Latest / The Front / How Japan beat Germany to sell us warships

Transcript

How Japan beat Germany to sell us warships · The Front

• 0:03
  Speaker 1: From The Australian. Here's what's on the front. I'm Christian Amiot.
• 0:06
  Speaker 1: It's Wednesday, August six, twenty five. Jim Chalmers will shift
• 0:13
  Speaker 1: the focus of his upcoming Productivity roundtable from tax reform
• 0:17
  Speaker 1: and government spending to slashing red tape. The Treasurers met
• 0:21
  Speaker 1: with dozens of chief executives and industry leaders in the
• 0:23
  Speaker 1: run up to the August summit, where he hopes to
• 0:26
  Speaker 1: boost productivity and speed up housing approvals. There was never
• 0:35
  Speaker 1: any doubt about it. Japan was always going to win
• 0:39
  Speaker 1: a major contract to build warships for the Australian Defense Force. Today,
• 0:44
  Speaker 1: Defense correspondent Ben Packham unpacks the ten billion dollar deal
• 0:48
  Speaker 1: set to shape the next generation of the ADF.
• 0:53
  Speaker 2: Sold.
• 0:56
  Speaker 1: A multi billion dollar auction has been held for the
• 0:59
  Speaker 1: future of Australia's warship fleet and the winner is Japan.
• 1:03
  Speaker 2: Woll Japan has won a fierce battle to build a
• 1:06
  Speaker 2: new fleet of Australian warships, winning a ten billion dollar
• 1:09
  Speaker 2: contract with the Albanesi.
• 1:11
  Speaker 1: Government Mitsubishi heavy Industries through the Kitchen Sink at an
• 1:15
  Speaker 1: Australian Defense Force bid to beat German shipbuilder This and
• 1:19
  Speaker 1: Krupp Marine systems. The Australians Foreign Affairs and Defense correspondent
• 1:23
  Speaker 1: Ben Packham broke the story, Ben, what do we know
• 1:28
  Speaker 1: about how that bidding process played out?
• 1:30
  Speaker 3: The Germans were outclassed.
• 1:32
  Speaker 2: Their ship was outclassed, and as Richard Miles and Pat
• 1:37
  Speaker 2: Conry have said, the Japanese ship, the mcgami, was far
• 1:42
  Speaker 2: and away the best ship out of.
• 1:45
  Speaker 3: The two options in that sense.
• 1:47
  Speaker 2: Well, no doubt the German company TKMS put in as
• 1:51
  Speaker 2: strong a bid as it could. It's Miko, a two
• 1:54
  Speaker 2: hundred vessel, was simply not as good as the mcgami.
• 2:01
  Speaker 1: So what is so good about this ship?
• 2:04
  Speaker 3: Now?
• 2:05
  Speaker 2: The Japanese ship has more vertical launch missile cells, It
• 2:09
  Speaker 2: has a stealthy design which the German ship doesn't. It
• 2:13
  Speaker 2: has a smaller crew of ninety compared to one hundred
• 2:17
  Speaker 2: and twenty for the German ship. Now that's really important
• 2:21
  Speaker 2: for the Australian Navy, which like the rest of the
• 2:24
  Speaker 2: Defense force, is struggling with a workforce crisis. It also
• 2:27
  Speaker 2: lowers their sort of lifetime costs of crewing that ship.
• 2:31
  Speaker 3: The Japanese ship also has a claimed.
• 2:34
  Speaker 2: Operational life of forty years compared to thirty years for
• 2:38
  Speaker 2: the German vessel. So look, the MGAMI really did win
• 2:43
  Speaker 2: hands down on the actual ship. There was other aspects
• 2:48
  Speaker 2: to the bid, including its industrial plan, how it intends
• 2:52
  Speaker 2: to transfer production to Australia, and even though the Japanese
• 2:57
  Speaker 2: vessel is a larger vessel and on paper should be
• 3:01
  Speaker 2: more costly, the government said that ultimately they were on
• 3:06
  Speaker 2: par and over the life cycle because of that smaller
• 3:09
  Speaker 2: crew and the longer life span of the Japanese ship,
• 3:13
  Speaker 2: the MCGAMI was actually the cheaper option.
• 3:16
  Speaker 1: It's the cheaper option now, but what about in future.
• 3:21
  Speaker 2: The ten billion dollar figure that we've been given that
• 3:23
  Speaker 2: is only for the first three vessels and the redevelopment
• 3:30
  Speaker 2: of the Henderson shipyards to get them ready to switch
• 3:33
  Speaker 2: production to WA. So that's just ships one to three,
• 3:37
  Speaker 2: plus some infrastructure and so forth. So really we're probably
• 3:42
  Speaker 2: looking at at least three times that for the full eleven.
