New Canadian Shipbuilding Strategy

[MarkOttawa]

Karel Doorman:  Good luck with such good sense in Canada--all our political parties insist on building the ships in Canada (jobs! jobs! jobs!) and cost be damned--until the conclusion is reached that fewer ships, probably less capable, is the solution.  But still built in Canada.  Nuts but reality.

There's even controversy over the possibility that new RCN tugboats might not be built in Canada:

Canadian Shipbuilders highlight perils from using foreign-built ships
http://www.newswire.ca/news-releases/canadian-shipbuilders-highlight-perils-from-using-foreign-built-ships-569056541.html

Have a look at the "Canadian Navy" posts here for extensive background:
https://cgai3ds.wordpress.com/tag/canadian-navy/

Mark
Ottawa

 

[Karel Doorman]

Karel Doorman:  Good luck with such good sense in Canada--all our political parties insist on building the ships in Canada (jobs! jobs! jobs!) and cost be damned--until the conclusion is reached that fewer ships, probably less capable, is the solution.  But still built in Canada.  Nuts but reality.

There's even controversy over the possibility that new RCN tugboats might not be built in Canada:

Have a look at the "Canadian Navy" posts here for extensive background:
https://cgai3ds.wordpress.com/tag/canadian-navy/

Mark
Ottawa

Mark i get your disappointment in this matter.(really i do) and think most of you(Canadians)think the same.

But maybe when the 2 of us(i mean our countries)design them together it's possible to built the Canadian "portion"of the new series in Canada itself(or at least most of them)

I mean we're both there from the start then and both parties should have a saying in the building aspect.

gr,walter

 

[Baz]

Maybe it's time for Canada to get on speaking terms(designing and building together)with the Dutch ,since "our" M-class will be up for replacing in about the same sort of timescale(2022-ish)and my thought will be that the MPF2(M-class Patrol Frigate 2)will be in the 600 million neighborhood a piece so for Canada (with some additional costs offcourse,since you like those  [ ,sorry couldn't help myself) the whole project(15 ships) could be done for around the 10 Billion figure  (so there's still money,a lot actually, in the "kitty",18 Billion give or take)

Although I agree the prices are higher in Canada for no real reason, I'm not convinced we would get them at the price the Dutch Government does.  Less than 5 minutes on google yielded "Our staff is experienced in pursuing subsidies from the Dutch government or from the European Union if applicable."  http://www.quel.com/suppliers/damen-shipyards-oostende, in addition to some other links, just by typing in "Damen Schelde subsidies."

The US is the worst example of this, the subsidize the crap out of the industry; but so does everyone else, even if it is hidden like in tax breakshttp://officerofthewatch.com/2013/03/20/spanish-yards-criticise-dutch-shipyards-financial-practices/.  Why would the Dutch government let us have the same deal they are paying for behind the scenes?


Of course, I have no idea what the true financials are, and you certainly aren't going to find them on the internet...

 

[Karel Doorman]

Although I agree the prices are higher in Canada for no real reason, I'm not convinced we would get them at the price the Dutch Government does.  Less than 5 minutes on google yielded "Our staff is experienced in pursuing subsidies from the Dutch government or from the European Union if applicable."  http://www.quel.com/suppliers/damen-shipyards-oostende, in addition to some other links, just by typing in "Damen Schelde subsidies."

The US is the worst example of this, the subsidize the crap out of the industry; but so does everyone else, even if it is hidden like in tax breakshttp://officerofthewatch.com/2013/03/20/spanish-yards-criticise-dutch-shipyards-financial-practices/.  Why would the Dutch government let us have the same deal they are paying for behind the scenes?


Of course, I have no idea what the true financials are, and you certainly aren't going to find them on the internet...

I wouldn't know if they would give Canada same sort of deal,but then again,think with me 

Let's say an "extra"-cost for Canada would be in the 200 million area,a piece(just thinking out loud here),the whole project would still be half of the budget,give or take.i mean the 28 billion figure for 15 is just sheer insanity,in my mind.(or will it be somesort of "Burke's"? )

gr,walter

 

[Kirkhill]

Although I agree the prices are higher in Canada for no real reason, I'm not convinced we would get them at the price the Dutch Government does.  ....

