Sweden announces pending order for two A26 submarines

Japan, France and Germany are the last three contenders for Australia's future submarine (SEA 1000) competion. The specifications of Swedens A26 (above) have not been made public. The A26 figures may be accurate with suppoting information of a displacement around 2,000 tons. (Diagram courtesy The Australian)

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COMMENT

Good news from Sweden of (pending) production orders for two A26 middle size conventional submarines for Sweden’s submarine assembly line. Australia-Sweden submarine relations have been under stain over the last few weeks due to another of Abbott’s undiplomatic statements – that Sweden cannot build modern submarines. This was in the context of Australia's removal, in February 2015, of Sweden as a contender in Australia’s submarine competition.

Swedish made submarines are not at all out of date. What may have concerned the Australian government more was Saab's (perhaps too strongly) politically insistent campaign alongside South Australian interests for "build in Australia". This may have been understandably prompted by Sweden's deep experience of building the Collins in Australia. Whatever the merits of the Collins build the Collins experience causes caution in politicians. Politicians, most of the public and fair-minded people are almost all outside of the professional inner circle and other interested parties who see/saw virtually no problems with the Collins build.

Under the, perhaps already decided "one horse race" called the “competitive evaluation process” DCNS’s position is not secure either. If Japan dropped out, for whatever reasons and/or the Australian Coalition Government fell, the possibility of returning Sweden to the selection process migh be more favourable.  

Anyway Sweden has made a positive announcement below, which should reassure potential customers that Saab-Kockums are a going submarine concern. I’m wondering whether there will be further announcements on 2 to 3 additional A26s for a total of 4 or 5 A26s to replace the 5  submarines currently in Sweden's submarine service ("flotilla"). An added concern is the emerging Russian threat in the Baltic Sea. Sweden might also wish to build 2 to 4 replacement submarines for the Netherlands although the Netherlands has not yet released details of what it wants. In that regard please connect with http://gentleseas.blogspot.com.au/2015/02/sweden-and-netherlands-replacement.html of February 19, 2015.

ARTICLE

Marine Technology News, March 18, 2015 reports http://www.marinetechnologynews.com/news/sweden-orders-submarines-510865 :

"Sweden Orders New Submarines

By Aiswarya Lakshmi [and Saab, Peter Hultqvist, Sweden?]

Sweden is to buy two new submarines from constructors Saab Kockums. The A26 subs are to be delivered by 2022 and will cost up to SEK 8.2 billion ($945 million).

"This is the biggest single decision when it comes to economic investments that we will make during this parliament. The decision, to be formally made by the cabinet on Thursday, is to ensure Swedish submarine capability past 2030", stated Defence Minister Peter Hultqvist.

"These are the next generation of submarine. These submarines will be very hi-tech", he added.

The government will on Thursday authorize the armed forces to order two submarines, defense ministry spokeswoman Marinette Nyh Radebo said.

The Swedish government is increasing its defense spending over the coming years, citing a worsening security situation, particularly Russian activity in and around the Baltic Sea.

Defence and security company Saab welcomes the Swedish Minister of Defence, Peter Hultqvist’s, announcement to invest in two submarines of the next generation, A26.

[Acquistions are a multi-stage process, hence not finally signed yet.]

Saab has not received any order on production of the new submarine but Saab looks forward to the discussions, which will lead to an agreement and order for A26. This will be a part of an earlier signed Letter of Intent. 

Saab and FMV (The Swedish Defence Material Administration) signed a Letter of Intent in June 2014 regarding the Swedish Armed Forces’ underwater capability for the period 2015-2024. The Letter of Intent comprises support, development, design and production of submarines and other underwater systems, corresponding to potential orders of approximately SEK 11.2 billion [US$1.3 Billion], provided that necessary decisions are made." ENDS

Pete

Australian Defence Department's requirements for Submarine Bidders

Defence Minister Kevin Andrews successfully asserting himself. Graphics courtesy julian winter.

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Andrews finding it is better to publish strategy papers than respond to media scrums. Photo courtesy Adelaide Advertiser.

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The high level of controversy regarding Australia's future submarine selection has died down over  the past three weeks due to what I see as:

- Prime Minister Abbott's position is now less threatened. He has not needed to reiterate his "build in Japan" preference. Abbott has also withdrawn himself from other submarine comments and public appearances.

- the removal of Sweden's Saab-Kockums from the submarine competition. Saab's business model appeared to be very much "build in Australia" - a campaign Saab was understandably running in  Adelaide ship building circles. "Build in Australia" was facilitated by Saab having no functioning production line for new submarines in Sweden. In terms of production line the Archer class (RSS Swordsman) was re-launched in 2010 leaving a gap until a build date for the A26s becomes public. Potential customers would be reassured when Saab-Kockums's A26 production plans become known. [Stop Press - since I wrote these A26 comments 24 hours ago - Sweden has published a decision Sweden Orders [A26s] "Sweden is to buy two new submarines from constructors Saab Kockums. The A26 subs are to be delivered by 2022 and will cost up to SEK 8.2 billion ($945 million)" ]

- perhaps the main debate reducer was new Defence Minister Kevin Andrews decision to be  assertive and his issuing of the Strategic direction of the Future Submarine Program (see  below).

