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Meyer Werft reaches downsizing agreement, other labor concessions

PHOTO: MEYER WERFT CRUISE_Meyer_Werft_labor_meeting.jpg
The new measures were announced to employees at a meeting Wednesday
Meyer Werft reached an agreement with IG Metall Küste and the yard's Works Council that involves downsizing and other labor concessions to stay competitive.

This responds to new market conditions triggered by the coronavirus pandemic.

Initially, up to 350 employees of Meyer Werft and 100 employees of EMS Maritime Services will be affected on a voluntary basis. An increase in external services as compensation for this reduction was jointly ruled out.

The new agreement ends Dec. 31, 2023. If the general conditions improve significantly in the long term — for example, if new orders are won — the agreement will end at the end of the current year.

Employees were briefed on the new measures in person and online at a works meeting Wednesday.

Meyer Werft said it has 'significantly less' work due to the pandemic, with production hours per year 'massively' decreased.

'The current agreement with the works council and IG Metall is an important step towards securing the Papenburg shipyard site, even though the staff reductions are very painful,' Managing Director Bernard Meyer said. 'The adopted socially responsible package for the future only works on the basis of further orders for the years 2024 and 2025.

'The orders from Japan for NYK, the participation in the construction of the Navy tanker and now a new apartment ship help to stabilize the lower utilization of production,' Meyer continued. 'Otherwise we would not have been able to achieve the current result at all. But it also shows that we are continuing on the path of developing new business areas. It's a good chance for a fresh start for cooperation with the works council and the union.'

In a three-stage downsizing process, a voluntary program with a transfer company will be implemented with the aim of avoiding or minimizing compulsory redundancies and reducing as many jobs as possible by mutual agreement.

Further concessions to improve competitiveness

In addition, an employee contribution and an efficiency improvement target for production costs were agreed. The employee contribution of 100 hours per year for Meyer Werft can be achieved by overtime or waiving special payments. For EMS Maritime Services employees, this amounts to 25 hours per year.

The industrial service of EMS Maritime will be dissolved. Where possible, employees will be deployed in other production areas and companies of the group.

Management, the Works Council and IG Metall also agreed on the introduction of a two-shift model in production and production-related areas. Previously existing shift arrangements in production areas remain unaffected. Details of this arrangement are still being worked out.

The Meyer Group said it has found solutions with employees at all three of its shipyard sites to master the crisis and operate competitively.

'Now we are fully focused on the transformation of the group, further digitalization and on developing climate-neutral solutions for our ships and maritime applications as quickly as possible,' Managing Director Jan Meyer said.

New order pending financing

This will require further innovative new ship projects. At the employee meeting, management announced another newbuilding project with completion scheduled for the end of 2025, subject to financing.

The shipyard has been working on the Ocean Residences project for some time. This 290-meter vessel will house more than 130 apartments. Meyer Werft said this order is urgently needed to prevent the utilization rate from dropping even more than 40% in the coming years.

Cruise orders on the books

Regarding cruise orders, according to the Seatrade Cruise News orderbook, Meyer Werft is set to deliver AIDAcosma and Meyer Turku Costa Toscana in late 2021. In 2022, Disney Wish and P&O Cruises' Arvia are due at Meyer Werft and Carnival Celebration at Meyer Turku. 2023 should see a third Carnival Excel-class ship at Meyer Werft and, at Meyer Turku, TUI Cruises' Mein Schiff 7 and Royal Caribbean's Icon of the Seas.

2024 would bring a Disney newbuild from Meyer Werft with the third Disney ship to follow in 2025, a year when NYK's vessel is also scheduled from Meyer Werft and a second Royal Caribbean Icon ship from Turku, with the third Icon to follow in 2026.

Two Evolution-class ships for Silversea Cruises were announced a while back for Meyer Werft with delivery dates unspecified lately.

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