For Europe, it’s naval business as usual

Is there enough drive to reach a unified shipbuilding enterprise?

ROME, LONDON, PARIS AND COLOGNE, Germany — As European shipbuilders prepare to transform their nations’ rising military budgets into naval power, local priorities are acting as formidable forces against the integration of a fragmented market. Two years ago, Italian defense think tank CESI produced a document lamenting the fractured state of the European naval industry, warning that firms on the continent would be swept aside by foreign competition if they failed to team up and take on the world.

The paper provided the ideological underpinning for proposals by Italian shipyard Fincantieri to jointly build vessels with France’s Naval Group, a plan being considered by both governments. But today, one of the authors of the report, Francesco Tosato, says that despite European Union moves to integrate the defense industry, little has changed in the naval sector.
“We still have six or eight types of frigates, each with manufacturing runs of no more than 10 vessels, which is unsustainable,” he said. Supporters of integration say shipyards will be able to cut costs through synergies and avoid competing against each other in export markets.

“The Germans are building U-212NG submarines with the Norwegians, but they are not integrating,” he added. A second analyst agreed that integration is not happening, but offered a positive outlook. “With European governments not wanting to spend on naval vessels, it is all about exports, and buyers in Asia and the Middle East want to deal with one government, not with Europe,” said Peter Roberts, director of military sciences at the Royal United Services Institute in London.“They may want a German frigate with a French radar and MBDA missiles, but they still want one national point of contact,” he added. Roberts also argued that European multinational shipbuilders risked stifling competition. “That could lead to poorer designs and higher prices,” he said. In addition, one European industrial giant may be unable to offer different types of vessels to export customers with a variety of requirements.

German angst
In Germany, meanwhile, industry officials and lawmakers are bickering over whether surface shipbuilding is, or should be, a national priority so critical that contracts must go to German yards. (The Ministry of Defence has only designated submarine construction as such a key capability.) That debate permeates the competition for the MKS-180 program, a novel multi-use combat ship. The thought that Dutch contractor Damen, one of the bidders still in the race, could win the contract over the purely German team of German Naval Yards and ThyssenKrupp Marine Systems has some coastal politicians and trade unions up in arms.

There is a lot at stake for German shipbuilders.

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