H&W jobs hinge on Norwegian ferry contract

The future of some 1,800 jobs at Harland & Wolff will become clearer this week when the shipyard learns if it has secured a contract to supply four ferries to a Norwegian company.

The ferries are reported to be worth £100 million sterling each and could save the yard's workers from a 90-day redundancy notice which may come in early June.

Failure to land this contract would probably leave management few options but to start laying off workers sometime next month.

The possibility of securing a major cruise ship contract from Luxus Holdings - a consortium of US and British expatriate investors - has yet to be realised.

The group is currently attempting to put together an offer for one - or possibly two - cruise ships and is in discussion with the British government over a suitable grant package.

Mr Jim Davis, who is poised to become chairman of the group if the necessary equity is raised, told The Irish Times a final decision on the viability of such a plan would be known within three weeks. Harland & Wolff is the only yard under consideration, he said.

"If it happens, they will be the guys," he added.

As well as an empty order book, Harland & Wolff faces the threat of bankruptcy. An outstanding claim for £133.3 million by US company Global Marine over cost overruns on two oil drill ships constructed by the shipyard is currently under arbitration.

To counter this threat, the board of Harland & Wolff has put together proposals for a corporate restructuring of the company. These envisage creating a new holding company called Harland & Wolff Group plc, and a new sub-division - Harland & Wolff Heavy Industries.

The company says that the changes are designed to remove the uncertainty prospective customers have about the financial stability of the company's shipbuilding operation.

In a statement to shareholders, chairman Mr Fred Olsen said the company needed a new financial platform, a new organisation, and an injection of new money to create new opportunities.

In effect, the new structure is intended to ring-fence the potential debt from the Global Marine claim and remove the threat of liquidation from any new company.

The proposals, which also include a rights issue, will be voted on by shareholders at the company's a.g.m on May 15th.

However, critics believe that the move may be part of a plan to cut the cost of scaling down the yard and transfer resources from shipbuilding into property development within the Titanic Quarter.