March 20, 2014

Swedish Cabinet responding to Russians or Submarine Industry?

Five instead of two A26s? (Graphics courtesy of TKMS-Kockums website

Events in Crimea and Ukraine have increased concerns in Sweden about the possibility of an increased conventional military threat from Russia. March 16, 2014 reports:

Sweden’s government is examining a proposal to boost military spending to defend its own territories and the strategic Baltic Sea area in the face of renewed Russian aggression in Ukraine. There is also a movement among high government officials to re-examine the long-running issue of joining NATO. The Swedish Cabinet will discuss, in coming weeks, a cross-party coalition proposal to significantly increase capital spending on the Navy’s submarine fleet.

…The Swedish Cabinet will examine in coming weeks a proposal by Foreign Minister Carl Bildt to expand the Navy’s submarine modernization program to cover the acquisition of five rather than two next-generation subs at an additional cost of $1.6 billion.

“We need to strengthen our military presence on Götland and our overall capability in the Baltic Sea. Two new subs is not enough. The ambition should be to have the best fighter and submarine capability for our size of any European nation,” Bildt said in a statement. “This is vital if Sweden is to create a credible defense.”

The Riksdag in June 2010 approved plans to buy two new submarines. The first of these were to have been delivered in 2018. However, the project has been delayed by several years, with the prospect that Saab, and not the Malmö-based, German-owned ThyssenKrupp Marine Systems (formerly Kockums), will get the contract.

Also see Corporate Battle Between SAAB and TKMS Over Kockums of March 14, 2014 at

Might the Swedish Cabinet be planning to spend more on submarines due to the resurgent Russian threat or is it simply a pretext to revive Sweden's submarine industry?



Anonymous said...

I believe it is Gotland, not Götland. I wonder how that got past the editor.

Joakim Wohlfeil said...

So correct, as a german living in Sweden i know the dot´s are tricky, as they have more than in most other languages.

Latest from the Sub-battle Germany vs Schweden is that more senior Kockums engineers has officially left TKMS for SAAB. including the top manager for the Stirling-AIP division.

If Mr Bildt suggest budget-subs are hard to know, he has always had a mind of his own.

Pete said...

Hi Joakim

SAAB getting hold of senior Kockums staff seems unusual. Also unusual is that Kockums staff are in a German (TKMS) owned building deep in Sweden at Malmo.

In Australia it would be unusual for a Foreign Minister (like Carl Bildt) to be so heavily involved in Defense matters. Is such "versatility" a usual Swedish approach or does it say more about Carl Bildt's own style?



Joakim Wohlfeil said...

Hi Pete, it's for sure a very unusual situation. We actually have a government supported (unofficially of course) hostile take over of a private company. Yesterday it was updates in Swedish media on more key persons leaving and 200 more should have started interview at SAAB s employment program. The locality issue is probably minor. The staff and facilities are mostly in Karlskrona, Malmö and the naval base Muskö. If Saab actually manages to drain all content of Kockums TKMS will stand with useless facilities and as they seen as national security issues the Swedish governments has to approve the buyers. So in the end it TKMS can be forces to sell to SAAB, or eternally pay for empty and unusable facilities in Sweden. As I'm of German origin I do also follow the German side of things and I can understand the frustration. This is a complicated story that goes "deeper" than only the Subs (sorry for the bad joke ;-) where TKMS has lost enormous amounts of money on the whole Kockums adventure for example, when the Swedes developed stealth corvettes (Visby class) and TKMS ended up with enormous losses. So building a new class of ships to fixed price and the Swedes again not giving access to the full drawings is like repeating a recipe for disaster for TKMS.
Then, on the other hand nobody in German even denies that HDW actually wanted to kill Kockums and get access to its customers and technology. It's not even controversial in Germany as everybody (especially in Kiel) knows this in the end is about employment. And this is the worst of times for Kockums instead finding an unexpected way to break loose. I know that I will be regarded as a national traitor but by a lot of interesting and historical reasons the Swedes have built extraordinary submarines, while HDW has relied on the financial and political power of Germany. Let's face it, defence business are never the case of free competition, it's about politics and who can offer the best counter business. Sweden can offer an excellent submarine and access to a market of 9 millions customers interested in outdoor products, Germany can offer an OK submarine and access to one of the most attractive export market in the world. End of game.... However the unexpected factor now is that Kockums had a strike of luck with their AIP that is inferior on the paper but works IRL, while the Siemens fuel cell solution is to complicated, is still nor mature and still has no good solution the the problem of the external tanks (while Kockums has moved ahead with general state of the art shock-resistance as a sales argument, and not the least the complicated refill. (What's the point of having an ultra silent sub I'd the enemy has perfect knowledge of the feew places it must come back to for a refill. You don't need to hunt it, just wait for it instead...). The Swedes has in general been better to use sturdy and simple solutions. And right now when HDW are shaken by technical and legal trouble around it's boats it would be the worst of times having a "newborn" Kockums emerging totally out of control from HDW. As political/financial strength vs. technology might come out futile in ex the Australia case (but this is your expertise).
Anyway, I think what's happening is exceptional. HDW/TKMS stepped in a hornets nest trying to close down Kockums due to domestic German politics. But the Swedish government first trying to have it sold back now actually seems to support this very unusual take over and maybe follow up with pressuring TKMS out of their localities.
The whole story is unusual indeed.

Well, about Mr Bildt you never knows, he is clearly out of his domain. And he has a mind of his own. And he has a history of jumping political fences. But he is also an unusually influential politician as former prime minister and with a strong informal position in the government. So, yes. It's extremely unusual and normally in Sweden a minister would be expected to stay in his/her domain. But the one exception might be just Mr Bildt.