The submarine controversy will of course resurface in acrimony but it is quiet at present. Submarine problems effecting relations with Japan will recur when Abbott's popularity in his Party and in public again slides. Doubts about Andrews may start again once the cost overruns and lateness of the Air War Destroyer and other defence embarrassments again hit the news.

A defence novice but with years of experience in several ministries Andrews is much wedded to defining the strategy and policy environment of major policy initiatives and programs. Hence he  delegated the task of writing a major paper Strategic direction of the Future Submarine Program for publication. This task probably fell to the Australia Department of Defence, the Navy and probably the Expert Panel writing the Defence White Paper 2015. It is important that the Strategic direction of the Future Submarine Program is consistent with the Defence White Paper (perhaps published around September 2015).

Publishing strategy papers avoids the tendency towards "policy on the run" with many voices issuing  fragmentary and conflicting statements. Strategic direction of the Future Submarine Program below was issued as a Minister for Defence Media Release. It is well worth reading in full - as every part is significant and hopefully well thought out http://www.minister.defence.gov.au/2015/02/20/minister-for-defence-strategic-direction-of-the-future-submarine-program/ :

"Minister for Defence – Strategic direction of the Future Submarine Program

20 February 2015

Today the Government announces the acquisition strategy for the Future Submarine Program. This announcement sets out further details of the competitive evaluation process that will be undertaken by the Department of Defence.

Submarines are an essential component of Australia’s naval capability and the Government will ensure that the future submarine provides the best possible capability and value for money for Australian taxpayers while maximising the involvement of Australian industry.

Submarines are the most complex, sensitive and expensive Defence capability acquisition a Government can make.

Australia’s national security and $1.6 trillion economy depend on secure sea lanes. We need the best possible submarine to protect our trade and support our maritime security.

It must be delivered in time to avoid a capability gap in the mid-2020s when the Collins Class submarine is scheduled to be retired from service. The decisions we make on the Future Submarine Program will determine what kind of capability we have to defend Australia and Australian interests into the 2040s and beyond.

The process outlined by the Government today provides a pathway for Australian industry to maximise its involvement in the program, whilst not compromising capability, cost, program schedule or risk.

The Government expects that significant work will be undertaken in Australia during the build phase of the future submarine including combat system integration, design assurance and land based testing. This will result in the creation at least 500 new high-skill jobs in Australia, the majority of which will be based in South Australia.

The Future Submarine Program is the largest Defence procurement program in Australia’s history and represents an investment in the order of $50 billion in Australia’s security. These costs will be subject to refinement through the competitive evaluation process. A significant proportion of this investment will be spent in Australia during the lifetime of the future submarine.

Successive governments have used various kinds of competitive evaluation processes for major Defence capability procurements.

As part of this competitive evaluation process, the Department of Defence will seek proposals from potential partners for:
a) Pre-concept designs based on meeting Australian capability criteria;
b) Options for design and build overseas, in Australia, and/or a hybrid approach;
c) Rough order of magnitude (ROM) costs and schedule for each option; and
d) Positions on key commercial issues, for example intellectual property rights and the ability to use and disclose technical data.

In addition to this – and on the advice of Defence – the Government has endorsed a set of key strategic requirements for our future submarines:
a) Range and endurance similar to the Collins Class submarine;
b) Sensor performance and stealth characteristics that are superior to the Collins Class submarine; and
c) The combat system and heavyweight torpedo jointly developed between the United States and Australia as the preferred combat system and main armament.

Defence advises that for Australian industry to have the best opportunity to maximise their involvement in the Future Submarine Program, it needs to work with an international partner.
Based on work completed by Defence, France, Germany, and Japan have emerged as potential international partners. All three countries have proven submarine design and build capabilities and are currently producing submarines.

France, Germany and Japan will be invited to participate in this competitive evaluation process that will assess their ability to partner with Australia to develop a Future Submarine that meets our capability requirements.

The Department of Defence will invite potential international partners to seek opportunities for Australian industry participation in the Future Submarine Program.

The competitive evaluation process will help the Government balance important considerations including capability, cost, schedule, and risk. Interoperability with our alliance partner, the United States, will also be a fundamental consideration.

The competitive evaluation process will take around ten months, after which an international partner will be selected for Australia’s Future Submarine Program. Further details about Australian industry involvement are also expected to be known at that point.

The competitive evaluation process will ensure that capability, cost, schedule, and key strategic considerations, along with Australian industry involvement, are carefully and methodically considered, and avoid unnecessary delays to the Future Submarine Program.

