Australian shipbuilder Andrew Bellamy says Australia should be able to build its own warships and rejects the view that they inevitably will be late and cost too much. He should know.

In Mobile, Alabama, over the weekend, he witnessed the “christening” of the latest of 10 combat ships his company, Austal, is building for the US Navy.

About 15 per cent of the vessels in the 300-ship US fleet will be made by the West Australian company that started life three decades ago building crayfishing boats.

While Australia’s shipbuilding industry struggles with delays, cost overruns and uncertainty about its future, Austal is a success story that has sailed largely under the radar.

It employs more that 4000 people in the US, about 500 in Perth and 200 in The Philippines. It has contracts worth more than $5 billion to build 21 vessels for the US Navy — 10 littoral combat ships and 11 joint high-speed vessels — at its US yard. That number is expected to increase.

Mr Bellamy, Austal’s chief executive, told The Australian he would consider buying the troubled shipbuilder ASC from the government and promoting Austal as a possible partner for a foreign designer and builder if some or all of the navy’s new submarines were to be built in Australia.

The struggling Air Warfare Destroyer program was rightly receiving a lot of attention. “But we don’t believe the issues in that program lie in the workforce,” he said. “We fundamentally believe that skilled Australian labour building ships in the right infrastructure, and management and incentives, can be as productive as anywhere else in the world.”

Shipbuilding had to be seen as a strategic industry for the nation, he said.

The latest Australian-designed littoral combat ship to be completed by Austal at its US plant was formally named the USS Gabrielle Giffords after the congresswoman who survived being shot in the head by a gunman in Tucson, Arizona, in 2011.

The USS Gabriel Giffords is a sleek, futuristic and predatory-looking warship, 127m long and capable of well over 40 knots.

Ms Giffords, who is still recovering from her wounds, told those gathered for the launch that the new ship was wonderful. She thanked Austal and its staff.
“She’s stealthy,” Ms Giffords said. “She will defend freedom around the world. Go navy!”

Captain Mark Kelly, Ms Giffords’s husband and a former astronaut, said the vessel represented the ships of the future and he was not surprised it was designed in Australia.

“Australia makes great stuff,’’ he said. “Australia’s an innovative country and we don’t mind at all. We’ll find who’s making the best ship and we’ll go and buy it.”

Assistant Navy Secretary Dennis McGinn said the ships were so versatile the US Navy considered them its Swiss Army knife. The first of the ships was already deployed with the US fleet. “It just gets better and better,’’ he said.

Littoral combat ships are fast warships which can operate anywhere in the world and carry enough firepower to defend themselves in hostile waters.

Wide, stable and roomy, the tri-hulled vessels are built from aluminium, which makes them much lighter than steel-hulled ships. It also means they require less fuel and have a range of 3500 nautical miles.

Austal is the only foreign company building warships for the US. Through its American subsidiary, Austal USA, Austal is playing a key role in an emerging US naval strategy to ensure the flow of global trade by protecting “choke points’’.

The US priority is to keep open narrow stretches of ocean such as the Strait of Gibraltar, the Panama Canal, the Red Sea, the Strait of Hormuz, Malacca Strait and the South China Sea to ensure shipping can run smoothly.

To do that the US aims to deploy a large number of cost-effective warships to those locations. As part of that strategy, the US Navy may opt to base a littoral combat ship, designed to operate close to shore, at a strategic port such as Singapore and fly the crew there to man it. That puts more ships where they are needed more of the time.

On the issue of the Australian shipbuilding industry, Mr Bellamy said he fundamentally disagreed “with the point that says you have to pay a 30 or 40 per cent premium to manufacture in Australia”.

“The cop-out in all of this is that people think we can’t manufacture productively in Australia, and it’s not true,’’ he said.
“The problem is not the Australian workforce or the skill set or the designer, because we have exported 250 ships out of Perth, so it can be done.”

A lack of focus on exports was part of the problem, along with an expectation that facilities would be filled by the government. That created the wrong culture, Mr Bellamy said.

Austal was building ships in Australia and the US for the same cost. “We are equally competitive in both markets,’’ he said.
“Because we are exporting that high-speed vessel built in Australia to the Middle East against international competition we can be pretty confident that not only are we competitive in the US but we are also competitive internationally.

“If we don’t mobilise industry and start to look outside the country, that will be the inevitable conclusion. When we came to America we did not know how to build frigates for the US Navy but we are now building frigates for the US Navy.”

Mr Bellamy said he had spoken to government ministers about ways to get the industry back on track.
“We are actively engaged with the Australian government, and with Defence in particular, and we are trying to provide some thought leadership on what the industry needs and what the industry should look like.”

In its plant at Henderson in Perth’s south, Austal is building a $330 million fleet of eight Cape-class patrol boats for Australia’s Customs and Border Protection Service.

To date, six of those boats have been delivered, on time and on budget.

It is also building in Australia two high-speed support vessels for the Royal Navy of Oman and two large, high-speed catamaran ferries.

Austal also hopes to build warships for Saudi Arabia, which is prepared to spend between $15 billion and $30bn. “There’s a great opportunity for Australia to build those ships in conjunction with the Saudi Arabian government,” Mr Bellamy said.

The ships could be built in Perth and Adelaide, or in Perth and the US.
“It’s too easy to fall into the trap that we can’t do this in Australia and export it,” he said.

Australia’s ambassador to the US, Kim Beazley, said Australia had been very supportive of the US bolstering its presence in Southeast Asian waters.
“These are the vessels with which they are enhancing their presence,” he said.
“So these ships, produced to an Australian design by an Australian company, are a focal point of the American rebalance.”

Source: The Australian       Correspondent Brendan Nicholson travelled to the US as a guest of Austal