Bailout to keep Germany’s largest shipyard afloat

From flat-bottomed canal craft with folding masts to Europe’s first iron-hulled paddle steamers and Disney’s latest batch of luxury cruise liners, the Meyer family have been building ships next to the right bank of the River Ems for seven generations.
Today their business is the sole survivor of what was once a cluster of more than 20 shipyards around the city of Papenburg — and the largest left in Germany, with the world’s biggest covered dry docks.
Yet it would have gone the same way as its long-forgotten rivals had the state not stepped in with a bailout package worth up to £1.5 billion.
Hammered by energy inflation and the rising cost of its raw materials, Meyer Werft was less than a month away from a bankruptcy that would have wiped out one of the country’s most venerable manufacturers and put as many as 18,000 jobs at risk.
On Wednesday, however, Olaf Scholz, the German chancellor, pledged public funds to rescue what he described as an “industrial crown jewel” and a linchpin of the German maritime economy. “If we all pull in the same direction — and I have no doubt that we will — then the federal government will contribute its share to the solution,” Scholz said during a visit to the shipyard.
Meyer Werft was founded in 1795, when it specialised in smaller wooden sailing ships, such as the shallow-draft mutte, built largely for transport on canals, and the one-and-a-half-masted kuff, typically used for coastal shipping around the southern fringes of the North Sea.
Its rise to commercial prominence came in the second half of the 19th century as the first German shipyard to embrace the shift from sail to steam and from wood to iron. In the heyday of the German empire it built tugboats and light vessels for the navy and a whole fleet of ships for the administration of Berlin’s colonial possessions in Africa.
One of these, a steamer called the Kaiser Wilhelm II, was scuttled off the coast of Dar es Salaam in 1916 then raised from the sea bed during the British occupation at the end of the First World War. Britain had the ship repaired and renamed it after Lord Milner, the war secretary.
Another, the Graf von Goetzen, was assembled in Papenburg in 1913, dismantled then shipped to Tanzania in 5,000 crates, where it was reassembled on Lake Tanganyika and converted into a troop transport with the outbreak of the war. It was subsequently sunk, raised by the Belgians in 1918 and then used by the British until 1961. It is still in service as a ferry, known as the Liemba.
During the Second World War, Meyer Werft was staffed by forced labourers from German-occupied territories and primarily used for repairing ships, including for the navy. In recent decades it has specialised in container ships, ferries for people or livestock and, most notably, cruise liners — including the first to be powered by liquefied natural gas.
Its order books have remained fairly healthy. Only a few days ago, it announced a contract to build four cruise ships for Disney. Yet it has struggled with the awkward financial sequencing of the shipbuilding industry. The manufacturer typically shoulders about 80 per cent of the costs until the ship is finished, meaning surging inflation over the past three years has taken a heavy, if temporary, toll on the balance sheet.
The federal government and the local state of Lower Saxony concluded that the shipyard was fundamentally viable but needed propping up with public money until its finances were back in order. Details of the rescue plan remain unclear, with some reports suggesting that the business could be largely nationalised until 2027 — in a fashion similar to the bailout of Lufthansa, the national flag-carrier, during the pandemic.