The Department of Defence will soon be holding industry briefings to inform Australian industry about the process and how they can engage with potential international partners.

An expert advisory panel will also be appointed to oversee the competitive evaluation process. Further details about this will be announced once individual appointments are confirmed." ENDS

Pete

Sweden and the Netherlands Replacement Submarine Needs

A Dutch Walrus class submarine. Note the serrated fin - probably for quieting and/or improved hydro-dynamic efficiency.
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The issues of the Dutch Walrus class submarine replacement and the future Swedish Saab-Kockums A26 development-construction are relevant to Australia's future submarine selection. This would become more important if the Soryu is not selected for whatever reason, forcing Australia to seriously consider European submarine designs. 

Saab-Damen Agreement

Since mid-late January 2015 there have been several reports that Saab and Dutch shipbuilder Damen Shipyards Group have signed an exclusive teaming agreement. This is  to:

- explore future opportunities in the international submarine market including bidding jointly on submarine procurement programmes, and

- explore development of a potential Walrus-class submarine replacement for the Netherlands. 

Netherlands' Situation

The Netherlands operates 4 teardrop hulled Walrus class submarines which are a development of the Dutch Zwaardvis class (2 Zwaardvis were sold to Taiwan). The Zwaadvis was based on the US teardrop hulled Barbel class (the US's last conventional subs).

Walrus specifications:

- 4 launched 1989-1992

- displacement 2,350 tons (surfaced)

- range 18,500 km at 9 knots (snorting) vs Collins 17,000 km at 10 knots (snorting)

- 20 US weapons Mark 48 torpedos and Harpoon missiles (weapons the same as the Collins. Collins has 22 torpedos) which suggest part use of a US combat system already.

- US heritage

- no reliance (like the Collins) on AIP

- like the Collins it has four combined rudders and diving planes in an "X" configuration

- with most NATO submarine being either nuclear or brown water Baltic the Walrus are considered blue water submarines. 

The Netherlands envisages acquiring just 2 submarines to replace the 4 Walruses. Just 2 may mean the Netherlands might want to use/select a common-overlapping design with Sweden. Maybe the Netherlands may settle for modified A26s. 

[As at mid March 2015 the Netherlands' requirements remain unknown.] 

Possible Swedish Role

While Sweden is building its own two A26s Sweden might build the two to four Walrus replacements or at least supply the components for assembly in the Netherlands. 

Sweden's 3 Gotland Class submarines  (launched 1995-96) need replacing by 2025 and 2 Sodermanland class (relaunched 2003) for replacement by 2035(?).

Some extra issues/questions are:

1. How many A26s does Sweden intend to build? Two or five (?) - given the rising Russian threat and the Gotland-Sodermanland two tiered "gap".

2. Will the A26 have the same specifications as provided on http://en.wikipedia.org/wiki/A26_submarine (1900 tons surfaced? A mixture of regular 533mm torpedo tubes and unique 400mm tubes?). Saab-Kockums' own website does not give specifications of diplacement or range. 

3. Will the A26 be built with Lithium-ion batteries?

4. Would there be some technical, industrial and political overlap in the Walrus-class submarine replacement and development and construction of Sweden's future submarine A26?

5. Would the Netherlands find only 2 Walrus replacement submarines an effective number, given the "rule" of three and usefulness to the US alliance experience with the 4 Walruses. 

6. Could the Netherlands continue to justify unusually large SSKs or scale down to the usual European country own use maximum of around 1,900 tons surfaced?

Pete

Abbott's "Open Tender" Future Submarine Call Doesn't Go Far Enough

Prime Minister Abbott seems to be the main advocate for "Buy Soryu and Built it in Japan" however his hold on the position of Prime Minister (PM) is still threatened. Yesterday (February 8, 2015) PM Abbott appeared to say that the future submarine issue should go to open tender.  But Abbott was not definite in stating what he meant. He did not say "Build the submarines in Adelaide". It was unclear whether the government owned Australian Submarine Corporations (ASC) would be ordered to ally itself with the Japanese Soryu (KHI and MHI) "bid". It remains likely the Soryus would mostly be built in Japan but as is already anticipated the US-Australian developed combat system might be mostly fitted in Adelaide by ASC.
- The extract in that article "It is understood that France, Germany, Sweden and Japan were to be named in a selective tender process that would allow Australia to solicit bids from other governments, rather than just corporations."  is ambiguous. It may be aimed at the US Government providing the combat system. It may also suggest there will be much weight given in choosing the winning "bid" on what bidding governments have to offer. This would favor Japan in the context of the Japan-Australia free trade agreement . The Japan-Australia strategic alliance issue I wrote about in my previous article would also favor Japan. The other contenders (Germany, France, Sweden) do not bring such economic and strategic benefits to the table.

