Germany is investigating rescue for Genting’s shipyards
There are urgent talks between MV Werften and the shipping company Genting Hong Kong with the German federal and state government about the release of additional rescue funds to keep the work of the financially troubled shipyard group going. The focus of the negotiations on a rescue package worth possibly more than 600 million US dollars is the continuation of the ongoing cruise ship building projects of the three east shipyards, but also talks about a possible reduction of the workforce by a third. In separate discussions there is talk of the closure of the Lloyd shipyard in Bremerhaven, which is also owned by MV Werften.
Last October, the state of Mecklenburg-Western Pomerania, in which the shipyards are located, and the federal government received an initial bridging loan from the Federal Economic Stabilization Fund (WSF) in the amount of 228 million at the shipyard sites. The bridging loan was set up to secure operations for a few months while a more comprehensive economic assessment could be carried out. According to the Ministry of Economic Affairs in Mecklenburg-Western Pomerania, the shipyard group received an additional $ 65 million in early 2021 to save the company from bankruptcy.
After meeting last Friday, the minister said her focus was on providing the finances needed to maintain short-term work and employment through the construction of the two 200,000 GT cruise ships currently being built for Genting’s Dream Cruises . Work on the Global Dream’s first cruise ship began in September 2018, followed by her sister ship a year later.
MV Werften stopped work in spring 2020 and later said it would not resume work until global supply lines were restored. According to German media reports, work on the two giant cruise ships resumed to a limited extent at the end of 2020. However, work on a smaller expedition cruise ship, the Crystal Endeavor, is almost complete. The minister said she believed this ship was 95 percent complete and would be delivered shortly, while Crystal Cruises announced it would postpone the launch of the Crystal Endeavor until August 2021.
“The prerequisite for the granting of the federal loan is the adjustment of the number of employees to the order situation,” said Peter Fetten, Managing Director of MV Werften. The company had started discussions with unions and government agencies to launch a transition program that could see up to 1,200 of the group’s 3,000 lose their jobs. Workers protested against the planned job cuts and feared that work at one of the group’s three locations will be discontinued.
In response to the expected long-term downturn in the cruise industry, MV Werften has also informed government officials that they want to realign the shipyard’s work towards tankers and platform ships. Genting acquired the three shipyards that make up the group in 2016 to focus on building ships for its Crystal Cruises and Dream Cruises cruise lines. However, the minister said the plan to expand to additional ship types is a medium-term initiative, while the cruise lines are the best hope for short-term work. The Federal Ministry’s decision is expected to be announced shortly after the financial details have been examined, and an agreement should be reached by the end of March.
Independently of this, talks are being held in Bremen with the Federal Ministry of Economics, the trade unions and employee representatives about the fate of Lloyd Werft. As one of the oldest German shipyards, the company was also taken over by Genting in 2016, but continued to focus on repairing cruise ships and building large luxury yachts. Citing the lack of work, as the shipping companies postponed the major modernization projects for cruise ships, talks began next to the deal for MV Werften about a possible sale or financial rescue of this shipyard. On Friday, Lloyd Werft announced to employees that they would probably cease operations by the end of the year.