Belfast yard future still in doubtNews // October 20, 2000
In the aftermath of the arbitration decision in favour of Harland & Wolff, management at the yard set about determining how best to restructure the company to ensure its long term survival, and said the company would reduce its core workforce in line with current workload.
The rationalisation has taken the form of an immediate downsizing to a core workforce of approximately 600 employees, necessitating the redundancy of some 600 others, a process completed early in October.
With a smaller, more competitive workforce the yard had hoped to be in a better position to win more orders to complement the ro-pax ships it has on order from Seamasters International and the Letter of Intent it holds for two cruise ships for Luxus Holdings.
However, in October, Global Marine announced that it would be appealing against the decision of the arbitration panel, and shortly afterwards the yard confirmed that the financing packages necessary for the ro-pax ships and cruise vessel to be built weretaking longer than expected to complete.
The yard's financial condition has been made all the more delicate by the fact that the $31 million paid by Global Marine at the end of September has not reached the yard yet, and is being held by the High Court in London pending the outcome of the appeal.
Commenting on the restructuring, Brynjulv Mugaas, Chief Executive of Harland and Wolff said: "The extent of the redundancy which needs to be implemented is highly regrettable and deeply painful. However, in order to provide the maximum opportunity for Harland and Wolff to restore market confidence and secure its future in shipbuilding and offshore construction, we need to match employment levels closely to confirmed workload.
"A leaner, more responsive and more productive shipbuilding and offshore construction business will be better placed to take advantage of emerging market opportunities and to counter the cyclical nature of ship ordering patterns.
"Critical to this will be the necessity for an immediate and fundamental step change in productivity in order to enhance the competitiveness of the company. We would hope to keep the redundancy implemented to around the level identified, but this will depend on achieving the major improvement in productivity coupled with the securing of major orders. This is the only way to ensure the company's future."
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