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Buyers wanted

Poland's three largest shipyards are fighting to survive. For years they have been in conflict with the European Commission over financial aid amounting to more than 200 million euros.

The Polish government ranks shipbuilding as "strategically important" to the country – despite the numerous problems faced by the three major dockyards in Gdańsk, Gdynia and Szczecin. The dockyards are key employers in the structurally weak Baltic region.

Photo: Jan Zappner

Tens of thousands of jobs depend on shipbuilding, including suppliers, subcontractors and at the dockyards themselves. The latter employ 13,000 people, although that number is steadily decreasing. In the 1980s over 17,000 people worked at the Gdańsk dockyards alone. With their 1980 strike these workers paved the way for the fall of communism. Nevertheless the historic symbolism of the site hardly plays a role nowadays in the negotiations on saving the dockyards, and has been largely outweighed by economic factors. These, in fact, do not look bad at all. On the contrary, like all dockyards, Polish shipbuilders are the winners of globalisation. The order books are well filled for the coming years. The dockyards have had to specialise in order to survive on the world market against the major shipbuilders in South Korea, China and Japan. They build containerships, chemical transporters or – as in Gdynia – vehicle transporters.

Doing good business at a loss

Nevertheless, production at Gdynia is a money-losing operation. In 2005 the shipyards signed a deal with Ray Car Carriers to construct vehicle transporters on a dollar basis. Meanwhile steel prices have risen by 300 percent, while the dollar has declined in value. "The boom has given us more problems than money", says Andrzej Bartoszewicz, a shipyard director. His dockyards must put tens of millions of zlotys (more than five million euros) into the construction of each vehicle transporter – money that the deeply indebted business does not have. This has prompted Warsaw to leap to the rescue, as the dockyards are still state-owned. But if the EU Commission has its way, that will change. Three years ago it initiated a formal enquiry against Poland.

Saved by public funds

Looking back, 2001 was a difficult year for the shipyards in Gdańsk, Gdynia and Szczecin despite the huge demand from abroad. The yards were burdened by mismanagement and debt, leading the banks to refuse new credits. Production was thus blocked, because the dockyards needed bank security to purchase material and make advance payments.
The state then intervened. The EU Commission speaks of 1.5 billion euros in aid money that have flowed into the dockyards since 2004. According to assessments by Neelie Kroes, the European Commissioner for Competition, the funds distorted European competition in helping to maintain the ailing dockyards. In theory, the yards could pay the money back, but not in practice. "That would bankrupt us", says Bartoszewicz.For that reason the dockyards must submit exact restructuring plans providing for downsized capacity, private investment and modernisation. However the EU complains that the plans were not presented at all initially, and when they finally were they were incomplete.

A Ukrainian investor

Whereas former Prime Minister Jarosław Kaczyński defended the Polish subsidies by stressing the dockyards' historical significance, the new government under Donald Tusk has focused on dialogue. Nevertheless the talks with Brussels are dragging on. For months the Polish government has been negotiating with potential buyers – a difficult undertaking in view of the dockyards' antiquated technology. The Gdańsk dockyards have had a new majority owner since the beginning of 2008. ISD Polska, a company belonging to the Ukrainian Donbass Group, now holds 84 percent. The Ukrainians also want to acquire the dockyards in Gdynia. The Polish steel company Mosostal Chojnice, together with the Norwegian shipbuilding company Ulstein, are also interested. Whether the investors' plans will satisfy Brussels will become clear in the coming weeks, when the Commission decides the fate of the dockyards.

Christina Hebel

Christina Hebel, born in Hamburg in 1979, is a freelance journalist and Poland correspondent for n-ost. She is currently completing her studies at the German ...
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