --
5 metric tons)
0
0 0
o o 17.4 17.4 26.1 26.1
26.1
Subtotal
A/41
/1?2 LILY
78.7 2Lg 88.7 118.5 159.5 142.8
?buds 2/
Maritime vessel
0
10.1 8.3
10.1 10.0 8.3 0 0 o
0
Inland tug
.0
17.0 25.5
25.5 25.5 25.5 51.0 51.0 51.0
51.0
Inland passenger vessel
0
0 0
0 0 0 22.0 110.0 99.0
132.0
Subtotal.
0
aj, 33.8
86-8 12=2 33.8 119 this 150.0
this
Balatonfared 2/
Inland passenger vessel
0
0 0
o o o 9.5 9.5 0
0
Inland patrol craft
0
0 0
o o o o o 25.5
12.8
Barge
0
0 0
o o o o 0 o
0.7
Subtotal
0
0 0
0 0 0 2=2 2.1 92_I
Danube
Inland patrol craft
0
0 0
0 0 0 0 0 25.5
25.5
Subtotal
0
0 0
0 0 0 0 0 25.5
925
Total of all shipyards s/
33.1
E2,2
114.3 lila au 122,2 330.0?a,kt
au
Ship repair 2/
21.6
24.0 26.6
!210 31.0 33.5 Li2 38.5 14.04
IsisU
Grand total s/
5"
103.2
zau
400.
a. The estimated margin of error is plus or minus 2D percent.
S. A forint-dollar ratio of 13 to 1 was used for the shipbuilding industry. For an analysis of this ratio, see Appendix E.
c. Including only the value of production.
d. Including only the value of ship repair.
e. Including the value of production and ship repair.
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Table 11
Value of Exports of Production by the Shipbuilding Industry of Hungary 2/
1946-55
Destination
and Type of Vessel
I2!&
Three Year Plan
Five Year Plan
One Year Plan
(1855)
Total
1947
1948
1949
1950
1951 1952 1953
1954
Million 1955 Forints tit
To the USSR
.
Maritime vesselfh
15.7
62.0
51.2
88.8
98.2
89.7 116.5
159.5
142.6
97.7
893.4
Inland vessel d
17.0
25.5
25.5
25.5
25.5 73.0
161.0
150.0
183.0
714.5
Total
ALI
79.0
ILI
114.1
123.7
115.2 189.5
320.5
292.6
280.7
1,607.9
To Communist China
Maritime vessel
18.2
18.2
To Poland
Maritime vessel
9.0
9.0
Inland patrol craft
25.5
12.8
38.3
Total
32.2
21.8
Y7.3
To Rumania
Maritime vessel
10.0
8.3
18.3
Grand total
12.1
72'?
7"
11111
133.7
AUL2 12L2
2212
:318.1
22?1
1,691.7
Percent
Percent of total value exported
47
100
100
100
100
100 95
W
93
90
0
a. The estimated margin of error is plus or minus 20 percent. The figures do not include value of repair.
b. A forint-dollar ratio of 13 to I was used for the shipbuilding industry. For an analysis of this ratio, see
Appendix E.
C. Including floating cranes.
d. Tugs and passenger vessels.
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Table 12
Input Requirements for Production by the Shipbuilding Industry of Hungary iy
1950 and 1955
Percentage
Quantity of the Hungarian Total
Type of Input
1950 1955
1950
1955
Carbon steel
Alloy steel
Metric Tone
8,596 13,916
448 1,114
Total
. 3143 15,023
1.78
1.70
Cast iron
294 2,868
N.A.
N.A.
'Copper and copper base alloys
216 639
N.A. hi
N.A. hi
Aluminum
24 2,048
0.11
5.52
Lead
11 181
N.A. hi
N.A. hi
Tin
6 33
0
0
Zinc
18 92
N.A. hi
N.A. hi
Rubber
12 16
0
0
Nickel and miscellaneous metals
18 106
0 -
0
Lumber
429 2,539
0.05
0.25
Thousand
Kilowatt-Hours 8/
Power
11,796 24;707
0.42
0.45
Man-Years
Labor
1,168 3,090
0.12 di
0.24 hi
a. All the requirements reflect US practice. The requirements include all in-
puts within the shipyard and within the component plants but do not include in-
puts for production of raw materials or inputs for ship repair. The estimated
margin of error is plus or minus 25 percent.
b. Indigenous production of these inputs during 1950 and 1955 was either zero
or negligible.
c. Including not only electric power but also all inputs of other power and
fuel, measured in equivalent kilowatt-hours.
d. Percentage of the industrial labor force.
