Push for co-operation among European shipbuilders could have Canadian ripple effect
German shipbuilder TKMS suggests it could help build smaller corvette warships in Canada
The head of the German company in line to build Canada's new submarines is pushing for more co-operation among European shipbuilders — an effort that could have spillover effects in this country as the navy considers adding corvettes to the fleet.
In an interview with CBC News, Oliver Burkhard, the CEO of ThyssenKrupp Marine Systems (TKMS), made a point of highlighting his company's recent co-operation agreement with the Spanish government-owned Navantia S.A.
The two companies are exploring teaming up on naval projects, including the potential production of TKMS submarine designs at Navantia's shipyards in Spain.
Burkhard said he believes there needs to be collaboration among shipbuilders.
Increasing demand for warships
"The pattern which I always observe in this market is [that] everybody in the past had time but no money. Now everybody has money but no time," Burkhard said in an interview with CBC News, referring to the steady, increasing demand for warship construction.
A recent report by the research and strategy company Imarc pegged that increase at more than five per cent over the next decade.
WATCH | Irving shipyard building Canada's River Class destroyers:In addition to submarines, the Canadian navy has begun construction of its long awaited River-Class destroyers and has suggested there's a military need for smaller, less expensive, ice-capable corvettes.
The destroyers are being built by Irving Shipbuilding in Halifax under the National Shipbuilding Program, which is in the process of wrapping up construction of the lightly-armed Arctic and Offshore Patrol Ships.
Since Canada has no modern submarine building expertise, the 12 boats being planned will be built in Germany.
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Burkhard spoke ahead of his trip this week to Ottawa, where he's meeting with companies that have partnered with TKMS to supply Canada's submarine program.
Last month, the Carney government named TKMS as the preferred supplier of the navy's submarines and hopes to have the German shipbuilder under full contract by the end of 2027. Burkhard said, given the speed at which the government has moved, he expects a signed deal will likely happen faster.
Burkhard said he doesn't foresee any of the work on the Canadian boats being transferred to Navantia.
'It can be built in Canada with our design'
In the run up to the TKMS selection, German officials behind the scenes floated the idea of how the company could possibly supply its MEKO A-100 corvette design to a Canadian shipyard — helping boost Canada's defence-industrial base.
The notion did not make its way into the submarine bid, but Burkhard confirmed it was under consideration.
He said there's been no pitch to Canadian officials about possibly exporting the MEKO A-100 package.
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"Export also means that it can be built in Canada with our design," Burkhard said. "We don't want to build them in Germany. We can build them elsewhere together with partners and maybe they are the general contractor. And we are just delivering, let's say, the material package."
While it remains only a concept, Burkhard added: "Let's say, we're ready if you are. Then we can talk about that."
Navy identified need for corvettes last year
The Canadian navy identified the need for corvettes last year and has been engaged in an options analysis on what role such a warship could fill and what capabilities it would need.
While he was still commander of the navy, Vice-Admiral Angus Topshee, who has been appointed the vice chief of the defence, defended the need for a smaller warship that packs a punch by saying the country has a quarter million kilometres of coast to defend.
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University of Calgary defence expert Rob Huebert said the starting point for any discussion about defence procurement needs to be military necessity, not economic benefit.
He said the navy needs corvettes and he's pleased to see Burkhard recognizes that nations, including Canada need to rapidly rearm.
WATCH | Navy commander discusses defending Canada's Arctic:"I think anything that will facilitate the construction of extra ships for the navy is a good one," Huebert said.
"If we find ourselves in conflict, which I'm very terrified we're going to in the near future, we need to get as many ships as possible and we need the ability to replace losses," he said. "So, if the Canadian government is open to that, I think it would be an excellent idea to go with."
Conditions similar to those that created Airbus
Huebert also said it's good to see closer co-operation among European shipyards — especially in submarine construction.
He said it's necessary when there are some companies, like TKMS, at more than 100 per cent capacity in terms of what their yards can sustain, while others are barely operating.
Burkhard compared the market conditions in shipbuilding to the 1960s when empty aircraft order books pushed European aerospace companies to create Airbus.
Back then, the principal competition was from the U.S. defence contractors, Boeing, Lockheed Martin and McDonnell Douglas.
WATCH | What Canada gets out of its submarine deal with German company:While acknowledging a maritime version of Airbus would be a complex undertaking, Burkhard said perhaps industry could take the lead.
"Politicians have to get re-elected and politicians in France will always take care about French shipyards, and politicians in Spain will always take care of Spanish shipyards," Burkhard said.
"But if the industry comes to an idea and say, 'Well, let's join forces like Airbus did in the '70s.' "
The need for closer partnerships among European defence companies was highlighted three years ago by the Washington-based Center for Strategic and International Studies (CSIS), which noted in a landmark study that European countries were spending more on defence but co-operating less. The study framed this issue as a deeply entrenched problem.