South Korean Company Exits Hamilton Deal After Submarine Loss

A shipbuilding firm from South Korea is stepping back from a collaboration to establish a training center with Mohawk College and Ontario Shipyards in Hamilton, following Canada’s decision to purchase navy submarines from a German manufacturer rather than Hanwha Ocean.

The other partners assert that Hanwha’s involvement was “significant,” but they believe their project isn’t completely out of options.

This announcement comes just days after Prime Minister Mark Carney revealed that the government selected Thyssen Krupp Marine Systems (TKMS) of Germany over Hanwha for building the new fleet of submarines. This major defense initiative is anticipated to be Canada’s largest ever.

Earlier this year, Hanwha signed an agreement with Ontario Shipyards – a private company involved in ship repair based in Hamilton, St. Catharines, and Thunder Bay – to share expertise and resources. They stated it would assist in developing a naval training and recruitment vessel that Ontario Shipyards intends to construct. The two companies also created a letter of intent with Mohawk for establishing the shipbuilding training hub.

When signing the agreement, Glenn Copeland, CEO of Hanwha subsidiary Hanwha Defence Canada, mentioned to CBC Hamilton that the partnership was worth “tens of tens of millions of dollars.” He didn’t break down how each partner would contribute financially to the endeavor.

“Hanwha’s agreement with Ontario Shipyards and Mohawk College was dependent on Hanwha being selected for” the Canadian Patrol Submarine Project, said Keelan Green, spokesperson for Hanwha Canada, in an email sent to CBC Hamilton on Monday evening. The Canadian Patrol Submarine Project refers to the federal plan aimed at replacing Canada’s old submarine fleet.

“All of it stops,” Green responded when asked whether there might be any continuation or renegotiation possibilities for the partnership.

Hanwha declined CBC’s request for an interview.

Mohawk and Ontario Shipyards Move Forward Without Hanwha

However, Sean Padulo, CEO of Ontario Shipyards, informed CBC that his company will maintain its collaboration with Mohawk and proceed with building the training vessel “on speculation.” He noted that this partnership initially existed between his business and the college before inviting Hanwha into it.

Mohawk spokesperson Sean Coffey confirmed via email that there is a “standalone agreement” between the college and Ontario Shipyards that will persist.

The remaining partners did not detail how exactly losing Hanwha’s support would impact them or what costs they have incurred due to this change.

“Hanwha’s commitment was primarily based on knowledge and technology transfer as well as training, so it’s tough to assign a dollar value on it; however, it would have been significant,” Ted Kirkpatrick, vice-president of business development at Ontario Shipyards said in an email.

“While we are disappointed that Hanwha was not chosen as the winning proponent, we are grateful for having collaborated with them during their bid process and look forward to possibly building what we hope will be a lasting relationship,” Kirkpatrick added.

WATCH | Carney makes submarine announcement:

Canada to buy ‘up to 12’ submarines from German shipbuilder

Prime Minister Mark Carney states Canada is negotiating terms for acquiring ‘up to 12’ submarines from Thyssenkrupp Marine Systems in Germany. During discussions with reporters in Halifax on Monday, Carney referred to this estimated $24-billion procurement as ‘the largest in Canadian history.’

Carney mentioned that negotiations will take several months before finalizing any contracts with TKMS.

If these negotiations fall through, Carney explained that “Canada retains the right to designate Hanwha’s KSS-III, currently the reserve supplier as preferred supplier and enter negotiations with them.”

The government had previously announced about a year ago that both Hanwha and TKMS were top candidates for building up to 12 submarines; soon afterward; Hanwha revealed multiple agreements within Canada.

A press release issued by them back in January highlighted their aim at “further expanding its industrial partnerships within Canada,” which supported submarine procurement efforts while citing various strategic MOUs covering steel production space technologies along with artificial intelligence advancements among others.

An element of their unsuccessful bid included an MOU established earlier this year pledging $345 million towards Algoma Steel’s establishment of a structural steel beam mill located in Sault Ste. Marie while securing supplies from Algoma products; additionally mentioning plans regarding collaboration on armored vehicle manufacturing activities across southern Ontario involving said mill once operationalized.

Dignitaries including local politicians such as Monica Ciriello attended when Padulo alongside Charles Kim-the CEO representing Hanhwa Ocean-inked their initial memorandum concerning Hamilton’s endeavor held at Mohawk College last February showcasing strong bipartisan support expressed toward forging relationships promoting regional industry growth potential illustrated through development pathways laid out therein.

Mohawk President Paul Armstrong shared insights indicating how collaborations birthed under three-way partnerships envisioned programming emphasizing trades education covering areas like welding & electrical fields while also integrating disciplines encompassing millwrighting marine mechanics robotics logistics ultimately impacting upwards upwards upon completion expected drawing engagement exceeding estimates suggesting around one thousand students potentially benefiting during transition phases leading until full operationality realized.

Source link