German Metalworkers Union advocates for merger of German shipyards
German Shipbuilding Leader Calls for Consolidation and State Involvement
Daniel Friedrich, head of IG Metall Küste, has endorsed the merger of German shipbuilding companies to create a "national champion" and urged the government to participate in the industry. This move aims to secure the international competitiveness of German shipyards.
Friedrich advocates for a consolidated company, backed by state support, that would dominate the European market. He suggests a government stake of at least 25.1% to safeguard national interests.
IG Metall Advocates for Strong German Navy Sector
The shipbuilding industry is viewed as a key sector by IG Metall Küste, with the potential for expertise and value creation to migrate abroad if foreign competition enters the German shipbuilding industry. Friedrich stated, "Our goal should be to have a national champion that is strong enough to integrate into Europe and not be integrated by it." This sentiment is particularly relevant for securing regional jobs, according to Friedrich.
Prominent German shipbuilding firms include Thyssenkrupp Marine Systems (TKMS), the Luerssen Group, and German Naval Yards (GNYK). Friedrich stated that competing with significant Italian and French marine conglomerates like Fincantieri and Naval Group is challenging due to their state support, which provides them with easier access to loans and financial resources for new contracts.
Geopolitical and Economic Factors Driving Consolidation
Consolidation in the German shipbuilding industry originates from a multitude of strategic, economic, and geopolitical factors. These include increased defense budgets across Europe, rising military threats, the rise of Chinese naval power, and the relative withdrawal of American protection. This political and financial shift places greater emphasis on defense sectors as critical for national and regional security [3].
In addition, the German shipbuilding industry has experienced a decline in revenue at a compound annual growth rate (CAGR) of 1.4% over the past five years, reaching approximately €5.7 billion in 2025 [2]. This downward trend necessitates consolidation to improve efficiency, scale, and global competitiveness.
Implications of Consolidation
Consolidation initiatives aim to enhance the competitiveness and industrial capacity of German shipbuilders through economies of scale, improved order books, and better resource allocation. This would enable them to take on large, complex contracts like the F127 frigate program and maintain a leadership position in advanced naval technologies [1][5].
Closer cooperation within Europe’s defense industries is also facilitated, fostering joint development and production programs that are vital for strategic autonomy in naval defense capabilities [3]. State involvement in major shipbuilding firms is gaining traction to ensure long-term stability and alignment with national security interests, as exemplified by the debate surrounding state ownership of TKMS [5].
Sustainability and lifecycle management are becoming an essential part of the industry strategy, as evidenced by the approval of Germany’s first large ship recycling facility [4].
Competing Marine Companies in Germany
ThyssenKrupp Marine Systems (TKMS) is the leading and most prominent player in the German shipbuilding industry. The company is a global leader in conventional submarines and is actively involved in frigate construction. TKMS is aggressively expanding capacity, modernizing old shipyards, and partnering with other European defense and shipbuilding groups to bolster its market position [5].
While not German, Saab Australia is a strategic partner to TKMS in frigate development, highlighting the international cooperation that drives consolidation efforts [5].
Other German shipyards and marine firms are also consolidating or merging to strengthen their competitive standing in the international marketplace.
In summary, the consolidation in the German shipbuilding industry is predominantly driven by strategic defense, economic, and geopolitical factors. This process seeks to create resilient, competitive shipbuilding entities capable of meeting advanced naval demands and contributing to European defense autonomy, with TKMS at the center of this transformation [5]. The establishment of new facilities such as ship recycling plants indicates a comprehensive industrial strategy that addresses environmental and economic considerations alongside consolidation efforts.
The consolidation in the German shipbuilding industry, driven by the need for increased national competitiveness and defense autonomy, is proposing a dominant European entity in the sector. This consolidated company, with a potential government stake of at least 25.1%, would be ideally positioned to integrate into European defense industries and not be integrated by them.
Given the significant financial support and resources enjoyed by foreign marine conglomerates like Fincantieri and Naval Group, the German shipbuilding industry needs this consolidation to stay competitive, with the objective of taking on large, complex contracts like the F127 frigate program and leading in advanced naval technologies.
