Carnival's shipbuilder may need a bailout

[tidecat]

Meyer Werft may soon be owned by the German state of Lower Saxony:

 

https://splash247.com/meyer-werft-looks-for-government-lifeline/

 

Meyer Werft has orders for the two remaining Excel class ships due in 2027 and 2028.

[Mike45LC]

I wonder how much Carnival has prepaid and if Carnival has $$$ at risk.  I know nothing about German bankruptcy law.
 

If the builder cannot perform, I’m sure Carnival will have to pay a lot more for these ships.  

[BlerkOne]

Sounds like there is already a bailout plan in the works.

[lostsoulcruiser]

It is not just Carnival, Disney has 4 ships under contract.  The shipyard has contracts for 10 ships overall.  

[MRVEGAS711]

When you're an employee of a company in doubt, the work suffers. Carnival should cut ties if it can, because that workforce, right now, doesn't give a hoot.

[chengkp75]

7 hours ago, Mike45LC said:

I wonder how much Carnival has prepaid and if Carnival has $$$ at risk.  I know nothing about German bankruptcy law.
 

If the builder cannot perform, I’m sure Carnival will have to pay a lot more for these ships.  

Typically, 10% of contract price is paid when signing the contract, but this is covered by a "refund guarantee" by a third party bank or financial institution in the event the contract is cancelled.  So, Carnival has nothing to lose.

[Earthworm Jim]

14 hours ago, chengkp75 said:

So, Carnival has nothing to lose.

 

Well, I assume they'd lose out on getting two new Excel ships in 2027 and 2028.

[jimbo5544]

On 8/16/2024 at 11:48 PM, tidecat said:

Meyer Werft may soon be owned by the German state of Lower Saxony:

 

https://splash247.com/meyer-werft-looks-for-government-lifeline/

 

Meyer Werft has orders for the two remaining Excel class ships due in 2027 and 2028.

Well that is interesting.  

[Despegue]

On 8/17/2024 at 12:53 PM, MRVEGAS711 said:

When you're an employee of a company in doubt, the work suffers. Carnival should cut ties if it can, because that workforce, right now, doesn't give a hoot.

Complete and utter bullocks. This is not the USA but the EU where we have actually workers protection , social security and a safety net .  your statement is simply absurd. You have no idea about the Meyer Werft history, its craftmanship and pride by their employees, many who have been working for them many many years and who are proud of their skill and their employer.

[DanJ]

29 minutes ago, Despegue said:

Complete and utter bullocks. This is not the USA but the EU where we have actually workers protection , social security and a safety net .  your statement is simply absurd. You have no idea about the Meyer Werft history, its craftmanship and pride by their employees, many who have been working for them many many years and who are proud of their skill and their employer.

On top of that, I say they aren't a dying company in a dying industry. Their current problems are are more of a matter of current pandemic-related circumstances, not a long term indicator of a badly run company or something. I'm pretty sure the workers don't feel their livelihoods are at stake in this, just a matter of who will be signing the checks. 

[jimbo5544]

Getting paychecks is always a good thing.  I never tried to cash a check on pride of workmanship.  If they are in trouble, someone screwed up.  You can put as much lipstick on the pig as you want.  Having to get bailed out by the feds is a big deal.  

[chengkp75]

1 hour ago, jimbo5544 said:

If they are in trouble, someone screwed up.

That would be the person who didn't foresee a global pandemic with a worldwide economic shutdown, and subsequent dislocation of the supply chain and spiking costs.  Don't think a lot of companies have CEO's that are that prescient.  All companies that rely on long term contracts got hosed by Covid, the fact that the shipbuilding industry works almost exclusively on long term, future contracts just makes the problem worse, and I would not be surprised to find other yards have been scrambling for outside financing due to the pandemic.

[chengkp75]

1 hour ago, jimbo5544 said:

 I never tried to cash a check on pride of workmanship.

Lots and lots of companies depend on the "pride of workmanship" from their employees to maintain their business, and then repay those employees for their pride.

[jimbo5544]

6 minutes ago, chengkp75 said:

Lots and lots of companies depend on the "pride of workmanship" from their employees to maintain their business, and then repay those employees for their pride.

Been there done that.  As long as the cycle completes itself all is good.  When buyouts fail, merges and takeovers happens.  Senior mgt will be fine, but lights out and closed doors benefit noone. The list is long.

Edited August 19 by jimbo5544

[jimbo5544]

10 minutes ago, chengkp75 said:

That would be the person who didn't foresee a global pandemic with a worldwide economic shutdown, and subsequent dislocation of the supply chain and spiking costs.  Don't think a lot of companies have CEO's that are that prescient.  All companies that rely on long term contracts got hosed by Covid, the fact that the shipbuilding industry works almost exclusively on long term, future contracts just makes the problem worse, and I would not be surprised to find other yards have been scrambling for outside financing due to the pandemic.

How many large shipbuilders are there?

[chengkp75]

2 hours ago, jimbo5544 said:

How many large shipbuilders are there?

Let's just say that Meyer Werft doesn't even crack the top 20 largest shipbuilders in the world.

[tidecat]

3 hours ago, chengkp75 said:

Let's just say that Meyer Werft doesn't even crack the top 20 largest shipbuilders in the world.

I know DSME (or whatever they are now) tried to get into the cruise ship building business back in the late 2010s. I'm sure they or someone would be interested in Meyer if it was for sale.

 

I don't know if Fincantieri would be an option since they acquired STX France (now Chanters d'Atlantique) a few years ago. EU regulators probably would veto them acquiring Meyer.

[DutchCruiseFan]

15 hours ago, tidecat said:

I know DSME (or whatever they are now) tried to get into the cruise ship building business back in the late 2010s. I'm sure they or someone would be interested in Meyer if it was for sale.

 

I don't know if Fincantieri would be an option since they acquired STX France (now Chanters d'Atlantique) a few years ago. EU regulators probably would veto them acquiring Meyer.

The acquisition of Chantiers de l'Antique by Fincantieri actually fell through and never happened. The French yard is owned by the French state and Naval Group.

 

Could the bankruptcy of Meyer Werft have consequences for Meyer Turku? 

 

I do not expect anything to happen to Meyer Werft, though. Carnival and more recently Disney would surely not have placed big orders there if there was a big risk.

[787cruiser]

3 hours ago, DutchCruiseFan said:

Could the bankruptcy of Meyer Werft have consequences for Meyer Turku?

Well it is all one company, so RCC will have eyes on this also.

[ChutChut]

On 8/18/2024 at 11:47 AM, Despegue said:

Complete and utter bullocks. This is not the USA but the EU where we have actually workers protection , social security and a safety net .  your statement is simply absurd. You have no idea about the Meyer Werft history, its craftmanship and pride by their employees, many who have been working for them many many years and who are proud of their skill and their employer.

Stop with the holier-than-thou attitude. It's not warranted - it really isn't. 

[jimbo5544]

On 8/19/2024 at 11:13 AM, chengkp75 said:

Let's just say that Meyer Werft doesn't even crack the top 20 largest shipbuilders in the world.

interesting. Thanks

[VentureMan_2000]

Germany is bailing out Meyer Werft.  

 

Sources familiar with the talks told Reuters that the government is planning to temporarily take a majority stake in the yard.
 

The company says it booked orders worth 11 billion euros ($12.3 billion) in recent months, including from U.S. entertainment group Disney.
 

But the shipbuilder, whose customers pay for the bulk of their luxury liners only upon delivery, has a financing gap of almost 2.8 billion euros due to the delayed effects of a lull in demand during the pandemic.

Germany's Scholz vows to keep luxury shipbuilder afloat | Reuters