On February 8, rather than making a serious effort to plan the future submarine build Abbott appeared to be just securing votes from Federal Liberal Party politicians from South Australia to support him in a No-confidence meeting on February 9, 2015.

Although Abbott won enough votes (at the 9am February 9, 2015 meeting in Canberra) from his Liberal Party to stay PM Abbott's survival as PM remains unresolved. This is because there was a split vote, 61 votes he should stay on and a substantial minority of 39 votes that he should stand down. This reflects continuing unhappiness at Abbott's non-consultative leadership style. More no-confidence votes are likely in the months to come.

Now that the immediatte threat to Abbott's PM job is over continuing submarine discontent of politicians in Adelaide is being heard. This more recent article (February 9, 2015) from Australia's ABC indicates: The South Australia State Defence Minister, Martin Hamilton-Smith, believes the newly promised shift to an open tender process for future submarines falls short of the Federal Government's promise that ASC would build the submarines in Adelaide. He believed the open tender process could still result in the ships being built overseas. So he believes that Build 12 submarines in Adelaide should be a definite condition of the tender.

- Independent Federal Senator Nick Xenophon said he was also deeply sceptical about Mr Abbott's new promise for an open tender process. Mr Xenophon said the PM should have announced that the tender process would lead to the subs being built in Australia.

- Federal Defence Minister Kevin Andrews urges caution and patience

Overall Abbott needs to be more explicit that he now supports a truly open tender with most of the build in Adelaide - not a rigged tender that favors a build in Japan. If Abbott remains vague, without Prime Ministerial OR Defence Ministerial Media Releases, Abbott may easily renege-backtrack as his 2014 broken promise of "Build in South Australia". 

In terms of what submarines should be built I think the cost of a totally new or heavily modified 3,000-4,000 ton (surfaced) submarines would be too expensive and involve overly long lead-times. Also since the end of Australia's mining boom, 2 years ago, Australia doesn't have the $20-$25 Billions for 10 to 12 large, possibly orphan, subs. More money towards other voter-popular causes (health, education, welfare) would keep Abbott in his job as PM and the Coalition in power.

Large, heavily modified submarines, built in Australia or overseas, are such a tough choice I think Abbott would describe it as a lose-lose decision. 

If I had my way I'd just buy 6 medium size (Scorpene, HDW 214, Dolphin 2, or Kockums A26) from France, Germany or Sweden for $5 Billion TOTAL price (ie. just over A$800 million per submarine).

Odds on Abbott makes no major decision till 2017 - that is AFTER the next election. - even if the US is applying pressure. Regarding US pressure, note this timely scholarly comment of MIT’s Jonathan D. Caverley “The thumb on the scales that has Australia leaning towards Japan for its submarines has an American fingerprint.” (page 19 of Running Faster to Stay in Place: U.S. Defence Exports in 2030 within RSIS’s  http://www.rsis.edu.sg/rsis-publication/idss/the-global-arms-industry-in-2030-and-beyond/#.VNhLU_mUen8 )

Pete

Australia - the future junior ally of Japan - revised

Most of the following article was also publised at Australia's On Line Opinion news http://www.onlineopinion.com.au/view.asp?article=17065

The revision is at FURTHER COMMENT below.

As the political reputation of Australia's Prime Minister, currently Tony Abbott, plummets, some of his more outlandish foreign policy ideas are being seen for what they are. This article doesn’t raise the bright ideas of rushing Australian troops to Ukraine, presumably to hold back Russian tanks, or to rush Australian troops to the Middle East, where those troops waited for an Iraqi invitation for two months, but the policy of buying into an alliance with Japan.

News.com.au reported on July 9, 2014 that: “AUSTRALIA and Japan have become partners in a “special relationship” that will see both countries join with the US in a powerful military alliance aimed at curbing China’s influence in the region. During an extraordinary day in the long Australia-Japan relationship, yesterday in Canberra both Prime Minister Tony Abbott and his Japanese counterpart Shinzo Abe pledged to create a partnership for “peace, prosperity and the rule of law”. Fresh from reversing almost 70 years of pacifism embedded in his nation’s post-World War 2 constitution, Mr Abe placed Australia alongside the US at the forefront of Japan’s future defence strategy.”

Alliance maintenance through weapon system purchases has long been a factor in Australia’s relationship with the US. However, as the US has no conventional submarines to sell, there is a joint US-Japanese scheme to sell Japanese submarines to Australia. The purchase price for Australia to secure this alliance with Japan is now around $25Billion (with the recent depreciation of the Australian dollar compared to the US dollar). This is specifically for 12 Made in Japan submarines. Abbott’s budgetary ideas have skimped on health, education and welfare but money is no object when paying for a military alliance from Abbott’s friend, the like-minded conservative Japanese Prime Minister Abe. 

