The government has today announced that shipbuilding company ASC will be split into three individual government owned companies.
The Minister for Defence Marise Payne stated that the split would "deliver a more flexible approach to managing the investment required in shipbuilding infrastructure to support the government’s historic continuous shipbuilding program".
The three companies, which the Minister was quick to point out would not be privatised, will support three capabilities - shipbuilding, submarine sustainment and infrastructure.
Although there has been talk of splitting ASC since 2014, the decision was made after a 2015 strategic review.
"The review sought to identify the best possible corporate, capital and governance arrangements to help maximise the future success of ASC and the Australian naval shipbuilding industry," said Payne.
ASC have recently been in the media spotlight after it was revealed that it was cutting 175 jobs by the end of October and a further 465 positions as the AWD build slowed.
Minister Payne, however, stated that the splits would ensure a growth in jobs.
"These changes will have no impact on ASC employees’ current terms and conditions and will provide the right structure for the growth of the workforce as a result of major infrastructure investment and the construction of Offshore Patrol Vessels, Future Frigates and Future Submarines."
Statement from ASC
The board and management of Australian submarine and shipbuilder ASC welcomed the federal government’s announcement to separate the company into three businesses.
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The formal separation of ASC into shipbuilding, submarine sustainment and infrastructure companies builds upon the company’s already successful operating model and positions the company to support Australia’s future shipbuilding and submarine capability.
ASC chairman Bruce Carter said the board had been working closely with the government on this issue and had effectively been operating separate submarine and shipbuilding businesses for the last two years.
“This operating model has enabled each business to focus its attention and allocate resources to deliver on their programs and pursue opportunities for future work. It has been a major contributing factor in the company’s turnaround in the Collins class submarine and Hobart class air warfare destroyer programs,” he said.
Mr Carter said there will be no change to ASC’s involvement in its current programs.
“The separation of ASC into three businesses will ensure that the company is best- placed to support the future needs of Australia’s naval industry,” Mr Carter said.
“The last two years has seen a remarkable turnaround in Collins class submarine availability and the Hobart class air warfare destroyer program is now meeting its schedule milestones and we expect our improved productivity to continue.”