For a long time, Italy, France, Germany, Finland, and very occasionally Japan, have been the only serious builders in the world to produce large cruise ships.
But with recent shipbuilding takeovers, this may now be changing.
In Italy, Fincantieri’s biggest customers are Carnival Cruise Lines, Holland America Line, and Princess Cruises, all of whom have taken most of their new deliveries from the Italian shipbuilders. To these can now be added Cunard and P&O. In 2010, Fincantieri delivered the Queen Elizabeth, the new flagship of Cunard Line. Carnival’s new 130,000-ton Carnival Magic became Fincantieri’s largest product when it was delivered in 2011. Fincantieri, one of the largest shipbuilders in the world, designs and produces cruise ships, ferries, naval vessels, offshore units, and megayachts. With nine shipyards—eight in Italy—it has 10,000 employees. Fincantieri, a world leader in the sector, has built 59 cruise ships.
STX Group, the South Korean conglomerate, last year had a daring swoop on Aker Yards (a Finnishbased company) that will see it take two-thirds of Aker Yards and leave the French with 34 to 25 percent already held by Alstom and another 9 percent STX will now sell to the French government. Aker Yards gives STX Group, a conglomerate involved in shipbuilding and energy production, specialized cruise ship and offshore vessel capabilities. STX is presently the sixth largest shipbuilder worldwide, with its strength in bulk carriers and container ships.
Aker Yards, meanwhile, controls 13 shipyards and has 15 cruise- and ferry-type vessels on its order book. However, Aker Yards has suffered losses, and building cruise ships is vulnerable not only to the economic downturn but also to changes in the dollar–euro exchange rates. However, Aker Yards’
advanced technologies in cruise ships, icebreakers, and specialized ships should put it less head-to-head with its national competitors.
In a generally difficult context, the European shipbuilding industry is in a very weak position. The main shipbuilding groups have had to face a drastic reduction in their order backlogs and requests by many ship owners to postpone deliveries. This has led to underutilization of production capacity, with the consequent job losses in the shipyards estimated at some 20 percent of the total workforce of 180,000.
In view of the difficult market conditions, STX Europe, Fincantieri’s main competitor (together with Meyer Werft shipyards in Germany), purchased by STX Shipbuilding of Korea in 2007, has considered the option of partially refocusing its cruise and ferries business unit on other segments. In the meantime, the absence of new orders led the company in 2009 first to temporarily lay off workers from its French and Finnish shipyards, and later to significantly reduce headcount, with a consequent downsizing of production capacity.
Germany was one of the countries hardest hit by the shipbuilding crisis: many shipyards are about to go bankrupt, others have already failed or shut down, and others have been or are about to be sold.
For Discussion
1. The leadership gained with a distinctive product “Made in Italy,” is the result of top quality and a privileged relationship with the best international customers. Why?
2. STX offers a wide variety of ships including icebreakers. Will this variation allow them to retain their market share?