COLOGNE, Germany — The elimination of Kiel-based ThyssenKrupp Marine Systems from the German MKS-180 combat ship competition sent shock waves through the industry in the spring, leaving Dutch shipbuilder Damen with a real chance to win the business. TKMS has since partnered with German Naval Yards to remain in the race, prompting calls by some coastal politicians and trade unions that domestic shipyards should get preferential treatment in big Bundeswehr programs.
Defense News’ European editor, Sebastian Sprenger, spoke with TKMS CEO Rolf Wirtz about what’s next for the company and European shipbuilding as a whole.
What is the state of the German naval shipbuilding industry?
On the one hand, from a market perspective, it is doing quite well. That is due to a great need to catch up after 20 years of lagging defense investments during the time of the so-called peace dividend. On the other hand, we are seeing worldwide political tensions. With the advent of the MKS-180 comes greater demand for combat power, not only in the littorals but also in more contested waters. For us, all that translates into a good market situation.
What is not good is that the MKS-180 program is being pursued (by the German Ministry of Defence) as a Europe-wide competition, despite the proclamation that underwater and surface shipbuilding are core technologies for Germany. No other European country does this.
Is this a matter of how governments interpret European acquisition policies?
The fact is, Germany is the only country that solicits bids Europe-wide. That puts us in competition with companies that are state-owned. It is hard to compete against companies where government representatives are the best sales agents. Therefore, the European and worldwide defense business does not happen on an even playing field.
Some have argued the marriage between Fincantieri and Naval Group is an outgrowth of consolidation efforts in the European naval market. Where does TKMS fit into that picture?
What you describe as a marriage is, in my view, currently not more than speed dating — contracts have been signed, but the implementation will take a few more years. Keep in mind that we also work very closely with Fincantieri. But yes, it is more a sign that we are at the cusp of a European consolidation wave.
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