Lack of workers to build the Navy's new fleet of ships & submarines, single biggest threat to the $90B endeavour

Posted: 30th Jul

Defence has warned its new ministers Linda Reynolds and Melissa Price that a lack of workers to build the navy's new fleet of ships and submarines is the single biggest threat to the $90 billion endeavour.

Senior officials also cautioned that the two foreign-owned shipbuilders responsible for the lion's share of the work were using different computer systems for their "digital shipyards", adding to the risk for the department and consequently, taxpayers.

The warnings are contained in the incoming government brief, prepared by bureaucrats to bring ministers up to speed on key portfolio issues following the election. The brief was released under freedom of information laws.

Under the Coalition's naval shipbuilding program, 54 vessels have been commissioned to be built in Australia: 12 submarines, nine frigates and 12 offshore patrol vessels for the navy, and 21 patrol boats to be gifted to Pacific nations.

Construction is already under way on the OPVs and patrol boats in Adelaide and Perth respectively but the workload will really ramp up from 2022 and 2023, when the first frigates and submarines start being built in Adelaide.

By 2030, about 15,000 workers will be needed to build and sustain naval vessels, Defence estimates.

In the case of the submarines, frigates and OPVs, the government has selected three foreign designs, adapted for Australian needs.

Defence's warning over the challenge of finding enough workers comes amid industry complaints that the submarine designer, Naval Group, is trying to funnel as much work as possible to French companies,

"The Naval Shipbuilding Program is the largest major capital acquisition program that has ever been undertaken in Australia," the incoming government brief says.

"The program is very ambitious and carries significant risks – particularly for cost and schedule.

"Defence considers workforce development to be the single largest risk to the success of the Naval Shipbuilding Program."

The brief says the frigates and submarines were two of the most complex programs worldwide. The product life management tools used in naval construction brought the "most advanced manufacturing and life cycle management capabilities to Australian heavy industry".

"The near-simultaneous start of construction adds risk in workforce and program management," the brief says.

"Skills learned in shipbuilding – whether CAD/CAM design, cost-effective manufacturing schedules or operating the most sophisticated welding and pipe-bending computer-controlled machines – will naturally migrate to other manufacturing trades within Australia.

"These advantages also bring risks: the near-simultaneous development of two different digital shipyards (Siemens for ships and Global 3D for submarines) will require careful co-ordination across programs within two different companies."

Caution on bidding war

Australian Strategic Policy Institute defence economist Marcus Hellyer said there was a risk the shipbuilding program could find itself losing skilled workers to high-paid mining jobs in the event of another boom.

But he cautioned against getting into a bidding war for labour, saying Defence should instead emphasise the "value proposition" of steady and secure work in shipbuilding against the ups and downs of the mining industry.

"If we have to wait even longer because of workforce shortages here, that is a terrible outcome because ultimately this is about capability in defence of Australia, not jobs in Adelaide, and we could lose sight of that," he said.

Asked by The Australian Financial Review whether she was concerned the government may not meet recruitment and training targets, Senator Reynolds said Defence was continuing to undertake strategic workforce planning activities for the shipbuilding enterprise, including examining the workforce requirements for industry and the Commonwealth.

"We have taken steps to support industry, mitigate risks associated with the availability of suitably skilled and experienced workers, and to stabilise the workforce during transition between build projects," she said.

"The Naval Shipbuilding College is a key initiative ensuring a co-ordinated, national approach to workforce development and skilling across the enterprise."

Source: Australian Financial Review - https://www.afr.com/politics/federal/defence-sounds-warning-on-shipbuilding-workforce-20190729-p52brp