page_title: Eriksbergs Mekaniska Verkstad
section_title: The financial crisis
hierarchical_section_title: Eriksbergs Mekaniska Verkstad / History / The financial crisis
caption_attribution_description: English: The crane at the old Shipyard Eriksberg.
context_page_description: Eriksbergs Mekaniska Verkstads AB was a Swedish shipbuilding company based in Gothenburg. It was founded in 1850 by Christian Barchman under the name Ericsbergs metall och tackjerns-gjuteri. It delivered its last ship in 1979.
context_section_description: The last profitable decade was the 1960s, before competition from the Japanese shipbuilding industry became too fierce. When Norwegian shipping companies discontinued refinancing their vessel purchases in the United States capital market (the Interest Equalization Tax), requirements were put on Swedish wharfs to hand out credits with subsidized interests and conditions, like the Japanese industry. Eriksberg succeeded however, unlike its competitors Götaverken and Kockums, to retain high solvency and go through the last years of the 1960s relatively unhurt. Both Kockums and Götaverken, being public companies, were insolvent and were saved, through a combination of private and state intervention. In the case of Götaverken, the Salén Group of Stockholm, assumed ownership for a limited time with the option to regaining its investment from the State.
  In the beginning of the 1970s, it became clear to the company's management that there was only a respite of a few years before the economic resources were exhausted. The rise of wages and salaries, enforced by the trade unions in the beginning of the 1970s, increased the company's cost by around 25% in the span of only a few years. The Swedish krona with recurring devaluations raised import prices for the wharf. When the Bretton Woods system was abandoned in 1973 and the US dollar became "floating", it was obvious that the Swedish shipbuilding industry was at the brink of ruin.
  For Eriksberg, the 1970s started nevertheless in positive territory. They acquired Lindholmens Mekaniska Verkstad and built the Portuguese wharfs Lisnave and later Setenave, that among other things, delivered the bows for the company's supertankers (VLCC, ULCC). In 1973 Eriksberg sold their repair business to Götaverken to become pure new building shipyard.
  In 1974 the company's management issued an anticipated warning about the serious state of the company, and the Managing Director Bengt Eneroth resigned after being with the company for 33 years. He had consciously held back new investments in buildings and equipment but the company was still hit. The unfavorable refinancing in foreign currencies created huge losses, as for the other wharfs, by the major problem were the customers, the shipping companies, canceling contracts and amortizations.
  The situation, however, was not handled well by the new company management from AB Tirfing, the owners, and they were eventually forced to sell Eriksberg for a symbolic 1000 krona and sign two very expensive ship building contracts with the new owners, now the soon defunct  Götaverken Group. In the long run, this meant a coup de grace for Broströmkoncernen and Tirfing, which were listed on the Stockholm stock exchange. This also meant the end of the once fortunate and rich Broström Group
  The obstinate attitude of the trade-unions and the socialist government to not lose a single job of the shipbuilders, proved to be a ticking bomb that in the end led to the death of the shipbuilding industry in Sweden. But this would take another 10 years.
  
  The government's irresponsible economic policies, driven by the Social Democratic governments, in tandem with the metalworkers union, alongside the devaluations of the Swedish Krona that made imports expensive, unreasonable wage increases eaten up by progressive taxes and an inconsistent currency regulation, which made it impossible to match the Krona with the credit commitments in US dollar, brought the shipbuilding industry to an end. The total cost for the State of shutting down this industry has been estimated to 39 billion Kronor ( 1986).
caption: Eriksberg's  84 m high, orange gantry crane built in Cologne 1969
exif: {"Image Make": "Canon", "Image Model": "Canon EOS 50D", "Image Orientation": "Horizontal (normal)", "Image XResolution": "72", "Image YResolution": "72", "Image ResolutionUnit": "Pixels/Inch", "Image Software": "Adobe Photoshop CS2 Windows", "Image DateTime": "2009:07:05 11:26:35", "Image YCbCrPositioning": "Co-sited", "Image ExifOffset": "232", "GPS GPSVersionID": "[2, 2, 0, 0]", "Image GPSInfo": "1000", "Thumbnail Compression": "JPEG (old-style)", "Thumbnail XResolution": "72", "Thumbnail YResolution": "72", "Thumbnail ResolutionUnit": "Pixels/Inch", "Thumbnail JPEGInterchangeFormat": "1114", "Thumbnail JPEGInterchangeFormatLength": "4302", "EXIF ExposureTime": "1/250", "EXIF FNumber": "22", "EXIF ExposureProgram": "Manual", "EXIF ISOSpeedRatings": "400", "EXIF ExifVersion": "0221", "EXIF DateTimeOriginal": "2009:06:27 10:51:51", "EXIF DateTimeDigitized": "2009:06:27 10:51:51", "EXIF ComponentsConfiguration": "YCbCr", "EXIF ShutterSpeedValue": "8", "EXIF ApertureValue": "9", "EXIF ExposureBiasValue": "0", "EXIF MeteringMode": "Pattern", "EXIF Flash": "Flash did not fire, compulsory flash mode", "EXIF FocalLength": "51", "EXIF SubSecTime": "26", "EXIF SubSecTimeOriginal": "26", "EXIF SubSecTimeDigitized": "26", "EXIF FlashPixVersion": "0100", "EXIF ColorSpace": "sRGB", "EXIF ExifImageWidth": "4752", "EXIF ExifImageLength": "3168", "Interoperability InteroperabilityIndex": "R98", "Interoperability InteroperabilityVersion": "[48, 49, 48, 48]", "EXIF InteroperabilityOffset": "968", "EXIF FocalPlaneXResolution": "792000/149", "EXIF FocalPlaneYResolution": "1056000/199", "EXIF FocalPlaneResolutionUnit": "2", "EXIF CustomRendered": "Normal", "EXIF ExposureMode": "Manual Exposure", "EXIF WhiteBalance": "Auto", "EXIF SceneCaptureType": "Standard"}