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APPENDIX D
INDIVIDUAL SHIPYARDS AND SHIP REPAIR YARDS IN HUNGARY
1. Gheorghiu-Dej Shipyard.
a. Locale and History.
The Gheorghiu-Dej Shipyard is located on the left (east) bank
of Ujpest Basin, an arm of the Danube River, in the Fourth District
of Budapest. Because the shipyard includes an independent crane plant
which works in close cooperation with the shipyard, both the shipyard
and the crane plant are Considered as a single entity. Et5/
Opposite the main section of the shipyard is the former Latz-
kovics Shipyard, which has been part of the Gheorghiu-Dej Shipyard
since 1949. g2I Before .11 July 1952 the Gheorghiu-Dej Shipyard was
known as the Ganz Shipyard. On that date the name of the shipyard
was changed in honor of Gheorghiu-Dej? Premier of Rumania.
b. Biographical Data.
The following persons have been identified at the Gheorghiu-
Dej Shipyard:
Name
Kiss, Istvan
Ormos
Paal, Joszef
Udvardi, Sandor
Schmidt, Imre
Position
Manager in 1955 10/
Director in 1954 11/
Chief Engineer in 1953 32
Production Engineer 33
Chief Accountant 34
c. Facilities.
The Gheorghiu-Dej.Shipyard has an area of some 50 acres and
contains the necessary machine ships, foundry, carpenter shop, and
other shops associated with shipbuilding. 12/
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The main section of the shipyard is estimated to have 10 trans-
verse building ways, which are in reality 1 continuous construction
area. These ways are served by 5 traveling gantry cranes, 1 mobile
25-ton jib crane, and 1 other mobile crane. The total length of the
construction area is about 2,500 feet, each set of ways being about
250 feet long and 60 feet wide.
Maritime vessels and floating cranes built at this shipyard
are launched transversely, probably on temporary or removable ground
ways.
There are possibly 4 additional trans-
verse building ways, each set of ways being 250 feet long and 6o feet
wide, in the area of the former Latzkovics Shipyard. The facilities
have expanded considerably since the end of World War II. The re-
ported capital expenditures for new equipment for the Gheorghiu-Dej
Shipyard are shown in Table 13.
Table 13
Reported Capital Expenditures at the Gheorghiu-Dej Shipyard in Hungary
1948-53
Year
. Expenditure
(Million Current Forints) W
Remarks ,
1948
1952
1952
1952
1952
1953
1953
43.0
2.6
o.4
4.8
0.7
38.0
0.5
Planned for a 3-year period. h/
For a?"concrete wall" (probably a
fitting-out quay). 2/
For a forge. 2/
For a carpenter shop. 2/
For an electric welding shop. 2/
For a new bull-fabrication shop. d/
For a dining hall and a nursery. 2/
a. A forint-dollar ratio of 13 to 1 was used for the shipbuilding in-
dustry. For an analysis of this ratio, see Appendix E.
d' 2Y
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Names or Class
Ul'yana Gromova
Class
Simeiz) Koreiz
Chiatura
(1Y?CEtatury)
Don, Dnepr)
!!!:11ia;sapl,
Odessa, Sim-
0
S-E-C-R-t-T
Main Characteristics
Tonnage, 1,194 GRT
Length, 216 feet
Beam) ho feet
Draft, 13 feet
Speed, 9 knots
Propulsion, diesel
Power, 800 hp
Tonnage, 1)030 GRT
Length, 236 feet ?
Beam, 33'feet
Draft) 11 feet
Speed, 14 knots
Propulsion) diesel
Power, Boo estimated hp
Tonnage, 2,396 GRT
Length, 306 feet
Beam, 43 feet
Draft, 19 feet
Speed, N.A.
Propulsion, diesel
Power, 1,600 hp
Tonnage, 1,125 GRT
Length, 238 feet
Beam, 33 feet
Draft) 11 feet
Speed, 14 knots
Propulsion, diesel
Power, 800 estimated hp
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Remarks
Cargo type. Production be-
gan in 1949 and was still
In progress in 1956. It.
Is estimated that 56 ves-
sels of this class were
built by the end of 1955.
All but three of these
vessels were exported to
the USSR. Two were ex-
ported to Communist China)
and one was retained by
Hungary.
