Australian shipbuilding - worth the effort?

So Australia’s naval construction program is risky. No sh*t Sherlock! Why did nobody say anything before?

With a decision imminent on which of the three bidders will build Australia’s Future Frigates, the majority of people who are fairly close to Australia’s shipbuilding plan have always accepted that it’s a risky venture that’s going to cause a lot of short-term pain. Are the rewards worth the pain? Let’s think about that for a moment.

Are we going to buy those submarines, frigates and patrol boats anyway? Yes. So if we don’t build them ourselves, and if we don’t insist on the highest reasonable level of Australian industry involvement, then most of the money we plan to spend will go overseas. 

But that’s supposed to be okay: the economists argue that we get the benefits of another’s efficiency. Some other country’s shipyards and equipment suppliers have been building ships for ages, so they’re good at it, so we don’t need to be good at it – we’ll just buy stuff from them. 

Really? Are we really going to spend $90 billions-worth of Australian taxpayers’ money enriching the taxpayers in another country?

What if we want to build that stuff ourselves? Well, the argument goes that we haven’t done much so we’re not good at it. So because we’re not good at it, we shouldn’t do it – it’s cheaper and easier to get it done by somebody else overseas (whatever ‘it’ happens to be - in this case ships and submarines; but the argument seems to be applied universally by pundits in Australia). But you don’t become good at something unless you practice. 

And what happens if you practice? You get better. At the end of the day, you might be better and cheaper than an offshore supplier; or you might be about the same, all things considered; or you might be slightly worse. The ANZAC frigate, Huon-class minehunter and AWD projects demonstrated that we actually get very good very quickly at building ships in this country – world-class, in fact. That’s the benefit of the learning curve effect, and it applies across other sectors of the defence industry as well as the wider economy. Yes, market volumes matter, which is why exporting and diversification are both so important. Guess what? The Commonwealth is trying to encourage defence companies to do both.

If you’re doing the job – building submarines and warships, or something else – in-country, and reaping the economic benefits that flow from designing, building, testing and maintaining stuff, and developing the industry-wide skills that can be applied to other projects and industries, you may be considerably better off. Especially if you then avoid, in down-stream phases, the financial and reputational costs of repeatedly starting up an industrial enterprise to build a few ships and then allowing it to shut down again, only for the process to be repeated. Each time you do that you almost guarantee delays and over-runs, not to mention quality issues, resulting from trying to mobilise an under-utilised, under-skilled and inexperienced work-force and customer. (Let’s not forget the customer plays a role in all this too.)

People who argue for the status quo tend to look narrowly at a specific project, ignoring the wider context. Yes, it’s expensive to either buy or build a submarine or a fleet of warships, but designing as much of them as possible in-country, building them in-country and designing and building in-country as much as possible of the equipment that goes into them can generate significant spinoff benefits beyond the project itself. No, there are many things we shouldn’t even contemplate trying to do ourselves, but that still leaves plenty that we can do, and the better and more efficient we get, the more of this stuff we can credibly claim for ourselves.

In a small-ish country with a small-ish population individual industry sectors generally aren’t big enough to support all of the specialist capabilities needed for self-reliance, let alone self-sufficiency in that specific sector – think of things like specialist metal coatings; specialist surface treatments; high-speed titanium machining; manufacture of high-end electronic chips; manufacture of high-strength metal alloys or carbon-fibre composites; highly specialised welding techniques; high-end industrial robotics, to name just a few. While an individual industry sector may not be able to sustain all of these capabilities in-country, a group of sectors with overlapping technologies and markets might – but they depend on each other to thrive. 

Even a struggling industry sector may still help underpin a technology pillar providing essential support to a bunch of other industry sectors. Without it those other sectors become less competitive. That’s the broader context that many commentators and policy makers ignore.

Conversely, if you invest in a new sector, or in reviving an existing one, you create spin-offs that benefit every adjacent industry sector. In this case we’re talking about manufacturing – that’s the smart stuff that people do with low-tech commodities such as iron ore, bauxite, titanium ore, coal and natural gas. And when they’ve done that clever bit, traditionally they have sold the resulting products back to the source of the coal, gas and ores – us.

