French shipyard lands $1.3bn luxury liner deal

SAINT-NAZAIRE, France: Officials hailed some rare good news for France’s struggling economy after an ailing shipyard landed a billion-euro contract to build a luxury liner for a US cruise company.
The deal comes as a lifeline to the STX France shipyard at Saint-Nazaire on the Atlantic coast, which had struggled to secure major new orders in recent years.
“It’s a nice Christmas present, that’s for sure, because it will allow us to have work and save jobs,” a worker in the plant’s painting department said after the news was announced.
Miami-based Royal Caribbean International said it was ordering a sister ship to its two top-of-the-line cruise liners, the Oasis of the Seas and Allure of the Seas, to be delivered in mid-2016, with an option on a second vessel in mid-2018.
Officials said the contract was worth in excess of one billion euros ($1.3 billion) and would represent more than 10 million hours in work over three years for the shipyard and its sub-contractors.
Following a slew of recent announcements of job cuts, Prime Minister Jean-Marc Ayrault said the contract was a sign that France’s industrial sector was recovering.
“France is showing its capacity to win the battle for the recovery of its industry and exports,” he said in a statement, praising “the excellence of French know-how in naval construction.”
“This is a historic moment because this is the largest liner in the world that will be built,” Ayrault told RTL radio, saying the project was “giving hope for French industry.”
“We are very happy with this order,” STX France chief executive Laurent Castaing said, noting that competition with STX’s branch in Finland for the contract had been “fierce.”
He said state help had been vital in securing the contract but that the government had provided no direct financial assistance.
He said the company hoped to begin hiring technicians and engineers very quickly, though he did not want to give precise numbers.
The company’s two other Oasis-class liners, built in Turku, Finland, cost 900 million euros each according to the trade press. They were delivered in 2009 and 2010.
The STX France yard employs 2,100 people, and provides work for another 4,000 sub-contractors.
Joel Cadoret, a representative of the CGT union at the shipyard, said the order was a “breath of fresh air and a relief” for the site, but added that more needed to be done to reform France’s industrial base.
Design work for the new ship will start in January and construction is expected to begin in September.
The two existing Oasis-class liners are the largest cruise ships in the world, boasting 16 decks and capacity of 5,400 passengers.
They have a range of facilities including a swimming pool with a wave machine, rock climbing walls, a full-size basketball court and an ice skating rink. Both ships are based in Florida.
STX France is two-thirds owned by STX Europe, which is a subsidiary of South Korea’s STX Shipbuilding. The other third is owned by the French state.
Earlier this month, Finance Minister Pierre Moscovici had promised to save the Atlantic shipyards by bringing in new contracts.
The Saint-Nazaire shipyard built the transatlantic liners Normandie in 1935 and France in 1960 and the Queen Mary 2 in 2002.