[Note this Submarine Matters article, of February 4, 2015, appears to have triggered a subsequent  article of February 7 in The Australian http://www.theaustralian.com.au/national-affairs/defence/japan-fears-25bn-submarine-deal-at-risk-in-tony-abbott-crisis/story-e6frg8yo-1227211135322  :-]

By having Japan build our submarines Abbott can also run down Australia’s ship and submarine-building industry, which he sees as a hotbed of Labor, leftwing, union interests anyway.

So what’s in it for Japan? Well the money helps. Japan also frets about what it sees as rising threats from China, North Korea and increasingly Russia. However Japan is mainly thinking about the potential economic benefits of contested islands in the South China and East China Seas.

Few Australians know or care about several disputes in the East China Sea involving China, Taiwan, Japan and others. Possibly the most dangerous Japan versus China dispute is over a small island chain - which is known as the Senkaku Islands in Japan, the Diaoyu Islands in China and the Diaoyutai Islands in Taiwan. The importance of the Senkakus are that great unmentionable factor - oil. Oil draws military forces – be they Australian forces in the Middle East or future Australian forces in Northeast Asia.

The US, for its part, is worried about the cost of keeping the world’s oceans open for trade, including oil. Although the US, in the next 12 months, will be spending many extra $Billions to maintain the Asia-Pacific “pivot” against China the US increasingly wants Japan to spend more on defence. Japan’s current defence spending is only about 1% of its GDP. The US also wants Japan to secure military alliances – that is with the few countries interested – not South Korea or most Southeast Asian countries - after Japan’s horrific conduct in World War Two.

The US and Japan are quite explicit in seeing a submarine sale as Australia-Japan strategic alliance cement. A US Admiral has condescended to interpret what an Australian Defence Minister really wanted. The Japan Times of January 18, 2015 reports: "Vice Adm. Robert Thomas, commander of the U.S. Navy’s 7th Fleet, reportedly said Oct. 24 [2014] in Tokyo that then-Australian Defense Minister David Johnston was very interested in Japan’s Soryu-class subs. “I talked to him about it four years ago and I said: ‘You want to find the finest diesel-electric submarine made on the planet — it’s made at Kobe works in Japan,’…”

Also in that Japan Times article retired Japanese submarine admiral Masao Kobayashi said."The U.S., which has close but separate security pacts with Japan and Australia, probably wants Australia to buy Japanese submarines because it would greatly strengthen their strategic military ties.”

When anyone bothers to ask ordinary Australians whether Australia should be drawn into a conflict by an additional senior ally (Japan) the response appears encouragingly negative. ABC News (online), January 6, 2015, reported the results of a Survey of over 1,000 Australians, which indicated “Australians would overwhelmingly reject siding with close ally Japan against top-trade partner China over a dispute in the East China Sea and prefer to remain neutral.” In the article Australia's former Foreign Minister Bob Carr said “…as far as the public was concerned, Australia was not obliged under the Australia-New Zealand-United States (ANZUS) treaty to make a commitment…".

Now it needs to be explained that the Survey, Australian Attitudes on ANZUS and the East China Sea , was commissioned by the Australia-China Relations Institute (ACRI) . ACRI was established in December 2013 with a grant of $1.8 million from a citizen of China. Bob Carr is the Director of ACRI.

Before one writes off ACRI as a support system for Chinese interests and for Bob Carr it must be said that ACRI was officially launched on May 16, 2014 by Foreign Minister Julie Bishop. Given the Coalition’s declining fortunes Bob may be a “former Foreign Minister” for a very short time. He may again be Foreign Minister after the next Federal Election.

If Abbott has his way Australia will be junior ally not only of the US but of Japan with either of those two drawing Australia into their wars. It must be asked “If or when Abbott stands down as Prime Minister would a Coalition Government still pursue an alliance with Japan?”

If Labor wins in the next election would Bill Shorten (who agrees with Abbott’s Middle East policies) pursue an alliance with Japan?

Is a survey a genuine gauge of what Australians’ want? How else can we, the public, influence basic foreign and defence policy changes - including multi $Billion defence alliances with “friends” likely to draw Australia into wars?

FURTHER COMMENT

US Admiral Thomas (mentioned above) might be right that the Soryu might be the closest approximation of what the Australian Government thinks it wants in a submarine. I disagree and think a modified HDW Dolphin 2 or 214, enlarged DCNS Scorpene or Saab-Kockums A26 part or mostly built in Australia, would be more reasonable on military, technical, cost, Australian industrial and political grounds. Regarding Admiral Thomas's public advice to Australia - in the Australian system of values serving military men should not get involved in what are key issues between other countries (in this case Australia and Japan). If the current US Defence Secretary (still Chuck Hagel?) wants to offer advice, then that is his legitimate multi-lateral right and responsibility.

