German naval yard merger seen as “long overdue”

Germany's new MKS 180 frigate is at the heart of a controversyGermany’s new MKS 180 frigate is at the heart of a controversy

The Lürssen Group and German Naval Yards Kiel (GNYK) are merging their military and naval surface shipbuilding activities saying the move is “long overdue” as well as “sensible and advantageous”, writes Germany Correspondent Tom Todd

A statement said the aim of a new joint company led by the Bremen-based Lürssen Group would be to “improve the structure of the German shipbuilding industry and strengthen its efficiency and sustainability”. The merger covers not only the building of innovative naval ships but also “functional integrity” – in other words vessel life-cycle repair and maintenance.

Iskandar Safa, CEO of GNYK parent company Privinvest Holding SAL, said the consolidation of naval shipbuilding in Germany was “long overdue”. Germany had “first-class naval yards and excellent technologies”, he said.

Safa added “However our customers need partners with the size and capabilities to fulfill large-scale orders of strategic importance. That can be better served when domestic players join forces”, he declared.

Lürssen Group head  Friedrich Lürssen added “We are convinced that the consolidation of our naval shipyards has significant strategic merit and will strengthen their competitiveness in the future”.

The merger follows talks which have been extensive and have also involved the German Government’s Maritime Coordinator Norbert Brackmann reportedly in a mediation role. Some media reports suggest that may have helped to calm the situation in the wake of a controversial decision by the Berlin Government in January.

That’s when the German Defence Ministry announced it was selecting  Damen Schelde Naval Shipbuilding, together with Hamburg partner Blohm + Voss (a Lürssen subsidiary) and Thales Nederland for a multi-billion contract to build up to six planned new MKS 180 multi-purpose frigates to the German Navy. The 155m long ships will displace around 9,000 tons and carry a core crew of 110.

Lürssen and GNYK also bid for the contract and GNYK later challenged the decision by the defense ministry, submitting a formal complaint and an application for review, charging that the award to Damen was not lawful and that it retained the right to take legal action if necessary.

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