U.S. shipbuilders need federal aid to stay afloat in a flood of foreign competition, according to a University of Pittsburgh industry expert.

"We're losing an entire industry," said Paul A. McWilliams, executive director of the university's NASA Industrial Applications Center, a research group.

Unless the government steps in, "I am convinced that in the next few years we will have lost our capacity in a critical area to our national defense," he said.

Government contracts for submarines and other military vessels keep some of the nation's 50 shipbuilders busy, but others could sink into bankruptcy soon, McWilliams said last week at a White House-sponsored conference on productivity.

"Easily half of them could go under within the next two years, and I think that's being optimistic," he said. "Many of the shipyards now are on a maintenance level."

Domestic shipbuilders, like their counterparts in the steel and auto industries, must compete with Korean, Japanese and other Far Eastern producers that enjoy radically lower labor costs, McWilliams said.

Foreign-built ships will claim up to 85 percent of the U.S. market this year--far above the peak level of 22 percent for imported steel last year, he said.

Excluding military trade, American shipyards did $11 billion worth of business last year, constructing only nine ships and repairing others, McWilliams said. So far this year, he said, "there are no new ships being ordered."

For the past five years, industry employment has dropped about 15 percent annually, and now stands at 172,000 workers, McWilliams said.