Cargo type. These two ves-
sels were built in 1946
and were exported to the
USSR.
Cargo type. This vessel
was built in 1948 and was
exported to the USSR.
Cargo type. These seven
vessels were built in 1947
and 1948 and were exported
to the USSR.
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Names or Class
Manych, Ural,
Desna
Mazowsze
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Main Characteristics
Tonnage, 1,022 GRT
Length, 238 feet
Beam, 33 feet
Draft, 10 feet
Speed, 14 knots
Propulsion, diesel
Power, 800 estimated hp
Tonnage, 1,181 GRT
Length, 198 feet '
Beam, 35 feet
Draft, 10.5 feet
Speed, 14 knots
Propulsion, diesel
Power, 1,600 hp
Capacity, 600 passengers
Remarks
Cargo type. These three
vessels were built in 1949
and 1950 and were exported
to the USSR.
Coastal passenger type.
This vessel was built in
1955 and was exported to
Poland.
Since 1946 the Gheorghiu-Dej Shipyard has also built floating
cranes of the two types listed below. LI-2/
Type
Self-propelled
Non-self-propelled
Main Characteristics
Tonnage, 714 GRT
Length, 141 feet
Beam, 62 feet
Mean draft, 4.5 feet
Speed, 4.7 knots
Lift capacity, 100 tons
Propulsion, diesel
Power, 320 hp
Tonnage, 300 GRT
Length, 72.7 feet
Beam, 47.6 feet
Mean draft, 216 feet
Lift capacity, 5 tons
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Remarks
Twenty-three of these
self-propelled cranes
were built by the end of
1955. Nearly all were
exported to the USSR.
It is estimated'that 39 of
these non-self-propelled
cranes were built by the
end of 1955. Nearly all
were exported to the USSR.
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e. Labor.
Figures on labor at the Gheorghiu-Dej Shipyard during 1947-55
have been interpolated as follows.
Year
Employees
1947
2,700-
1948
2,750
1949
2,800
1950
2,800
1951
2,85Q
i952
2,900
1953
2,900
1954
2,950
1955
3,000
Wages of the employees of the shipyard are reported to compare
favorably with those of other industrial workers, but the application
of working norms which exploited the workers, of drives in productivity,
and of harsh methods of labor control have combined to induce high rates
of absenteeism and turnover of labor. The increase in turnover of
labor in 1954 over that in 1953 was reported to be from 100 to 200 per-
cent.
f. Maximum Capability for Production.
Time for production of 1 maritime vessel at the Gheorgbiu-Dej
Shipyard is reportedly 8 months.11// On the assumptions that all 14
building ways were devoted to production of the same type of vessel
and that a 1-shift, 48-hour-week operation for labor was in effect,
annual production of 21 vessels, or about 25,000 GRT, valued at 191 mil-
lion forints ($14.7 million) is possible. In comparison, production
during 1955 at this shipyard was about 15,000 GRT, valued at 140 mil-
lion forints ($10.8 million). The product mix In 1955, however, in-
cluded both maritime vessels and floating cranes.
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2. Obuda Shipyard.
a. Locale and History.
The Obuda Shipyard is located on the west side of the southern
end of Margit Island) in the Third District of Budapest. This ship-
yard was owned by Austrian interests before 1939. After 1945 the USSR
took over the shipyard and subsequently turned it over to the Hungarian
government in June 1952.
b. Biographical Data.
The following persons were identified at the Obuda Shipyard in
late 1955 AV:.
Name
Borka, Attila
Hausser? Adorjan
Papp, Laszlo
Szasz, Ferenc
Kovacs, Istvan
Position
Director
Chief Engineer
Chief of Construction
Chief Technologist
Chief of Personnel
5
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Names or Type
Dunay, Irtysh,
Sheksna, Pechora,
Sukhona, Kolyma, -
Midia, Sulina,
Mangalia, Constan-
tsa
Inland paddle wheel
passenger vessel
S -E -C -R-E -T
Main Characteristies
Tonnage, 544 to 622 GRT
Length, 189 to 197 feet
Beam, 28 to 30 feet
Draft, N.A.
Speed, 8 to 16 knots
Propulsion, diesel
Power, 800 estimated hp
Tonnage, 450 full load
displacement tons*
Length, 236 feet
Beam, 51 feet
Draft, 4 feet
Speed, 10 knots
Propulsion, steam**
Power, 450 hp
Inland paddle wheel Tonnage, 280 full load
tug displacement tons
.Length, 187 feet
Beam, 57 feet
Draft, 3.5 feet
Speed, 9 knots
Propulsion, steam
Power, 400 hp
e. Labor.
