Patrick Durrant | Sydney
DCNS executive Andreas Loewenstein has remarked to German newspaper Süd-Deutsche Zeitung (SZ) that the French shipbuilder DCNS and recent winner of the contract to build Australia's future submarines was "open for [merger] talks once [TKMS] has overcome the loss".
Saying the offer was not a "hegemonic claim" and that DCNS was prepared to guarantee the Germans a strategic position, Loewenstein, responsible to DCNS for strategy partnership and innovation, added the merger would aim to duplicate the success of Airbus in the maritime shipbuilding sphere.
"The aim must be to build a long-term viable European industry," Loewenstein told SZ.
"It may well be that the little ones will disappear," he said.
TKMS (Thyssenkrupp Marine Systems) is a division of Thyssenkrupp. The traditional core business of the parent company – steel – has suffered in recent times as cheap imports flood into the European region from China. The conglomerate had been labouring from a combination of overcapacity and a sharp fall in prices of the commodity however CEO Heinrich Hiesinger has worked hard since 2011 to transform the company from a steel giant to a more diversified capital goods company - with some success.
European shipbuilders are struggling however as defence budgets dwindle and their ability to anticipate orders from their own governments becomes complicated.
Loewenstein said that despite increasing revenues, DCNS had slipped in the ranking of top shipbuilders from fifth to eighth position. Russian and Asian competitors were outperforming the Europeans and "the question is, in view of high investments in technology, how many of us will survive?"
"It may well be that the little ones will disappear," he said.
It's likely the French overtures are at least partly aimed at scuppering any chance of a wholly German alliance from taking place. German heavy vehicle manufacturer Rheinmetall has been seeking to buy the TKMS division for some years.
As SZ reported, Thyssenkrupp considers DCNS a "difficult interlocuter" and the German company also lacks the political support necessary for a defence alliance.
Loewenstein told SZ he had learned much from the Franco-German conflict that had ensued during the fledgling stages in the creation of EADS (Airbus Group prior to 2014). He cited France's less stringent rules for the export of military equipment as being an advantage and gave the example of the Franco-German tank partnership of Krauss-Maffei Wegmann and Nexter.
In the German press it had been rumoured the French were awarded the Future Submarine contract because they had voluntarily granted an option that their submarine design could also equip with nuclear propulsion but Loewenstein denied this saying "the option had not been offered".