Building an internationally competitive shipbuilding sovereign capability

Geoff Crittenden, CEO of Weld Australia, explains what it will take for Australia to successfully deliver its major shipbuilding project.

I recently visited two BAE Systems shipyards in Glasgow, Scotland: Govan Shipyard, and Scotstoun Shipyard. It is here that BAE Systems is building the eight Type 26 Frigates ordered by the Royal Navy. The “First of Class” HMS Glasgow is currently under fabrication, due for completion in 2023.

The purpose of my visit was to observe the production of the HMS Glasgow, in order to understand BAE’s process for welder training in their shipyards. BAE has a comprehensive training program tailored to BAE’s needs and the requirements of the shipyards. Based on the UK Marine Engineering Framework, this training is delivered by an integrated TAFE (Clydebank Technical College) and the BAE Welding School.

The three-year program consists of over 2,100 hours of training, including over 1,300 of practical welding experience – compared with the Australian equivalent of 210 hours – and over 800 hours of theory.

As a result, BAE has an extremely stable and experienced steel workforce, many of whom have worked in the yards since leaving school. This workforce consists of approximately 420 welders (comprised of 300 boilermakers and 120 pipe fitters), who demonstrate not only a very high level of skill, but also a deep understanding of the shipbuilding process.

During my visit, I learnt some lessons that will be invaluable when it comes establishing Australia’s own Frigate shipyard in South Australia. BAE Systems Australia’s new subsidiary, ASC Shipbuilding, has been awarded a contract by the Australian Government that provides the framework for the design and build of nine Hunter Class Frigates for the Royal Australian Navy.

The challenge is to ensure Australia has the appropriately sized, skilled, and readily-available workforce to deliver this major project. Developing this workforce presents a complex, national, long-term challenge – it requires a significant amount of individual training that needs to be delivered by TAFE and companies to meet global standards.

This shortage of qualified and certified welders is certainly not the fault of Australian tradespeople. It has been many years since the trades of welder and boilermaker were listed in the national VET system.

Instead, for nearly 15 years, TAFE has been required to teach courses such as fabrication, in which the welding modules are of varying degrees of complexity, and are usually optional. This has not produced welders that are skilled or qualified to the levels needed by industry, especially within the defence sector, and the new training package does not appear to be any better.

A global shortage of welders
There is a global shortage of welders caused by a combination of demographics and the internet age. According to a recent employment outlook survey in Australia, skilled trades workers (such as electricians and welders), engineers (electrical, civil and mechanical), and technicians are scarce. Over 34 per cent of Australian employers admit that filling job vacancies is increasingly difficult, mainly due to lack of applicants (25 per cent), lack of skills (21 per cent), and lack of experience (19 per cent).

In fact, in a recent survey, 75,000 Australian tradesmen identified as being welders. Of these, just 10 per cent actually hold a welding qualification or certification. Not surprisingly, when it comes to completing a welding coupon – an AS/NZS 1554 Structural Steel Welding full penetration fillet weld – the failure rate is 80 per cent. For a weld that complies with ISO 9606-1 Qualification testing of welders – Fusion welding – Part 1: Steels, the failure rate is nearly 90 per cent.

In addition, approximately 30 per cent of Australia’s existing welding workforce is aged over 45 years. This heavy proportion of older skilled trade workers, particularly welders, puts into focus the looming issues that industrial sectors are likely to face when baby boomers finally reach retirement age – welding positions will simply become impossible to fill, particularly given the projected increased demand.

Our lack of skilled workers combined with an aging workforce demographic is exacerbated by strong employment growth in the manufacturing sector. Although Australia’s overall employment growth rate has dropped over recent months, recent labour force data from the Australian Bureau of Statistics indicates that employment growth among manufacturers surged by 86,000 over the past 12 months – the highest growth rate of any Australian industry – closely followed by both the mining and construction industries.

This employment growth rate is not surprising given some of the major projects on the horizon, including the $90 billion Naval Shipbuilding Plan, and other major infrastructure projects such as the $12 billion Sydney Metro project, and the $5 billion Melbourne Airport Rail Link.

The solution
Established shipbuilding nations, such as the US, Japan, Korea, the UK, and Germany, with whom we wish to compete, are spending millions of dollars on programs to attract young men and women into engineering trades. In comparison, Australia is just getting started in trying to recreate a buzz around welding and careers in shipbuilding.

It is anticipated that the continuous naval shipbuilding program in South Australia will require around 2,600 tradespeople from 2020 to 2027. Almost half of this demand will be for welding professionals. We cannot simply wave a magic wand and expect these skilled tradespeople to appear.

It is important not to fall into the trap of thinking that this is a problem unique to South Australia. Every state is currently suffering shortages in skilled tradespeople, including welders. Simply moving activity around Australia will not address this issue.

I am often accused of being a scare monger for pointing out that we already have a critical shortage of qualified welders – and that’s before we commence projected defence and infrastructure projects – but it is clear that the issue must be addressed.

Australia requires a significant increase in skilled, qualified trades workers to meet future demand on major projects in industries as diverse as infrastructure, rolling stock, resources, defence, shipbuilding, and aerospace.

The Commonwealth needs to:

  • Recognise the enormity of the task of building internationally competitive shipbuilding sovereign capability, and understand that the issue of developing welder capability cannot be outsourced to the states and primes;
  • Take responsibility for delivering the necessary training and outreach programs to build
    a competent and sustainable workforce; and
  • Stop talking about the “Valleys of Death” and do something to retain the competent workforce currently working for ASC.