German works council IG Metall and cruise ship builder Meyer Werft’s management recently agreed on key points for the reconstruction of the financially troubled company.
A framework agreement was reached to shed 340 jobs, which should be implemented without shutting down any activities, as far as possible.
The management also accepted the formation of a supervisory board and a works council at group level. In addition, the company’s headquarters is to be moved back from Luxembourg to Germany, representatives of the trade union, works council and management announced at a press conference in Papenburg on 3rd July.
According to the agreement, a workforce of around 3,100 employees, of whom at least 1,200 are on collective bargaining agreements, is to be guaranteed up to the end of 2030. In addition, at least 45 apprentices and nine dual students are to be hired annually.
The job cuts are to take place in several stages, explained works council chief, Andreas Hensen, according to local media. For example, 100 temporary positions are to go first, and the remaining positions should be reduced as much as possible through a voluntary programme.
Meyer Werft is currently experiencing the most severe crisis in its more than 200-year history. By the end of 2027, more than €2.7 bill must be raised, of which €400 mill is needed to increase the equity capital, said Chief Restructuring Officer, Ralf Schmitz.
He emphasised that the remaining €2.3 bill was to finance two new shipbuilding projects, which were necessary for the German state and federal government guarantees.
Schmitz added that the company still has a long way to go. It must become profitable and the result must improve by €200 mill.
“I believe in the company, and I believe in the products,” he said, which is an important prerequisite for the future of the company, local media reported.
Meyer Werft CEO, Bernd Eikens said the agreement was an important building block for the future of the company and the workforce. “But it is only a step, and in the coming days, further steps will have to be taken,” Eikens said.
The Meyer family has invested in the yard’s growth for years. “Today, the significance of the Meyer Werft for the region and the maritime location Germany is not high enough to be appreciated,” Eikens added.
“Meyer Werft must and will become more profitable. Our goal is to be better than our competitors – financially as well.”
The prospects for cruise shipbuilding are good, with a growth of 6% expected in the next 10 years, he said.
Schmitz further added that an investment process could only be looked at after 2026 or 2027. For the necessary capital increase, persons or institutions would have to be approached who are ready to give capital to the company in the short-term.
“If Meyer Werft is no longer there, it is a blow for the maritime economy as a whole,” Schmitz stressed.
“We are talking about more than 20,000 affected parties if Meyer Werft does not have a good end.”
At the same time, IG Metall demanded a clear commitment and help from the German Federal Government.
“We have gathered here to fight, we have achieved a reasonable agreement. But the yard is not saved,” said the union’s Heiko Messerschmidt. “We now need corresponding signals from Berlin, and they must come very, very quickly.”
This is necessary for the preservation of the yard and the jobs, he stressed.
“We will support the formation of a supervisory board and are convinced that there will be constructive, forward-looking co-operation in this body,” said a joint statement from family head Bernard Meyer and his three sons, who run the yard.
Meyer Werft is facing a liquidity crisis caused by the pandemic and rising supply costs, which is hampering its effort to build and deliver the cruise ships it has on order.
Normally, the cruise lines provide a 20% down payment when ordering a ship, leaving the shipyard to finance the materials and pay employees and contractors during the construction period until the final 80% is paid upon the delivery of the vessel.
