Germany's Chancellor pledges government support for local shipyard
The German government is committed to ensuring support for local cruise ship manufacturer Meyer Werft, German Chancellor Olaf Scholz confirmed during a visit to the company's Papenburg facilities on Thursday, August 22.
During the same visit, Mr Scholz and Lower Saxony's Minister President Stephan Weil expressed their support for Meyer Werft as part of a restructuring program.
Bernd Eikens, Meyer Werft's Chief Executive Officer, and Ralf Schmitz, the restructuring expert appointed by the company, declared in a joint statement that "the way has now been paved for the start of restructuring and securing the future of the shipyard."
Both the shipyard's management and the owner family have stated that they will now move to implement the solution promised by the Chancellor. The aim is to create the framework conditions for the adoption of the new structures and the start of the reorganisation and restructuring measures as quickly as possible.
As part of its restructuring, Meyer Werft must raise €2.7 billion (US$2.9 billion) over the next few years to compensate for losses it had incurred. The German government will then extend a financial lifeline to the cash-strapped shipyard following an assessment.
Meyer Werft's financial troubles began following the onset of the Covid-19 pandemic, when supply chain disruptions led to some ship deliveries being delayed, as well as a drop in orders for new vessels. This forced the company to temporarily reduce its production activities, resulting in only one large and one small cruise ship being completed each year.
The situation was further impacted by inflation and rising costs in the wake of the 2022 Russian invasion of Ukraine. According to local media, the contracts for those cruise ships under construction at the Papenburg facilities had already been finalised before the pandemic occurred and therefore do not provide for adjustments to account for any price increases affecting energy and raw materials.
