TKMS-KOCKUMS: Sweden’s pricey divorce

The submarine-building partnership between Germany and Sweden lasted about a decade. The launching idea behind it was to capitalize on Sweden’s engineering creativity, by adjoining it with Germany’s manufacturing capacity. The partnership didn’t yield a single sold submarine but escalated into a mini-war between the two countries. After the dust has settled, what is left of Sweden’s submarine design capacity?

The initial partnership left many military observers with bated breath: if Sweden’s brilliant engineers started working with the powerful German industry, much was about to happen in the small world of submarines. Sweden has owned its own submarine shipyards (Kockums) for decades, and currently defends its waters and those of Europe with the subs, with recognized success. The Swedish submarine fleet is currently composed of 2 Södermanland class and 3 more modern Gotland class, fitted with new generation Sterling engines, which enable quieter operating, and therefore increased stealth.

In 2005, a Swedish submarine was able to defeat a US aircraft carrier’s detection system and mock-sink it, during war games, leading the Americans to rent a Swedish sub to study it, in order to up defences. However, the industry as a whole is simply too small to streamline its building processes up towards the higher quality levels necessary for warships. The Swedish subs are considered modern and high-performance because their development was supported extensively by the Swedish government. But when it came to build for regular customers on the global market, as with the disastrous Australian Collins class, the Swedes simply could not compete. In other words, they were good on paper, but not at sea, unless developed domestically for the Swedes. The partnership was about to change that: the Germans wanted the technological innovations such as the Air Independent System (AIP), and the Swedes wanted the building capacity.

But it didn’t quite pan out so. If the Germans had wanted simply to run a promising competitor out of the market, they probably would not have acted otherwise. As the big brother in the partnership, German engineering firm TKMS (naval division of ThyssenKrupp) placed outlandish demands on every potential customer, asking each to support alone the cost of the development, instead of mutualizing research and development costs, as is ordinarily done. Reuters Maria Sheahan writes: “Sweden had been seeking ways to share development costs with other potential buyers of its A-26 submarine but failed to agree on commercial terms with ThyssenKrupp, which also builds submarines in a separate business in Germany.” Additionally, the Germans outright forbad their Swedish partner to compete in several submarine deals, such as Australia and Singapore. ThyssenKrupp argued that the promising new model, the A26, was going to generate development costs which they didn’t want to bear - leading even the Swedish government to withdraw its support to the partnership and cancel its order of new submarines. Additional to the reasons of withdrawal were the fact that Sweden is very active in the defence of Northern borders against Russian incursions and that the Germans could not be trusted to contribute loyally, leaving a potential gap in continental underwater defences.

The tension resulted in an all-out business war: Sweden pulled the plug on the partnership and sent the army to Kockums shipyards to forcibly retrieve industrial secrets. German employees responded by locking the Swedish soldiers inside the premises and holding them hostage. The dispute was settled with TKMS selling back Kockums to Swedish defence firm Saab for 50 million dollars, an all-time low price for a strategic shipyard. Based on appearances, it seems that TKMS, itself on the verge of collapse, simply tried to run a competitor out of business, and nearly succeeded.

The toll on Sweden was not particularly financial, although contracts could have been got, if Kockums hadn’t been busy fighting its partner. But national support to the strategic industry was enough to ensure Kockum’s survival. The most severe blood loss for Kockums was industrial. The last export, the Australian Collins class, showed that the Swedes were promising in the building of submarines, but needed more practice. But twenty years without sale has dire consequences on a shipyard’s keeping its valuable workforce. Kockums, gasping for fresh air, is intending to compete for the Netherlands’ replacement of submarine fleet but would, if they were selected, have to work out the kinks of a new type of submarine (AIP) while working on a skeleton crew. Janes specialist Beth Stevenson writes: “A Saab-Damen team has revealed an initial design of a submarine that it plans to offer to replace the Royal Netherlands Navy’s incumbent Walrus-class fleet. The two companies initially joined forces in 2015 to jointly bid for work in a number of markets, stating at the time that the Dutch tender was of particular interest. Partly derived from Saab Kockums’ A26 submarine, the two companies have designed what they describe as a modular vessel for the Netherlands’ requirement.” Saab, in its war with TKMS, had managed to poach many Kockums engineers, but not all - and those which did stay on board with Saab haven’t built a submarine in decades.

Added:

By: Sierra Rogers (12.00)

Tags: Sweden, Germany, Kockums, TKMS, Submarines

Location: Sweden