Why Swedish Shipbuilding Is Sinking

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Throughout 2019 there have been worrisome news and rumors regarding Swedish shipbuilding and its undesirable state.

Since mid-2019, rumors have been circulating that the leadership of the Swedish company Saab has shown considerable concern about the lack of foreign orders for the construction and modernization of surface ships and submarines at the Kockums shipyard in Karlskrona.

The Kockums shipyard remains the most problematic of all six production units of the Saab concern, as it is the only one that shows a negative result during the three quarters of the end of 2018 – mid-2019.

So, in the second quarter of 2019, the company brought 0.4%, operating losses, having received a loss of 3.0 million krones ($312 thousand), and the total turnover decreased to 703 million krones ($73 million).

In the last quarter of 2019, the total turnover was even less, only 690 million krones ($ 70 million), but at the same time, apparently, in the previous, third, quarter it was so bad that operating profit stood at 3%, which amounted to 21 million crowns ($2.2 million).

As it became known, recently the Minister of Defense of Sweden Peter Peter Hultqvist informed the Riksdag [Swedish Parliament] that by the end of last 2019 at Saab Kockums the situation was almost critical.

The meeting was held behind closed doors, but some information leaked out. It turns out that over the past couple of years, Saab Kockums have been actively updating its leadership, replacing a large share of older, experienced technicians with ‘young promising managers’, most of whom are women. The purpose was to increase diversity and avoid any sort of discrimination lawsuits, which are currently quite popular, and as a result, and due to a lack of necessary skills, the shipyard appears to be dying, rapidly.

Be that as it may, the leadership of Sweden and Saab concern are jointly looking for ways to solve the problem with the financial issues of the Kockums shipyard. If in the near future it is not possible to conclude contracts for the export supply of submarines of project A26, it is likely that this will lead to the closure of the Kockums shipyard.

When it was looking for partners in developing its new Ula-class submarine, Sweden was considered, but was rejected as a possible partner.

In the mid-1990s, negotiations began on a joint Nordic Submarine sub-program of the Nordic countries, better known as the Viking Project. It was planned to build at the then Swedish shipyard Kockums ten of the same type of new generation boats – four for Norway, four Denmark and two Sweden. But, having existed for about ten years, the project fell apart after Denmark refused to continue the operation of submarines in its Navy.

Since then, seven years of research on the issue has led the Norwegian government to decide in November 2014 to hold a tender for the purchase of new boats.

Initially, six participants were invited to participate in the competition, one of which was the Swedish project A26. Saab Kockums, who proposed it, repeatedly emphasized how much Norwegian DNA is contained in this submarine, specifically with reference to the Viking Project. In the spring of 2016, the Swedes left the competition in the first round, along with the Italian Fincantieri, the Spanish Navantia and the Korean DSME.

It appears that the lack of funding, as well as the lack of the necessary skills to develop military surface vessels and submarines, as well as a questionable leadership have been digging the grave of Swedish shipbuilding.

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