Submarines bonanza for locals with $900m package

French defence giant Naval will announce on Friday a $900m package for local builders to kick-start construction of the 12 Attack-class submarines.

Defence Minister Linda Reynolds. Picture: Katrina Bridgeford

French defence giant Naval will demonstrate its commitment to using Australian manufacturers to build its submarines with the announcement on Friday of a $900m package for local builders to kick-start construction of the 12 Attack-class submarines.

Affirming what it calls a “50-year commitment to Australia”, Naval Group has decided against using French manufacturers for key components in the subs, scotching fears that much of the government’s $50bn investment in the project would effectively be spent overseas.

Naval Group is instead calling for expressions of interest from Australian firms to build and provide major components and features of the submarines in a $900m package the company is hailing as “the first of many” to benefit Australian manufacturers and suppliers.

This first package covers 23 major items of equipment within the submarines, including the steering gear system, the weapons handling system and main shaft line for the submarines, a move that Naval Group says will support hundreds of Australian jobs.

The announcement of preference for Australian manufacturers is likely to cause some consternation in Europe, where defence contractors have been eyeing off much of the Attack-class work.

Friday’s announcement will be made at Naval Group’s new offices at Port Adelaide by Naval Group executives and federal government representatives, including Defence Minister Linda Reynolds, Defence Industry Minister Melissa Price and Trade Minister Simon Birmingham.

Ms Price said the announcement was a major win for Australian workers and would be of huge benefit not only to the Australian defence sector but also to a range of non-defence manufacturers and suppliers. “I have said from the outset that our government will have the backs of Aussie workers,” she said.

“The decision to manufacture these essential pieces of equipment in Australia demonstrates our commitment to create new opportunities and jobs for Australian businesses.”

Naval Group executive vice-president Jean-Michel Billig hailed the announcement as “a milestone day for this program, Naval Group and Australian manufacturers”.

“Importantly, through this manufacturing occurring in Australia, local business capability will be enhanced for generations, meaning the legacy of this program goes beyond the regionally superior submarines we will deliver,” Mr Billig said.

“Ever since Naval Group has been chosen as strategic partner for the Attack-class submarine program, we have had a strong focus on ensuring that significant benefits are delivered to Australians and local industry through the 50-year program.

“This package, the first of many, demonstrates our clear commitment to Australian industry and will lead to increased manufacturing capability in Australia and local jobs.”

Naval Group Australia chief executive John Davis said Naval Group was sending “a clear message to Australian industry that Naval Group means business”.

The new Naval Group Australia office at Port Adelaide will host its existing 250‑strong workforce but may be expanded to 350.

Defence Minister Linda Reynolds said the program was about to enter a critical phase: “We are in the process of designing and selecting more than a million submarine parts that need to work perfectly together.”