Loss Of Contract Deals Blow To N. Ireland Economy

Northern Ireland's economy suffered a blow when the shipyard that built the Titanic lost its bid to build a new Queen Mary cruise liner.

The loss to a French yard threatened the survival of Harland and Wolff, the shipyard that once employed 30,000 workers and symbolized Northern Ireland's industrial prowess. Today it is a shadow of its former self with 1,745 workers. Harland and Wolff's Chief Executive Brynjulv Mugaas said a last-minute finance package put forward by the British government "came as too little, too late."

"The impact that this has on the ability of the UK shipbuilding industry to compete for projects is now clear and needs to be urgently addressed if there is to be a future for the industry in the United Kingdom," he said.

British Prime Minister Tony Blair rejected the criticism. "We're very disappointed at the decision. But it's a decision by a commercial company. What we had to do was to give maximum support to the Harland and Wolff bid, which we did," Blair said.

Cunard announced on March 9 that it had signed a letter of intent to build the Queen Mary II at the Alstom subsidiary Chantiers de l'Atlantique shipyard in Saint-Nazaire, France.

Harland and Wolff, whose giant yellow cranes "Samson and Goliath" dominate the Belfast skyline, had said its 1,745 workers could lose their jobs if it did not land the $600 million contract.

Squeezed By Foreign Competition

The shipyard, majority-owned by Norway's Fred Olsen Energy, has only two orders on its books and had pinned hopes of survival on winning the Cunard order. It has concentrated recently on building vessels for the offshore oil industry, but has been squeezed by fierce competition, particularly from South Korea.

Efforts to save the yard have not been helped by the political stalemate in Northern Ireland and the suspension of a fledgling home-rule government last month in response to the Irish Republican Army's reluctance to disarm.

"This ought to give the politicians some encouragement to get their show on the road again," economic analyst John Simpson said. Andrew Mackay, Northern Ireland spokesman for Britain's opposition Conservative Party, demanded an investigation by the European Commission into whether the French government gave illegally high subsidies to Chantiers de l'Atlantique.

"As somebody who knows Harland and Wolff well...I cannot accept that this efficient management and its hard-working employees can have put in a bid so much higher than the French without there being illegal French subsidies," he said. -(Reuters)