The Quebec-based Davie Shipbuilding is getting into the U.S. market in a big way. (Photo courtesy Davie Shipbuilding)
By David Pugliese
The Quebec-based Davie Shipbuilding is getting into the U.S. market in a big way. It has announced its intention to make a significant, long-term commitment to the American shipbuilding industry as it establishes a key foothold in the U.S.
Final site and partner selection for the move has still to be announced. But Davie’s initiative caught the attention of the White House which issued a July 29 statement highlighting the move. “Throughout its history, Davie has also supported American shipbuilders on strategic projects such as the U.S. Navy Nimitz Class Aircraft Carriers and Arleigh Burke-class destroyers,” the White House noted in its praise for the company. “Davie seeks to collaborate with U.S. partners to support the growth of American shipbuilding capacity.”
Davie is in the process of positioning itself as a critical link in the production of icebreakers not only for Canada but the world. In November, 2023 it announced it bought Finland's Helsinki Shipyard, which has built over half of the world’s icebreaker fleet.
In addition, the U.S. Department of Defense launched its 2024 Arctic Strategy on July 22, outlining steps the Pentagon will take, in collaboration with allies and partners, to preserve the Arctic as a secure and stable region, Davie officials noted.
The coming investment in the U.S. ensures Davie has a physical presence in America. That aspect is needed for the firm to comply with the American government’s Jones Act, which requires that vessels engaged in domestic transportation be registered and built in the U.S. According to the Shipbuilders Council of America the Jones Act “ensures a robust shipbuilding industrial base that helps ensure the U.S. maintains its expertise in shipbuilding and ship repair that can be utilized by the nation’s armed forces.”
Defence analyst Rob Huebert told CBC that Davie’s goal appears to involve taking the technology it is acquiring from the Helsinki Shipyards and then using that to build ships in the U.S.
Davie noted its future plans are also aligned with the ICE Pact, a trilateral collaboration between the U.S., Canada, and Finland announced on July 11. The ICE Pact will enhance the production of in-demand polar icebreakers in participating countries boosting economic, climate and national security, while supporting shared interests in the contested polar regions.
The arrangement will consist of three initial components: enhanced information exchange between the United States, Canada, and Finland; collaboration on workforce development; and an invitation to allies and partners to purchase icebreakers built in American, Canadian, or Finnish shipyards.
Due to the capital intensity of shipbuilding, long-term, multi-ship orderbooks are essential to the success of a shipyard, the White House pointed out in its statement on the ICE Pact.
The statement, coordinated with Finland and Canada, also included interesting details of how the countries see the pact as working: “The governments of the United States, Canada, and Finland intend to leverage shipyards in the United States, Canada, and Finland to build polar icebreakers for their own use, as well as to work closely with likeminded allies and partners to build and export polar icebreakers for their needs at speed and affordable cost. As yards in the United States, Canada, and Finland make significant investments in their domestic capacity to build these vessels for their own needs, ICE Pact invites allies and partners to purchase vessels from American, Canadian, and Finnish shipyards with experience building polar icebreakers.”
Through diplomatic collaboration, shipyards focused on building polar icebreakers can reach the scale needed to reduce costs for allies and partners that need access to the polar regions,” Canada, the U.S. and Finland noted.
By the end of 2024, the three nations will develop a joint memorandum of understanding that will outline a framework for how this arrangement will be implemented within each country – and a mechanism for adding or including additional allies and partners as participants. The process to develop this non-binding arrangement will be conducted through a regular trilateral consultation process during this period.
In addition, the White House noted that the U.S. Coast Guard is working with Bollinger Shipyards to build the first Polar Security Cutters. The Louisiana-based shipbuilder will continue its effort to deliver new American-made icebreakers to the U.S. Coast Guard’s polar icebreaking fleet. These vessels will be the first American-built heavy icebreakers in over 50 years – and the foundation of the American effort to enhance its surface presence in the polar regions. ICE Pact will continue to support those efforts, the White House added.
Meanwhile, in other industry news, the issue of ammunition supply continues to be problematic. Canada’s domestic defence industry says, despite all the promises to the contrary from the Liberal government, it is still waiting for some real action on ammunition production.
The Liberal government announced in early April a commitment of $9.5 billion over 20 years to accelerate ammunition production in the country. The push will also replenish the ammunition stocks of the Canadian military that had been depleted because of donations of weapons to Ukraine.
Chief of the Defence Staff Gen. Wayne Eyre, who retired on July 18, said several months ago the plan would see some “quick hits” on ammunition production to signal the Liberal’s new defence policy was being taken seriously.
But Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, points out the initiative is now mired in red tape. No major contracts beyond what was already previously anticipated have been let.
Even if industry wanted to bankroll an increase in production of ammunition on its own, the companies wouldn’t be able to get loans from banks to do that because they have no signed orders from Canada, she added.
“The file appears stuck in a hamster wheel of bureaucracy, red tape, and impediments,” Cianfarani said.
