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Bremer-Vulkan Schiftbau und Maschinenfabrik, Vegesack, Bremen

The Bremer-Vulkan Schiftbau und Maschinenfabrik shipyard was originally founded in 1805 in Vegesack (Bremen). It was incorporated as "Bremer Vulkan AG" in 1893. By 1908 it had an area of about 80 acres, water frontage of three-quarters of a mile, and was furnished with all the latest appliances and machinery necessary for a large modern yard. It had six slips capable of building the largest vessels, each slip having electric travelling cranes. Since it was founded, 506 vessels had been launched by 1908, among which may be mentioned large mail, passenger and freight steamers for the Norddeutscher Lloyd, Hamburg-Amerika Line, Hansa Line, Argo Steamship Co., A. Kirsten, Hamburg, and a number of small steamers for the Woermann Line, and the East Africa Line. Between 1900 and 1905 vessels were launched with a net tonnage of 138,250, and machinery of 76,330 I.Hp.

In the 1919-1923 timeframe it was increasingly dominated by Thyssen conglomerate. The big shipyards were special target of the bomb Rank reefs. Bremer-Vulkan built U-boats during the 1930s, and delivered a total of 74 during World War II. During the War U-Boot construction and their repairs were relocated to large concrete bunkers. To this end, the bunker "Hornet" was built near the Weser AG and "Valentin" in Bremen. Construction began in 1943 at the Schwaneweder Heide, where huge underground storage tanks were built. The bunker walls were about 6 meters thick. In early 1945, the bunker "Valentin" was ready, but due to multiple bomb attacks the bunker was never finished. Today the bunker in Bremen-Farge the largest in the world.

The company was allowed to resume shipbuilding in 1949. In 1972 Bremer Vulkan became part of Thyssen-Bornemisza-Group NV. Bremer Vulkan was a general contractor for the F122 frigate programme of the Federal Republic. Six warships were built and 5 yards were charged. The shipyards built ships and AEG-Telefunken equipped them with arms and weapons guidance systems. The sum of 6 frigates amounted to 1,794 billion DM this was Bremer Vulkan 393 million DM, AEG-Telefunken 900 million DM and Blohm & Voss about 140 million DM AEG. The high proportion was due to the purchase of expensive foreign Weapons and electronic equipment. The frigate program was established and the contract was awarded in 1972 because the German Navy's activities in the North Sea were set to intensify. The Navy should hunt Soviet submarines to protect the supply lines between the USA and Western Europe. The economic side was at least as important The German shipbuilding industry was facing a serious crisis. The international competition was great.

During the 1980s Bremer Vulkan expanded by acquisition and diversified. It merged with Lloyd-Werft in 1984.

The Soviet Union agreed to buy eight container ships from West Germany at a cost of 1.2 billion marks, or $620 million, Bremer Vulcan A.G., the state-owned shipbuilder said August 15, 1989. The deal involving two shipyards followed President Mikhail S. Gorbachev's visit to the country in June 1989, in which he called for closer business ties. Bremer Vulcan said that in addition to the firm order, the Soviets had taken an option on four more container vessels. The deal was due to be signed on Sept. 1 in Moscow. Gorbachev cited Soviet orders for German shipbuilders as one area in which links could be intensified. Bremer Vulcan said it and its consortium partner, Howaldtswerke-Deutsche Werft A.G., were also negotiating the sale of 46 multi-purpose cargo ships to the Soviet Union.

As the dry docks of Britain and other West European competitors were being turned into marinas, the company could not keep up with orders, and expanded into eastern Germany. The rationale for absorbing the derelict slipways of the east in 1992 appeared to be sound: west German management harnessing cheap skilled workers in the east would see off the Japanese. Vulkan kept itself afloat by syphoning off DM600m (about pounds 260m) of funds from Brussels destined for the shipyards in the east.

