Yards look to live without subsidies. (German Maritime Industry).
In the months ahead, German shipbuilders and marine equipment manufacturers face a tough challenge. At the heart of the problem, in the opinion of many, is unrelenting--and unfair--competition for shipbuilding business from Korea. Right now, under European Union rules, German shipbuilders are no longer permitted to offer direct subsidies. Many in the industry were hoping that the EU would permit limited subsidies for certain ship types, as well as taking a complaint to the World Trade Organization as a way of pressuring Korea.
For now, at least, that action is on hold. German and other European shipbuilders will have to make do without direct subsidies.
In 2000, the last year for which complete figures are currently available, German shipyards succeeded in maintaining their market position, achieving sales of just under $4 billion, of which 57% was accounted for by export orders.
New orders were received for 58 vessels, totalling 2.4 million gt, worth close to $5.5 billion, some $3.2 billion of which was export business. Containerships accounted for about two-thirds of overall tonnage, ferries and passenger vessels. 15% and RO/RO ships some 9%.
At the end of 2000. the industry had a backlog of about $10 billion and its workforce remained stable at 25,600. How long that level can be sustained is a matter of conjecture.
The EU rules banned granting subsidies on contracts after December 31, 2000. Projects ordered and subsidized up to that date had to be delivered by December 31, 2003. What appears to have happened is that, during 2000. German yards managed to obtain subsidies and financing to cover this three-year period and last year entered a new and more difficult era with only scant new orders, leaving most yards now looking for work past 2003.
