2024-08-23 07:05:03
The ailing Meyer Werft is to become a state-owned company. That is a good thing – especially because it is already clear that the state wants to withdraw from the company in 2027.
No, it is not the pure doctrine. And yet, with regard to the rescue of the Meyer Werft shipyard in Papenburg, one thing can be said: This state intervention, which Chancellor Olaf Scholz (SPD) announced on Thursday, is the right thing to do. And not just because of the approximately 3,000 jobs that depend on the shipbuilder.
The state should actually stay out of the market economy as much as possible. If a private company gets into financial difficulties, politicians should not, in principle, bail it out – despite all the cries for help.
When a company goes bankrupt, there is always a good reason for it. It is usually due to mismanagement, and often due to a lack of demand for the products and services it produces or offers. The slow death of the business model of department stores, which cannot withstand competition from online retail, is the best example of this.
In the worst case, as the socialist planned economy of the GDR taught us, the state’s rescue intervention keeps companies alive that have become superfluous on the market and are no longer needed. This is called a zombie economy.
In the case of Meyer Werft, too, it could be said that management clearly did not manage its business with enough foresight. Otherwise, the shipbuilder would hardly have been overwhelmed by the increased raw material prices, which have now pushed it into the red. At the same time, however, things are different in the current case. Meyer Werft is not suffering because it has no customers.
The company’s order situation is excellent; the Disney Group has just ordered four more cruise ships from the shipyard. This is a record order for the company, increasing the order book to a volume of around 11 billion euros. The shipyard’s problem is that the industry does not have price adjustment clauses and customers only pay a small part of the order amount in advance before transferring the large remainder when the ship is launched a few years later.
This was precisely what proved fatal for Meyer Werft in times of high inflation: the shipbuilder could not simply pass on the sharp rise in steel prices and energy costs. In the future, it is assumed that the shipyard will be able to charge its customers higher prices. However, to do this, the financial hole of almost 2.8 billion must be plugged in the short term. And this is where the state is supposed to help.
Of course, it could also be argued that the shipyard’s business model may come under pressure in the future – and that the state is thus helping a company that is likely to have problems again in the foreseeable future. Cruise ships that pump diesel into the air so loudly that it makes noise are extremely harmful to the climate. It is not impossible that this realization will sooner or later be reflected in travel customers.
However, there is currently no sign of this development. Demand for cruises is actually increasing.
In this respect, it is good that the state is now saving the plant. Especially since the scope of the aid is manageable and the federal government and the state of Lower Saxony have evidently learned from previous state participation.
According to insider information, the majority of the aid – around 2.3 billion euros – is to be provided only as state guarantees for bank loans. In the best case scenario, these will not be touched at all and will not cost the taxpayer a cent.
And with a view to the additional 400 million euros that the federal and state governments are putting up for the majority takeover of the company, it is also important to note that this is a temporary state entry. Unlike in the case of Commerzbank, whose billions of shares the federal government has still held after 15 years since the financial crisis of 2008/2009, the federal and state governments want to say goodbye to Meyer Werft in just three years. This clear “exit strategy” is important so that the company does not become a million-dollar pit for taxpayers’ money. And it is very likely that it will work, given the major Disney contract.
If everything goes smoothly and the EU Commission gives its blessing in terms of aid, the final deal that has yet to be concluded will not only benefit the location, the shipping industry in Germany and the employees of the shipyard and its suppliers. But in the best case scenario, the tax authorities will also benefit, as they can look forward to increasing tax revenues in the future. Then this state intervention in the private sector is, for once, the right thing to do.