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German cruise ship-builder halts production

Sou-Jie van Brunnersum
July 19, 2020

The builder of luxury cruise ships is struggling to stay afloat after the global health emergency decimated the tourism industry. The shipyard needs to save €1.2 billion over the next five years.

A ship under construction at Meyer Werft's shipyard in Papenburg
Image: picture-alliance/dpa/S. Schuldt

German shipyard Meyer Werft will halt production and suspend operations from Monday for six weeks due to a slump in orders due to the coronavirus pandemic.

The company, best-known for building luxury cruise ships, has described the move as a kind of extended company holiday, which will last until August 30.

A spokesperson for the shipyard said it was still working on the delivery of two ships.

Read more: Can the cruise ship industry keep coronavirus at arm's length?

Cruising into the unknown

Over the next five years, Meyer Werft needs to save €1.2 billion ($1.3 billion) due to cruise firms canceling and stretching their orders for new liners.

The firm — located in the northwestern German town of Papenburg on the river Ems, which runs into the North Sea — is hoping to receive help from the Lower Saxony state government and from the federal government. 

Meyer Werft boss Bernard Meyer described the situation as "precarious," and that the firm will have to fight for survival during its 225th anniversary year. 

Read more: Sailors around the world stranded because of coronavirus pandemic

Cruise ship sector struggles to stay afloat 

More than 3,000 workers are still waiting for their vacation pay — a bill that already amounts to €14 million, which will only be paid out later in the year.

The company said it was also planning to agree with staff representatives to move to part-time working hours until the end of the year.

The global pandemic has largely left the global tourism industry at a standstill, with cruise firms particularly hit hard by the crisis and unable to say when they can resume their holidays.

With locations in Papenburg, Rostock and Turku in Finland, Meyer Werft was planning the delivery of three cruise liners prior to the pandemic but is now negotiating with customers to extend orders.

Read more: Coronavirus fallout: Cruising into the unknown

Tourists return to Venice

One of the cruise ships — "Iona" — was supposed to have been handed over to British shipping company P&O in May.

In March, the ship was already moved via the Ems river but coronavirus-related hygiene requirements delayed work on the ship's interior in the northern port city of Bremerhaven.

The company is now hoping for the successful delivery at the end of August, according to a Meyer Werft spokesperson.