Remarks
Cargo type. Ten vessels
were built during 1947-51.
The Dunay, the Irtysh,
the Sheksna, the Pechoi.a,
the Sukhona, and the Ko-
lyma were exported to
the USSR. The Midia, the
Sulina, the Mangalia, and
the Constantsa were ex-
ported to Rumania.
It is estimated that 33 of
these vessels were built
by the end of 1955.
It is estimated that 76 of
these tugs were built by
the end of 1955.
Figures for labor at the Obuda Shipyard during 1947-55 have
been interpolated as follows.
* Full load displacement tonnage of a surface vessel is the number
of tons (in tons of 2,240 pounds) of water displaced by the vessel
afloat, fully loaded, including all equipment, outfit, crew and their
effects, fresh water, provisions, fuel, and all other items necessary
for the operation of the vessel.
** These steam engines are produced within the shipyard.
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Year
Employees
1947
1,509
1948
1)700
1949
1)900
1950
2,100
1951
2,250
1952
2,450
1953
2,600
1954
2,800
1955
3,000
In 1955, 6o percent of labor was skilled, 4o percent unskilled;
95 percent was male, and 5 percent female. The female employees were
mostly skilled workers such as machine operators and welders.
The Obuda Shipyard, like the Gheorghiu-Dej Shipyard, also has
trouble with increased labor norms. In the summer of 1955 the regime
decreed an increase in the labor norms for certain types of employees.
At the same time the payroll allotment of the shipyard was reduced by
30 percent. The increase in labor norms did not bring about a reduc-
tion in wages, because the employees concerned showed an increase in
their norms by submitting faked records of production. They received
the same salaries, but on paper they worked faster and wasted less
time.
Petty theft and corruption seem prevalent at the Shipyard
f. Maximum Capability for Production.
On the assumptions that all 12 building ways at the Obuda
Shipyard were used for construction of inland passenger vessels and
inland tugs, on the basis of 6 ways for each type, and that each type
required 4 months to be produced, the shipyard could construct 18 pas-
senger vessels and 18 tugs annually. This production is the equiva-
lent of 15,300 hp (8,100 hp of passenger vessels and 7)200 hp of tugs),
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valued at abut 275 million forints ($21.2 million). In comparison,
1955 production at this shipyard of the same types of vessels was
valued at 183 million forints ($14.1 million), or about 67 percent
of value of maximum capability.
3. Minor Shipyards.
a. Balatonfured Shipyard.
The Balatonfured Shipyard is on the northwestern shore of Lake
Balaton, in western Hungary, isolated from the town of Balatonfured.
The shipyard possibly has 1 marine railroad and 3 small building ways
of unknown dimensions. 21/ Modernization and construction of new
building facilities were in progress during 1956, and a new building
way and a covered assembly area were reported under construction. The
cost of the building way is reported at 5 million forints ($380,000). 2V
This shipyard has built lake passenger vessels, pontoons, alu-
minum sailboats, "spray boats" for agriculture, and inland patrol craft
for the Hungarian and Polish armies. Some consumer goods such as re-
frigerators and motorcycle sidecars have also been made here. 22/ Planned
production under the original Second Five Year Plan (1956-60) included
40 barges with cargo carrying capacities of 1)000 metric tons. Pro-
duction during 1956 is reported to have been 3 small passenger vessels
and 8 barges. In 1955, about 800 employees worked at this shipyard.
b. Danube Shipyard.
The Danube Shipyard at Vac, on the left bank df the Danube
River, about 40 kilometers north of Budapest, has built inland patrol
craft for the Hungarian and Polish armies.? These craft are the same
type as those built at nfured Shipyard. A total of 28 of
theSe patrol craft were at the shipyard in late 1955. 2/
The Danube Shipyard has no actual building ways, and construc-
tion is done on stocks in the open. In July 1956 a new assembly hall
was reported under construction. The shipyard plans to complete dur-
ing 1956 10 small inland passenger.vessels of aluminum. In 1955 this
shipyard had about 400 employees.
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4. Ship Repair Yards.
