Shipbuilding industry ‘valley of death’ cannot be avoided, says Defence Minister Kevin Andrews

THE shipbuilding industry’s feared “valley of death’’ is now inevitable, as staff are laid off at the end of major projects before more work becomes available, Defence Minister Kevin Andrews has warned.

But Mr Andrews has held out hope that when the air warfare destroyer project nears completion, South Australian job losses could be minimised by the creation of new opportunities when new navy frigates are commissioned.

The defence industry has been warning the government for years about the increasing risk of a “valley of death”, a scenario where the gap between large contracts leads to the industry’s demise.

Defence Teaming Centre chief executive Chris Burns said design engineers were already being laid off by the ASC at Osborne.

The industry says it has already entered the valley, and the engineers are the first of what could be thousands of jobs to go.

The construction of the three Hobart Class air warfare destroyers is expected to be fully completed in about 2019.

Mr Andrews will on Tuesday tell a naval shipbuilding conference that there will inevitably be a lag between the end of the project and possible work on the construction of up to eight new frigates.

“The gap between completion of the AWD project and the start of the Future Frigate project — Labor’s valley of death — cannot be avoided and no decision this Government could make now could stop it,’’ Mr Andrews will tell the Australian Strategic Policy Institute conference in Canberra.

“Those decisions needed to be made during the six years in office of the previous Labor Government.’’

About 3000 people across Australia are directly employed on the AWD project.

In South Australia, about 27,000 people are employed directly and indirectly in the defence industry.

Mr Andrews will say that though it is too late to avoid the valley of death, “its impact can be lessened’’.

‘“The size and complexity of the Future Frigates dictate that decisions made on that particular project go to the very heart of this Government’s commitment to ensure a sustainable Australian naval ship building industry,’’ he will say.

A decision on the commissioning of the Future Frigates is expected to be announced when the government launches a defence policy White Paper later this year.

The government was also progressing other shipbuilding projects that would create opportunities for design, building and sustainment work.

Shipbuilders at Williamstown in Melbourne and Newcastle in NSW have also warned that they will soon be forced to retrench thousands of workers.

Mr Burns will on Tuseday help launch a national campaign in support of Australia’s defence industry.

The “Australian Made Defence’’ campaign will call for governments to adopt a 30-year bipartisan strategy which would enable a continuous shipbuilding program and the further development of Australia’s advanced manufacturing and complex engineering capabilities.









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