Damen Shipyards undervalued its shipbuilding contracts

Damen Shipyards still has to deal with loss-making projects this year. When entering into these assignments, an incorrect or, in retrospect, over-easy assessment of the risks was made, says CEO Arnout Damen. The company will also refrain from building cruise ships.

Damen has taken measures. ‘A new risk board has been formed. A committee of top managers and department heads that subjects large, complex and deviating projects to a test,’ says Damen in Dutch newspaper FD. The committee is led by the newly recruited Chief Transformation Officer Andreas Fluhrer, a German who made a name for himself at McKinsey.

Fluhrer’s task is to make the organisation more effective. Damen: ‘The organisation was too complex. It was difficult to identify who was responsible for building a ship. The dozens of shipyards and other companies in the group now come under six divisions. Each division has to carry its own weight.’

In order to turn the losses around as soon as possible, the CEO also does not rule out a reorganisation that may cost jobs or the sale of foreign shipyards.

Damen turns away from cruise ships

Furthermore, the group refrains from the market for the construction of cruise ships. ‘That’s not in Damen’s current risk profile,’ says Arnout Damen in the FD. ‘You should only do that if you can find enough technical specialists. That’s a very difficult task.’

Picture: Arnout Damen (by Damen Shipyards).

This article first appeared (in Dutch) on Schuttevaer, a sister publication of SWZ|Maritime.

Author: Mariska Buitendijk

Mariska Buitendijk is one of SWZ|Maritime's journalists as well as the magazine's copy editor.