It’s fantastic to be here today, to deliver my first keynote address since BAE Systems acquired ASC Shipbuilding, and signed the contract to deliver nine Hunter Class Future Frigates to the Royal Australian Navy.
Together, we are embarking on the largest surface ship project in the nation’s defence history, in fact one of the largest in the world today, demonstrating our combined, unwavering commitment to the nation; its security, its economy and its people.
Much has been discussed about building a sovereign shipbuilding capability in Australia. Today, I would like to share with you some thoughts around this topic:
- Firstly, a quick recap of what has happened to get us where we are today
- Secondly, to outline our vision for a sovereign shipbuilding capability
- And thirdly, to summarise some of the key activities we are doing, right now, to deliver that vision.
Recap of where we are today
So, to begin, let’s recap where we have come from, and the foundations that have been laid over recent years.
In 2016, the Australian Government published the Defence White Paper, where it stated its intention to modernise and regenerate the Australian Navy.
The Naval Shipbuilding Plan followed in early 2017. This outlined the government’s plan to invest $90 billion to build a strong, sustainable and innovative naval shipbuilding industry.
The program of work which was committed: 21 pacific patrol boats, 12 offshore patrol vessels, 9 future frigates and 12 future submarines, is just the beginning of this momentous opportunity.
The competition and selection process for these projects has attracted much interest and attention. This is important; our Navy deserves the best capability. Similarly, Australia deserves the benefits associated with delivering this capability.
And, on December 14 last year, we signed the Head Contract to build nine frigates for our Navy. These frigates are based on the UK Type 26 design and will be some of the most advanced submarine hunting vessels in the world.
We also completed the acquisition of ASC Shipbuilding, which is now a subsidiary of BAE Systems Australia. And if that wasn’t enough, we signed a sovereign capability deed. A critical document that sets out the vision for a continuous sovereign shipbuilding industry and the steps to achieve it over coming decades.
These commitments lay the foundations for BAE Systems Australia and broader industry to work collaboratively with the Federal Government and Defence and to play our part in establishing a sustainable shipbuilding industry for our nation.
The process to get us here was ambitious. Going from a down select of preferred tenderer in June, to the head contract less than 6 months later, for a contract of this complexity, was a new benchmark in the global defence industry.
Achieving this result required an extraordinary team effort. The Department of Defence, the Department of Finance, the Navy, ASC, and BAE Systems had to work together in a manner very different to traditional approaches. We succeeded. And we are, and should be, very proud of our achievement.
And not only was the Type 26 design successful in Australia, but it was also recently chosen as the design for the Canadian frigate program. Meaning, we all have a generational opportunity to build a truly Five Eyes frigate.
What is the vision of a sovereign shipbuilding capability
So let me put some context around our vision of this growing sovereign capability. Let’s imagine, it’s the ADM conference in 2030, and yes, Kath is still hosting…
The first Hunter Class frigate is in service with the Navy and performing superbly. The collaboration between the Australian, British and Canadian navies is building much anticipation as to the prospect of joint operations. The benefits of commonality and information sharing across the Five Eyes Nations has helped drive closer cooperation between the three Navies.
The shipbuilding enterprise is in full swing, with the Hunter program contributing more than one billion dollars annually to the Australian economy.
The Osborne shipyard in Adelaide is a thriving production facility, and is viewed globally as the best warship-building yard in the world. Some three thousand people are employed directly to deliver the Hunter program, with a further two thousand employed across the supply chain. Three more frigates are in production, with cut steel on the next ship commencing imminently.
As the Hunter fleet is being built in three batches, with each batch representing further updates to the capability, our Australian engineering team is well established, having completed the design work for the second batch of ships. That engineering team is now working in collaboration with our UK team, to design the replacement for the Air Warfare Destroyers for both the UK and Australian Navies. Another collaborative Five Eyes program. A true sovereign design capability now exists in Australia.
Full design authority for the Hunter Class has been transferred from the UK to Australia, allowing all maintenance, upkeep and upgrade of the in-service ships to be carried out in Australia, by our Australian workforce.
Maintenance and support of the fleet is world class. On-board ship diagnostics provide data that ensures the frigate is operating as the best in class for availability. Upgrade planning is so much smoother, as the digital design means we have a full digital twin of the frigate’s exact build configuration and can plan maintenance and upgrades with real-time data.