The main problem with the Soryu, apart from "Build in Japan only", is that selection of that submarine brings grave strategic, political and economic risks for Australia. 

That risk centers on being drawn into Japan's battles involving Australia's main trading partner (China). Such Japanese battles may not even relate to Japan's national survival but to sometimes slender Japanese claims to undersea oil resources.

Japan appears immature. Japan is unwilling to introduce peaceful precedent solutions such as those that occured in Northwestern Europe six decades ago. The Western European solution of sharing the oil and profits for "North Sea Oil" is what mature, peaceful countries should be doing in Northeast Asia.

Admittedly politics encouraged Australia from the 1960s to choose then operate the British built Oberon submarines. But Britain by then was not expecting Australia to get involved in Britain's battles. Britain like the US was a long term friend and mentor of Australia - Japan isn't.

Life would be so much easier if the US had conventional submarines to sell to Australia or if Australia took up the US offer in early 2012 for Australia to buy or lease Virginia SSNs.

It is a political and economic necessity that some or most of a conventional submarine build take place in Australia. Australia has the capacity to build conventional submarines but not nuclear submarines. 

These are all things for embattled Prime Minister Tony Abbott to work through - in his relations with Coalition Backbenchers and some Coalition Frontbenchers from Australia's submarine states of Victoria, NSW, Western Australia and South Australia.

BACKGROUND

Note that two senior Australian defence commentators are saying the same thing as me - see:

http://www.theage.com.au/comment/defence-should-not-swing-on-abbotts-whimsy-20150202-133mfj.html, and

http://www.asiapacificdefencereporter.com/articles/574/The-consequences-of-capricious-decision-making

Pete

A26 Program "terminated", Now Becoming "Next Generation Submarine" (NGS)

MHalblaub kindly alerted me to an article of April 14, 2014, by the Editors of The Australian Strategic Policy Institute's (ASPI's) blog The Strategist at http://www.aspistrategist.org.au/submarines-german-swedish-tensions/ . I've republished this article under the Creative Commons licence and conditions. Note in the article Göran Larsbrink, retired Rear Admiral from Sweden, indicates:

"The submarine program A26 is terminated, but instead the project NGS—Next Generation Submarine—will arise like a bird phoenix. Furthermore, there is a political will to substantially increase Sweden’s defence budget—thank you Mr Putin—including an increase of our submarine force from four to five submarines." 

Article reads:

"Submarines: German–Swedish tensions

At last week’s submarine conference, the following exchange took place between Dr Hans Christoph Atzpodien of TKMS and RADM (Rtd) Göran Larsbrink of Sweden, prompted by a question from the floor. Given the potential contribution of German and Swedish industry players to project SEA 1000, and given recent press interest, we thought it worth presenting the discussion in its entirety.

For the latest on this issue see June 11, 2014’s Australia's Future Submarine - Swedish vs German Claims http://gentleseas.blogspot.com.au/2014/06/australias-future-submarine-swedish-vs.html . It is unclear whether Germany or Sweden hold the strongest intellectual property rights to the Stirling AIP.

Errors and omissions excepted

Kym Bergmann (Asia Pacific Defence Reporter):

…to Dr Atzpodien, we read in the European media that there’s a high level of unhappiness between TKMS and your Swedish subsidiary Kockums. Could you please comment on this for us?

Hans Christoph Atzpodien:

Just coming back to your question, actually as everybody knows we are the 100% owner of Kockums in Sweden, which in the meantime is renamed into TKMS AB. We have been invited to acquire it 15 years ago, and unfortunately now as Sweden has engaged in a national submarine program called A26 it seems that we are no longer wanted as a foreign owner— that is our perception. Of course we would have been open to any discussions and fair solutions to this new situation, but there was not much of talking—recently there was much more of, let’s say, force to deprive us of our basic ownership rights, and I can only hope that this will come to an amicable solution. Finally, at least I can say we are open for talks and have offered this various times, and I hope we will have a good solution for that in time because we feel first and foremost a responsibility also for the employees of the company.

Göran Larsbrink:

My name is Göran Larsbrink, retired Rear Admiral from Sweden. Normally there would have been speakers from Sweden here today, but there are reasons for not being here, and it’s just recently that the information about what’s going on has become public, and therefore I think it’s appropriate to mention a little bit about what’s going on since this has an influence on Australia’s choices.

And Sweden is today in a process to resume command over its own naval industry and thereby its own future. And this industry is classified as being of essential national security interests. As wrong as it was to sell Kockums to HDW in 1999, as right it is today to take it back and resume control. In doing so Sweden will be in control of and have the capability to design, produce and operate our own submarines, as well as to cooperate with whom Sweden wants to cooperate with in order to meet national security interests, all under the umbrella of government-to-government agreements. And in this Sweden possess all relevant IP and use it as we want, together with whom Sweden wants, and there is no one else that can use it without permission from our Government.

