Davie Yards to lay off 1,590

Davie Yards, Canada's largest shipbuilder, has filed for bankruptcy protection and plans a temporary layoff of about 1,590 employees on March 1, the Quebec company said Thursday.

The Lévis, Que., shipyard said 160 employees will continue working on a project already underway while new financing is sought.

"We hope that we will soon be able to bring our valuable workforce back to work," said CEO Gustav Johan Nydal, who just took over last week. "We are committed to deliver the ships we have on order."

Davie blamed its financial problems on accumulated losses caused by currency fluctuations and project cost increases. The company also said building offshore vessels has required a more challenging learning process than expected and resulted in additional delivery delays and costs.

The yard's main business is building complex and technologically advanced vessels for offshore oil exploration and production.  

Davie reported a loss of $15.8 million US on revenue of $80.6 million US in the nine months ended Sept. 30 and warned at that time that it might have difficulty continuing in business.

It has received government help on several occasions. Most recently, the federal government provided $380 million in credit financing and guarantees in February 2009.

Based across the St. Lawrence River from Quebec City, Davie was founded in1825 by Capt. Allison Davie and has built everything from sailing ships and tankers to warships and ferries.