Thyssenkrupp Expands Submarine Production in Wake of Russian War

(Bloomberg) -- Thyssenkrupp AG is increasing its submarine production capacity in Germany, the latest sign that Russia’s invasion of Ukraine is upending Europe’s security landscape.

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The manufacturer is converting the MV Werften shipyard it purchased in June in Wismar on Germany’s Baltic coast to submarine production. Speaking at the launch Tuesday in Kiel of two submarines for Singapore’s navy, German Chancellor Olaf Scholz hailed the move as part of an inflection point in Germany’s approach to its military.

“Russia’s war of aggression against Ukraine has made it painfully clear to us that the maritime economy is not only the basis of our global trade chains and thus of our prosperity,” Scholz said, according to the text of his speech.

“Germany is taking responsibility for the safety of our partners; we can be relied upon,” he added. “That’s why I’m also extremely pleased that Thyssenkrupp Marine Systems will expand its production in Germany and also start production at the Wismar site from 2024.”

Germany has come under sustained criticism for its failure to boost defense spending more rapidly, even before President Vladimir Putin launched his invasion of Ukraine at the end of February. Government officials have admitted that the country will miss a commitment to raise its defense spending to at least 2% of its economic output this year and probably next.

The expansion of submarine production points to a change in Thyssenkrupp’s strategy regarding its naval unit. The company previously said the manufacturer of military ships and submarines wasn’t core to its operations.

Singapore has ordered a total of four German submarines from Thyssenkrupp. The first one, the Invincible, was handed over in 2019. The submarines launched on Tuesday in Kiel, in the presence of Singapore Prime Minister Lee Hsien Loong, northern Germany were numbers two and three.

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