The Canadian government has chosen Germany’s ThyssenKrupp Marine Systems (TKMS) as the preferred contractor for its next-generation submarine project. This decision was announced on the 6th of the month, with Prime Minister Mark Carney explaining that both TKMS and Hanwha Ocean met the Canadian Navy’s high standards. However, he emphasized that TKMS proposed a strategic adjustment in the order sequence between Germany and Norway, which would allow for an earlier delivery of submarines.
To support Germany, which had been behind South Korea in terms of delivery timelines, Norway, a NATO ally, relinquished its position in the order sequence. This move enabled TKMS to gain full backing from the European bloc, strengthening its position against Hanwha Ocean. Initially, Hanwha Ocean had taken the lead by committing to supply four submarines by 2035, highlighting its technical capabilities and fast delivery. However, the strength of K-defense was ultimately challenged by the “Team Europe” alliance.
This marks the fourth consecutive loss for K-defense in major international defense contracts. In May, Hanwha Aerospace lost a significant project worth 6 trillion Korean won to Germany’s Rheinmetall, which involved supplying next-generation infantry fighting vehicles for Romania. In June, a UK-France consortium outbid Hanwha in the follow-up project for France’s upgraded multiple rocket launcher system. Additionally, in November last year, Hanwha Ocean also lost Poland’s 8 trillion Korean won-scale submarine project to Sweden’s Saab. These losses highlight the difficulties K-defense faces against Europe’s well-established security and defense cartels.
Hanwha Ocean released a statement on the same day, expressing that they had given their best effort in the bid but could not overcome the NATO alliance barrier. Lee Yong-cheol, the head of the Defense Acquisition Program Administration (DAPA), noted that the key difference appeared to be related to NATO interoperability and collaboration. Meanwhile, President Lee Jae Myung, who was in Ankara, Turkey, for the NATO summit, posted on Facebook: “K-defense’s bold challenges will continue. The government will provide all possible support, from R&D and export assistance to strengthening international cooperation.”
Key Challenges Faced by K-Defense
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NATO Interoperability: One of the main factors influencing Canada’s decision was the need for submarines that can seamlessly operate within NATO systems. TKMS was able to demonstrate stronger compatibility with these systems.
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Strategic Alliances: The support from Norway and other European countries created a strong coalition that favored TKMS over Hanwha Ocean.
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Delivery Timelines: While Hanwha Ocean had initially promised faster delivery, the adjusted order sequence allowed TKMS to offer a more realistic and timely plan.
Recent Losses for K-Defense
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Romania Infantry Fighting Vehicle Project: Hanwha Aerospace lost this 6 trillion Korean won contract to Germany’s Rheinmetall.
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France Multiple Rocket Launcher System: A UK-France consortium outbid Hanwha in this project.
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Poland Submarine Project: Hanwha Ocean lost this 8 trillion Korean won project to Sweden’s Saab.
Government Response and Future Outlook
Despite these setbacks, the government remains committed to supporting K-defense. President Lee Jae Myung emphasized that K-defense will continue to challenge itself and that the government will provide necessary resources and support. This includes enhancing research and development, improving export capabilities, and fostering stronger international partnerships.
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