Unemployment looms over Finnish shipyards

HELSINKI: As they put the finishing touches on the Oasis of the Seas, some Finnish shipyard workers are too concerned about their futures to savour completing the largest cruise ship ever built.

Many of the 5,000 employees and subcontractors at the STX shipyard in the southwestern city of Turku are worried about what will happen to their jobs after the Oasis and her sister ship are delivered amidst a sharp downturn in the industry.

"The mood at the shipyard is pretty low. Some people are more worried than others," said workers' union representative Jari Aalto.

"We will try to hang on to our staff, but it is certain that some will disappear," leaving for other jobs or retiring as lay-offs loom, he said.

Shipyards in Finland and elsewhere are suffering from the global economic turmoil, which has prompted cruiselines and shipping companies to postpone decisions on new ship orders.

"Since autumn 2008, for over a year now, nobody has ordered new cruise ships," Teppo Raitis, director of the STX shipyard in Turku, told AFP.

About 300 of his workers are currently laid off temporarily and that number is expected to rise in coming months.

"By the end of the year, the number of temporarily laid off (employees) will increase to around 900," Raitis predicted.

STX Finland, part of South Korean shipbuilder STX, has one shipyard in the capital Helsinki and two in the southwestern cities of Turku and Rauma. The three shipyards employ some 3,800 people.

But the dry spell in shipbuilding also impacts STX's subcontractors and thousands of workers in metals and engineering companies.

It could force up to 3,000 workers into temporary unemployment by the end of this year, according to Kimmo Puolitaival of Southwest Finland's employment and economic centre.

The Turku shipyard specialises in large cruise ships, and the future of most employees there looks bleak, as they finish up Oasis of the Seas ahead of her delivery to the Royal Caribbean cruiseline in late October.

When her sister ship, Allure of the Seas, is delivered next autumn, most of STX's 2,300 employees in Turku will be temporarily laid off, the shipyard's director said.

The situation is slightly better some 90 kilometers (58 miles) away at the Rauma shipyard, as its 1,000 staff workers are working on two ferries to be delivered in 2010 and 2011.

In Helsinki, around half of the STX shipyard's 500 employees are at work.

The maritime industry and authorities in southwestern Finland have asked the government to help shipyards by aiding innovation and changing the tax lease system, which gives financial incentives on new ship orders.

Yet the Nordic country's government, which is dealing with the eurozone's worst recession, has promised no money for the shipyards.

Economists have predicted that cruise companies will start ordering new vessels again once the economy stabilises, as consumers will start spending again on holidays and cruises.

"All of the big cruise vessels have been delivered to the United States and the key issue is how the US economy will develop," said Birgitta Berg-Andersson, a researcher at Finnish economic research institute ETLA.

She added it was difficult to predict when cruise companies would make new orders, but STX's Raitis remained confident they would be coming soon.

"I predict that next spring or possibly during this year, there will be new orders," he noted.

Oasis of the Seas and Allure of the Seas are the largest cruise ships ever built and cost around 900 million euros (1.3 billion dollars) each to be made.

The Oasis can accommodate up to 5,400 passengers, who will have luxurious attractions such as pool surfing, rock-climbing walls and a park with real trees at their disposition on board.

The vessel is scheduled to make its maiden voyage from the US-port city of Fort Lauderdale to Haiti on December 1.