Meyer Werft is experiencing a challenging period of recoupment.
In a last-minute intervention, the state saves Meyer Werft from financial ruin. At a recent assembly, Lower Saxony's Minister of Economics, Olaf Lies, speaks optimistically about better times ahead, but first, there's a necessary restructuring - and that means job losses. Around 340 positions might be eliminated.
The billion-euro rescue of the financially struggling Meyer Werft in Papenburg, Lower Saxony, is now a done deal. All necessary documents have been signed off, said Olaf Lies following the assembly at the shipyard. "The shipyard's future is now secured, and we anticipate a promising evolution of the sites," said the SPD politician. However, it's also clear that the shipyard now enters a "challenging restructuring phase".
Last week, both the Budget Committee of the German Bundestag and the Budget Committee of the Lower Saxony state parliament gave their approval for state aid. On Friday, Lies stated that contractual negotiations were still underway. A "significant number of banks" are part of the Meyer Werft rescue operation.
Established over 200 years ago, the company, renowned for its cruise ships, is currently facing financial hardships. The federal government and the state have agreed to provide temporary ownership of the company. The bailout package includes the federal government and the state purchasing about 80% of the shipyard's shares for around 400 million euros together. They will also offer guarantees of around one billion euros each to secure bank loans.
Approximately 7,000 people work for the Meyer Group, which operates not just in Papenburg, but also in Rostock and Finland's Turku. Despite the well-stocked order books of the shipyard, some pre-pandemic cruise ship contracts do not allow for adjustments to the soaring energy and raw material prices. Moreover, in the shipbuilding industry, most of the construction price is paid upon delivery of the ship. Consequently, Meyer Werft must raise almost 2.8 billion euros for funding new ship construction by the end of 2027. Time was of the essence for the bailout: an agreement needed to be reached by September 15th, otherwise, the shipyard would run out of funds.
The bailout package, consisting of temporary ownership and financial aid from both the federal government and Lower Saxony, aims to save Meyer Werft from bankruptcy, impacting its Economy. Due to the necessary restructuring, around 340 jobs might be eliminated at the shipyard.
