In the Netherlands, Naval Group's offer was €1,5 billion cheaper than Saab-Damen's

Just a month ago, The Hague announced that the proposal from the French Naval Group, based on the Blacksword Barracuda submarine, had been preferred to that of the Swedish Saab associated with the Dutch Damen, for the replacement of the four submarines. of the Walrus class of the Royal Netherlands Navy.

As soon as the decision was made public, Saab and Damen questioned its validity, arguing for a more efficient offer both from an operational point of view and from an industrial point of view, and promising not to stop there.

The companies had one month to appeal the Dutch ministerial decision to the Dutch courts. This period is now coming to an end, and neither Damen nor Saab have filed a complaint.

And for good reason ! Even if they promise to take the fight to the Dutch Parliament from now on, it turns out that Naval Group's offer, the total amount of which is still not detailed, was €1,5 billion less expensive than that proposed by Saab and Damen.

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Saab-Damen calls into question a price “inaccessible to a private company” in the face of Naval Group's Blacksword Barracuda submarine

To explain such a price difference, which can be estimated between 25 and 33% of the total price, the Dutch naval group and its Swedish partner highlight the superior operational qualities of their model, without providing any details to support these assertions. .

A26 Blekinge
Saab-Damen's offer was based on an evolution of the Swedish A26 Blekingue, a submarine designed specifically to operate in the Baltic Sea.

We can also doubt these, to the extent that, objectively, the Naval Group submarines have been chosen by five naval forces and 16 examples, over the last twenty years, and not the least (Brazil, Chile, India, Indonesia, Malaysia), while Saab and Kockums no longer exported submarines from the two Archer-class ships to Singapore, in the early 2010s, second-hand Västergötland-class ships entered in service in 1986 and 1987.

« The final score is disproportionately influenced by a very low price [from Naval Group], which is far below the realistic price for private defense companies.“, we can read in the press release on this subject, implying that the difference in price would be linked to the public company status of Naval Group, the French State holding 62,25% of the group, Thales 35 %, and the balance, 1,75%, by the company's employees.

Note that Damen does not provide, here either, any element to justify a particular role of the French State in this area. This is not the first time that the Dutch group denounces the public shareholding of Naval group, like that of the Spanish Navantia or the Italian Fincantieri, which would distort the competition, according to his analysis.

The fact remains that with such a price difference, we understand that the Dutch decision-makers had a lot of difficulty in bringing into play the national preference, especially since Damen itself took advantage of a more attractive offer to take over the construction F126 frigates for the German Bundesmarine, to the great dismay of industrialists across the Rhine.

Saab and Damen promise more investment in Dutch industry than Naval Group

However, if Saab and Damen have renounced legal action, knowing full well that with such a difference in prices, it would have been wasted effort, they have not given up on derailing the Franco-Dutch program .

Naval Group Blacksword Barracuda
The Blacksword Barracuda promises to be a very high performance submarine. We wonder what superior performance the offering from Saab and Damen can claim?

The selection of Naval group, at the end of the competition organized for the replacement of the four Dutch Walrus submarines, must, in fact, be validated by the Dutch Parliament during June 2024, while the latter now has a majority (not absolute ) nationalist, since the legislative elections last fall.

The two groups are already preparing their arguments, to seduce Dutch parliamentarians, by announcing superior performances, on the one hand, and by promising greater investments in industry and the Dutch economy, on the other. other. No one would say that with €1,5 billion more, that's the least we can do.

Note that, at the same time, Naval Group has undertaken to prepare its Dutch subcontracting network, announcing, in this regard, the signing of several industrial partnerships to fully involve the Dutch economy and industry, a few years ago. days of that.

Do not repeat, for Naval Group, the same error as in Australia, by neglecting the weight of public opinion

However, the same trap is now emerging for the French industrialist as the one that was set for him in Australia, notably by Saab. Indeed, due to its national character, Damen enjoys, and quite naturally, an excellent image within Dutch public opinion, while Saab, for its part, has extensive experience in campaigning. political influence and public opinion.

Shortfin barracuda australia
The hostility of Australian public opinion, structured politically and industrially for years, was the keystone of the cancellation of the Shortfin Barracuda contract.

It will therefore be necessary for Naval Group to ensure that it maintains, and even develops, a high-quality and attractive image among Dutch public opinion, and by transitivity, among the country's parliamentarians, to avoid a reaction under the influence media emerges against the French offer, as was the case in Australia.

French Defense groups, traditionally and culturally, carry out few actions towards this type of public, which is nevertheless decisive in the case of parliamentary democracies of an Anglo-Saxon nature, as in Australia, and as in the Netherlands.

We must therefore hope that Naval Group will not be surprised, or contractually forced, as was the case in Australia, to suffer denigration campaigns led by other industrialists, or even political exploitation of the contract, as this issue is strategic for the industrialist as for the entire French naval BITD.

We can think that French participation in another Dutch program, for example, the heavy anti-aircraft frigate program, as mentioned in a previous article, would be an excellent way to kill the debate, while ensuring increased popular support, while providing the French Navy, in the process, with the two anti-aircraft frigates which it lacks today. Win-Win, they say...