What is going on now is a swift and determined transition of submarine design and production competence from former Kockums to Saab. The infrastructure for production can and will be solved in different ways. The submarine program A26 is terminated, but instead the project NGS—Next Generation Submarine—will arise like a bird phoenix. Furthermore, there is a political will to substantially increase Sweden’s defence budget—thank you Mr Putin—including an increase of our submarine force from four to five submarines. And in this, the Government, the Opposition, all the defence authorities and the industry (meaning Saab) are agreed upon and are fully committed that it shall be done [inaudible] and successfully.

Hans Christoph Atzpodien:

Please allow me to just comment on this. Mr Larsbrink I think this is a surprising statement. You have to recognise first of all we are the legitimate owner of the company and we are living all together inside the EU, and I rate it quite surprising if you state here that you just take it back. We could, I was not going more deeply into that upon the question I was asked, but with this statement I have to because the measures to take it back resulted in hiring massively our skilled people without telling us, taking away the business licence or putting it on hold, not providing us with any further orders for shipyard in total and thereby destroying the industrial base and the employment base for almost a thousand people, and this is something which we cannot see in line with legal actions and we cannot see in line with responsibility for a company and for the employees.

(End)"

Again, article originally at http://www.aspistrategist.org.au/submarines-german-swedish-tensions/ .

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.

DefenseNews.com March 16, 2014 reports: http://www.defensenews.com/apps/pbcs.dll/article?AID=2014303160008:

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 http://gentleseas.blogspot.com.au/2014/03/corporate-battle-between-saab-and-tkms.html.

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?

Pete

Corporate Battle Between SAAB and TKMS Over Kockums

The reality of corporate battles (Cartoon courtesy of CartoonStock.com).
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For the latest on this issue see June 11, 2014’s Australia's Future Submarine - Swedish vs German Claims http://gentleseas.blogspot.com.au/2014/06/australias-future-submarine-swedish-vs.html . It is unclear whether Germany or Sweden hold the strongest intellectual property rights to the Stirling AIP.

The current corporate confrontation between SAAB and TKMS underlines the need for Australia future submarine project (SEA 1000) to be (reasonably) technically self reliant and flexible enough to tolerate changes in the threat-strategic environment, corporate and broader international economic environment. Australia needs as much autonomy as possible in intellectual property, spare parts and test facilities. 

Connect the current escalation in corporate conflict between SAAB and TKMS over Kockums with:

- Kockums loss of its traditional Singapore customer to HDW – see Singapore Buying Two HDW 218SG Submarines – Sweden’s Loss of December 3, 2013http://gentleseas.blogspot.com.au/2013/12/singapore-buying-two-hdw-218sg.html , and

- German’s Sinking Kockum’s Swedish Sub-Maker of November 13, 2013 http://gentleseas.blogspot.com.au/2013/11/germans-sinking-kockums-swedish-sub.html .

ARTICLE

Birgitta Forsberg of affars Valdern (translated from Swedish) of March 12, 2014 reports http://www.affarsvarlden.se/hem/nyheter/article3811470.ece :

"Thyssen Krupp ask FMV stop Saab"

"Kockums German owners ThyssenKrupp ask FMV stopping Saab from recruiting top people from Kockums.

n a letter to Lena Erixon, Director General for Defence Materiel Administration, [known as]  FMV, asking the head of the German Thyssen Krupp Marine Division, Dr. Hans Atzpodien FMV stopping Saab from recruiting key personnel from Kockums.

Thyssen Krupp wholly owns Kockums but has for years thwarted Kockums from exporting submarines because the Germans also owns the German shipyard HDW where they would rather control the business. Recently, FMV enough of the Germans' delaying tactics when it came to ordering a Swedish Kockums and instead asked Saab to do a feasibility study on Sweden's future submarines.As a result of the Saab has recently recruited top people from Kockums and also went yesterday, Tuesday, issued a press release that the company seeking employees for its shipping division.

The letter writing Atzpodien addition to the Thyssen-Krupp

§  - will support the export of the planned Swedish submarine A26

§  - is willing to negotiate a contract to sell the A26 to Sweden

§  - is willing to offer Swedish authorities influence at board level in Kockums or at least greater  transparency in company

§  - want to invest in to let Kockums produce a small submarine (up to thousand tons)

§  is willing to develop Kockums

§  - wants Kockums and HDW cooperate closer without infringing on the patents FMV own

His Atzpodien and Lena Erixon has a meeting scheduled for 18 March and it's ahead of the meeting that Atzpodien written the letter.

But the offer of influence has come before, and that the Germans want the Swedes to focus on small submarines, while the German shipyard HDW may take the major orders, are also known. According to a source, who sees the whole thing as a way to get Kockums out of the way as a competitor, there is no bigger market for small submarines. In other words, it is doubtful whether FMV soothed by letter. 

