The rise and fall of the German shipyards

To analyse

Status: 10.01.2022 6:15 p.m.

Until the outbreak of Corona, the German shipyards benefited from the cruise ship boom. Now the crisis is driving MV Werften into bankruptcy. What future prospects does the industry have?

By Notker Blechner,

A few years ago, the “Global Dream” in Wismar still made for big dreams. There was talk of a “job miracle”. In the three East German shipyards of Wismar, Rostock and Stralsund, the number of jobs for the construction of the largest cruise ship in the world doubled. 9500 passengers and 2500 crew members should have space on the “Global Dream”. Among other things, an amusement park, a water slide and a roller coaster were to be accommodated on 20 decks.

1900 jobs at risk

Nothing will come of it now. The dream threatens to turn into a nightmare. At noon today, MV Werften filed for bankruptcy. More than 1900 jobs are at risk. It is questionable whether the construction of the cruise giant will ever be finished.

The investor was both a blessing and a curse. The Genting Group from Hong Kong took over the shipyards in Stralsund, Rostock and Wismar in 2016 and, according to its own information, pumped two billion euros into the locations. Because of the Corona crisis and the slump in the cruise business, the entertainment company, which also operates casinos, is now running out of money. Genting refused a contribution of 60 million euros to save MV Werften. The Federal Ministry of Economics had promised help, but demanded guarantees and a contribution from the co-owner. With around 600 million euros from the economic stabilization fund, the gigantic cruise ship was to be completed.

Almost 2,000 jobs are at risk: MV Werften employees leave the shipyard after a short-term staff meeting.

Image: picture alliance / dpa / dpa-Zentral

Interested in locations in Stralsund and Bremerhaven

Now the question arises whether the MV Werften can still be saved. IG Metall is calling for the shipyard in Stralsund and the Bremerhaven location to be sold quickly. In Stralsund, the city could buy the space and then let companies such as Nordic Yards settle in, said Daniel Bischof, head of IG Metall coast And in Bremerhaven there are two interested parties, one from the Arab region and one from the region.

The oldest shipyard also went bankrupt

MV Werften are not the only victims of the German shipbuilding crisis. Germany’s oldest shipyard, Pella Sietas in Hamburg, went bankrupt last summer. You are threatened with extinction after 386 years. Other shipyards such as FSG in Flensburg and Nobiskrug in Rendsburg were saved from bankruptcy by the well-known young German investor Lars Windhorst.

Other shipbuilders had to cut costs and cut jobs. The cruise ship manufacturer Meyer Papenburg cut hundreds of jobs. And recently Blohm + Voss announced the reduction of 133 jobs in the civil repair business.

The industry has been in crisis for a long time

“The German shipbuilding industry has been in crisis for decades,” says industry expert and ex-professor for maritime economics in Bremen, Ulrich Malchow. The construction of tankers, container ships and ferries has shifted to low-wage countries in Asia – first to Japan, then to South Korea and now increasingly to China. Only cruise ships, yachts and naval ships have remained in German industry.

And even the cruise ships could soon be increasingly manufactured in China. Meyer boss Bernard Meyer believes the first cruise ship in the Middle Kingdom will be completed in 2025. “Many German politicians will still experience their miracles,” he said in the “Welt am Sonntag”. “We have to decide whether we want to have our own shipbuilding facility in Europe.”

Corona is turning off the cruise industry’s business

The corona pandemic has already brought the cruise business to a standstill. Meyer Papenburg landed just one order last year. According to the Meyer boss, the cruise lines burned around 20 billion dollars in 2020, and in 2021 it will have been another ten billion. It is unclear when the industry will recover. Most recently, Omikron has stopped several cruises.

A good 200,000 jobs still depend on the maritime industry in Germany. Five large companies dominate the German shipbuilding industry: the Meyer Group, MV Werften, the FSG Group, the Lürsen Group and Thyssenkrupp Marine Systems. There are still 60 shipyards in total. Not all are bad. IG Metall coastal district manager Friedrich refers to a certain stability in the medium-sized shipyards and those who build large yachts.

Emission-free ships as a way out?

In future, however, German industry will only have a chance with ships that no one else can build, he says. Germany should become a pioneer in emission-free ships. The federal government has set itself the goal of building the first zero-emission cruise ship in Germany by 2030.

In addition, German shipbuilders could concentrate on niches such as battery or fuel cell powered yachts. And re-entering the business with platforms for the booming offshore wind energy could be worthwhile.

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