Shipbuilders in distress - Report brings hope for crisis-hit Meyer Werft
The Papenburg-based Meyer Werft, which is fighting for its existence, should and can be refurbished according to a report from an external expert, a spokesperson from the Lower Saxony Economy Ministry in Hannover stated. The yard is reportedly fundamentally refurbishable and worthy of refurbishment. The report is required for the granting of bank loans as well as for the approval of guarantees from the state and the federal government.
The yard initially declined to comment on the report. "We first want to inform the workforce," a spokesperson said, adding that a statement might be made on Monday.
The company needs to raise more than 2.7 billion Euros by the end of 2027 for financing new shipbuilding projects. This amount reportedly includes the increase of equity capital by 400 million Euros demanded by banks.
Back in competition in three years
Lower Saxony's Economy Minister Olaf Lies spoke on inquiry about a crucial point for the future course. The report attests the yard a strong order situation and a strong customer structure. The products of the company serve a rapidly growing market and are highly sought after. "The goal is to make the yard competitive again on the market in the next three years. This report provides the foundation for that," Lies said.
Unlike in other restructuring cases, the Meyer Werft does not have a problem with its future business model. That's an important signal for the colleagues on the yard and for suppliers. Lies also pointed out that the expert report identified urgent optimization potentials.
"It's the management's task to now consistently continue the path that has been taken, together with the workforce," Lies said. The state will stand by the side of the Meyer Werft and its workforce.
Employees should be involved
The report clearly shows that the business model of the Meyer Werft has a future, said SPD state legislator and former works council chairman of the Meyer Werft, Nico Bloem. "In the optimization processes, involvement of the workforce, works council, and IG Metall is crucial."
The report is a central basis for the support of the yard by the state, said CDU fraction leader Sebastian Lechner: "Based on the restructuring concept, the state and the federal government can grant the necessary state aid to temporarily strengthen the equity capital and secure the financing of upcoming orders with guarantees."
Impact of the Corona Pandemic
The yard, known for its cruise ships, is in its gravest crisis in its more than 200-year history. The yard currently has orders up to 2028. However, some contracts for cruise ships were signed before the Corona Pandemic.
Due to the interim decline in the tourist market, the orders were adjusted in agreement with the shipping companies. However, they do not see any adjustment to the significantly increased energy and raw material prices due to the Russian attack on Ukraine. The yard receives about 80% of the purchase price only at delivery and must finance the construction with loans.
Restructuring concept agreed upon
At the beginning of July, the management reached an agreement with the works council and IG Metall on a restructuring concept. Approximately 340 of the more than 3,000 jobs are to be eliminated. An supervisory board and a corporate works council are to be established, and the company headquarters are to be moved back from Luxembourg to Germany.
The owner family, including patriarch Bernard Meyer, also acknowledged this. He had moved the company headquarters to Luxembourg in 2015 to avoid the required supervisory board with employee co-determination in Germany. The company aims to be more profitable and considers the market situation to be good.
Negative impacts beyond the region
The end of the yard, according to industry experts, would have negative consequences for the entire German shipbuilding industry. But for the state of Lower Saxony, the implications would be enormous: In addition to the more than 3,000 employees, more than twice as many people are directly employed by suppliers. The regional economic interest group Ems-Achse recently reported this.
Two-thirds of them work in Emsland, Ostfriesland, and further in Lower Saxony. Therefore, approximately 18,000 people depend on Meyer Werft for their employment, including the Meyer Visitor Center, tourism due to the yard, and the consumption needs of the yard employees.
- The external report suggests that Meyer Werft in Papenburg, situated in Lower Saxony, can be significantly refurbished to secure its future.
- Olaf Lies, Lower Saxony's Economy Minister, highlighted the strong order situation and customer structure of Meyer Werft, emphasizing their role in a rapidly growing market.
- Lies also mentioned the identification of urgent optimization potentials highlighted in the report, indicating the need for management and workforce collaboration.
- Nico Bloem, a former works council chairman of the Meyer Werft and SPD state legislator, emphasized the importance of involving the workforce, works council, and IG Metall in the optimization process.
- CDU fraction leader Sebastian Lechner stated that the restructuring concept, based on the report, allows for state aid to temporarily strengthen equity capital and secure financing for upcoming orders.
- The Coronavirus pandemic has affected Meyer Werft, a shipyard known for its cruise ships, causing adjustments in orders due to an interim decline in the tourist market.
- The shipbuilding industry and the state of Lower Saxony could experience significant negative impacts if Meyer Werft were to cease operations, as more than 3,000 employees depend on the yard directly, with more than 18,000 people indirectly affected.