Anonymous said...

Dear Joakim,
the problem with the external hydrogen tanks is already solved. HDW developed an methanol reformer to produce the hydrogen on board. This system will be used on Spanish S-80 submarines. Also direct methanol fuel cell are already available for commercial use.

I don't expect SAAB to export any submarine before the first A26 is proven. At that time the Pacific market could already be satisfied. I just expect Australia to be crazy enough to buy an enlarged A26-sketch.

Viele Grüße aus Deutschland,

Joakim Wohlfeil said...

Sehr geehrter MHalblaub

It was not my meaning to start some kind of pie-throwing.

My main point was that the interesting situation with a government actually supporting a hostile takeover between commercial companies is very rare, and I was trying to gove a background to how this started. And now SAAB/FMV from an ethical perspective are taking some very questionable measures, especially if they get government support in finally taking over the facilities. It seem´s like the Swedish government (Via FMV) actually are in for some traditional medieval style revenge….trying to make TK loose Kockums without money after they rejected to be bought out.

My second point was that even if HDW/ThyssenKrupp has used some unorthodox measures to thwart Kockums the is no masses in Germany (and especially Kiel) protesting and wasting any tears on this…
HDW/TK did what they had to do to keep Kockums out of business for a few volatile years and…they where successful
Kockums has (by reasons to long to go into here) been technically fortunate for some time, but where did it get them ??
HDW on their side had the political/finacial muscles and let´s face it, they won !!

They could overrule Kockums and order them to abstain from offering, or sometimes when the Swedish government protested to loudly let them offer, but undermine the business. worked !! AND it´s not a big issue in Germany, I say the opposite would be nearly unthinkable. Imagine TK-manager Hans Atzpodien speaking to the staff in Kiel that "you might be sorry for the lost job’s, but we had to be good sportsmen and refrain to use our influence over Kockums", that would have created headlines !!!

Let me repeat what I wrote in an earlier post, and why there is not such thing as free competition on product level in defence business.

"However, let's face it. Defence business is not about free competition, it's about politics. The decisions are based on counter export and industrial and military alliances.
Kockums can offer counter business with access to a markets of selling Swedish meatballs to 9 million inhabitants, or Lego production to IKEA furniture.
Germany can offer alliance with a NATO-member, and counter business including access to one of the most attractive export markets in the world...this is what counts in defence business.
In the end the performance of the boat is irrelevant."

Alles gute !! //Joakim

Pete said...

Hi Joakim Wohlfeil

Thanks for your very extensive comments.

Major issues of interest for Australia may be:

- that the corporate-part government backed battle between Swedish and German submarine interests don't destabilise the international SSK market in ways detrimental to Australia's long term buying aims

- that the AIP (if any) selected by Australia is suitable for Australia's usage patterns (including batterry use) and strategy (something probably confidential in several respects)

- still more likely Australia will be going for a large SSK - even though I would hope for a small crew SSN. But the chances of Australia buying French Barracuda SSNs might be unlikely...

- the Australian Defence Minister and other Australian statutory authorities and departments have direct knowledge, I don't, but they still read this blog :)


Pete said...

Hi MHalblaub

Yes - based on Australia's previous surprise choice of Kockums over HDW to build the Collins Australia again surprising all be selecting an "enlarged A26-sketch" or even an enlarged S-80 sketch cannot be discounted.


Anonymous said...

Dear Joakim,

as long as you hit my mouth with small pieces of pie, I have no problem with pie-throwing.

The simple question is, why Kockums was sold first to HDW and not to SAAB? Just to employ the engineers during the hard times between two major contracts? When another major contract is foreseeable HDW(TKMS) can go?

What FMV and SAAB are doing will make any foreign investor start to think twice about business in Sweden.

"In the end the performance of the boat is irrelevant."
That's the Australian way of submarines.

It's is hard to get information outside of Sweden according to this situation. Can you keep us up to date?

Schöne Woche noch,

Pete said...

Hi MHalblaub

Re: ""In the end the performance of the boat is irrelevant."
That's the Australian way of submarines."

Australian submarines are OK. They're pretty good aside from the propulsion system which was a joint Australian and Kockums error.

Basically the diesels in the Collins were based on lower use, lower speed, less salty Baltic conditions - faced by the Swedish Navy.

The diesels are not suited to Australia's real operating conditions which are:
- high use
- long range
- higher speed
- saltier Indian and Pacific Ocean conditions.

It may be a future question mark whether Japanese Soryu propulsion would be suited to Australian usage patterns.



Anonymous said...

Dear Pete,

the Collins-class might be OK now but full operation capability was achieved in 2007.

It was a political decision to chose an unsuitable US-combat system. It was a political decision to rebuild the engines from a rather small unexperienced company in Australia. Like Upholder/Victoria-class engines were originally designed for railway locomotives.

The Soryu propulsion system is a powered by additional 4 Kockums Sterling engines. This system provides more power output than a fuel cell system but lacks efficiency. The latest fuel cells work with methanol so problems according hydrogen storage is solved.


Pete said...

Hi Matthias

I suspect propulsion problems may not be adequately fixed even now.

Yes politics inevitably influenced the overly quick tender process. In the end Australia acquired a very good combat system - a development of the American Raytheon CCS Mk2 - in a second tender process.

The propulsion system seems more Swedish - Hedemora Diesel AB - than Australian. Australia's inexperience in choosing such an engine obviously played a part - see .

I don't whether a separate Aussie company is rebuilding the diesels.

Probably Sweden and Australia will debate forever about the diesels' suitability. I think the diesels would have been fine if the Collins operated in the Baltic :)

AIP is a big question mark - though Australia in 30 years time may wish it chose nuclear "AIP".