Future submarine jobs in Adelaide have been thrown into doubt in the wake of an apparent U-turn by French company DCNS on how much work will be carried out locally, senator Nick Xenophon says. DCNS last night confirmed to a Senate committee it is not planning to directly involve Adelaide-based ASC in the construction of Australia's next fleet of submarines.
The company's interim chief executive, Brent Clark, told the committee DCNS had "no formal agreement" with ASC and that the company intends to "absorb" ASC workers. "At this stage ... we would be looking at a transition of the ASC workforce to DCNS," he said. "We would be assuming we would absorb them."
Last year, DCNS secured the $50 billion contract to build 12 new submarines for the Navy.The same day the deal was announced, CEO Sean Costello — who has since quit — said "over 90 per cent" of the build would occur in Australia. But last night, DCNS did not recommit to that target, telling the Senate committee it was too early to say whether it could be met. "I don't want to give this committee a figure," Mr Clark said.
Senator Xenophon described the evidence as "disturbing" and said it could mean Australian jobs would be lost."The figures are now rubbery — they are talking about a 60 per cent figure," he said. Senator Xenophon said the company's response also raised questions about long-term plans for deep-level maintenance of the existing Collins submarine fleet — work that is currently carried out in Adelaide. He called on the Federal Government to clarify whether that would continue to be the case.
"Right now there are 1,400 South Australian-based jobs at stake in terms of the deep-level maintenance for the Collins-class submarines," he said. "There doesn't appear to be any plan for that to continue with the future submarines, and that could mean 1,400 jobs being shipped over to Western Australia."
'Ironclad' promise 'appears to be jettisoned': SA Government
South Australia's Defence Industries Minister Martin Hamilton-Smith said DCNS appeared to be backing away from its promise to complete 90 per cent of the submarine build in Australia "The [interim chief executive] of DCNS is speaking a different language," Mr Hamilton-Smith said."The 90 per cent promise appears to have been jettisoned [and] that's very worrying." "One would have hoped that the Federal Government would be writing into the contracts with DCNS that 90 per cent promise, or at least coming back to us and explaining why that can't be achieved, given that it was an ironclad promise." Mr Hamilton-Smith said it was not just ASC, but workers in the supply chain, that stood to lose. "If we're only going to get 60 per cent, or 50 per cent, or 40 per cent, that's a lot of jobs that will be going off overseas to France or elsewhere, and not [stay] in Australia," he said. In a statement, ASC said it looked forward to working with prime contractors DCNS and Lockheed Martin, as well as the Federal Government. "ASC anticipates growing its workforc significantly in coming years as it maintains the Collins-class submarine fleet as well as meets increased demand for future submarine capability in Australia," the statement said.
"ASC's maintenance of Collins-class submarines will be delivered through the In Service Support Contract, while current and future support for the future submarine program will be delivered under appropriate commercial agreements."