Kevin Andrews may move to avoid ship building ‘valley of death’

The government may employ a ‘continuous build’ strategy to
avoid a ship building ‘valley of death’ in which no contracts are current and
there is no work to be done.

AAP reports that Defence Minister Kevin Andrews (pictured) told a
conference in Canberra today that one way to keep local ship builders
alive would be to pace defence contracts so there are no gaps between major
contracts.

“This would require Defence to carefully manage its
acquisition processes and keep the future frigates operational for relatively
less time than has been the norm to date,” Andrews said.

“By adopting such an approach the industry would no
longer be characterised by a stop-start approach to naval shipbuilding.”

According to the AFR, such an approach would cost $100
billion and would include the building of warships, submarines and other naval
vessels over the next 20 years.

However, it would probably also mean that fewer shipbuilders
would be able to continue operating and those that do would have to improve current
productivity levels.

As the Australian reports, Andrews added that it will not be
possible to completely avoid the ‘valley of death’. At this stage, he said, any strategy the
government implements will only serve to minimise it.

He explained that the gap between the completion of the AWD
project and the Future Frigate Project is now unavoidable. He blamed the
previous Labor Government for this.

Job losses in the ship building industry are already a
reality.

For example, earlier this month Forgacs cut 130 workers or a fifth of its 600-strong workforce at Newcastle due to a lack of shipbuilding
contracts. And job losses have already started at BAE Systems Australia’s
Williamstown shipyard in Melbourne.