The hard-fought race to build Canada’s next submarine – National

From a massive ad featuring Canadian broadcasting icon Peter Mansbridge to a cabinet minister calling on shipbuilders to cough up the car industry, the short race to replace Canada’s aging submarines has turned heads in more ways than one.

The unusually short competition to build the navy’s next submarine has appeared to focus on everything but the boats themselves – although the two vessels in the running are, in some ways, very different.

Nowhere during the two-year procurement process did the federal government really talk about the capabilities of the boats. The Navy made it clear early on that any model would do just fine.

With July’s NATO summit just around the corner, the Liberal government is expected to announce its chosen supplier of 12 submarines in the coming days.

It’s a huge order, worth tens of billions of dollars – enough to grab the attention of South Korean manufacturer Hanwha as Seoul seeks to establish itself as the world’s fourth-largest defense manufacturer.

Hanwha launched a massive ad campaign, plastering airports in Canada with ads and hitting broadcast TV and broadcast platforms to showcase its KSS-III.

Even its competition – the European market leader responsible for supplying many of NATO’s conventional submarines – noticed advertisements from as far ashore as Winnipeg and Calgary.

“This is nuts, frankly,” said Oliver Burkhard, CEO of rival TKMS, in an interview at the CANSEC military show in May. “We are not used to this.”

His usual rivals – French, Spanish, Italian, British and Swedish submarine makers – “don’t do this,” he said. Submarines are not supposed to be so visible, after all. These competitions are often focused on what subscribers can actually do, and the sales pitches are aimed entirely at governments – not everyone.

“This is unusual. Let them try it,” he added. “If they win, maybe we say this was a great strategy and we won this because of our advertising. If they don’t win, then it’s the most famous loser … the biggest loser.”

But Hanwha is not a competitor. Although it has never shipped submersibles before, it prides itself on its large shipyard space and offers Ottawa a breakneck delivery schedule.

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Hanwha says it’s making a long-term play with ads. It’s a popular name in Korea but not yet known in countries like Canada as a top defense supplier, said Canadian CEO Glenn Copeland.

“It’s about brand recognition and it’s about understanding what our capabilities are, and as people have pointed out, it’s a very strong company,” Copeland said in an interview days after the big trade show.

He said these ads also “got the attention” of several levels of government and led to many knocks on their doors.

Hanwha may be new to submarine deployment but its boats are already in service with the Korean navy. One sailed to Esquimalt, BC in May.

The TKMS model 212CD sub is the company’s latest design and has yet to hit assembly lines. It offers state-of-the-art engineering from a long-established manufacturer.

While all subs are silent, the 212CD has a diamond-shaped body designed to make it invisible to sonar.

TKMS’ campaign for the subcontract is based on the fact that Germany and Norway, NATO allies, are buying the same model. Working together – doing things like training and fixing together – is the stated goal of the alliance.

While the details of the bids are still classified, the public side of the Korean campaign surprised some observers.

“Korea did everything they could to win this,” said Paul Mitchell, a professor of defense studies at the Canadian Forces College. “In a way, I think it’s their loss.”

Initially, Hanwha set an aggressive delivery timeline – four boats in the water by 2035, then one boat per year. The Germans then revised their system to speed up the delivery late in the game.

Hanwha’s KSS-III is a larger, more open boat than the 212CD, something that can affect the conversion and width.

It is designed to keep North Korea in check, and comes with the added ability to launch surface-to-air missiles or cruise from the sea to hit targets on land – something the German submarines lack.

“The power that a German boat has over a Korean boat is very difficult to explain — the teamwork, the position of the boat itself, and I would argue the language factor… “And language will be an important issue.”

Many experts say that this competition seems to be hot pink or slightly leaning towards one or the other. No one really knows, because Ottawa is keeping it tight under wraps.

The federal government’s behavior over the past two years has also been unusual. It changed rules and standard procedures to speed up what could be the largest military procurement in Canadian history, moving it forward by several years.

Ottawa made the dramatic move to extend the bid deadline this spring. Industry Minister Mélanie Joly has publicly announced that she hopes bidders will pocket the promise to open a new auto plant in Canada to help the struggling auto sector.

That led to an additional offer from Hanwha – a joint venture that would likely build military vehicles.

Those watching the military procurement closely were not completely shocked.

“I would say that’s consistent with Canadian studies, honestly,” Mitchell said.

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Carney visits a South Korean shipyard competing to build Canada’s next submarine

When Canada was about to order the current Victorias from the UK in the 1990s, he said, Ottawa asked for an additional $50 million discount at the last minute.

With purchase projects this large, economic benefit often arises.

“This is a rare acquisition, in part because it’s so valuable,” said Darren Hawco, a retired military officer who now works with Deloitte.

“While most purchases of military capabilities are relatively low-cost … this purchase is unique because of its scale, because of its (national) strategic implications and because of Canada’s overall economic strength.”

Retired vice admiral Mark Norman said he was “really impressed” by both buyers.

“The Korean people were very aggressive and they went ahead in the community. They were coming out and talking, not just making deals but also talking about the nature of those deals,” he said.

“The Germans were also working hard but more behind the scenes.”

He said he’s not sure either company has a clear edge as Ottawa’s decision will come down to how it considers the number of economic benefits and strategic synergies it offers. Public comparison skills get a little bit of a maker so far.

“The difference between the Toyota Camry and the Honda Accord is the most popular thing for consumers,” said Norman.

“They’re both essentially doing the same thing. They’re both the same configuration, they’re basically the same product. They’re packaged differently and they deliver their power in slightly different and more nuanced ways.”