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Orders go to Asia: “German shipbuilding in the substance endangered”

Nicholas by Nicholas
September 9, 2022
in News
0

Dhe crisis in shipbuilding in Germany is coming to a head. In just one year, the industry has lost 16 percent of its jobs. Only 14,000 people are currently employed in the German shipyards, fewer than ever before. “We have to stop this downward spiral, otherwise we will lack the basis of a functioning value chain,” warns Daniel Friedrich, district manager of IG Metall Coast, and he warns against misjudging the small shipyard industry: “It’s not a question of whether we continue traditions. It is about the geopolitical ability of Germany and Europe to act.”

In fact, orders have been falling all over Europe for years, while global shipbuilding demand is rising sharply. 85 percent of all orders last year went to China and Korea, where the maritime industry receives significant subsidies, warns not only the union, but also the industry association for shipbuilding and marine technology VSM. Even Japan, which maintains high domestic demand, no longer has a 10 percent market share, while Europe as a whole still has 4 percent. According to VSM Managing Director Reinhard Lüken, China’s influence is not just limited to the ships. 96 percent of the containers that are so important for world trade now come from China.

Worrying substance consumption

“The strength is still there,” said Lüken in view of the rush of trade visitors to the SMM, the world’s leading trade fair for shipbuilding in Hamburg this week. “But we have to be careful.” Against the background of the expected strong growth in demand, the years of substance consumption of shipbuilding capacities are worrying. The politically set framework conditions would have to be corrected “in order to avoid an irreversible loss of ability”.

Lüken refers above all to the importance of the maritime economy in the diversification of energy and raw material procurement. “In Korea, the shipyards are on their knees in view of the many orders for LNG ships,” reports Thorsten Ludwig, who analyzes shipbuilding for the Agency for Structure and Personnel Development (AGS) on behalf of IG Metall. In the field of wind energy, too, the music plays elsewhere, he makes clear.



Ships in the national interest?

In the US, ships for offshore projects are categorized as “national interest”, while not much is happening here. In fact, in the context of the insolvency of the MV shipyards, the question was raised several times as to whether converter stations for offshore wind farms could be built on the Baltic Sea coast instead of cruise ships. All the shipyards have now been sold, but the issue isn’t completely off the table yet – because the Bundeswehr, which bought one of the shipyards for its naval arsenal, doesn’t need the entire site, at least not for the time being.

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There are talks with the Belgian company Smulders, which wants to build converter platforms there, confirmed IG Metall district manager Friedrich: “The federal government must pull itself together and make a decision in the next few weeks,” demands the trade unionist. He fears that although there are great future opportunities here, value creation will ultimately migrate back to Asia because there is no reliable industrial policy.



The shipbuilders also see the business with wind energy on the high seas as a great opportunity. “It’s a huge market,” confirms VSM boss Lüken. It’s not just about converter stations, crane ships are also needed to set up the generators, cable layers are needed, ships are needed to transport the crew. There are significant opportunities associated with this.

Cautious optimism

According to the AGS industry survey, such ships have not yet been ordered from German shipyards, but at the same time it is clear that optimism is burgeoning again. While a third of those surveyed were pessimistic about the order situation in the past two years, this only applies to 16 percent, while 27 percent expect the order situation to improve soon. More than half of the shipyards are working on expanding the product portfolio, ranging from emission-free ship types to unmanned submarines for explosive ordnance disposal.

In naval shipbuilding, hope is primarily pinned on the Bundeswehr’s special assets and the generally growing defense budget. In this market segment, an increase in personnel is to be expected. For example, TKMS (Thyssenkrupp Marine Systems) bought the Wismar site from the MV insolvency and is planning to hire additional employees there. Thanks to the transfer companies for the former employees of the MV shipyards, it can generally be expected that competence will be maintained and expanded, the trade unionists register positively. It is worrying that only 46 percent of the shipyard employees are still working in production.

Tags: armed forcesDaniel FrederickIG MetalIG Metall CoastMV shipyardsReinhard Lükenshipbuilding

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