Bremer Vulkan Verbund AG was a diversified shipbuilding group, comprising of four operational divisions: shipbuilding, electronics and systems technology, engineering and machine tools and financial holdings. These divisions are subdivided again into operational sections; shipbuilding into merchant shipbuilding, naval shipbuilding and repairs and conversions; electronics and systems technology into naval technology, systems technology, simulation technology and ship's systems; engineering and machine tools into diesel engine construction, machine tools, port handling technology, environmental technology and water treatment and mechanical engineering components; financial holdings into shipping companies, trading companies, software-holdings and other companies. In 1994, the company had over 80 subsidiaries worldwide. Shipbuilding accounted for 44% of 1994 revenues; electronics and systems technology, 31%; engineering and machine tools, 22% and financial holdings, 11%.

In 1994, Bremer Vulkan, a huge German ship building consortium, received substantial subsidies by the Treuhandanstalt under the condition that these funds be exclusively used in accordance with the applicable rules under European Union Law. Specifically, the funds were granted in order to aid one of the corporate daughters, MTW Schiffswerft GmbH ("MTW"), a German Limited Liability Company (GmbH), in Wismar, East Germany, which had recently been privatized and integrated into the Bremer Vulkan Corporate Group. Another aim of the subsidies was to aid the regional economic framework and employment situation in the East German Land of Mecklenburg Vorpommern. Bremer Vulkan, however, created a central Cash-Management System within the Corporate Group by which it hoped to multiply the funds it had received. Shortly after, when Bremer Vulkan faced serious financial distress, the THA funds were eventually swallowed up, which led to MTW's almost crashing, the occurrence of which was only averted by the extraction of MTW from the Bremer Vulkan corporate group, its indirect re-affiliation with THA/BVS and its recovery by new public funds.

The German Federal Agency for Special Tasks related to the German Reunification (Bundesanstalt fr vereinigungsbedingte Sonderaufgaben - "BVS"), successor to the former Treuhandanstalt ("THA"), sued several members of the defendant corporate mother's board of directors (Vorstandsmitglieder) of Bremer Vulkan Verbund Aktiengesellschaft ("BVV") for damages of roughly 10 Million German Marks (DM) each.

On 21 February 1996 Bremer Vulkan Verbund A.G., Germany's largest shipbuilder, said that it had lost one billion marks, or $685 million, in 1995 and would seek court protection from its creditors to avoid bankruptcy. At the same time, the European Commission, the administrative agency of the European Union, demanded that Bremer Vulkan repay $585 million in aid intended for the company's shipyards in the former East Germany. When Vulkan filed for credit protection, the regional parliament's deliberations focused on saving 14,000 jobs in Bremen and Bremerhaven. But within a few days local politicians in Bremen abandoned attempts to rescue their shipyards.

On May 1, 1996 Bremer Vulkan-Verbund, once Germany's biggest shipbuilder, said that bankruptcy proceedings had formally begun, though work would continue at most operations. The bankruptcy applied to the parent company and to several separately incorporated shipyards in western Germany.

The company and the city where it was based seemed to embody all that was good about German industry: a tradition of excellence pursued with vigorous efficiency in the teeth of the rising challenge from Asia. Its demise has now revealed the symptoms of a malaise afflicting a growing number of companies in Europe's economic powerhouse: insolvency and faltering profits masked only by large infusions of public subsidies.

The stunning demise of Bremer Vulkan Verbund AG, the largest shipyard employer in Germany with over 22,000 workers on the rolls at the time of its collapse in 1996, was a traumatic event. The refusal of creditors and the government to bail out the firm caused mass demonstrations and violent protests. The abuse in the Bremer Vulcan episode in West Germany consisted of a vast amount of aid destined for East German yards disappearing and going to prop up Bremer Vulcan in West Germany. This was strongly challenged by the UK Government at the time.

On October 30, 1998 the European Commission dropped its formal state aid investigation, opened under Article 93@2 of the EC Treaty, against aid for D"rries Scharmann Technologies GmbH following the German Government's decision not to go ahead with the aid package. The Commission informed the German Government in 1997 that it had decided to block the proposed public aid injection.

In May 2004 Germany's highest court, the Bundesgerichtshof, has ordered a retrial of three former managers of Bremer Vulkan group, the bankrupt giant shipbuilder, on charges of embezzlement.

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Page last modified: 11-07-2011 02:54:39 ZULU