Across the supply chain, much activity continues. The combat system is being delivered in a benchmark model of cooperation across Australian suppliers. In the propulsion community, we are delivering some of the most complex systems on any warship.
Indigenous businesses have been established in the defence industry and are now actively and positively contributing to delivering the Hunter program. This is encouraging young indigenous people to set themselves realistic and achievable ambitions to contribute to the long-term development of our sovereign capability and the prosperity of the nation.
Many more suppliers across Australia have established long-term, sustainable businesses off the back of the Hunter program. This program and the long-term outlook has provided stability and surety of work that has enabled them to invest in developing new products that can be used on future Australian ships and exported around the world.
From a people perspective, shipbuilding is seen as an attractive, high technology industry that people want to join. Universities and academia are working collaboratively with the Naval Shipbuilding College to provide a continuous pipeline of highly skilled talent. These are for engineering, systems integration, program management, production and many other necessary skill sets.
There is a world-leading apprentice and graduate program in the shipyard, as well as in other major suppliers and partners supporting the enterprise. The program is collaborative and allows young people to gain experience across the build yards and suppliers. They also have opportunities to work in partner nations in the UK and in Canada. It’s all helping to make the industry feel attractive and able to support their career ambitions.
And we have a highly active business development team looking at opportunities for export outside of Australia. This team represents the Australian shipbuilding enterprise and is chasing whole ship build, system supply and component opportunities for Australian businesses. It is proactively supported by the Commonwealth and Royal Australian Navy.
And yes its 2030 and the English cricket team are preparing once again to secure the Ashes Test series!
So what are we doing today to build the foundations for the vision
So now let’s turn to what we are doing right here and right now. Visions are exciting. But without a plan to realise them, they can so often be no more than a dream.
Today we are building that plan. It will take time, but together today we start with a shared view, with the Commonwealth and the Navy as to what ‘success’ could look like.
I truly believe the most important factor in realising our vision for sovereign shipbuilding capability will be on how we collaborate across industry, government and the Navy. The capability will not all rest in BAE Systems, nor should it. It will vest in many of your companies here today. So we all have to work collaboratively over the coming years to realise this bold ambition.
The nature and way we collaborated to deliver the head contract in such a short period of time was amazing. It has created a framework of trust that will allow us to evolve this vision over coming years. The contract does not try to define all the answers today, but it creates a framework and an environment of how we are going to do this.
We are working closely with government and the Navy to deliver this vision. And collaborative forums have already been established with UK counterparts in the Navy and government to embed a long lasting partnership. Now that Canada has moved to contract for its frigates, I am confident they will also join the collaboration.
At the program level, in Adelaide, we have already established a Hunter program office. This is home to nearly 100 people today and is growing on a daily basis. And it’s not just BAE Systems employees there. Our partners are working with us. It was fantastic to welcome the Saab and Lockheed combat team members at the beginning of the month.
We continue to engage with the broader supply chain. In December, hundreds of people, including representives from 100 Australian SMEs and 30 OEMs, attended a workshop in Adelaide which provided them an opportunity to engage and potentially collaborate on future opportunities on the program.
We have already prequalified more than 700 Australian companies to work on the Hunter program, and four Australian suppliers are already delivering into the UK Type 26 program.
The ASC Shipbuilding acquisition is realising benefits today. The knowledge and skills gained on the AWD program by the team is being used to help shape the future build plans for Hunter, and ensure we build on lessons learned, both positive and negative.
And of course the new shipyard at Osborne continues to take shape. This will be a superb facility, I would go as far as to say it will be the best in the world, and will be complete by the middle of next year.
So, in conclusion, the government has given us all a generational opportunity to not only build the Hunter Class frigates, but to build a shipbuilding enterprise that will be sustained for generations to come.
We are all tasked with ensuring we use this opportunity wisely.
We have the opportunity to build an industry that can design, build, integrate and maintain complex ships in Australia with an Australian workforce for centuries to come. In Hunter, we will build the best and most sophisticated anti-submarine warship in the world. We will do it at Osborne – one of the best shipyards in the world – and we will do it with an Australian workforce.
The commitment of BAE Systems is to build this sustainable industry collaboratively.
The program is complex, carries much risk and will create both challenges and opportunities over the coming years. Many of which we haven’t even thought of today. But if we work collaboratively, always thinking of the best for the program, we can – and will – make this vision a reality.
We will build a capability in Australia that the nation is proud of. A capability which the rest of the maritime world looks on with envy.