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A South Korean shipbuilder is exiting a training center partnership with Mohawk College and Ontario Shipyards in Hamilton after Canada decided to buy its Navy submarines from a German company rather than Hanwha Ocean.
The remaining partners say Khanwa’s support has been “considerable” but their initiative has not died down.
The news comes the same week that Prime Minister Mark Carney announced that the government had selected Germany’s ThyssenKrupp Marine Systems (TKMS) over Hanwha to build the Navy’s new submarine fleet. The multibillion-dollar defense program is expected to be the largest in Canadian history.
In February, Hanwha signed a memorandum of understanding to collaborate with Ontario Shipyards, a private ship repair company operating in Hamilton, St. Catharines and Thunder Bay, to share knowledge and resources. The company said it will help support the creation of a naval training and recruitment vessel that Ontario Shipyards plans to build. The two companies also entered into a letter of intent with Mohawk to establish a shipbuilding training center.
At the time of the signing, Glenn Copeland, CEO of Hanwha Defense Canada, a subsidiary of Hanwha, told CBC Hamilton that the partnership was worth “tens of tens of millions of dollars.” He did not provide specific information about how each partner would invest in the project.
“Hanwha’s agreement with Ontario Shipyards and Mohawk College was contingent on Hanwha being selected to participate in the Canadian patrol submarine project,” Hanwha Canada spokesman Keelan Green said in an email to CBC Hamilton on Monday evening. The Canadian Patrol Submarine Project is the name of the federal initiative to replace Canada’s aging submarine fleet.
“This whole thing is ending,” Green said when asked whether the partnership could continue or be renegotiated.
Hanwa declined CBC’s request for an interview.
Mohawk, Ontario Shipyards will continue to operate without Hanwha
However, Ontario Shipyards CEO Sean Padulo told CBC his company will continue to work with Mohawk and build the training vessel “based on speculation.” He said that the partnership was only between the business and the college before they invited Hanwa.
Mohawk spokesman Sean Coffey confirmed in an email that there is a “separate agreement” between the college and Ontario Shipyards that will continue to apply.
None of the remaining partners specified exactly how Hanwha’s exit would affect them or what it would cost them.
“Hanwha’s commitment was primarily based on the transfer of knowledge and technology, as well as training, so it is difficult to put a monetary value on this, but it would be significant,” Ted Kirkpatrick, Ontario Shipyards vice-president of business development, said in an email.
“While we are disappointed that Hanwa was not selected as the winner, we are honored to work with them to support their application and have the opportunity to build what we hope will be a long-term relationship,” Kirkpatrick said.
WATCH | Carney makes a statement about the submarine:
Canada to buy up to 12 submarines from German shipbuilder
Prime Minister Mark Carney said Canada is in talks to buy “up to 12” submarines from German shipbuilder Thyssenkrupp Marine Systems. Speaking to reporters in Halifax on Monday, Carney called the $24 billion purchase “the largest in Canadian history.”
Carney said the government would hold several months of negotiations with TKMS to sign the contract.
If negotiations fail, Carney said, “Canada retains the right to designate Hanwha’s KSS-III, currently the standby supplier, as the preferred supplier and enter into negotiations with it.”
About a year ago, the government announced Hanwha and TKMS as the best options for building up to 12 submarines, and Hanwha subsequently announced several Canadian agreements.
The company said in a January press release that it had “further expanded its industrial partnerships in Canada” in support of submarine procurement, citing “a series of strategic memorandums of understanding covering steel, space, artificial intelligence and advanced technologies.”
Part of the company’s unsuccessful bid in Ottawa was a memorandum of understanding reached in January to give Algoma Steel $345 million to establish a structural steel beam manufacturing plant in Sault Ste. Marie and purchasing Algoma products. Hanwha also said it would partner with an armored vehicle manufacturing plant in southern Ontario.
When Padulo and Hanwha Ocean CEO Charles Kim signed a memorandum of understanding with Hamilton at Mohawk College in February, several local politicians, including Hamilton Mountain MP Monica Ciriello, were present and praised the partnership.
Mohawk President Paul Armstrong told CBC Hamilton the three-way partnership will include programming in trades and disciplines including welding, electrical, machinist, marine mechanics, robotics and logistics. He also said that by the time the program is fully operational, it will likely impact 1,000 to 1,200 students across multiple programs.