Or anybody else in Europe.

Nobody in Europe, not even the Brits, manages to inflate the costs of their ships as well as we do.

And by the way - the Navy is not without fault here.  As has been noted many times - much of the cost is what is stuck in the ship, and not the ship itself.  And the Navy determines that. 

Our Admirals seem to have read Scharnhorst and determined that General Purpose means Every Purpose.

 

[MilEME09]

http://www.citynews.ca/2016/03/09/davie-shipyard-drops-unsolicited-bid-on-liberals-to-build-icebreakers/

Looks like Davie wants more of the pie

 

[Karel Doorman]

BTW i have a question for you'll:

If(and i say if,but looks like it) the "Iver" is chosen as a "template" for the new frigates what will it cost(if needed for Canada)to built them to full mill spec?(since they're partially mill spec now)

I mean it will be alot more,no?

just asking,don't know whether this would be an issue just interested;

gr,walter

PS,whatever ship will be chosen it will be a great day for Canada when the decision is finally made.

 

[AlexanderM]

http://www.citynews.ca/2016/03/09/davie-shipyard-drops-unsolicited-bid-on-liberals-to-build-icebreakers/

Looks like Davie wants more of the pie

I hope they drop a bid for the CSC build as well.

 

[sandyson]

For half of the various estimated costs of these ships, we could probably just bribe any 'bad guy' (...or gal) to go away.

 

[PuckChaser]

I hope they drop a bid for the CSC build as well.

So we can spend years in legal fights only finally to get the first ships in 2040?

 

[AlexanderM]

So we can spend years in legal fights only finally to get the first ships in 2040?

The only contract that has been signed is for the AOP's. I wonder if anyone knows the ramifications of not signing additional contracts with Irving. MarkOttawa do you know?

 

[jollyjacktar]

The only contract that has been signed is for the AOP's. I wonder if anyone knows the ramifications of not signing additional contracts with Irving. MarkOttawa do you know?

I think Puck Chase has it right.

 

[Kirkhill]

Building ships or building an industry?

If the Government want cheap and fast they can do that.  It is only a matter of "needing cash now".  And the industry will boom and bust just like it always has.

If they want to manage the cash flow a bit better then they will pace the cash flow and the builds, as was the original plan.

Now if the yards can demonstrate that they are good, solid, credible suppliers then maybe money could be found to pick up the pace.

But none of that guarantees that any option will produce a good ship.

 

[Edward Campbell]

Building ships or building an industry?

If the Government want cheap and fast they can do that.  It is only a matter of "needing cash now".  And the industry will boom and bust just like it always has.

If they want to manage the cash flow a bit better then they will pace the cash flow and the builds, as was the original plan.

Now if the yards can demonstrate that they are good, solid, credible suppliers then maybe money could be found to pick up the pace.

But none of that guarantees that any option will produce a good ship.

I think you're right.

The team (a team of very, very senior civil servants) who concocted the shipbuilding strategy were aiming to build a sustainable industry.

International trade rules (very correctly) ban subsidizing "domestic champions" in pretty much any trade sector ~ the aim is to make everyone a bit richer by enforcing one of the first "rules" of capitalism: in a free market the better product at the lower cost will sell the most and everyone will benefit, some by bauilding the better product, others by being able to buy it at lower costs. But, and there's always a but, there are exceptions to even the best rules and one exception ~ large enough for e.g. the Americans and the French to sail giant aircraft carriers through it ~ is "national security." We can "buy Canadian," and, thereby, pour taxpayers' money into otherwise failing industries, when it is for "national security"

What I believe those very senior civil servants had in mind was a programme that would have seen two or three yards build ships, slowly, but steadily, for the RCN and the CCG and then refit those ships when the building slowed even further ...

build ...
            ... build ...
                            ... build ...
                                            ... build ...
                                                            ... refit ...
                                                                          ... build ...
                                                                                        ... refit ...
                                                                                                      ... refit ...
                                                                                                                    ... refit ...
                                                                                                                                  ... build ...
                                                                                                                                                  ... refit ...
                                                                                                                                                                ... refit ...
                                                                                                                                                                              ... build ... and so on, year after year and decade after deacde.

