Government support for maritime shipyards.
The German shipbuilding company, MV Werften, got a promise of a €900 million life-saving loan from the state of Mecklenburg-Vorpommern. This decision was made in collaboration with the federal government, but the final approval of this €900 million credit is yet to be confirmed. The parent company of MV Werften, Genting Hong Kong, has been in financial trouble due to the economic effects of the Coronavirus pandemic. They had to rely on state money already for the second time.
Hard Hit by the Pandemic
Since the beginning of the coronavirus pandemic, the global environment is slowly getting back to normal. The increasing tests and vaccinations are allowing society and the economy to breathe again. But the damage caused during the pandemic is still there. Many industries were hit hard financially. The gaming and tourism industry, which Genting Hong Kong is part of, faced severe issues.
MV Werften, a part of Genting Hong Kong, has been struggling with their financial situation throughout the past year. They have locations in Schwerin, Wismar, and Rostock. The lockdown and the restrictions put on the gaming sector, and the pause in cruises because of the worldwide Corona regulations landed the company in a critical situation. For a long time, the future of the company was in question.
In the summer of last year, the gaming and tourism company warned us about their alarming situation because of the pandemic. They mentioned in a statement that the Covid-19 pandemic will impact their financials significantly.
Saved by State Aid
By December 2020, the MV Werften was in a bad situation. To avoid a worst-case consequence, the company already asked for state help once before. The state of Mecklenburg-Vorpommern provided €200 million in aid. Now, the state wants to increase this help to €900 million and increase their credit to €1.1 billion. Berlin and Mecklenburg-Vorpommern will jointly provide €900 million, with €500 million coming from Federal Aid, and €400 million from the state itself.
The federal government had to go through critical assessment before choosing to support the comprehensive rescue package. The CDU and SPD factions pointed out that the government will only support those who play a crucial role in the system and the economy.
MV Werften was considered vital by the politics before the outbreak of the pandemic. The company kept growing its workforce and investing in their shipyards.
Keeping Jobs. The main aim of the €900 million lifeline is to ensure the jobs of the MV Werften. Their current workforce stands at around 3,100 people across all their properties.
Job Security Depends on Contracts. The rescue package is aimed at financing the development of a new cruise ship, "Global 1.” The parent company Genting Hong Kong initially tasked this significant project to MV Werften. That's why 2,100 of the 3,100 staff members will be secure for some time. It's been reported that the government also plans to help finance another ship.
Long-term Security Depends on Contracts. However, the future of MV Werften hinges on their long-term contracts. Although the order situation was stable and improving pre-pandemic, the world has drastically changed since then. Daniel Friedrich, head of IG Metall Coast, highlighted this point, indicating that only with a solid order situation can the local sites be assured long-term.
Risky Future Prospects. In their first-quarter report, Genting Hong Kong was cautious about the expected future. The tourism, leisure, and gambling industry will remain unsure. The tourism sector will have to deal with continuous travel restrictions, and the gambling market will face problems.
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Source: www.onlinecasinosdeutschland.com
