Print Friendly, PDF & Email

The sparrows in Bremen, Hamburg and Kiel whistled that something is in the bush. The result is nevertheless surprising: German Naval Yards Kiel and Lürssen intend to work together permanently in naval shipbuilding, with the Bremen team taking over the helm. Long-term cooperation. In the joint press release dated May 13, 2020, the goal was "to improve the national industrial structure and to strengthen efficiency and sustainability." Under the moderation of the Federal Government's Maritime Coordinator, Norbert Brackmann MdB, the preparatory work could be carried out this week final contractual agreement to be successfully completed. Which also means that the core work is now really going on. And of course the planned merger is subject to an antitrust assessment.

Lürssen and German Naval Yards Kiel, who are working together on the construction of the second batch of the Corvette K130 of the German Navy, were indirect competitors in the competition for the order to build the multi-purpose combat ship MKS 180. On January 13, the Federal Ministry of Defense announced its decision to draft the Dutch women's group. Damen-Schelde Naval Shipbuilding intends to work as a partner with Blohm & Voss, Hamburg, which is part of the Lürssen Group. Not only the construction should take place in the Hanseatic city. The German partner, i.e.Lürssen or Blohm & Voss, should be involved in construction and procurement. “We will carry out this project together and in real cooperation. This is very important! ”Said a representative of the management of the Dutch family business in an earlier interview.

The losing German Naval Yards Kiel submitted an application for review to the Federal Procurement Chamber on March 13. The complaint - the first possible step to take action against an award - was not previously complied with by the Federal Office for Equipment, Information Technology and Use of the Bundeswehr (BAAINBw), which is responsible for the award. In general, it is now expected that as a result of yesterday's announcement of future cooperation, the procedure will be settled, so that further delays in the award decision and the commissioning of the project are no longer to be expected. Brackmann: “I very much hope that with the decision, the construction of the multipurpose combat ship 180 can now start promptly. … That would be good news, especially for our navy. ”

In fact, the Handelsblatt reported on May 15, citing the German Press Agency, that German Naval Yards Kiel withdrew the request for review from the federal procurement chamber. A corresponding letter would also have been received by the Federal Office for Equipment, Information Technology and Use of the Bundeswehr.

If the intention expressed by the Dutch to largely involve German partners remains, the merger (subject to approval by merger control law) will make another German construction site available for the construction of the multi-purpose combat ship 180. Which arouses hope of quick implementation.

The Federal Ministry of Economics welcomes the agreement between the two shipyards to bundle their capacities in surface shipbuilding. This is a first important step towards the consolidation of German naval shipbuilding. The maritime location of Germany and the key defense technology of naval surface ship building will be strengthened.


Multi-purpose combat ship 180 project

The talks about a merger started with thyssenkrupp Marine Systems as a third partner. Ultimately, the two owner families agreed on the modalities that now need to be designed. In this respect, no statements can currently be made about the distribution of work, organization and structures including financial planning, i.e. the model of cooperation in general.

Even if the 'tactical' need to realize the multipurpose combat ship 180 project is at the forefront of the merger, the development is generally received positively. Politicians and unions have long been in favor of consolidation. The unions' objections relate to the lack of communication to the workforce about the events. They make their point in terms of securing locations and jobs.

The extent to which the pledge to cooperate between German Naval Yards Kiel and Lürssen, should remain with this configuration (see more below) the hope that it will become more internationally assertive, even more competitive, will ultimately depend on the quality of the depend on the product to be delivered. In contrast, a crowding-out effect in the German shipyard landscape seems unlikely. The other shipyards are characterized by specializations and work in market segments and have very good chances of survival.


Preservation of maritime skills

In the spirit of the preservation of maritime and high-tech expertise that the Federal Government is striving for, it is now important to follow the fate of thyssenkrupp Marine Systems. According to the Reuters news agency (May 14), the parent company thyssenkrupp is holding talks with the Italian Fincanteri. The Marina Militare procured boats of class U 212A in two lots of two copies each. A third lot is planned. The builder was Fincantieri. The Italian shipyard is well positioned in both cruise and naval shipbuilding and worldwide. The company, which is majority-owned by the state, does not only operate joint projects with the French Naval Group - also predominantly state-owned - (e.g. the frigates of the FREMM class), but has formed a joint subsidiary, Naviris, with it as a joint venture.

The Essen turn to Italy may be a gesture towards Berlin in order to seek the side protection there under the pretext of preserving key technology. Because on the way to thyssenkrupp Marine Systems' self-imposed goal "to take on a shaping role in Europe from a position of strength in the next few years" (according to CEO Dr. Rolf Wirtz), 250 million euros will be invested in the infrastructure by 2023. Among other things, a new shipbuilding hall (200 meters long, 60 meters wide, 40 meters high) with capacities for large section production, a second equipment line in the dock for the equipment of submarines, a new platform system as well as a modernized service hall and a chip lift are to be built. The workforce is to be expanded by 500. Initiatives that do not indicate withdrawal.


Cooperation options

One option could be that Kielers return to the negotiating table and then continue the negotiations with Lürssen, the company leading in cooperation with German Naval Yards Kiel.

The comments made by thyssenkrupps board member Oliver Burkhard indicate: “As thyssenkrupp we still think the merger is right - but as an intermediate step. Three are always one too many in partnerships - in life and in business. The current development initially reduces complexity. That's always good. For a real consolidation in the German marine sector, the intermediate step must be followed by another step. ... We have always emphasized that we are constructive partners here - also vis-à-vis Berlin. "

Everything may depend on how the Essen parent company, which had flirted with the sale of its marine division in the past, positions itself. Reuters on May 14: thyssenkrupp could also decide to retain and further develop the division, which generated sales of 1.8 billion euros in the past financial year and 1 million adjusted operating profit. In this respect, expectations are set for the Supervisory Board meeting on May 18.

It would also be conceivable to split off the surface water business with a focus on the core competence of submarine construction. Kielers still have orders for Egypt and Brazil, but the acquisition is becoming more difficult. In contrast, a conglomerate of German Naval Yards, Lürssen and thyssenkrupp Marine Systems would be smarter and politically more desirable. Also because of the self-image of the Essen company - thyssenkrupp Marine Systems cannot get past submarine or surface ship construction.

The emerging consolidation could help the naval shipbuilding industry, which has gotten a little wobbly, to give this technology area and the suppliers behind it a perspective. Certainly and especially the Navy!


Promising opportunities

The move is a ray of hope, especially with regard to the effects of the current crisis around Covid-19 on shipbuilding and maritime transport. In an online press conference on May 14, the representative of the Baltic and International Maritime Council (BIMCO), an international shipping organization, did not bode well: when asked about the effects of Covid-19 on the shipping industry and shipowners, she said: "Ready Be aware that there will be no quick recovery! If you want to start cleaning up - now is the opportunity! "

The Dutch woman, for her part, sees the step that became known on May 13 as "promising opportunities for further strategic and partnership-based cooperation between the owner-managed companies Lürssen and Damen", said Richard Keulen, Director Naval Sales Support, about European security and technology. Damen is watching the consolidation efforts in Europe critically - especially against government-supported companies like in France, Italy and Spain. Since Lürssen and German Naval Yards, like women, "are private shipbuilding companies that are managed by their owners themselves", the Dutch are "confident that we will successfully expand the cooperation we have entered into with the new, expanded structure, and thereby can achieve greater international weight. "

Based on this: The development in the German shipyard landscape and its direct impact on the multipurpose combat ship 180 is fueling the hope that thyssenkrupp Marine Systems could now be involved in the construction of the Walrus submarine successor in the neighboring country.

Hans Uwe Mergener