The whole thing is complicated by other agreements between Kockums and FMV, including for servicing submarines." ENDS

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COMMENT

Joakim Wohlfeil on March 14, 2014 sent the following comment to Australia by the Indian Ocean:

"Breaking news update ;-) The Submarine war between Sweden and Germany escalates !!

SAAB has succeeded to recruit the full technical management team at Kockum, including the manager for the submarine division Per Nilsson and are now actively seeking to recruit the remaining ca. 230 engineers. (http://www.affarsvarlden.se/hem/nyheter/article3811470.ece ["Thyssen Krupp ask FMV stop Saab" see above].

According to local press in Malmö the engineers being feed up with ThyssenKrupp are joining SAAB en masse. As the Swedish government are the formal owners of the construction patent and drawings of all Swedish submarines SAAB could actually perform a hostile take-over without paying anything to ThyssenKrupp. (and this seems to happened with the blessing of the Swedish government).

2 days ago, ThyssenKrupp formally protested to the Swedish government ([the Defence Materiel Administration known as] FMV) and demanded they should stop SAAB´s hostile recruitment campaign.

In return Thyssen Krupp has offered.

- ThyssenKrupp will not block the procurement process of A26 and approve that it will be built in Sweden

- Thyssen Krupp will allow Kockums to market A26 for export (however it´s not said if the condition that HDW can see and approve Kockums export offerings will be lifted)

- Repeating the offer Sweden besides of A26 will be the new centre for small submarines (an offer that has earlier been rejected by Kockums employees and the Swedish government).

However, if Sweden suddenly seems to sit on the upside, ThyssenKrupp can answer with obstructing the upgrades and service of Swedish naval crafts that is contracted to the still ThyssenKrupp owned Kockums industriers (TKMD)"

Pete

Saab Being Subsidized To Buy Back Kockums?

A possible design for Kockums' A26. Will it ever be built? (Courtesy of Kockums' website ) 

Christopher Harress of International Business Times, March 3, 2014 reports http://www.ibtimes.com/saab-angling-take-control-thyssenkrupp-submarine-yard-sweden-1559035

:
"Saab Is Angling To Take Control Of ThyssenKrupp Submarine Yard In Sweden"

Three years ago, Kockums, the Swedish national submarine manufacturer was sold by the Swedish government to Germany’s ThyssenKrupp, but after uncertainty over jobs and boat building guarantees, it appears the Swedish government is angling for Saab to take control of the Malmo-based ship-building yard.

In a clear statement of intent, Sweden’s procurement agency FMV announced on Feb. 27 that it was allocating $3.84 million to test whether or not Saab had the ability to design and build the next generation of Swedish submarine.

The move was spawned by disappointment coming from the Swedish Defense Ministry that Thyssen wouldn’t give guarantees that ThyssenKrupp Marine Systems, what Thyssen renamed the old Kockums yard in Malmo, would continue to be a large-vessel producer in the region. Additionally, the ministry was concerned because Thyssen hadn’t provided fixed prices for the delivery of two new A26 generation subs and mid-life refits for the Gotland-class submarine.

That said, the failure for TKMS to get finalize those contracts has put jobs in jeopardy, says Thyssen. But Saab’s emergence as a possible buyer for the yard, according to the Swedish Defense Ministry, is because it’s believed that Thyssen is going to reorganize the 1000 unionized workers in Malmo and is to begin the manufacturing of small-sized subs and surface vessels up to 1000 tons. The New A26 class boats and those awaiting refit are around 1900 tons.

The Swedish government procurement agency has said that Thyssen’s reluctance to ioffer fixed prices for the new boats and upgrades means it is currently not possible to move forward to the build stage as it is not practical, sustainable or best use of taxpayer’s money.

Saab has contended that it could meet the needs to design, build and refit submarines, however, it has declined to comment suggestions that it might take control of the TKMS yard." 

ENDS 

COMMENT

Please connect with Singapore's December 2, 2013, decision to buy two HDW 218SG subs instead of the  purchasing Kockums' submarines  http://gentleseas.blogspot.com.au/2013/12/singapore-buying-two-hdw-218sg.html and  http://gentleseas.blogspot.com.au/2013/11/germans-sinking-kockums-swedish-sub.html 

This development begs questions. Why did the Swedish Government sell Kockums to its German competitors in the first place? Swedes may also want to know how much government money will be required to fund the buyback of Kockums? Also how much government money will Kockums need to build two new A26 generation submarines and for the mid-life refits for the Gotland-class submarines (two or all three)? 

Meanwhile US company DefenseNews reported on the same matter, but failed its geography test - by placing Helsinki in Sweden - see http://www.defensenews.com/article/20140302/DEFREG01/303020012/Saab-Maneuvers-Buy-Swedish-Submarine-Maker?odyssey=mod_sectionstories naughty!

Pete