2000 jobs at risk in Air Warfare Destroyer project chaos

UP to 2000 naval shipbuilding jobs could be lost across three states next year — a third of the entire industry — according to a confidential report into the troubled Air Warfare Destroyer project.

Such a sudden loss of shipbuilding expertise across Victoria, NSW and South Australia would seriously damage Australia’s strategic capability, it says, calling on Defence to examine the “controlled extension” of the AWD project to prevent the need for mass sackings.

The findings are in a draft copy of the report by former US Navy secretary Don Winter and former Australian shipbuilder John White commissioned by the government into the $8.5 billion AWD project. The government has refused to release the report.

As revealed in The Australian yesterday, efforts to implement the report’s recommendations are bogged down by infighting between government departments and defence contractors.

The leaked draft, obtained by The Australian, warns “serious” job losses are looming as a result of gaps between major naval shipbuilding projects.

“The so-called ‘Valley of Death’ is real and will be reached in the 2015 time frame with the ¬potential loss of some 1500-2000 skilled employees across three states unless alternative plans are implemented,” it says.

“Time is of the essence if this situation is to be alleviated, not only in the interest of the various industry participants, but also to avoid the need for another costly start-up program and a serious near-term reduction in an ¬important strategic capability.”

More than 1000 jobs could be lost next year at BAE Industries’ Williamstown shipyards in Melbourne and 780 at Forgacs in Newcastle in NSW when work finishes on block construction for the three AWDs.

Naval shipbuilding in Australia has been plagued by the periodic loss of skills and expertise as a ¬result of gaps between big projects, ¬resulting in costly mistakes when new projects are forced to employ an inexperienced workforce.

The Winter report says the best way to ensure the survival of the industry is to slow the completion of the AWD project and speed up the plan to build a new fleet of frigates to replace the Anzac ships, -establishing a rolling employment program from one project to the next. “This calls for an -urgent review, rescheduling and reallocation of (AWD) block construction,” the report says.

The “continuous build of major naval combatant ships” in Adelaide, supported by other shipyards, is “the most cost-effective solution to the ongoing development of Australia’s essential naval shipbuilding and major ship repair capabilities”.

The project to build three AWDs has been plagued by problems and is almost two years late and about $600 million over budget. The report says the government, the ASC, subcontractors BAE Systems and Forgacs, as well as the ship’s Spanish designer Navantia, must share the blame for problems on the project, which ¬Defence Minister David Johnston has called “a disgraceful mess”.

The report found that the structure of the AWD Alliance — ASC, the Defence Materiel Org¬anisation and Raytheon Australia — was flawed from the start, with no one organisation assuming prime responsibility.

ASC lacked the capability and management to handle a project as large and complex as the AWDs and BAE and Forgacs had struggled at times with building AWD blocks, it says.


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