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Chantiers eyes Pinnacle order
15/11/2004

Chantiers de l’Atlantique is trying to clinch the contract for Carnival Cruise Lines’ enormous Pinnacle project, reports The Wall Street Journal today in a story on the troubled French yard.
However, Carnival Corp.’s multi-ship order with Fincantieri in late September included an agreement to continue working with the Italian builder on new cruise development projects including, specifically, the Pinnacle prototype. Seatrade Insider asked Carnival chairman and ceo Micky Arison if that has changed. ‘While there hasn’t been a deal done, it’s clear that Fincantieri has the inside track,’ Arison said today.

Chantiers chief Patrick Boissier told The Wall Street Journal that the yard has taken steps to reduce its break-even point to two and a half cruise ships a year from around four. The French builder faces a heavy loss in 2005 as orders drop off. Chantiers currently has two cruise newbuilds on the books for delivery in 2006 and ’07, both for MSC Cruises.

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Originally posted by eroller:
‘While there hasn’t been a deal done, it’s clear that Fincantieri has the inside track,’ Arison said today.

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Meanwhile, Chantiers is getting help from high places. French finance minister Nicolas Sarkozy has vowed to keep the yard afloat...

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Under EU regulations is the French government allowed to help (subsidise) Chantiers d’Atlantique? As said, the government can only encourage state owned companies to order from them, but the question is, will this be enough?

In my opinion Chantiers d’Atlantique should be looking at other projects, namely MSC Crociere, Disney and Star/NCL. As Carnival has made an agreement with Fincantieri so should the French builder. If it needs two and a half newbuilds per year to break even that’s what they should be doing.

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mec1 wrote:
I think that in terms of quality of finish Chantiers and Meyer Werft are light years ahead of Fincantieri and Wartsila

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Mike, do you really believe if Chantiers d’Atlantique undercut Fincantieri would they deliver a better finish? All builders build to specifications and the finished product has to pass stringent criteria or else there are penalties. I doubt there is too much difference between the builders except for qualities in design.

Regardless of who wins the contract it seems the strong Euro may force these shipbuilders to share their skills with their Asian counterparts. It was reported that RCCL had urged Fincantieri and Kvaerner Masa (Aker Finnyards) to do this. It would mean strategic alliances with either Chinese or Korean yards. Fincantieri has already stated its interest in developing relations with Chinese builders, where of course Fincantieri retained the technological upper hand. The outcome would be hulls and superstructures built in Asia, engines, electronics and all the interior finishing (the value-added parts) built and assembled in Europe.

Chantiers d’Atlantique has ways of cutting costs by subcontracting parts of its ships to Polish yards, it also has parent company Alstom close by to work on engines and electronics, but as it stands in my opinion Fincantieri still has the upperhand. They can build the Pinnacle Project at Monfalcone near Trieste, where they can also build Wartsila engines. I also have a hunch that if Fincantieri were forced to cut costs and keep work in Europe they could (hypothetically) subcontract parts of the ship to Croatian yards close by.

Another issue is worker’s wages and conditions. I think they are lower in Italy than in France. If so, Chantiers d’Atlantique would have a hard time with the respective unions. Comments?

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Cheers

[ 11-15-2004: Message edited by: bulbousbow ]

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Originally posted by bulbousbow:

Another issue is worker’s wages and conditions. I think they are lower in Italy than in France. If so, Chantiers d’Atlantique would have a hard time with the respective unions. Comments?

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As I have already said Chantiers d’Atlantique needs to be looking at more orders and not at a single project. In the Carnival may order a Pinnacle ship in March 2005 thread, Christophe mentioned French newspaper Ouest France reported MSC was going to order another two newbuilds. If MSC has decided to order these (as options to the already ordered two 90,000gt ships), it would be very good news for Chantiers d'Atlantique, but as far as I know and with the development of the cuts in the workforce I doubt this has happened, unless of course they have confirmed them as options for a later date, possibly after the completion of MSC Musica in 2006.

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