The federal administration and Lower Saxony's government are planning to purchase an approximate 80% stake in troubled shipyard Meyer Werft for 400 million euros. This was announced by Lower Saxony's Minister of Economics, Olaf Lies, during a session in the Hannover state parliament.
This rescue operation will be carried out in conjunction with the federal government, who will also provide guarantees amounting to approximately 1 billion euros each. These steps aim to prevent the shipyard from bankruptcy. The political coalition announced their intention to save the shipyard last week, which has encountered financial difficulties.
Olaf Lies emphasized that the shipyard's crisis directly and indirectly threatens over 20,000 jobs in Germany, with about half of them in Lower Saxony. "The state can't just watch," said Lies, a prominent member of the SPD party. Germany's maritime industry must be preserved, he added.
However, Lies emphasized that the state does not aim to be the majority shareholder of Meyer Werft in the long term. "We can easily imagine a successful future for the shipyard in private hands," he said. This includes an option for the Meyer family to buy back the shares.
Meyer Werft needs to secure funding by mid-September to finance the construction of new ships. German Chancellor Olaf Scholz, a prominent figure in the SPD party, praised the company last week. "The Meyer Werft is a valuable asset that we cannot afford to lose and will not lose," said Scholz during his visit to the Papenburg shipyard.
The federal and state budget committees still need to approve the project. Most political factions in the state parliament agree that the shipyard should be saved. Criticism of the planned rescue came from economist Marcel Fratzscher, the president of the German Institute for Economic Research (DIW). Fratzscher questioned the necessity of the government's intervention, citing Meyer Werft's lack of competitiveness in the current market.
Enrichment Insights: The current plans for the proposed government takeover of Meyer Werft involve a total investment of 400 million euros to secure an 80% stake in the company. The German federal and state governments also plan to provide guarantees amounting to approximately 1 billion euros each, aiming to stabilize the financial situation of Meyer Werft.
The takeover is crucial to secure the future of Meyer Werft and, by extension, the jobs of thousands of workers in Germany. The proposed operation aims to address Meyer Werft's operational challenges, including high production costs and the slow recovery of the cruise ship sector, both of which have strained the company's operations.
However, the success of this plan will depend on effectively managing the financial and operational complexities involved. Without a competitive edge, the company may continue to struggle in the long term, despite government intervention.
