Hanwha’s improved submarine bid could help keep Canada’s auto industry afloat. AMPA president Flavio Volpe said in an interview with CTV News on Wednesday that Canadian auto plants are making 30 per cent fewer vehicles this year because of U.S. tariffs. But the partnership with Hanwha has the possibility of injecting new life into stagnant auto plants and creating thousands of jobs.
But there’s a huge caveat.
The deal is contingent on Hanwha being awarded the massive contract to build up to 12 diesel-electric submarines for the Royal Canadian Navy (RCN).
After submitting their initial requests for proposals in March, Hanwha and its German competitor ThyssenKrupp Marine Systems (TKMS). were asked by the federal government to sweeten their bids. The winner is expected to be chosen in June.
Under the terms of the agreement, vehicle parts manufacturers would come together under a consortium named Project Arrow Defence. Volpe emphasized that this venture would be “51 per cent Canadian owned, with a Canadian CEO.”
What is ‘Project Arrow Defence’?
The consortium would build five types of Hanwha vehicles that are estimated to be worth $10 billion over two years.
“It’s equivalent activity to bringing one fully functional auto assembly plant here,” said Volpe.
He added that it took about a week and half to negotiate the joint venture with Hanwha. The deal came together at 2 AM Wednesday morning after the agreement was approved in both Seoul, South Korea and Toronto, Ont.
A news conference announcing the partnership took place eight hours later in an Ontario manufacturing plant.
In the memorandum of understanding, Hanwha would build five of its armoured vehicles in Canada, including the K-9 Thunder self-propelled Howitzer, which looks like a small tank.
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