Submarines: June 25, 2003

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Howaldtswerke-Deutsche Werft AG (or HDW) is the largest shipyard in Germany, and the parent group of an international ship repair, engineering and logistics company employing 6600 people in Germany, Sweden and Greece. Profits have been falling for the past few years because of the economic slowdown in Europe. Particularly hard hit has been orders for submarines. Worse yet, debt has increased. HDW has been building subs for over a century, and resumed doing so in the 1960s after a post-World War II hiatus. Since then, HDW has built 91 subs, most of them (61), the highly successful Type 209 diesel-electric boats. But the new Type 212 and 214 are the future of HDWs submarine construction efforts. These boats have AIP (an air-independent propulsion system based on hydrogen and fuel cells, which allow the boat to cruise submerged for weeks.) Currently, the United States is trying to get the German government to change its policy towards arms sales to Taiwan, so the U.S. can finance the building of eight Type 214 subs for Taiwan. To further muddy the water, in March, 2002, an American bank bought a controlling (75 percent) interest in HDW for $844 million. The German government is under a lot of pressure from HDWs employees, who see further job loss if they don't get the Taiwan contract. Some fear that the American ownership of HDW might see the companies submarine building technology, and jobs, transferred to the United States. While no American shipyard has built a non-nuclear sub in 40 years, current HDW sub technology is seen as a major threat to American nuclear subs, if a hostile nation got their hands on an HDW sub design. German law also prohibits the export of submarine parts without government permission. But the technology is another matter, it is something that can be taken out of the country on a CD, or emailed in less than an hour. Recognizing this, Taiwanese shipbuilders are now lobbying for some of the Type 214 construction to be done in Taiwan. All of this puts more pressure on the German government to do something, for to do nothing, they could lose their submarine building industry.

 


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