Shipbuilding downturn hits GL

30 Jul 2012
Job losses ahead for GL?

Job losses ahead for GL?

The COO of Germanischer Lloyd, Torsten Schramm, has said restructuring and job losses are now likely in the classification society as a result of a continuing global decline in ships on order, writes Tom Todd.

In an interview with the respected German-language publication THB, Mr Schramm noted continuing world-wide reluctance to order newbuildings and its effects on the equipment supply sector. “If a crankshaft is not ordered then an engine doesn’t get built. And if an engine doesn’t get built, neither does a ship”, he was quoted as saying.

Employees at GL’s Hamburg HQ and at branches across the world have already been informed of the current situation. The society employs some 6,900 people, 1,200 of them in Hamburg.

Mr Schramm said GL’s 1,500 ship surveyors world-wide were “fully booked” to the end of this year and added that GL was involved in the delivery of ships of about 12 million gt in 2012. However, in 2013 there would be a decline in newbuilding orders, he predicted.

One reason was the difficult situation in German shipping companies - traditional GL customers. They were either not getting, or experiencing great difficulty getting, finance to build new ships. According to THB Mr Schramm described the recent decision by the giant Commerz Bank to withdraw from ship financing as “a fatal signal for the sector”.

One result of the decline in newbuilding orders, Mr Schramm was quoted as saying, was that alternative work had to be found for about 180 employees world-wide in GL’s Maritime Services sector. Redundancies were a possible last-ditch resort, but GL wanted to concentrate on “intelligent measures spread over two to three years”, he said. Alternative job possibilities were seen above all in the expanding oil and gas and renewable energy sectors.

GL said a revival in business and in newbuilding activity was expected by 2016 at the latest and Mr Schramm predicted: “tomorrow’s ships have to be more economical and more eco-friendly. There are big opportunities for GL here, for example in providing expert advice to shipowners. To do that however we need good engineers”.

He predicted that research and development would become increasingly important with LNG propulsion more interesting for owners faced with stricter eco regulations and rising oil prices. He noted GL was already very active in this sector.

“Germanischer Lloyd has mastered many business crises in its 160 years. It will also master this one”, THB quoted Mr Schramm as saying.

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