Kvaerner to Exit Shipbuilding Business

Kvaerner, Europe’s largest shipbuilder, said it is pulling out of the business as part of a restructuring because of weak demand and shrinking profit. The Norwegian conglomerate will sell or shut down its biggest shipyards--in Scotland, Russia and Norway--along with smaller operations, including the naval shipyard in Philadelphia. The company said it may spin off the shipbuilding unit or combine it with another shipbuilder into a joint venture. Shipbuilding has been a drain on Kvaerner’s profitability because of increased competition from low-cost producers in South Korea and Japan, and because of limited demand for new ships. The effort to restructure its operations toward engineering and construction will cut about 10,000 jobs in shipbuilding alone. An additional 15,000 of Kvaerner’s 80,000 worldwide work force will be cut under a plan that will shed operations in metals, manufacturing and pulp and paper later this year.