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Preparing the nation for a truly sovereign naval shipbuilding capability

2020 is shaping up to be a big year for the government’s $95 billion Naval Shipbuilding Program. As the multibillion-dollar Arafura Class and Hunter Class programs continue to meet targets, industry and government collaboration is necessary to ensure the success of the nations sovereign shipbuilding endeavour, explains BAE Systems CEO Gabby Costigan.

2020 is shaping up to be a big year for the government’s $95 billion Naval Shipbuilding Program. As the multibillion-dollar Arafura Class and Hunter Class programs continue to meet targets, industry and government collaboration is necessary to ensure the success of the nations sovereign shipbuilding endeavour, explains BAE Systems CEO Gabby Costigan.

The countdown is on.

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Before the end of the year, BAE Systems Australia’s shipbuilding business, ASC Shipbuilding, will cut steel on prototyping for the Hunter Class Frigate Program.

The $35 billion program will deliver nine of the world’s most advanced anti-submarine warfare frigates to the Royal Australian Navy.

The frigates will be built by an Australian workforce, using many Australian suppliers and materials at a brand new shipyard located at Osborne, South Australia.

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But the program is more than just building warships.

We are growing and sustaining sovereign capability, both within ASC Shipbuilding and in our supply chain.

No single approach will deliver that capability, therefore our strategy for maximising Australian industry outcomes has four focus areas.

Firstly, we are developing Australian capability with our original equipment manufacturers (OEMs) – major equipment and system suppliers – which includes helping industry meet the more stringent conditions required when building an anti-submarine warship. We already have good news stories to tell in this space. More on that shortly.

Secondly, we are committed to maximising cost-effective Australian industry content and spending on Australian products and services, including supporting the creation of 15-20 new indigenous defence companies over the life of the program.

Thirdly, as the Hunter design progresses and we encounter obsolescence in equipment, we will work with Australian suppliers to see if they can fill the gaps, providing them access to global supply chains.

Finally, we are finding opportunities for innovative Australian technologies either in ship production or on the ship itself. Our research and technology team is already working closely with researchers, universities and governments to identify those technologies.

Working to these principles, BAE Systems Australia’s aim is to develop, support and deliver the industrial capability that will endure beyond the Hunter program’s conclusion, benefiting future naval shipbuilding and support programs.

Imagine: Australians designing the next generation of complex warships, building them and maintaining them right here in Australia.

Eventually we could reach a point where we are exporting our warship design and manufacturing know-how to our allies.

One thing is certain: we won’t achieve sovereign capability alone. It requires a collaborative approach – between governments, Navy and industry.

The Hunter Class frigate is the Australian variant of the Global Combat Ship – where the UK Type 26 variant is already under construction in Glasgow, Scotland.

Since 2018 we have been engaging with the Global Combat Ship OEMs to explore opportunities to ‘Australianise’ the Type 26 frigate design and to invest in the local advanced manufacturing sector, including producing, assembling and testing equipment locally and partnering with Australian businesses.

As hinted above, there are already great news stories to tell, like Rolls-Royce Australia working with Australian company Marand and their MTU brand working with Penske Power Systems; Ernest West & Beynon working with Cold Logic; and Marl working with Redarc Electronics.

We are working closely with the government and these OEMs to build Australian industry capability plans that we hope will lead to contracts with Australian suppliers. This activity takes time to do well and needs careful consideration to ensure the best outcomes.

2019 was a busy year for the ASC Shipbuilding team as a number of them hit the road, updating Australian small and medium businesses in every state and the Northern Territory, as well as some regional centres, on how to become involved in the Hunter program.

Interest in the program has been high.

Currently 1,000 businesses – of those 975 Australian – have registered through the Industry Capability Network to try and win a contract on the program.

In the coming months, we will begin placing contracts with some of those Australian companies for the prototyping phase of the program.

During the two-year prototyping phase, which begins in December this year, five prototype blocks will be built and all the processes, systems, tools, facilities and workforce competencies will be tested and refined before full construction on ship one starts in 2022.

The majority of the materials and labour on prototyping will be provided by Australians and Australian businesses.

One of the prototyping contracts we will announce this year will be for Australian steel. Another great news story.

If 2019 was the year of our people working with global and Australian companies to put in the groundwork to get contracts, then 2020 will be the year we start delivering the contracts and building Australian industry capability.

We are committed to being the Commonwealth’s long-term strategic partner to deliver a sovereign industry that is both enduring and uniquely Australian.

The countdown is on for an exciting year for Hunter and our Australian suppliers.

Gabby Costigan is the chief executive officer at BAE Systems Australia.

She joined BAE Systems Australia as CEO-designate on 2 October 2017 and became CEO on 1 January 2018. As CEO she is responsible for one of the nation’s largest defence companies, which has supported the Australian Defence Force for more than 60 years.

Costigan is a former Colonel in the Australian Army and has led logistic operations for both the Australian and US governments internationally.

Costigan brings to BAE Systems Australia a distinguished international logistics career with great experience in managing international supply chains. Her experience includes leading roles in the logistics and aviation industries.

She is a board member on the Australian-ASEAN Council, which promotes Australia’s interests in south-east Asia by initiating and supporting activities designed to enhance awareness, understanding and links between people, business and institutions in Australia and south-east Asia.

Prior to joining BAE Systems she was the CEO for Linfox International Group, where she focused on transforming the business with an emphasis on strong customer service and the highest standards in safety and integrity across the region.

Costigan has been honoured for her military service by the Australian and US governments and NATO. She is married to Simon and has two children, Honey and Lucas.

Preparing the nation for a truly sovereign naval shipbuilding capability
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