Politique Internationale — Is the naval industry like any other? Or does its link to defense issues set it apart?
Pierre Éric Pommellet — We’re a dual industry, with two pillars: defense and civil. Some 57,400 people work under this dual banner, for total sales of between €15 billion and €16 billion. Of course, the coasts and port areas immediately come to mind, but our geographical coverage is very broad, with several bases set up in the heart of territories, such as the Île-de-France region. In some regions, our industries account for over 10% of industrial employment, serving “made in France” production.
From a historical perspective, we’re several hundred years old: for example, a company like Naval Group was founded four hundred years ago. For the sector, the 1970-80 period brought about an in-depth reorganization after the manufacture of large civil vessels was largely relocated to Asia. We are still active in many segments: in the military sector, our industry covers the whole range of vessels, from nuclear-powered craft (submarines, aircraft carriers) to the broad spectrum of frigates (FREMM and FDI), corvettes, patrol boats and combat drones. Apart from United States, China and Russia, few countries like France can guarantee such sovereignty in its production activities.
In the civil shipbuilding sector, Chantiers de l’Atlantique is particularly emblematic for the construction of ocean liners. At the same time, service vessels and fishing boats represent two significant areas of activity. Innovation is central, as demonstrated by the cargo sailboat model developed by Piriou for TOWT. Are we an industry like any other? The sea is a world that arouses passions like no other. Working in the naval industry gathers passionate people. We can’t stress that enough. And, in the case of naval defense, it has the added responsibility of protecting the security of a nation, its territory, its people and its interests.
P. I. — What are the consequences of new conflicts (Ukraine, Red Sea) for the naval industry? Has the industry’s view of operational schedules and/or major industrial deadlines been affected?
P. É. P. — In our industry, the short term and the long term are closely intertwined. Take nuclear-powered ballistic missile submarines (SSBN), for example, whose third generation we are currently preparing. The design phase takes between ten and fifteen years, followed by construction in ten years, and the lifetime of the vessel is around forty years. In short, with this multi-decade trajectory in our sights, we are already projecting ourselves into the 22nd century. On the other hand, with tensions in the Red Sea, time has accelerated: for the first time in many years, a French frigate has used its anti-aircraft weaponry against a non-state adversary. In this context, it was necessary to speed up the construction of certain defense systems, more specifically to combat enemy drones. In this case, we’re only a few months away from the end of the road. More generally speaking, the emergence of new technologies is a formidable project booster.
P. I. — How is your industry coordinated? Can we speak of an integrated industry approach? If so, how do the different players interact?
P. É. P. — The integrated industry approach is a reality because there is no clear-cut, definitive separation between the civilian and military sectors. An innovation registered in one field may well have applications in the other. Not to mention the companies that operate jointly in both spheres. Naval and maritime activities cannot be
separated: for example, both the military and scientists are interested in the seabed, and we can pool our approach to protect resources.
Among its missions, Gican is responsible for driving the development of the industry: our strategic industry committee is at the forefront in this respect. Its work testifies to the vitality of the economic fabric where major groups are in close contact with smaller companies: the former are the main industrial prime contractors, while the latter represent a wide range of subcontractors - 18% of which are ETIs, 56% SMEs and 18% VSEs. A crucial issue such as the energy transition clearly illustrates the joint mobilization of all players. The aim is to identify technological solutions that can be deployed on a large scale.
P. I. — While we’re on the subject of crucial projects, what’s your assessment of the major naval shipbuilding programs? Are they sufficient, or do they need to be optimized?
P. É. P. — We are at a turning point: the French Navy, together with the DGA, is engaged in a major fleet renewal effort, supported by the Military Planning Law (LPM). It involves almost every type of vessel: SSBN was mentioned, but there are also nuclear attack submarines (SSN), different types of frigates, patrol boats and support vessels. And, of course, the new-generation aircraft carrier. You’d have to go back to the 1990s to see modernization on this scale.
However, to remain competitive, the shipbuilding industry’s business model requires export sales. For now, our companies work on 60% of their commitments for the French market. The aim is to move towards a 50-50 balance.
Do I need to mention that exports give our industries prime visibility? They attest to a know-how that has a direct impact on recruitment. Young people need to see themselves working for dynamic companies that are open to the world and show it in concrete terms.
P. I. — Between the groundswell of fleet modernization and the acceleration of certain equipment programs in the wake of current conflicts, do companies have enough manpower?
P. É. P. — I was talking earlier about the passion that surrounds our businesses. The wealth of our industry is first and foremost a human wealth, with an incredible density of skills and expertise. This passion is a powerful driving force, as we plan to recruit 30,000 people over the next ten years, including 13,000 new positions - with 1,300 assignments to be orchestrated in the immediate future. The war in Ukraine and other conflict zones, in addition to the need to renew our capabilities, presents us with a real industrial challenge. To meet this challenge, we need to expand our teams.