• 3:47
  Speaker 2: They do get cheaper as you go along, but also
• 3:50
  Speaker 2: the ones that we produce in Western Australia are going
• 3:52
  Speaker 2: to be more expensive, at least initially to build than
• 3:56
  Speaker 2: the ones that are built in Japan, but it's not
• 3:59
  Speaker 2: clear exactly how much they will cost each.
• 4:04
  Speaker 1: Mitsubishi Heavy Industries will build eleven upgraded MGAMI frigates over
• 4:08
  Speaker 1: the next decade or so. The first three will be
• 4:11
  Speaker 1: built in Japan, with the remainder to be built at
• 4:14
  Speaker 1: Western Australia's Henderson Shipbuilding Precinct by ostel Ben You wrote
• 4:19
  Speaker 1: for The Australian that this is the most consequential defense
• 4:22
  Speaker 1: procurement decision since Labour won the twenty twenty two election.
• 4:26
  Speaker 2: Why is that this is really the first defense program
• 4:30
  Speaker 2: that labor fully owns. It has also inherited a couple
• 4:34
  Speaker 2: of botched naval programs from the former government, in particular
• 4:39
  Speaker 2: the Hunter class frigate program, which has suffered just some
• 4:44
  Speaker 2: terrible cost blowouts and schedule blowouts.
• 4:48
  Speaker 3: The cost of those ships.
• 4:50
  Speaker 2: Is running at something like nine billion dollars per hull
• 4:54
  Speaker 2: and we will not see the first one of those
• 4:57
  Speaker 2: in service until twenty thirty four. Now that's largely the
• 5:01
  Speaker 2: result of changes being made to the design they wanted
• 5:04
  Speaker 2: to change for Australian requirements. Now, whenever you do that,
• 5:07
  Speaker 2: it just causes problems. And the government in this case
• 5:11
  Speaker 2: was very clear it wanted a ship that was in
• 5:15
  Speaker 2: service and that was not going to be modified in
• 5:20
  Speaker 2: any way.
• 5:21
  Speaker 3: The government and Defense are very confident.
• 5:24
  Speaker 2: That this will be a pretty smooth build, in particular
• 5:28
  Speaker 2: with the first three ships that are going to be
• 5:31
  Speaker 2: built in Japan. When production shifts to Australia, that's going
• 5:35
  Speaker 2: to be the real challenge. Japan is a very efficient
• 5:38
  Speaker 2: shipbuilding nation, but Japan has not actually built ships off
• 5:44
  Speaker 2: shore before, and it's never dealt with the Australian supply chain,
• 5:50
  Speaker 2: Australian workforce capacity constraints, or the Australian Department of Defense,
• 5:56
  Speaker 2: which can be very meddlesome and impose requirements that can
• 6:03
  Speaker 2: slow things down. Now, I suspect that Defense will get
• 6:06
  Speaker 2: out of the way. You know, they're under orders to
• 6:08
  Speaker 2: just let the company do its thing.
• 6:12
  Speaker 3: Let's hope that's what happens.
• 6:15
  Speaker 1: The Albanesi government has given Mitsubishi Heavy Industries a deadline
• 6:18
  Speaker 1: of twenty twenty nine to deliver the first vessel under
• 6:22
  Speaker 1: the new agreement. Ben You and I spoke back in
• 6:26
  Speaker 1: twenty twenty three when the landmark Defense Strategic Review was
• 6:29
  Speaker 1: released by the Albanesi government. I recall you said at
• 6:33
  Speaker 1: that time that the overarching message to the ADF when
• 6:36
  Speaker 1: it came to defense procurement was to stop letting the
• 6:40
  Speaker 1: good be the enemy of the perfect. That they were
• 6:42
  Speaker 1: spending so long fitting new technologies that they were out
• 6:46
  Speaker 1: of date by the time they finally arrived in the field.
• 6:49
  Speaker 1: This new deal seems fast by comparison. Is this a
• 6:53
  Speaker 1: sign that Defense Force is turning things around?
• 6:55
  Speaker 2: Well, it's a sign that the Albanesi government doesn't want
• 6:58
  Speaker 2: to repeat of what's happened four. I think probably Defense
• 7:02
  Speaker 2: has got the message here, and because we're getting it
• 7:04
  Speaker 2: off that Japanese production line, we're going to be getting
• 7:07
  Speaker 2: the first one quite quickly and certainly by Australian standards.
• 7:11
  Speaker 3: Now, to sweeten the deal.
