Meyer Turku in talks to lay off 450 workers

  • Business & Finance

Finnish shipbuilder Meyer Turku shipyard has launched talks with its employees on the layoff of 450 people as a result of the coronavirus crisis on the yard’s operations.

The company said the temporary layoffs would differ in length and that additional 900 people would be affected by other types of measures including work time adjustments and other arrangements.

Meyer Turku
Source: Meyer Turku

The company had around 2,386 personnel employed at its yard in 2019.

Meyer Turku’s key customers are cruise liner companies that have been severely impacted by the pandemic as they have had to stop their sailings to help curb the spread of the disease.

The sailings were suspended following rising numbers of the virus outbreaks on different cruise ships across the world, including Diamond Princess, Grand Princess as well as MS Zaandam and Coast Victoria among others.

Cruise liner companies have been on an ordering spree over the past few years as the cruise business was yielding growing profit each year.

The pandemic often referred to as a black-swan event has inflicted such an unexpected financial blow to cruise liner companies that have never had to suspend their operations to such an extent.

The struggle to cut costs and remain liquid has seen cruise liner majors announce efforts to delay payment of their newbuild installments for at least the upcoming year. Delivery delays of newbuild ships are also being negotiated with shipyards to accommodate to the new reality.

Cruise shipping heavyweights Carnival, Norwegian and Royal Caribbean have around 43 new ships on order at different yards.

The corona pandemic has changed the situation unexpectedly and totally. We are facing the fact that the corona-caused pause in cruising requires to stretch the order book. We are currently discussing the details with our customers. This new situation will force us to take painful adaptation measures to secure a sustainable future for Finnish cruise ship building and the network,” CEO of Meyer Turku, Jan Meyer, said.

Instead of a further ramp-up from one to two large ships delivered per year until 2023, the estimation is now that Turku shipyard will in the future build one large cruise ship per year and not further ramp-up.”

The shipbuilder said that the exact changes to the building and delivery times of the seven ships in Meyer Turku’s order book, formerly reaching until 2025, were still being negotiated with the shipyard’s customers.

Meyer Turku said that its results for last year were predominantly impacted by the delays of the delivery of the Costa Smeralda and reservations for the coming years.

The cruise ship builder reported a loss of € 109.7 million in 2019, against a profit of € 29 million in 2018.

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