The Mahart Ship Repair Yard is the largest and most important of
the eight ship repair yards in Hungary.* It is north of the Gheorghiu-
Dej Shipyard, on the northeast side of Nep Island. This yard has 2
transverse building ways, each set probably being 250 feet long, and
possibly 2 marine railroads. These facilities are used for repairing
and reconditioning maritime and inland vessels. No new vessels are
built at this yard. It is estimated that this yard employed 800 peo-
ple in 1955.
* For a list of ship repair yards, see Appendix A.
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1. Forint-Dollar Ratio.
The estimated cost of constructing a Hungarian vessel of 1,194 GRT
Is 1955 us $600 per GRT. The development of the cost in 1955 us dollars
was determined by averaging the cost of many cargo vessels of various
types built in the US during 1943-45. 22,/ The types of vessels, cost
per ton of light ship displacement, and speeds of the vessels are as
follows:
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APPENDIX E
METHODOLOGY
?
Cost
(US Dollars
Type per Ton
of of Light Ship Speed
Vessel Displacement) (Knots)
C-1
684
14
C-2
622
15.5
C-3
631
16.5
c-4
667
17
Liberty
524
11
Victory
589
15.3
From these averages a production function of cost per ton of light
ship displacement related to speed was established, thus indicating
that the cost of a vessel with a speed of 9 knots (similar to the Hun-
garian type) was 1943 US $500 per ton of light ship displacement.
To convert this cost to 1955 US dollars, the following calculation
was used:
236
500 x - 875
135
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500 = cost in 1943 US dollars,
135 = index of production for 1943
(1939 7 100), 29/
236 = index of production for 1955, %./ and
875 = cost in 1955 US dollars per ton of
light ship displacement.
Cost per ton of light ship displacement times 0.68 is cost per GRT.
Therefore, 875 times 0.68 is approximately 1955 US $600 per GRT.
The forint-dollar ratio-of 13 to 1 was determined by dividing the
Plan cost (7,605 forints per GRT) by %he estimated US dollar cost
($600 per GRT), resulting in a ratio of 13 to 1 for the shipbuilding
industry. No directly comparable dollar values were available; and,
Indeed, few if any vessels of this type have been built in the US in
recent years.
2. Costs Used to Value Production.
The costs used to value all types of vessels produced in Hungarian
shipyards are shown in Table 14.*
The costs of maritime vessels, floating cranes, inland tugs, inland
passenger vessels, and inland patrol craft shown in Table 14 were ob-
tained from price lists of 1953. L./
Costs of small passenger vessels (none completed at the end of 1955)
are based upon an East German cost converted to US dollars for a simi-
lar vessel ($733,500). ,2!/ This cost was converted into forints on
the basis of the forint-dollar ratio of 13 to 1. Costs of barges are
derived from data supplied by US builders ($105 per DWT) and converted
Into forints on the basis of the forint-dollar ratio of 13 to 1.
3. Value of Production by Belgium During 19557
The shipbuilding industry of Hungary was compared with the ship-
building industry of Belgium on a value basis because Belgium is the
* Table 14 follows on p. 49.
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Table 14
Costs Used to Value Production
by the Shipbuilding Industry of Hungary
1946-55
Type of Vessel Size
Maritime vessel
Floating crane
(100-ton capacity)
Floating crane
(5-ton capacity)
Inland tug
544 to 1,194 GRT Ei
714
300
GRT
CAT
4004
Inland passenger 450
vessel
hp
Inland passenger 450 hp
vessel
Inland passenger . 110 hp
vessel
Inland patrol craft
Barges
360 hp
1,000 DWT di
Costs _ Remarks
7,605 forints
per GRT 11/
12,170 forints
per GRT
9,650 forints
per GRT
4,250,000 fo-
rints per tug
11,000,000 fo-
rints per ves-
sel
9,535,500 fo-
rints per ves-
sel
2,330,900 fo-
rints per ves-
sel
850,000 forints
per craft
1,365,000 fo-
rints per
barge
Self-propelled.
Non-self-propelled.
Steam, paddle
Steam, paddle
Diesel.
Diesel.
wheel.
wheel.
Non-self-propelled.
a.
b.
For
C.
d.
Gross register tons.
A forint-dollar ratio of 13 to 1 was used for the shipbuilding industry.
an analysis of this ratio, see 1, above.
Horsepower.
Deadweight tons.