• 7:13
  Speaker 2: Japan offered Australia a ship that was already in its
• 7:17
  Speaker 2: production schedule. The Misubishi Heavy industries have famously never missed
• 7:23
  Speaker 2: a deadline, certainly not in their current operation, but they
• 7:27
  Speaker 2: haven't delivered a ship built in Australia yet, so that
• 7:30
  Speaker 2: will be a challenge. It should also be noted that
• 7:34
  Speaker 2: even though the government wants ships four to eleven to
• 7:38
  Speaker 2: be built in Australia, Pat Conroy, the Defense Industry Ministers,
• 7:43
  Speaker 2: said today that Australian industry really needs to prove that
• 7:46
  Speaker 2: it's up to this and get into a position where
• 7:48
  Speaker 2: it can do that. Now that's a message to Ostel,
• 7:52
  Speaker 2: which has been named the government sovereign shipbuilder. They're located
• 7:56
  Speaker 2: over in wa They've got a lot on their plate.
• 7:59
  Speaker 2: And the other issue with getting things going over there
• 8:04
  Speaker 2: is there hasn't been a lot of redevelopment yet or
• 8:08
  Speaker 2: works going on at Henderson, and there's going to have
• 8:12
  Speaker 2: to be a lot happen there to get that precinc
• 8:17
  Speaker 2: really up to speed.
• 8:20
  Speaker 3: Well, to build a whole.
• 8:21
  Speaker 2: Range of things, including to sustain nuclear submarines for the
• 8:27
  Speaker 2: US and the UK that are going to be rotating
• 8:30
  Speaker 2: through there. And there's a whole lot of sort of
• 8:32
  Speaker 2: regulatory stuff that needs to happen over there, and you've
• 8:36
  Speaker 2: got multiple levels of government that have to agree to everything,
• 8:40
  Speaker 2: so that's going to be a huge task. So you know,
• 8:43
  Speaker 2: none of this is guaranteed, and if I was a
• 8:46
  Speaker 2: betting man, I'd be saying the precinct there is not
• 8:48
  Speaker 2: going to be ready for the fourth ship and that
• 8:51
  Speaker 2: they might have to build another three in Japan, which personally,
• 8:55
  Speaker 2: I don't think would be such a bad outcome, especially
• 8:58
  Speaker 2: for the Navy because it'll get six ships in quick
• 9:02
  Speaker 2: time that it would otherwise not get as quickly.
• 9:09
  Speaker 1: Coming up what this mega deal means for Australia's relationship
• 9:13
  Speaker 1: with Japan. Next week will mark the eightieth anniversary of
• 9:29
  Speaker 1: victory over Japan in the Pacific. August fifteen is known
• 9:33
  Speaker 1: as VP Day and it commemorates Japan's surrender and the
• 9:37
  Speaker 1: end of World War II in the region. Australia joined
• 9:41
  Speaker 1: her allies and an outburst of rejoicing the Lake of
• 9:43
  Speaker 1: witch mersites have never seen before.
• 9:45
  Speaker 3: The pendub emotion of six years poured out as a flood.
• 9:49
  Speaker 3: Freedom was really.
• 9:50
  Speaker 1: Their Eight decades later, it's Japan and Australia who've united
• 9:55
  Speaker 1: against the growing military might of China in the Pacific.
• 10:00
  Speaker 1: Japanese troops have this year commenced training in the top
• 10:03
  Speaker 1: end alongside Australians and US Marines, and Ben Packham says
• 10:08
  Speaker 1: the new deal to supply mcgami class frigates is another
• 10:11
  Speaker 1: positive step in Australia's geostrategic relationship with Japan.
• 10:16
  Speaker 3: Talk about a turnaround.
• 10:17
  Speaker 2: Historically, you know, the contest was between Germany and Japan,
• 10:22
  Speaker 2: our two wartime foes to build us these ships. So,
• 10:26
  Speaker 2: I mean, it really does show how things can change.
• 10:29
  Speaker 2: But Importantly, we have a special strategic partnership with Japan.
• 10:33
  Speaker 2: It's known as our quasi Ally, Japan is one of
• 10:37
  Speaker 2: the powers with the US that is really going to
• 10:39
  Speaker 2: be critical in deterring any conflict with China, particularly over Taiwan.
• 10:46
  Speaker 2: Japan has a highly capable military obviously the US does
• 10:50
  Speaker 2: two and the closer that we can all work together
• 10:54
  Speaker 2: in terms of integrating our capabilities, training together, doing exercises together,
• 11:00
  Speaker 2: and integrating our defense industries so that they work more seamlessly.
• 11:05
  Speaker 3: That is going to serve us well in that.
• 11:08
  Speaker 2: Longer term challenge to respond to China's massive military growth
• 11:16
  Speaker 2: and its desire to be the dominant power in the
• 11:19
  Speaker 2: Indo Pacific.
• 11:31
  Speaker 1: Ben Packham is the Australian's Foreign Affairs and Defense correspondent.
• 11:34
  Speaker 1: You can read all his reporting and analysis of the
• 11:37
  Speaker 1: future of the Australian Defense Force at the Australian dot
• 11:40
  Speaker 1: com dot au