Dispute Threatens ThyssenKrupp's Submarine Business

The Wall Street Journal ^ | March 23, 2014 | GUSTAV SANDSTROM and CHRISTINA ZANDER

[sukhoi-30mki]

STOCKHOLM—A dispute between the Swedish armed forces and ThyssenKrupp AG TKA.XE +1.39% threatens one of the German industrial giant's most-profitable operations and could shake up the growing global submarine business.

The row, which is partly over export possibilities, has prompted Sweden to yank contracts for the next generation of Swedish submarines from ThyssenKrupp, the world's largest exporter of nonnuclear submarines.

Sweden has signaled that it instead is considering giving the work to Swedish defense company Saab AB. Currently, Saab doesn't build manned submarines, but it acknowledges it is trying to poach engineers from ThyssenKrupp's submarine unit, which is based around a Swedish company that ThyssenKrupp acquired in 2005.

Swedish officials are upset that their country hasn't exported a new submarine since Swedish submarine maker Kockums was integrated into ThyssenKrupp in 2005, according to people familiar with the Swedish position.

The country was previously the world's third-largest exporter of conventional submarines, behind Russia and Germany.

Demand is growing for conventional submarines, which are far cheaper than their nuclear counterparts.

Tensions in regions including the South China Sea and Horn of Africa have prompted many countries to boost naval spending, even as they cut funding for land and air forces. Japan, Australia and South Korea aim to renew their conventional submarine fleets. Other countries, including Vietnam, are buying their first submarines.

A conventional submarine can sell for less than $600 million, and offers small countries a powerful and hard-to-detect tool to challenge larger naval powers, said Pieter Weseman, a senior researcher at the Stockholm International Peace Research Institute.

[sukhoi-30mki]

[yarddog]

Do the Japanese make and subs now? I have read their WWII subs were of good quality.

[Amberdawn]

But, I thought America was the #1 arms trader in the world.../s

[MHalblaub]

“The country was previously the world’s third-largest exporter of conventional submarines, behind Russia and Germany.”

At what time did that happened? The only real export I remember was the Collins-class disaster. 6 submarines built in Australia. I won’t count refurbished old submarines.

French DCNS is building 14 Scorpène-class submarines and TKMS over 20 Type 214 submarines. The A26 is the same size.

The Swedish government is wondering that an undeveloped A26 submarine is more expensive than an existing class of Type 214 submarines and TKMS therefore offered Type 214 submarines cheaper to Singapore than A26. They also wonder that TKMS dislike to invest their money to develop another submarine of the same class they already have.

The last Gotland-class submarine was built in 1996. 1999 Kockums was sold to HDW (TKMS bought HDW later) because Kockums was deemed to small. Kockums never really was in the business of exporting submarines.

Collins-class is the master of disaster.
“There was talk before the election of the cost of keeping the Collins in the water approaching $1 billion a year and it is only going to get more expensive as they get older[...]”
http://www.afr.com/p/evolved_collins_favourite_but_timing_o1GOoSKyLUa9Eyvw4jO8wI

If Australia would scrap the Collins-class today Australia could afford 6 new proven European submarines within 3 years! The A26 is not a proven submarine Type. A26 is nothing more than the sketch you see above.

The trouble is about TKMS denying a fixed price offer to the Swedish government because the Swedish government kept it secret what they wanted TKMS to build. Good luck SAAB!

[FreedomPoster]

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