1100 jobs lost in massive reorganisation at shipbuilder Royal IHC
Royal IHC has announced a major restructuring. It means approximately 300 jobs will be lost in the Netherlands over the coming months, with a similar number of redundancies taking place outside of the country. This mainly concerns management and office roles. In addition, a contingent workforce of around 500 will be phased out.
In order to return to profitability, after its takeover by an industry consortium, and to offer it a sustainable future, Royal IHC is returning to its core activities in the dredging and offshore market. The size of the organisation will be brought in line with the expected turnover of EUR 600‐700 million for the coming years. IHC has more than 3000 employees in 39 locations worldwide, which means the redundancies amount to almost a third of IHC’s workforce.
According to IHC’s spokesperson, none of the company’s yard locations in the Netherlands will be divested.
At the end of April, IHC was rescued from bankruptcy by the government, banks and a group of companies, with bridging loans and credit guarantees amounting to hundreds of millions of euros.
CEO Gerben Eggink comments: ‘Royal IHC has a long history, in which it has built up extensive technological knowledge and a leading position in the Dutch maritime cluster. This was only possible through the knowledge, commitment and talent of its employees. It is very painful that we now have to say goodbye to some of those colleagues. However, I am convinced that given their own qualities and with the guidance we provide them, they will be successful in moving from work to work.’
‘Because we are now adapting the organisation to the expected turnover and structuring the company in such a way that we can respond efficiently and flexibly to market movements, IHC can continue to fulfil its leading role in the Dutch maritime industry,’ Eggink adds. ‘This is how we preserve the unique and high‐quality technology and knowledge in the Netherlands.’
Core activities: dredging and offshore, possibly wet mining and defence
It was clear at the time of its acquisition by an industry consortium last June that IHC would define a new strategy in which it would return to its foundations. Moving forwards, the company will focus on its core activities in the dredging and offshore market. Activities in the (wet) mining and defence markets have been designated as potential core activities, with opportunities to develop further.
Other activities and business units will be divested, with the key objective being job retention. This is said to involve among others engineering companies Vuyk and KCI, IHC Hitech, which supplies diving and medical equipment, and the company’s tunnelling business. Its participation in Rotterdam Offshore Group and Brazilian joint venture GranIHC (50 per cent share) will also be divested. With this approach, IHC is helping to ensure that the company has a strong future, and that unique and specialist knowledge and technology is retained for its customers in the maritime sector.
From work to work
IHC has agreed a redundancy plan with the unions, based on as much guidance as possible in helping workers make the transition into new roles and offering support in increasing their employability skills in the labour market. Various training and education courses are being offered for this purpose.
The aim is to help employees as much as possible, for example through collaborations with various companies in the region and (local) government to help preserve the unique craftsmanship within the maritime sector. Although most layoffs concern management and office roles, IHC’s spokesperson says some 5-10 per cent will involve yard personnel. The works council has advised on the plans, which are also backed by the various social partners involved, all of whom recognise the necessary steps that have been taken to give IHC a stronger future perspective.
Now the new organisational structure is in place and conditions for a sustainable future have been created, Chairman of the Supervisory Board Jaap Huijskes has stepped down. As chairman, he guided IHC through an important period, for which the company is very grateful. Commissioner Menno Snel takes over as Chairman of the Supervisory Board from 1 November. Former Dutch State Secretary of Finance Snel was appointed a member of the board on behalf of the Dutch State, after it rescued the company.
Picture by M.M. Minderhoud.