The programme or strategy was designed for industrial "permanency:" to keep the yards working for a very, very long time at an acceptable (in terms of employment) rate of production. It's a very civil service sort of a plan: sensible, achievable, prudent ... and very unpopular with the Navy, which wants everything, right now, and with many politicians, too, who want jobs! Jobs!! JOBS!!! in abundance, also right now.
                                                                                                                                 

 

[MarkOttawa]

CSC Eyes right!

Status Report on Transformational and Major Crown Projects
...
Milestone Date
Project Approval (Definition Phase I) June 2012
Project Approval (Definition Phase II) 2016
Contract Approval (Definition Phase II) 2016
Project Approval (Implementation) Early 2020s
Implementation Contract - Awarded Early 2020s
First Delivery Late 2020s
Initial Operational Capability Late 2020s
Full Operational Capability Mid 2040s
Project Close-Out Late 2040s
...
http://www.forces.gc.ca/en/about-reports-pubs-report-plan-priorities/2016-status-report-on-transformational-and-major-crown-projects.page#P6

Makes never never land look goodl

JSS IOC now 2020 vice 2019, only two:
http://www.forces.gc.ca/en/about-reports-pubs-report-plan-priorities/2016-status-report-on-transformational-and-major-crown-projects.page#P14

A/OPS on schedule, first delivery 2018--but no number given:
http://www.forces.gc.ca/en/about-reports-pubs-report-plan-priorities/2016-status-report-on-transformational-and-major-crown-projects.page#P3

Surely not fewer than five?
https://cgai3ds.wordpress.com/2015/01/16/mark-collins-contract-signed-for-5-or-6-rcn-arcticoffshore-patrol-ships/

Mark
Ottawa

 

[Colin Parkinson]

I wonder if any of the other oversea contract account for this

The remaining $1.2 billion will be spent on infrastructure such as new jetties in the North, contingency funds, ammunition, spare parts and training.

 

[Kirkhill]

Watch what happens when we hit a 50 cent dollar. 

(I guess the good news will be that Ontario and Quebec factories will be humming and we out here in the hinterlands can continue to relax).

 

[Underway]

The programme or strategy was designed for industrial "permanency:" to keep the yards working for a very, very long time at an acceptable (in terms of employment) rate of production. It's a very civil service sort of a plan: sensible, achievable, prudent ... and very unpopular with the Navy, which wants everything, right now, and with many politicians, too, who want jobs! Jobs!! JOBS!!! in abundance, also right now.                                                                                                                             

Not quite (yellow highlight mine).....
The Navy was the one who proposed this type of build system.  The reason was budgetary.  It costs more to have a midlife refit and then continued maintenance per year than to just have  new ship built with maintenance up to midlife and retire the old ship.  The initial numbers in the life cycle cost analysis IIRC back in 2006 (which is a stretch) was a savings of $200 odd million a year for a fleet of 12 ships in a continual build system.  The navy gets new ships more often,  the people get jobs, and the gov't saves money.  Everyone wins except FMF!

All that industrial permanency stuff was to sell it to the government, and quite frankly is not a bad idea in an of itself from the navy perspective (we need domestic expertise and some place for retiring chiefs to work don't we?  ;D).  Whether that math holds with ballooning costs we will see, however those same cost balloon for maint and midlife as well....

 

[jmt18325]

The 50 cent dollar is a ways off now.

 

[MarkOttawa]

Coast Guard has problems too though less severe obviously than CSC--costs also going up:

Canadian Coast Guard Vessel Acquisitions Sliding Right
https://cgai3ds.wordpress.com/2016/03/13/mark-collins-canadian-coast-guard-vessel-acquisitions-sliding-right/

Mark
Ottawa