So what’s the problem with investing in a new national shipbuilding plan? Andrew Davies in ASPI’s ‘The Strategist’ blog, said the process is a ‘shambles’. It’s certainly untidy but that, I suspect, is because the Government is having to make up six years of lost ground when the Labor governments of Kevin Rudd and Julia Gillard refused to make a single decision or invest a single dollar in building submarines and ships for the Navy. 

Now, we as a nation are trying to make up for lost time by building up enough momentum to clear the so-called ‘valley of death’ that’s resulted from those years of inactivity, and the picture isn’t pretty. Apart from the understandable concerns over the submarine and future frigate contracts, both of which are massive and will run for decades, there seem to be other areas of concern.

One of them is the decision to split the build of the Navy’s 12 Offshore Patrol vessels: two will be built in Adelaide by ASC, the remaining 10 in Fremantle by CIVMEC. Yes, that looks untidy and inefficient, but it has a couple of benefits: firstly, CIVMEC (or AMSEG, as it is now called) still gets a 10-ship build program at its Henderson yard – that’s important because it helps them develop management, engineering and construction skills and infrastructure which can then be turned efficiently to other projects. Secondly, it helps maintain engineering and shipbuilding skills at ASC that would otherwise be lost pending the start of the Future Frigate build. Remember how Australia’s shipbuilding industry atrophied after the finish of the ANZAC frigate program, and the costs and delays that resulted when we started re-mobilising the national workforce to build the first AWD? That’s the sort of problem the Government is trying to avoid here. Yes, it’s untidy and inefficient, but down-stream this approach ought to pay dividends. Read p.47 of the Naval Shipbuilding Plan: 

“The Government announced on 18 April 2016, that naval shipbuilding in Australia will be centred on two yards: Osborne Naval Shipyard in South Australia for major surface combatants and submarines; and Henderson Maritime Precinct in Western Australia for construction of minor naval vessels. This consolidation will focus investment, industry and workforce in an effective and efficient manner.”

That’s the intent: getting there will be a bit like making an omelette, leaving a mess in the kitchen and plenty of broken eggshells. Sorry, but given where we’re coming from that’s probably unavoidable.

This whole shipbuilding plan is about husbanding and growing efficient naval construction resources. The nine future frigates will be built in Port Adelaide in the same yard where ASC built the Navy’s AWDs. That yard is now in the Commonwealth’s hands but the workforce – from project managers and design engineers to welders and shipwrights – will still be there. 

Of course, we don’t know exactly what the submarines and frigates will cost us. The Future Submarine design hasn’t been finalised as yet. And the Future Frigate hasn’t even been selected yet, so we don’t know what the program will cost, nor what industrial arrangements will be put in place to build those ships. Meanwhile, the commentariat are already talking about ‘cost blowouts’ and ‘delays’. Really? 

As for the future of ASC, let’s wait and see what transpires after the Sea 5000 decision is made. My personal suspicion is that the Future Frigate program will have a rapid and significant bearing on ASC's future, but that’s just me. We don’t have room to discuss it here and I suspect I’d only be speculating wildly in any case.

Andrew Davies’s celebrated ‘shambles’ will start to resolve itself once the Sea 5000 decision is made and technical and schedule risk factors can be identified and quantified properly; the process will advance still further once the Future Submarine design is completed. Things are messy, which public servants and policy analysts hate passionately, but we always knew that would be the case. What’s different today is that we have defence industry policy being shaped by a strategic outlook, rather than a succession of narrow, transactional decisions devoid of any broader context. Does that make the rewards worth the pain? If we as a nation can reap the rewards of thinking strategically and becoming more pro-active globally, then yes it does in my opinion. 

JSF - concurrent development and manufacture: is this really a problem?

I was struck recently by an online story on the Flight Global web site, from which I reproduce the following three paragraphs:

“The [US] Department of Defense agreed with a Government Accountability Office report that it should resolve the Lockheed Martin F-35’s critical deficiencies before requesting funds to pay for full-rate production of the aircraft.

“Waiting for the resolution of critical deficiencies in the F-35 Lightning II could delay the aircraft’s full-rate production, which the DoD had planned to begin in 2021.

