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Gdansk Shipyard

Gdansk Shipyard builds sea-going vessels and per-forms other related activities such as producing partsfor vessels or steel structures and providing a variety of ancillary services. Once a place of work for over 20,000 people, the Gdansk shipyards provide only 3,000 jobs today. The site of the former Gdansk (Lenin) Shipyard has been reduced to 1/5 and occupies only the island, while the area on the mainland is intended to be converted into a business centre. Some of the slipways and building berths are now idle and will be scrapped as shipbuilding construction of the Gdansk Shipyard has completely moved to the adjacent island

The history of Gdansk Shipyard began in 1844 when Royal Corvette Building Workshop was established. After twenty seven years it was taken over by the Prussian State and was named Kaiserliche Werft (Imperial Yard). In 1890 near the Imperial Yard another yard was created ? Schichau Werft, which was building the cargo, passenger and cargo-passenger vessels as well as naval ships. During the World War II both yards were building mainly for German Navy. After the liberation of Gdansk in 1945, based on the premises of both yards i.e. Kaiserliche and Schichau Werft, a new Polish, state-owned shipyard - Stocznia Gdanska was established and soon the production was started (the 25th of July 1945). The first vessel, ordered by the Polish Steam Company, ore-collier ?Soldek? was launched on the 6th of November 1948.

Two years later the Gdansk Shipyard delivered it?s first vessel for a foreign client, an ore-coiller ?Pierwomajsk? for a Russian owner Sudoimport. For many years Gdansk Shipyard?s production was designated mainly for Russia. In 1967 the name of the Gdansk Shipyard was changed to The Lenin Shipyard. In 1990 due to the democratic changes in Poland, the privatization process began and the form of the company was changed from the state-owned to joint stock company with 61% National Treasury and 39% employees shares balance. Since that moment the yard has been functioning as Stocznia Gdanska S.A.

The first real test for the Brezhnev Doctrine after Czechoslovakia came in Poland. On December 12, 1970, long-simmering public discontent over the shortage of basic foodstuffs and housing, dependence on the Soviet Union, and lack of freedom fomented open rebellion in Gdansk. Triggered by the announcement of a fifteen to thirty-percent increase in the price of food and fuel, protesters went to the streets. Gomulka ordered an immediate crackdown. Thousands were wounded and several hundred were killed. Gomulka justified the brutal response with the claim that the workers? unrest was indicative of a ?counter-revolutionary? attack against the Party and the socialist system. The brutality of Gomulka?s repressive actions caused immediate concern among those in opposition to Gomulka in the Central Committee, especially when a wave of protests spread to other industrial centers. When Gomulka suffered a heart attack on December 19, 1970, he was forced to resign and Edward Gierek was elected as the new First Secretary. The Soviets then chose to save socialism in Poland with ?hard currency? and not intervention.

The uneasy truce crumbled in 1980. The firing of a Polish shipyard worker inspired a democratic movement that changed the face of Europe. Workers? strikes were banned under communism. Triggered by price increases which resulted in shortfalls in every area of the economy, the first signs of transition from dissent to demonstration again erupted in the Ursus Tractor Factory where workers went on strike on July 2nd. They demanded increased wages and improved working conditions. The Gierek regime, hoping to buy time and obtain further credits from the West, agreed to negotiate.

On August 14th, more than 50,000 workers at the Gdansk shipyard went on strike, adding demands for rights accorded only in democratic countries. The ?21 Demands? presented to Politburo member and negotiator Mielzstaw Jagielski included the right to organize independent trade unions, the release of political prisoners, the right to strike, access to the media for the Church, and the demand that the guarantees in the Constitution would be honored by the government.

When Polish shipyard workers in Gdansk, led by Lech Walesa, defiantly called a strike, the government immediately ordered a news blackout. But within hours, the whole country knew of the workers? resistance and related developments from RFE broadcasts. Because the Communists feared a general strike might follow, they quickly agreed to a compromise settlement with the shipyard workers. Solidarity was born. The following year, however, the Communist leader, Gen. Wojciech Jaruzelski, sought to destroy the movement by imposing martial law.

In 1996 Gdansk Shipyard went bankrupt and in 1998 its assets were bought up bythe biggest shipyard in Poland ? Gdynia Shipyard,located approximately 20 km away. From then on, Gdynia Shipyard concluded contracts, purchasedmaterials and arranged financing for production atGdansk Shipyard. In 2006 Gdynia Shipyard sold its shares to the state-owned Industry Development Agency and became only a minor shareholder. After it was taken over by Gdynia Shipyard in 1998, Gdansk Shipyard became largely dependent on the mother company.

By 2005 the site of the former Gdansk (Lenin) Shipyard had been reduced to 1/5 and occupies only the island, while the area on the mainland is intended to be converted into a business center. Some of the slipways and building berths were idle and were to be scrapped as shipbuilding construction of the Gdansk Shipyard has completely moved to the adjacent island.

In 2006 the Polish authorities, who held a controlling share in Gdynia Shipyard, decided that the two yards should be separated. In August 2006, the majority of shares in Gdansk Ship-yard were taken over by a number of State-owned entities and, as a result, Gdansk Shipyard was separated from Gdynia Shipyard. Next, in December 2006, the Polish authorities decided that Gdansk Shipyard should be privatised to improve its prospects of long-term viability. The yard issued new shares which were acquired by ISD Polska, a subsidiary of Ukrainian steel producer Donbas, which was already a minority shareholder in Gdansk Shipyard. Since January 2008, ISD Polska is the majority shareholder of Gdansk Shipyard.

Gdansk shipyard, together with the shipyards in Szczecin and Gdynia, received public money to help with the restructuring process. European Commissioner for Competition Neelie Kroes indicated 31 August 2007 that the Commission has no problem as such with the subsidies on condition that the Gdansk shipyard reduces its production capacity to ensure that there is no distortion of competition that would harm the shipyards in Szczecin and Gdynia or other shipyards in Europe. "We have an obligation to ensure that all shipyards - within Poland and within Europe as a whole - are treated equally", the Commissioner underlined. "The shipyards in Szezcin and Gdynia have already agreed to make capacity cuts and I remain confident that we will be able to reach agreement on Gdansk."

Commissioner Kroes underlined that "This does not mean closing the yard. On the contrary, I want to see Gdansk restructure and become a successful, company able to stand on its own feet without state support. That is in the interests of the shipyard, the workers, and the Polish economy as a whole. Gdansk Shipyard has played a crucial part in European history and the struggle for freedom and a reunited Europe. It deserves a sustainable and viable future and that is our goal."

In 2007 Gdansk Shipyard gained a new shareholder - an international corporation Industrial Union of Donbas (ISD), the second largest industrial holding in Ukraine. The corporation bought almost 84% shares of Gdansk Shipyard and planned to be the sole shareholder. ISD corporation started to combine the shipbuilding and steelworks industry to diversify the production of the Gdansk Shipyard. The imposition of new work norms resulted in workers meeting only about two-thirds of their production targets, causing significant wage losses. The shareholders of the Gdansk Shipyard are Gdansk Shipyard Group (company independent from ISD Poland) and Industrial Development Agency.

On 22 July 2009, the Commission authorised Stateaid granted or planned by Poland for restructuring Gdansk Shipyard. The Commission found that both the EUR 94 million of aid already received by the yard since 2004 and the further EUR 35 mil-lion planned were compatible with the Community Guidelines on State aid for rescuing and restructuring firms in difficulty. The decision marked the end of a long-pending in-depth investigation launched by the Commission in June 2005 following notification of aid dating back to October 2004, soon after Poland joined the EU.