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only Western country with about the same number of employees and ship-
yards. The analogy is far from perfect, however, because the Belgian
shipbuilding industry is engaged in construction and repair of large
maritime vessels and because shipbuilding is probably more important
to the economy of Belgium than the Hungarian shipbuilding industry is
to the ,economy of Hungary. It is necessary, therefore, that the com-
parison be used with caution because it is valid only in general terms.
In 1954, Belgium produced 97,300 GRT valued at $48 million, or
$493 per T. In 1955, Belgium produced 83,510 GRT. The value
for this tonnage was not given. VI/ In 1955 the value of production,
based on $493 per GRT, equaled $ 1 million. To this figure was added
6.6 percent* to account for the increase in building costs between
1954 and 1955. The resulting figure of $43.7 million was divided
by 82 percent (the estimated difference in cost between the figures
for Belgium and the US).** Thus the value of Belgian shipbuilding in
1955 in terms of US costs equaled $53 million plus $21 million for
ship repair, or a total of $74 million.
U. Value of Ship Repair by Hungary.
a. During 1955.
Total labor for production in 1955 = 7,200 workers.
Direct labor for production in 1955= 0.8 x 7,200=
5,760 workers.
Cost of direct-labor per year in 1955 = direct labor times
average monthly wage times 12 months (5,760 x 900 forints
x 12) = 620208,000 forints.
Total value of production in 1955 = 357,900,000 forints.
Direct labor cost = 62,208,000 0.174
Value of production 357,900,000
* This figure is the increase in costs in the Netherlands between
1954 and 1955. The figure for the increase in costs in the ship-
building industry in the Netherlands was applied to the shipbuilding
industry in Belgium because information from the US Maritime Admin-
istration indicated a similarity in the increases in costs of ship-
building in both countries.
** This resulting figure is based on information from the US Mari-
time Administration indicating that the ratios of Belgian and Nether-
land costs to US costs are approximately equal, the Netherland costs
being 82 percent of US costs.
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In the US, cost of direct labor for production = 0.27 of
total cost.
In the-US) cost of direct labor for repairs = 0.35 of
total cost. ?.?/
The assumption that the ratio between cost of direct labor
for repairs and for production in Hungary is the same as
In the US gives the following:
Labor cost for repairs in Hungary = 0.174 x 0.35 0.226 of
0.27
total cost.
Total labor for repairs in Hungary in 1955 = 1,300 workers.
Direct labor for repairs in Hungary in 1955 = 0.70 x 1,300 =
910 workers.
Total cost of direct labor for repairs = direct labor times
average monthly wage x 12 months (910 x 900 forints x 12) =
9,830,000 forints.
9,2
Total value of repairs in Hungary in 1955 = 183000
0.22 -
43,000,000 forints.
Value of production in 1955 = 357,900,000 forints = 89.3 per-
cent.
Value of repairs in 1955 43,000,000 forints . 10.7 percent.
Total value of production of the shipbuilding industry in
Hungary in 1955 = 400,900,000 forints ($30,840,000) =
100.0 percent.
b. During 1947.
Total labor for repairs in Hungary in 1947 = 720 workers.
Direct labor for repairs in Hungary in 1955 = 0.70 x 720 .
500 workers
Total cost of direct labor for repairs = direct labor times
average monthly wage times 12 months (500 x 900 forints
x 12) = 5,400)000 forints.
Total value of repairs in Hwneary in 1947 5,500,000
-
24)000,000 forints ($1,800,000). 0.226
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Between the figures for 1947 and 1955 a straight line inter-
polation, which supplied the estimated value of ship repairs for the
Intervening years, was made. A continuation of this interpolation
provided the value for 1946.
5. Value of Production by Hungary During 1956-60.
The value of froduction in 1955 = 357,900,000 forints.
The value of exports in 1955 = 90 percent of 357,900,000 or
322,100,000 forints.
It is estimated that by 1960 the volume of foreign trade will
increase by 40 percent over that in 1955. L9/
In 1960 the ;volume of foreign trade = 450,900,000 forints.
Under the original Second Five Year Plan (1956-60), Hungary was to
construct vessels for domestic use valued at 281,000,000 forints.
Average yearly value of vessels to be retained by Hungary =
56,200,000 forints.
Total value of production in 1960 = total value of vessels pro-
duced for foreign and domestic use,(450,9001000 + 56,200,000
forints).
Value of production in 1960 = 507,100,000 forints ($39,000,000).
Points on the graph for the value of production in 1955 and 1960
were plotted, and a straight line interpolation gave the value of
production for intervening years.
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