Canadian Manufacturing

German tycoons vie for role in warship contracts

by The Canadian Press   

Manufacturing Public Sector eurozone FDI Germany merkel National Shipbuilding Procurement Strategy

The real money for contractors in the National Shipbuilding plan is in the weapons systems.

OTTAWA—A German defence consortium accompanying Chancellor Angela Merkel has its sights on Canada’s plan to eventually replace its command destroyers and patrol frigates with a single class of modern warships, say a number of defence sources.

The head of ThyssenKrupp Marine Systems is one five German business tycoons who took part in meetings with Canadian counterparts on Parliament Hill.

The company is already a major player in the Canadian navy’s plan to build new supply ships at the Seaspan yards in Vancouver.

ThyssenKrupp Marine is under contract to consult, and observers widely expect the company’s Berlin-class design will end up being chosen as the basis for the new replenishment ships.


But the bigger prize, according to industry sources, is the planned Canadian Single Class Surface Combatant Ship, which has yet to be given a firm price tag or start date.

Following meetings in Ottawa, the German delegation left for Halifax—home to Irving Shipbuilding, the company heading up major warship production in Canada.

Government and industry insiders say Public Works will begin consulting with defence contractors this fall on the single-class ships.

The consultations are meant to give both the federal officials and defence planners a sense of how the project could unfold—where it fits within the framework of the Harper government’s much-hyped national shipbuilding strategy, and perhaps more importantly, its affordability.

The Halifax-class patrol frigates, built in the 1990s, are going through their mid-life refit, but the navy’s three Iroquois-class (also known as Tribal-class) destroyers are all about 40-years-old and at the end of their life span.

Replacing them has been a priority for nearly a decade because they act as floating command centres that allow Canada to form its own naval task forces.

Even still, federal budget documents suggest no replacements are on the horizon until almost the end of the decade, at the earliest.

According to defence insiders, ThyssenKrupp Marine is interested in getting in on the ground floor of the single-class design and the eventual installation of combat systems, such as radar, missiles and guns.

That would be in keeping with the Harper government’s strategy, which mandates that the warships be built in Canada.

The consortium is also mentioned in federal briefing records as being a leading contender for the replacement of the navy’s British-built submarines in a project that’s anticipated after 2020.

A defence procurement expert said bending steel and building hulls is probably the least expensive element of building warships; the real money for contractors is in the weapons systems.

“The government’s strategy of building at home doesn’t preclude those systems from coming from elsewhere,” said Phillipe Lagasse of the University of Ottawa.

The Canadian navy has over the decades taken great pride in having its designers lay out the plans for the new warships it wants, but Lagasse said the deficit-minded Conservative government has realized that the process is lengthy and more expensive than going with existing drawings in other nations.


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