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Dr Andrew Davies
Introductory paper
The 2009 Defence White Paper outlined a significant expansion of Australia’s naval force. There are various strategies that could be adopted to ensure that the industrial capability and capacity required to support the planned naval expansion is in place when required. Essentially the question boils down to the extent to which the government sees fit, or feels compelled, to intervene in the market. There is a range of views on exhibit here, but some common themes emerge: the challenge of delivering the Defence White Paper’s planned expansion of the naval fleet, the need to manage the workflow for industry to avoid a ‘boom and bust’ pattern, and the need for Australian industry to be competitive in a global marketplace. |
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Defence Materiel Organisation
The future of Australian naval shipbuilding—a DMO perspective
A process of reforms and restructuring beginning in the 1980s has seen the Australian government divest itself of much of its industrial infrastructure. The resulting industrial landscape is a more efficient and competitive environment and Australian industry can now confidently bid for the most complex shipbuilding projects. However, delivering the enhancement of Australia’s naval capabilities flagged in the White Paper will require skillful development and management of the workforce. Whether Australian industry will have the capacity to undertake all the programs forecast will be tested through the tendering processes to be undertaken over the next decade. |
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Defence Industry Unit, Dept of Innovation, Industry and Regional Development Victorian Government
The future of Australian naval shipbuilding—Victorian Government perspective
In looking at the future of naval shipbuilding in Australia there is a need to address three challenges. These are:
• supporting an Australian naval shipbuilding industry that is internationally competitive
• ensuring the industry does not face a boom or bust cycle
• letting commercial forces decide how many shipbuilders we can support in this country. |
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Defence SA Advisory Board
Naval shipbuilding: Australia’s $250 billion nation building opportunity
The quest for best practice necessarily involves an evolution of business models used for major naval shipbuilding projects. Improvements to current models might be implemented at two levels. Firstly, the skills base required to build new ships strongly overlaps those required to support them through-life. It is highly desirable to manage work flows in order to retain essential workforce skills. Boom-and-bust models do not work well in a sector that requires high levels of individual and team-level expertise and experience. Secondly, the effectiveness of the Australian market at the prime contractor level needs testing. The performance of Australian shipyards has sometimes been world-class; at other times it has fallen short. But data is patchy and there is no consistent benchmarking. A study that provides a ‘ground truth’ on Australian performance against international standards could provide the base required for rational decision-making. |
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BAE Systems Australia
The future of Australian naval shipbuilding
Defence’s historical approach to procurement assumes that they can procure naval capability when needed. This results in Navy’s procurement program being either boom or bust for industry. In Australia, with a single customer and a relatively small industry base, the competitive tendering of a small number of very high value contracts produces winners and losers for companies and communities, and sub-optimal outcomes for Navy and Government. In this environment, industry will not risk long term investment decisions until there is contractual certainty. Only after winning a contract will the successful company invest in facilities creation or upgrade programs that can be charged to that project. Workforces are mobilised and trained, and ship building processes are created or, in some cases, dusted off and relearned. This reactive and short term approach introduces complexity while the project proper is mobilising, setting the tone for the project and resulting in increased project risk, lower productivity levels and increased cost. |
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Austal Ltd
Can the Australian industrial base construct large naval vessels over the long term on a sustainable basis?
Australian industry has proven itself to be highly competitive in the niche field of aluminium vessel design and construction. However, Australian shipbuilding is not cost competitive for the construction of steel ships. Australia should be cautious about investing in a naval shipbuilding sector that may not be economically sustainable in the longer term. Instead, we should continue to focus on those aspects of shipbuilding where we have proven capability and an existing competitive advantage. Attempts to boost an uncompetitive sector are likely to deliver disappointing results. |
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Henry Ergas
Building the fleet of the future*
Decisions about where production of the future fleet is undertaken should be made on the basis of securing value for money, without giving any special preference to Australian industry, other than where that preference is a way of acquiring defence outputs that are valued in themselves. To the extent to which there are such outputs, they should be separately identified and costed, and should be taken into account only where securing them as part of the acquisition is the most efficient way of ensuring their supply. Rigorous implementation of this principle would likely lead to a substantial increase in the share of vessel construction and refurbishment work undertaken overseas, reducing the gap between naval and other military platforms in terms of their reliance on imports. |
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Dr Mark Thomson
A modest proposal: do our homework
Late last year the South Australian Government’s defence advisory board, DefenceSA, released a discussion paper on the future of naval shipbuilding in Australia. And while the executive summary explicitly favours concentrating shipbuilding in South Australia, the report itself is somewhat less parochial. Indeed, the Paper is a thoughtful and well researched effort which should be mandatory reading for anyone interested in naval shipbuilding policy. |
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