When the giant industrial concern ThyssenKrupp releases its annual results on Thursday, the focus will likely be on the company’s unprofitable steel division, which is being merged with Tata Steel UK and hopes to return to profit by cutting thousands of jobs.
But ThyssenKrupp’s Achilles heel is not in its steel business. Rather it is found along the wharves and dry docks in the northern city of Kiel, where the skeletons of dozens of ships and submarines under construction by ThyssenKrupp’s Marine Services line the shore.
Despite all the evidence of feverish activity, ThyssenKrupp’s shipbuilding division is in a mess. Sources at the company told Handelsblatt that the division suffered an operational loss in the financial year 2016-2017, and that the dire situation is unlikely to change going forward. As a result, company sources told Handelsblatt that division chief financial officer Evelyn Müller will depart the firm by the end of the year.
If every dry dock in Kiel is occupied with a ship or sub under construction, how could the company be losing money? Because of technical and planning bottlenecks and delays, almost every ship is finished well behind schedule. The company actually loses money every time the Dom Perignon bottle smashes on a hull at launch. “No submarine is delivered on time,” said one source at the company.
This sloppy management convinced the Australian government to award a €34-billion contract for a fleet of new submarines to France’s DCNS shipyards in 2016, a huge blow to ThyssenKrupp’s ambitions. After that fiasco, company management promised a complete overhaul of its business – but nothing much seems to have happened.
Now, the division is unsellable. (end of excerpt)
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