Australia’s shipbuildingfuture hangs in the balance as Federal Government issues final warning on AirWarfare Destroyers
- by:Political Editor Tory Shepherd
- From: The Advertiser
- June 04, 2014 10:38PM
SOUTH Australia faces the“devastating” loss of thousands of jobs and billions of dollars if theshipbuilding industry does not improve its output.
The Government on Wednesdaysaid the Adelaide-based Air Warfare Destroyer Alliance was on its last chanceto turn things around after delays in producing the warships and a Budgetblowout of more than $300 million.
Defence Minister DavidJohnston sent a “very clear message” that the multi-billion-dollar FutureFrigates program was in danger of being sent overseas as he announced a seriesof measures to fix the AWD project, including “urgently” sending a newmanagement team into ASC.
ASC is one of the threecompanies making up the Alliance that is building the three ships, which aretwo years behind schedule. The others are Raytheon Australia and the DefenceMateriel Organisation.
“If we can’t fix (the $8.5billion AWD project), (the Future Frigates project) is something that willcertainly be in jeopardy because I don’t believe the government will support anenterprise that cannot deliver productively,” Senator Johnston said.
“We will not have a projectrunning over time, running over costs … we’re going to take immediate action.We must do better.”
Air Warfare Destroyer beingbuilt at Osborne. Picture: Roy Van Der Vegt
The Defence industry said ifthe frigates project was lost up to 2500 jobs and a billion dollars a yearwould go with it.
“It would be devastating forthe state if we lost our shipbuilding capability,” Defence Teaming Centre chiefexecutive Chris Burns said. However, he added that he was optimistic thatshipbuilders were up to the challenge of fixing the AWD program.
The core of the problems withthe project, he said, were the peaks and troughs caused by a lack of continuousprojects, which meant skills and jobs were lost and hard to regain.
The Government yesterdayreleased a summary of the Winter report — a review led by former US Navysecretary Don Winter — outlining problems with the project from its initialprogram to the Alliance’s ongoing performance and suggesting a strategy toimprove productivity and put an experienced management team into ASC, althoughcurrent executives will remain in place.
ASC chair Bruce Carterwelcomed the review and said the project had challenges from the beginning, butthat they would do what was necessary to “get the best outcome”.
“There had to be changes tothe way that this is managed … there has to be improvements from everyoneincluding ASC,” he said.
“The one thing that must notbe lost is that the actual work being done down there … is first class.”
ASC is hoping to get acontract for the $40 billion Future Submarines project, which Senator Johnstonsaid was a “different kettle of fish” to the ships.
State Defence IndustriesMinister Martin Hamilton-Smith said the Commonwealth was right to take remedialaction. Consistent work for the shipbuilding industry was important for Defenceand the state, he said.