Germany's Scholz pledges that his government will help rescue a troubled cruise ship maker
Chancellor Olaf Scholz has pledged that his government will help rescue a major German shipyard that has solid orders for new cruise ships but has run into financial difficulty
BERLIN -- Germany's government will help rescue a major German shipyard that has solid orders for new cruise ships but has run into financial difficulty, Chancellor Olaf Scholz said Thursday.
Meyer Werft employs more than 3,000 people in Papenburg on the Ems river in northwestern Germany, near the Dutch border. The company has build 58 cruise ships so far, according to its website.
Its customers include Disney Cruise Line, with which it announced an agreement earlier this month to build another four ships. Even before that, the company said it had full order books through to 2028.
However, it has run into financial trouble because it has had to pay much of the cost of building cruise ships up front. Scholz cited the consequences of the COVID-19 pandemic as one factor in its troubles and said the company is “systemically relevant” to shipbuilding in Germany, Europe’s biggest economy.
Scholz, who traveled to Papenburg to speak at a staff meeting, praised the company's ships as “state of the art” and told employees that “what you build here are actually little cities,” according to remarks released by his office. He said 17,000 jobs across Germany depend in one way or another on Meyer Werft.
He said there had been “great progress” in negotiations with management, banks and the state of Lower Saxony, but “there's still a bit of detailed work to do.”
The federal government “will contribute its part to the solution, and I have the clear expectation that all other participants join in,” he said.
German media reported that the planned solution would involve the federal and state governments temporarily taking a stake in the company and financing a capital increase for the shipyard.
“If the federal government and the state government now come on board for a certain time, they they will not do that to remain partners for ever — we are not shipbuilders — but to lay the foundation for a good future on a private-sector basis,” Scholz said in a later statement to reporters.
He did not give financial details, but pointed to similar previous moves such as a temporary stake the government took in airline Lufthansa after the pandemic started.