“Roman Abramovich frustrated over delays to superyacht Eclipse.”
This according to the 14 November TELEGRAPH ( THE London TELEGRAPH that is www.telegraph.co.uk , not to be confused with the Macon, Georgia, USA TELEGRAPH www.macon.com ).
The piece suggests that Abramovich is a perhaps a mite peeved that his plans to visit next year’s World Cup in South Africa aboard his 300 million something ECLIPSE – the biggest yacht yet - may be running aground as a result of the delays.
But there may be an important business lesson here: In superyachts, delivery delays can happen even to the best, biggest, richest, and most experienced. (Something anyone considering buying a troubled superyacht builder might well consider, by the way.)
This should also be at least a small source of some holiday cheer this economically challenged Christmas for all those newcomers to the industry over the years who have suffered a few costly surprises in their search for their superyacht dream, sometimes buying a failing yard to save their yacht.
But the yacht builder in this case is none other than the legendary Blohm and Voss www.blohmvoss.com, part of the most substantial ThyssenKrupp AG www.thyssenkrupp.com , who on the very same day, in one of those great ironies that makes life so interesting, announced their annual results.
And in superyachts, Russian Oligarch Roman Abramovich is sometimes known as “The Admiral”.
In any Navy, a simple Captain has but one ship, which then disqualifies Abramovich from that moniker (begging the question of how Khadafi made “Colonel”....). Admirals have whole fleets and Abramovich has actually owned lots of superyachts besides the “soon-to-be-completed” ECLIPSE.
(For perspective, while the carrier USS RONALD REAGAN (CVN-76) is only 1092 feet long, ECLIPSE, SUSSURO and LUNA total 1100 feet LOA exactly. Add his former yachts ones, and you have 2129 feet of personal superyacht experience.)
Then, according to Forbes magazine, in March of 2009 Abramovich was the 51st richest man in the world with a net worth of US$8.5 billion - admittedly down a wee bit after all the recent global financial bother.
The point is, the Admiral is certainly no virgin to business or superyachts.
And of course, Blohm and Voss is no newcomer to ship-building either.
As for its parent, ThyssenKrupp, the group’s situation after months of retrenchment was summed up in the press release that announced the year’s results, “At the end of 2008 and well into 2009 the world economy experienced its deepest recession since the end of World War II. This global downturn hit ThyssenKrupp hard.”
To be fair, it must be remembered that process of building a custom superyacht - any custom superyacht, not just the world’s biggest - might challenge the patience of even the calmest PROFESSIONAL project managers who could be forgiven for chickening-out of superyachts and dealing with comparatively simple projects like nuclear power plants and three-mile long suspension bridges.
Historically of course, superyachts and budgets have sometimes been oxymorons as designs tend to evolve during the 3 to 4 year builds as a result of owners’ friends, “special” friends, advisors, yacht captains fearing a loss of their jobs and changing technology – “Couldn’t we just move that wall over there??”
This not surprisingly tends to fly in the face of true project management with its sophisticated disciplines and methodology all in search of those three sacred goals: on time, on spec and on budget.
Then there’s superyacht project management, as practiced by some.
Once I attended a presentation by self-proclaimed “experts” on yacht project management.
At the end of their rather nebulous presentation, these “expert” superyacht project managers took a question from the floor as to why, in their entire just ended 45-minute presentation on project management, they had not once mentioned standard project management tools like Critical Path, PERT or PRINCE2 for that matter.
To give them their due, they stayed within their style. The somewhat confusing reply from these superyacht “professionals” was to the effect, “Oh, we don’t need to, we take care of the big things in a yacht project and the little things just take care of themselves…..”
A confusing project management discipline indeed. But again, this is superyachts.
Anyway, the TELEGRAPH piece went on to sum up the Admiral’s perspective on the current ECLIPSE problem, “.... (Abramovich) has become so frustrated over delays to the completion of his new £310 million superyacht Eclipse that he has allegedly threatened to withhold the final payment for the vessel.”
As if in response, almost setting a tone for any future negations, the simultaneous ThyssenKrupp press release went on to say that as of 30 September 2009, the Group had over €9.8 billion in cash, cash equivalents and available credit lines.
So we can conclude bottom-line, even if Abramovich doesn’t pay, ThyssenKrupp would probably limp by.
Again, with the ECLIPSE project, we have a very experienced yacht owner in Abramovich and a very experienced and solvent builder. So, who knows what caused the delays???
But it does prove the point: project managing a custom superyacht ain’t always easy.
More importantly, it also possibly vindicates ThyssenKrupp’s decision last summer to flog (in British parlance) 80% or so of their superyacht operation in Blohm and Voss to Abu Dhabi MAR Group www.abudhabimargroup.com .
Hopefully Abramovich won’t have to buy them to get his yacht out, but I suppose he could.