MV Werften: From giant cruise ships back to the offshore business?

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Up to 1200 of the previously around 2900 jobs at MV Werften in Wismar, Rostock-Warnemüne and Stralsund could be cut.

The company management announced it to the employees by video on Tuesday evening.

Shipbuilding on the German Baltic Sea coast had experienced a boom since 2016, with the then new owner Genting from Malaysia, who launched a large program there for the construction of cruise ships.

But the pandemic and the collapse of the cruise business suddenly stopped the boom in early 2020.

How things will continue with the three shipyard locations is open.

MV Werften is the third largest company for civil shipbuilding in Germany, after Meyer Werft in Papenburg and the Bremen Lürssen Group.

Meyer Werft is also currently in crisis due to the cruise market practically standing still, but it is more broadly positioned with customers and orders than MV Werften, which has so far produced exclusively for Genting.

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The union IG Metall announced on Friday demonstrations for next Wednesday in Stralsund and Rostock-Warnemünde.

The two locations are currently particularly at risk from job cuts.

In Wismar, on the other hand, around 500 shipyard workers are currently working on the construction of the world's largest cruise ship “Global Dream”, which Genting has ordered especially for the Chinese market.

Of the currently around 2900 employees at MV Werften, around 1900 are currently on short-time work.

The three shipyards in Mecklenburg-Western Pomerania and their associated sister shipyard in Bremerhaven are in an "extremely critical situation", said Daniel Friedrich, IG Metall coast district manager, at a digital press conference.

At the same time, he defended the takeover of the shipyards, which at that time had no more orders, by Genting in 2016: "Until the pandemic, Genting always kept its commitments in terms of investments."

But now IG Metall is also looking for perspectives beyond the Asian owner at MV Werften.

Crisis management runs on parallel paths.

On the one hand, it is about the further construction of the “Global Dream”, which with a capacity of up to 9500 passengers and 2500 crew is to become the largest cruise ship on the market to date.

Completion is currently planned for summer 2022.

The delivery of the first expedition cruise ship of the Endeavor class in Stralsund to Genting for around 200 passengers was also delayed.

The final equipment is still missing there.

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On the other hand, there is also a continuation of the program originally intended by Genting, for example for a second Global Class ship, the construction of which has already begun.

MV Werften hopes to be able to fully utilize a loan from the Economic Stabilization Fund (WSF) of 500 million euros, 193 million euros have already flowed in so far.

For this, Genting would have to provide a clear forecast for the continuation of the shipyards, which has not yet been the case.

“We are currently seeing an interplay between Genting and the WSF.

Both sides are professionals, ”said Friedrich, referring to the tug-of-war to further finance the shipyards.

Their continued existence is also likely to be made more difficult by the fact that the state-owned KfW bank is now expecting the shipyards involved to provide an equity ratio of 40 percent instead of the previous 20 percent to support shipbuilding orders.

“We cannot understand that,” says Friedrich.

Substations for offshore wind farms instead of ships?

The union calls on politics and business in Mecklenburg-Western Pomerania and the federal government to work on new perspectives for the shipyards.

In the medium term, the three locations could again build substations for the booming European offshore wind power market.

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The three East German shipyards, which were then still called Nordic Yards, had implemented several major projects for DC transformer stations on the North Sea by 2016, especially for Siemens.

This connects offshore wind farms to the onshore grid.

The maritime transformer stations were the first of their kind in the world.

Since then, Siemens has ordered - smaller - systems in Asia.

“With a view to the shipyards, we also need an industrial policy perspective,” said Friedrich.

“The world's largest market for offshore wind power is on the North and Baltic Seas, right off our coasts.

And here are shipyards that pioneered the construction of the necessary substations years ago. "

Offshore wind power is considered to be the most reliable power source for the energy transition in Europe.

Individual states such as Germany and Great Britain, but also the EU as a whole, are planning a major expansion of wind farms at sea in the coming decades.

At the same time, however, one also hopes that the international cruise business will quickly pick up again after the end of the pandemic, said Friedrich.

Genting took over the three East German shipyards in 2016 in order to be able to quickly access building sites for cruise ships, especially for the then booming Chinese cruise market.

The company, which also operates from Hong Kong, aimed specifically at international business with the expedition cruise ships. It is currently unclear how bad the tourism and gaming company is actually in the face of the pandemic and whether Genting will hold on to the three shipyards in Mecklenburg-Western Pomerania.