Yesterday's notification of redundancy to 1,745 workers is not entirely unexpected. The yard has had a difficult year and has warned many times that it would face closure unless it could fill its empty order book.
The immediate crisis is the lack of orders in the pipeline. The shipyard has recently finished work on one of two drill ships under a $400 million contract with the US company Global Marine, and is due to finish work on the second by midsummer. With no other major contracts in prospect there is simply no work for employees.
Mr Brynjulv Mugaas, group chief executive of Harland and Wolff, said yesterday that for some time there had been a "compelling argument" to issue redundancy notices. He said the company had held off beyond the point where it should have, and commercial realities eventually forced the company's hand.
Only a few months ago staff staged a temporary walkout, demonstrating to save their jobs in the face of a multi-million pound contract dispute between Global Marine and the shipyard.
The Belfast yard claimed it should be compensated for extra work they undertook on the two drill ships. The dispute is currently under arbitration and Harland and Wolff has lodged a £133.2 million compensation claim against Global Marine. If proceedings go against the shipyard it would probably face closure anyway. Harland and Wolff's last hope for survival rests on its tender for the Queen Mary II contract from Cunard. The contract for the passenger ship is reported to be worth at least $650 million. Harland and Wolff is one of two yards shortlisted for the contract by Carnival Corporation, Cunard's parent company. The French shipyard Chantiers de L'Aplantique is also in the race.
However, in an interview with The Irish Times last week Mr Larry Pimental, president and chief executive of Cunard, made it clear Harland and Wolff were outsiders for the contract.
"Candidly I think the French are far ahead," said Mr Pimental. "H&W is are trying to do something that is not the norm for them. I think there is a bit of complexity in their bid." A decision on the contract was widely expected to be announced this week at the world's largest shipping exhibition in Miami. However, Mr Pimental said last week he would probably extend this to allow Harland and Wolff time to reshape their original bid, which was deemed too expensive. Cunard asked the Harland and Wolff to prepare an all UK-based bid, rather than have the outfitting work done by the German company Lloyd Werft. Discussions with several UK-based firms, the IDB and the Department of Trade and Industry to refine the bid have been ongoing since last week.
The suggestion that the timing of yesterday's redundancy notice was a deliberate move to put pressure on the British government to provide a full nine per cent subsidy and some form of a guarantee for the project, probably has some merit. However, even if this is some last ditch throw of the dice, it is unlikely to impress Cunard.