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Germany & MKS 180: is the competition only a regional issue?

In a rare public intervention during the ‘Hamburger Messe[1], Lürssen, the German subcontractor to the Dutch Damen, has recently deplored the lack of political support from the city Mayor of Hamburg in the fierce competition around the MKS 180 program in these terms : ‘Dort hatte man sich vorgenommen, den Bürgermeister darum zu bitten, im Werftenstreit aktiver zu werden

But beyond the (supposed) absence of a more active political lobbying of Hambourg, Lürssen has curiously tried to ‘regionalize’ the issue by opposing Hamburg to Kiel in the giant frigate competition : ‘Hamburg dürfe sich von Schleswig-Holstein nicht die Butter vom Brot nehmen lassen’.

 This regional rivalry is somewhat current in Germany but here a curious issue in a serious matter: Is the MKS 180 competition only a question of location in Germany, opposing one Land against another one in a suicidal race? Are not the real stakes elsewhere?

 

The MKS 180 competition: a regional issue, really?

 

If Mr. Günther, the CDU Ministerpräsident of the Schleswig-Holstein promoted his Land, which is his right and his duty, it is curious to see Lürssen, a well-established German ‘Traditionswerft’ with several locations in Germany, to use the regional issue among the MKS 180 competition.

Lürssen itself has shipyards in five Länder and not only in the City of Hamburg:

  • Bremen (both in Vegesack and Aumund), City of the Land (Freie Hansestadt Bremen) which is its HQ and also the head of Lürssen logistics;
  • Wolgast, located in the Land of Mecklenburg-Vorpommern;
  • Hamburg,  (also a Free and Hanseatic City), location of B+V and Norderwerft repair and the location for the construction of the MKS 180 if Damen clinches the deal;
  • Rendsburg, in the Land of Schleswig-Holstein, for yachts, and Naval ships repair;
  • Wilhelmshaven, in Lower-Saxony, for repair and upgrade of long Naval and commercial ships and yachts;
  • Lemwerder, located in Lower-Saxony too, which is the main warehouse of the group, and used for refits, repair, maintenance.

So, to put it straight, the  issue is certainly not limited to the sole City of Hamburg or Northern Geermany, but obviously to the whole Germany… DefenceChronicles believes however that the real stakes are to find elsewhere.

 

The MKS180: the real stakes for the German industrial ‘Standort’

 

Far from being a regional issue, the MKS 180 competition is a serious national matter.

 

First, because, the real challenge for German shipyards, is the survival of the sector’s capability in Germany. By its size and its complexity, the MKS 180 competition will create a long-term, sustainable naval shipbuilding and ship sustainment capability that will serve German strategic and economic interests for many decades. Innovation is also critical to the success of this German naval shipbuilding program. Not only will innovation ensure that German Navy retains a warfighting advantage and capability edge, but also investment in innovative industrial capabilities and practices by businesses will drive cost-competitiveness, guarantee a sustainable German industrial base after years of weak domestic budgets.

⇒ The MKS 180 program is about retaining and developping complex Naval capabilities such as the design, the production and the integration of highly-sophisticated systems in Germany and not only limited to regional jobs, even if, all agree, this aspect is specially important in and to Northern Germany.

 

Then, as put in evidence by DefenceChronicles experts in other articles, the MKS 180 competition will be the most ambitious shipbuilding program that will establish Germany’s continuous naval shipbuilding capability, representing a strategic national asset for future generations in Germany. We dare to say that these new frigates could transform the German naval shipbuilding and ship sustainment industry here in Germany: with German engineers and workers, in German shipyards, and using German resources. This is truly a federal – and not only a regional – endeavour – involving all Länder, industry and the education and training sector – to achieve the ambitious agenda for naval shipbuilding as stated in the contract of coalition (March 2018) and expected by the Bundesmarine after the failures of previous programs. In no case, this is an issue opposing Kiel to Hamburg, but a German issue. It is curious to see a such well-established German shipyard, now sub-contractor of a Dutch shipyard (Damen), using the regional issue. For decades, Lürssen has been part of Germany-wide consortia (ARGE 125, ARGE 130 for recent examples) and knows that all the German’s workforce skills base will be used in such a complex program. It may also happen that, given the challenges of the program, other European countries such as the Netherlands, could be picked for their sub-systems or equipments.

⇒ The MKS 180 program will be however a truly Germany-wide program capable of feeding a German large industrial base and not only a regional one.

 

Last but not least, the MKS 180 is about export. Not export of these frigates, but export in general. DefenceChronicles said that foreign trust comes from national orders[2]because that is simply how it goes in the defence sector. The big deal that one suspected to be clinched between both countries – German submarines for the Netherlands and Dutch-designed frigates for Germany under the umbrella of a G-to-G agreement – is over. But this project could revive if the German MoD decided to award the MKS 180 program to Damen to ease later the sale of German submarines to the Netherlands. Such a policy would lead Germany in a situation where the prime contractorship of the complex surface ships would be left to a foreign shipyard with no guarantee of clinching the submarine deal in the Netherlands later…There is a fierce competition. Neither TKMS, Lürssen or German Naval Yards could hope to be awarded a major surface fleet contract on the export market. If a foreign Navy can still be seduced by a competitive technological and commercial offer, the other competitors will stress that these shipyards does not have the support of their Navy, thus disqualifying the shipbuilder.

⇒ The MKS 180 is a matter of foreign trust into German capabilities and not only limited to the survival of a regional industry.

 

In conclusion, let’s come to real stakes around the MKS 180

 

So, far from being limited to a regional issue, the MKS 180 competition is, on the contrary, all about the survival and future of the whole German Naval shipbuilding capability and sheds light on three major issues:

  1. Will the German Naval industry still be capable of designing, producing and servicing complex Naval ships in Germany in German locations with German engineers and workers in the next decades if the prime contractorship be chosen abroad?
  2. Will the German Naval industry still be fed with Federal ambitious programs to sustain  the whole German industrial base if surface shipbuilding is not considered a a strategic asset and purchased off the shelf?
  3. Will the German Naval industry still be credible on the export markets if it loses the trust of its domestic customer, the first and the most important customer to secure?

These are, DefenceChronicles believes, the three crucial issues at stake. Not a petty quarrel of regional rivalries.

 


[1] 6 septembre 2018, Hamburger Abendblatt Online.

[2] https://www.defencechronicles.eu/trust-by-domestic-order/, 19th of June.

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