Twelve submarines, a contract estimated to be worth around 62 billion euros, and a production horizon set to keep the shipyards busy for many years. This is the result of the tender awarded by Canada to TKMS, Thyssenkrupp’s company specialized in military shipbuilding.
For Berlin, it is a success that goes beyond the industrial plan: it comes after a complicated phase for the defense sector, marked by the failure of the Franco-German FCAS fighter jet project and the cancellation of the F-126 frigate project, and rewards intense economic diplomacy carried out at the highest levels of government.
A MATCH ALSO DECIDED BY POLITICS
In recent months, Chancellor Friedrich Merz, Economy Minister Katherina Reiche, both from the CDU, and Defense Minister Boris Pistorius (SPD), have directly supported TKMS’s bid towards Ottawa. A work that CEO Oliver Burkhard openly acknowledged, thanking the government for the support received during the negotiation.
Canada, engaged in replacing the current four Victoria-class submarines, had narrowed the competition to two offers: the German one and that of the South Korean group Hanwha. The final choice fell on the 212 CD model, developed with Norway and already intended for the navies of Berlin and Oslo.
“Together we will build the largest and most modern conventional submarine fleet in the world,” said Pistorius. For his part, Canadian Prime Minister Mark Carney called the operation “the most important procurement program ever undertaken by the country,” although, like TKMS, he did not confirm the economic estimates circulated in the Canadian media.
FIRST DELIVERY IN 2033
For TKMS, which became an independent publicly traded company last October, the Canadian contract represents a decisive step. The order portfolio, currently close to 21 billion euros, is expected to grow by more than 50 percent.
Burkhard spoke of “an important day for Canada, Germany, and Norway,” calling the agreement the largest order ever obtained by the group’s naval division. Thyssenkrupp AG CEO Miguel López also attributed the result to the greater autonomy gained with the spin-off, stating that this new structure will allow TKMS to further strengthen its presence in the international market.
The delivery of the first submarine is scheduled by 2033. Germany and Norway have declared their willingness to postpone part of their respective deliveries to allow Canada to receive the first unit earlier, while the final contract details are still under negotiation. Burkhard expects to reach the signing by the end of the year.
PRODUCTION CHALLENGES
The enthusiasm for the success does not erase the operational difficulties awaiting the German group. TKMS will have to prove it can manage the construction of the twelve submarines destined for Canada in parallel with that of the eight frigates recently ordered by the German navy. A commitment of this magnitude makes the involvement of other national shipbuilding companies likely to distribute the production load.
From NATO’s point of view, the awarding of the contract also strengthens integration among allied fleets. Adding up the orders from Germany, Norway, and Canada, there will be 24 U-212 CD submarines in service, all based on the same platform, with obvious advantages in terms of interoperability, maintenance, and spare parts management.
As Handelsblatt notes, “relief was palpable in Berlin’s government district.” After recent setbacks, losing the Canadian submarine competition “would have represented a new severe blow to the image and credibility of the German defense industry.” This time, however, the result went in the opposite direction and “ended in favor of the Germans, who not coincidentally have declared military shipbuilding one of the national key technologies.” For the German shipbuilding sector, once on the brink of collapse, the Ottawa contract represents a great success story, which should guarantee production facilities and jobs for years, concludes the economic daily: “Even if demand for cruise ships should decline, the armed forces’ need for floating steel is far from being satisfied.