It’s not the easiest thing to do. The war for talent is real, with the scarcity of qualified candidates and areas that are short- staffed – over thirty in our industry. Raising awareness among the next generation of the attractiveness of naval careers has become a priority: doing so requires our implementation within the training courses. Hence the creation in 2018, on the initiative of manufacturers and regional authorities, of the Campus for Naval Industries (CINav) to contribute upstream to skills management. The CINav is also involved in the maritimization of a number of training courses, and provides accreditation for certain curricula.
P. I. — To what extent are you a high-tech industry? More generally, is artificial intelligence revolutionizing your industrial world?
P. É. P. — We face a large number of technological challenges: artificial intelligence, coexistence of sea and space in a context of confrontation, all aspects of cybersecurity... We have no choice: we have to work and develop relevant solutions to provide answers to these new fields of conflict. This calls for innovative processes, such as the Perseus-labeled approach organized by the French Navy and the DGA. In brief, it’s a short-loop process; it’s like being in a laboratory, with a range of trials and tests, with no constraints of standards, no circumscribed fields nor future assignments for increased efficiency. One example, the construction of cyber by design ships - where technological developments are an integral part of building design, not something to be added on - highlights this desire to be always at the cutting edge.
P. I. — For the exports you’re looking to develop, how do you ensure that your added value is protected and that there are no technology transfers to the detriment of the country’s sovereignty?
P. É. P. — First and foremost, there is a precise and rigorous framework: the Interministerial Commission for the Study of War Materiel Exports (CIEEMG) governs every single transaction. It does so in the light of our country’s international commitments, in particular the European Union’s Common Position of 2008 and the Arms Trade Treaty of 2013, which are essential guidelines. Ultimately, any arms sale by France constitutes an exceptional regime.
P. I. — In view of all this information, how does the French shipbuilding industry compare with that of other major countries? In which areas are the main developments expected?
P. É. P. — We are leaders in Europe, a continent where competition is fiercest, as it is home to the majority of naval defense actors, such as Germany, Spain, Italy, Great Britain and the Netherlands. The list is not exhaustive, as over the years, additional rivals have emerged in most regions of the world. Turkey, Israel, South Korea and China, to name a few, are now able to position themselves on the export market.
Future developments will take into account the evolution of naval operations, which almost systematically combine manned vessels with autonomous surface, submarine and airborne vehicles. There is a greater need for these devices, despite the fact that many countries have expertise in this field, or are seeking to acquire it. France is well placed with export references, but we still need to strengthen our position.
P. I. — The energy transition is seen as the main vehicle for a sustainable development policy. How does the naval sector contribute to the fight against global warming?
P. É. P. — Our roadmap includes ambitious targets, with less than 40% greenhouse gas emissions by 2030 compared with 2008, and a second major phase aiming for carbon neutrality by 2050. These milestones require us to optimize our operating methods at every level of our industries. Transportation plays a key role: all types of buildings now have much more efficient energy systems at their disposal. Technological advances are benefiting all segments, from traditional applications seen in vehicle propulsion to less explored fields such as hydrogen.
Today, not only do ships consume less fuel to move, but they also travel much more efficiently: technological equipment makes it possible to plot routes with accuracy, particularly in periods of heavy weather.
P. I. — Euronaval, an event directly organized by Gican, is being held in Paris this autumn. What are your expectations of this event?
P. É. P. — Euronaval is quite simply the world’s leading naval defense show. Some 450 exhibitors and 150 delegations are expected to attend. All those who count in - and for - our industries will be here: it’s a unique opportunity to gauge the sector’s weight and achievements, measure the stakes in real time, hear from the experts... Euronaval is not the place to finalize contracts, most of which are, incidentally, accompanied by a certain discretion. However, the show’s accelerating effect is undeniable. On the other hand, the players come together in a unique setting, for meetings that often foreshadow the collaborations - and cooperations - of tomorrow.
P. I. — The naval industry faces a recurring obstacle: the reluctance of investors to support its development. What countermeasures do you have in place?
P. É. P. — This is not a new phenomenon, but it has grown in recent years. Banks, investment funds and insurers are using ESG criteria (environment, social and governance) to tighten the conditions for financing our companies. This can lead to tense negotiations, an avalanche of procedures, disproportionate requirements, or even a petition of principle to stop any relationship dead in its tracks. These approaches become problematic in the case of exports, where bank guarantees are sometimes very difficult to obtain. Yet the defense industry is part of sustainable development, as it is the prerequisite for a sustainable society.
We’re not standing still. For example, we believe it is legitimate for the European Investment Bank (EIB) to finance defense projects, which is not possible at the moment, since its statutes forbid it to do so, even though war is on Europe’s doorstep with the Russian-Ukrainian conflict. Of course, we’re not going to celebrate the outbreak of this conflict, but it’s clear that it’s starting to make people think. Gican’s message about the need to strengthen our security is being echoed. One can no longer ignore the concept of sovereign defense in an environment of such severe tensions Gican’s role is essential to promote the war economy referred to by President Emmanuel Macron.