ThyssenKrupp sounds warning on Aussie naval shipbuilding

Australia has the skills and industrial bases to maintain an efficient naval shipbuilding industry despite questions about its viability, defence officials said today. A federal parliamentary inquiry has heard repeated evidence that the next generation of Australian warships will almost certainly be built offshore because of decades of errors in defence policy and the small size of the RAN.

But senior defence officials today expressed confidence in the industry, saying they expected major warships to be constructed in Australia for a long time to come.

“With the onshore build of AWD (Air Warfare Destroyers) and the long term maintenance program for Collins (submarines) and Anzac (frigates) there will be sufficient skills … to meet that requirement and to act as a base for future development programs,” defence capability chief Lieutenant General David Hurley said.

The inquiry by the Senate’s foreign affairs, defence and trade references committee, is examining the cost effectiveness of naval shipbuilding following the government?s decision last year to build three air warfare destroyers in Adelaide at a cost of $6 billion.

In June, the government called for tenders to build two amphibious ships worth $2 billion.

The official in charge of the air warfare destroyer program, Warren King, said the AWD program showed the viability of military shipbuilding in Australia. “I think our industry base is very well balanced against the needs of supporting our defence force,” he told the committee. “We wouldn’t embark on the AWD program as a nation today if it hadn’t been for all the skills set that have been built up and broadly retained in the industry base as a result of Collins, Anzacs and mine hunters.” Defence Materiel Organisation chief Stephen Gumley also said he was confident shipbuilding had a future, but sounded a warning about maintaining the skills base. “At the moment the shipbuilding industry is fairly stretched to find good people,” Gumley said. “We’re hearing examples of one company taking staff off another company with 40% pay rises.

A major defence contractor, however, did not share defence’s optimism when it faced the inquiry today. ThyssenKrupp Marine Systems, the design subcontractor to Tenix for the Anzac ships, said Australia risked losing its design capability unless defence gave greater support to local operators.