Europe is plagued by too many naval yards, French Navy chief says

Yahoo

6 days ago

PARIS — Europe has too many naval shipyards competing for business, and the industry needs to consolidate to a handful of players than can win export contracts, French Navy Chief of Staff Adm. Nicolas Vaujour said in a parliamentary hearing last week.
The Naviris joint venture between Italy's Fincantieri and France's Naval Group, created in 2020 and meant as a first step in wider European naval consolidation, 'unfortunately didn't quite live up to expectations,' Vaujour told the National Assembly's defense committee on Wednesday.
'Today in Europe, we have around 14 shipyards that are competing with each other pretty much everywhere,' Vaujour said. 'In an ideal world, we would have three or four that challenge each other, but would above all be winning export market share abroad.'
Europe lacks a single naval strategy, with countries having their national strategies and struggling to converge, the French Navy commander said. With governments keen to safeguard regional industrial activity and economies, political initiatives are probably not the way to consolidating military shipbuilding, according to Vaujour.
'We have the political ambition to be more coherent, from an industrial point of view, and to divvy up the market a little, so to say,' Vaujour said. 'But the reality is, we all agree here that if we must choose between Naval Group and Fincantieri, obviously it's Naval Group. And when you're in Italy, they of course say Fincantieri.'
France also wants to protect the smaller naval yards along its coast, such as Piriou, Socarenam and CMN, according to the admiral.
That means creating a naval equivalent of European aircraft maker Airbus would depend on the shipbuilding companies first and foremost, 'that is, if they manage to merge,' Vaujour told lawmakers. 'We didn't succeed with Fincantieri.'
When Naval and Fincantieri created Naviris, they said the joint venture would serve the French and Italian navies, but also pursue export opportunities outside Europe and be a leader in shipbuilding consolidation. While Naviris won part of a €1.5 billion contract to upgrade the French-Italian Horizon-class frigates in 2023, success in the latter two areas has been more elusive.
France and Italy have 'very, very different' strategies for shipbuilding and vessel size, according to Vaujour. France has been moving towards smaller frigates, with the newest Frégate de Défense et d'Intervention, or FDI, displacing 4,500 metric tons, whereas Italy's new PPA offshore patrol vessel displaces 7,000 tons and the DDX destroyer design is for 14,000 tons, Vaujour said.
'We consider that the size is a little too large,' Vaujour said. He said the FDI is drawing interest from European countries because the frigate is suitable for small navies, an accessible vessel that can be operated by a small crew. 'So we have divergence in our vision of the vessel of the future.'
France and Italy also use different economic models, with the Italians buying 'a lot of ships' for their navy that they can resell, allowing to rapidly fill potential export orders, according to Vaujour.
The French are in discussion with Naval Group about ordering a 'blank hull' that would be either available for export, or join the French fleet ahead of schedule if there's no buyer, Vaujour said. Naval Group currently has a minimum production rate of one FDI per year at its yard in Lorient, and says it can raise capacity to two per year, according to the admiral.
France has ordered five FDI frigates from Naval Group, with the lead vessel of the class Amiral Ronarc'h completing sea trails last month. The first of three FDI frigates for the Hellenic Navy, HS Kimon, started sea trails on May 21 in Lorient.
'The first thing partners interested in the FDI ask about is the lead time – how soon can you supply me with a frigate?' Vaujour said. 'That's the only question the Norwegians, Swedes, and Danes ask when they ask for the FDI: `When can you deliver?''
Naval Group is convinced of the blank hull concept, while the Directorate General for Armament considers the model 'really relevant,' Vaujour said. He said the idea of ordering an FDI hull without a guaranteed buyer does carry risk, and the Finance Ministry still requires convincing.
'The acceleration of new contracts, we have to be able to do that,' Vaujour said. 'Lorient is capable of moving to two per year, and we can help with that.'
A recent partnership agreement between Naval Group and Norway's Kongsberg should be seen in the context of a potential sale of frigates to the Royal Norwegian Navy, according to Vaujour. Norway is 'quite interested' in the FDI, which is in competition with British, German and Italian designs, and should France win the deal, there will be work sharing with Kongsberg, Vaujour said.