Article from April 12 in full version until May 19

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  1. The salary costs between the PB and the RFA are not really different, therefore the direct variable costs linked to the construction
    On the other hand, the absorption of fixed costs which easily represent 40% at least (recruitment/training, special machines, infrastructure, software, R§D, tests, qualification of subcontractors) the same for subcontractors, must be out of all proportion. , a simple volume effect. Naval has released at least one soum / year for 80 years, at least 5 to 8 times more than SAAB
    We can add more than 2 billion Euros paid by Australia on invoice and as compensation... (without any sheet metal having been cut, but 1 week before...! I don't know Naval and their subcontractors, Safran, Jeumont, Thales etc. but they surely have the digital infra largely amortized (CAD, DTP, PLM, even digital twin) and in place where you modify everything with a click (well almost..)
    The DGA, but also India, Brazil and especially Australia have subsidized the PB...the order of magnitude is not aberrant with a corner of the table calculation
    FYI NG publishes its results.. and it does not lose money at all, quite the contrary

  2. THE HAGUE (ANP) – The German thyssenkrupp Marine Systems (tkMS) objects to the missed contract for the construction of four submarines for the Netherlands. The government has awarded the contract to French competitor Naval. As far as the ministry is aware, only tkMS has objected to the provisional award decision.

    The ministry thus confirms an earlier report from De Telegraaf. The spokesperson does not want to say anything substantive about tkMS's objection. According to De Telegraaf, the Germans are angry because the Dutch government initially said it wanted a relatively standardized submarine 'off the shelf', but ultimately opted for custom-made submarines from Naval.

    TkMS was not immediately available for comment.

    Naval is working with the Dutch maritime company Royal IHC on the submarines. Another Dutch company, shipbuilder Damen, tried unsuccessfully for the billion-dollar order together with the Swedish Saab. Damen and Saab say on social media network LinkedIn that they will not appeal against the provisional award.

    • It must be understood that if Naval Group consolidates the Blacksword Barracuda program in the Netherlands, it will become very, very complicated for TKMS or Kockums to place their own ships, with such a price difference, for one or two decades. We understand that neither of them give up easily. It is their future that is at stake here.

      • In SM, the situation of Kockums has been bad for 20 years, they were rejected in Australia after the costly misadventures of the Collins, bought by TKMS then taken over by SAAB (and the Swedish Government), execrable relations with TKMS, large part of the equipment come from Safran, Jeumont, Thales, IX blue/Exail, more export contracts..the weakest link
        TKMS has just been bought (15 days ago!) by the US Carlyle fund, because Thyssen is not doing well. TKMS must therefore “get agitated”. The legal argument, if this is true, is weak. .what is a “standard” SM?
        As for subsidies...between Saab saved by the Govt. Swedes and TKMS taking over the Wismar construction sites (Ex GDR) to maintain jobs in the East... (without aid of course) it is not at all sure, but not at all, that NG is the most "subsidized" .Another case of Brussels-style “liar poker”!

        The market share of TKMS is falling compared to NG in the soums where the Scorpène actually replaces the 209 (India, Brazil, Chile, Indonesia, etc.). The NL contract, even re-awarded to SAAB / Damen politically) is a very hard blow. In 1943/44 the Germans “invented the modern XNUMXst century SM”…conservatism?technological stubbornness? Listening to customers.?...
        The result is there

        • Absolutely agree with you. And if/when the Blacksword becomes established, the situation for these two shipyards could become untenable.
          Ultimately the German government did not take a blocking stake in TKMS then? It was about that like they did about Hensoldt.

          • My mistake
            The deal is not finalized and the German Government through KfW (a sort of BPI German version) would take 20% minimum according to the eco press. Pressure also from the Unions
            Since the end of March nothing new in fact
            The problem with a fund is that by definition it must “come out” one day.. Surprising in a business with cycles as long as the soums.. Implicit commitment from the Government on orders (and margins, etc.) for mask a de facto nationalization (politically impossible to sell)?

          • This must be a tough negotiation between Pistorius and Scholz on this subject. B. Pistorius is today the political figure with the best ratings across the Rhine, and he has every interest in continuing his momentum. It is also interesting to note that the German Ministry of Defense can produce leading political figures, both in the country and in Europe.

  3. Tkms is creating a buzz to make people believe that it will sign with India for the supply of 6 sm as part of the p75I program. For the moment, it is Naval Group which is in a position to supply, through an Indian shipyard, 3 scorpenes to complete the 6 already built. For the Dutch parliament vote, it is in June.

  4. I am a native of Cherbourg. Who does not have the memory of the “arsenal workers”, in the sixties, going up the streets of Cherbourg four abreast on bicycles at 11:30 a.m. for lunch at home, cannot have an idea of the magnificent history of the construction of submarines in this Cotentin port, where Napoleon wanted to renew the wonders of Egypt, also a pearl in the Normandy landscape😉


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