“The department had planned to defer resolving some critical deficiencies found in testing until after its full-rate production decision in October 2019, according to a GAO report released on 5 June. However, the report cited concerns that fixing deficiencies after starting full-rate production could eventually create additional costs tothe government.”

Yes, I can understand the logic behind the GAO recommendation, but it’s this very linear approach to multi-path innovation that creates (or compounds) many of the project delays that bedevil modern, complex acquisition projects such as the F-35 and, before it, the F-22 and B-2.

If you were going to retire all the risk on every aspect of the project before approving funding for the next stage or for Full-Rate Production you’d probably never complete the project. At the very least, you’d be looking at one hell of a slow schedule. 

Just to make it clear, I don’t have a problem with concurrent development and manufacture. In fact, I would suggest that the practice be endorsed more frequently by the Joint Program Office (and CASG here in Australia). However, this would only work if expectations were subtly modified. Read on. 

Consider: the F-35 program embodies all-new technology in multiple areas concurrently: airframe manufacture; mass-production of stealth features; helmet-mounted display; RF and IR sensor suites; flight control software; engine and vertical lift system; in-service support via the ALIS; and so on. 

Yes, you could probably prove many of these individual technologies (perhaps not the airframe, stealth mass production and vertical lift system, admittedly) in a bunch of separate risk-mitigation projects using existing platforms, or even just design and build a bunch of different aircraft that embody whatever selection of these new technologies is useful to their specific role. But I note that the three US customers for the F-35 (USAF, USN and USMC) chose not to do that. And none of the export customers had the resources to even contemplate doing that by themselves or in a non-US consortium, except for the Eurofighter consortium members – and the Eurofighter program predates the JSF by a decade.

Therefore, the decision to develop and build an all-new 5^thgeneration aircraft that embodied all of these technologies was probably inevitable – as was the subsequent decision to pursue concurrent development and manufacture of the F-35. If the JSF partner nations hadn’t agreed to do that we’d probably still be waiting for Low-Rate Initial Production (LRIP) to begin. 

Instead, we have more than 265 aircraft already delivered; the F-35A and F-35B are already in front line service with the US Air Force, Israel Defence Force and US Marines, respectively; and the F-35A has already been to war against the modern air defence systems the Russians have sold to their ‘friends’ in Syria. And the F-35 hasn’t even entered Full-Rate Production (FRP) yet. 

Think back 80 years. In 1938 the Royal Air Force was just starting to re-equip its fighter squadrons with their first monoplane fighters, the Hawker Hurricane and the Vickers Supermarine Spitfire. The Hurricane was the service’s first 300mph fighter, but it was largely fabric-covered, had the most basic version of the Rolls-Royce Merlin engine developing barely 1,000hp, and it was propelled by a fixed, two-bladed airscrew. The Merlin was still a developmental power unit and the fighter’s new reflector gun sight and eight-gun armament were also new and experimental. The Spitfire was a much more modern design but still had the same engine, twin-bladed airscrew, armament and gun sight. Both aircraft represented a revolutionary advance in air combat technology for the RAF.

But the early model Hurricanes and Spitfires, advanced as they seemed for their time, were only at the start of their development paths. Two years later, in mid-1940, just as the Battle of Britain was getting under way, they both had a much more powerful engine and a Rotol three-bladed, constant speed airscrew that transformed their take-off and altitude performance. The Hurricane also now had all-metal wings that reduced overall weight by 80lb while increasing maximum speed by 80mph. These were very significant improvements for their time. 

Importantly, the engine and airscrew upgrades were implemented on both aircraft as fleet-wide retrofits. The same went for the Hurricane’s metal wing. Was this expensive? Undoubtedly. But these retrofits were essential – during the early months of World War 2 the Hurricanes’ old fabric-covered wings and two-bladed airscrews put them at a huge disadvantage.

The point is that, firstly, the RAF had the aircraft in service to be retrofitted: if production had been delayed to allow testing of these and other important enhancements to be completed the RAF would have been woefully under-equipped and quickly overwhelmed. Instead, production continued and existing aircraft were retrofitted once in service; the sheer numbers mattered. Secondly, as a consequence, the RAF had two years before the start of World War 2 to train pilots and controllers and develop tactics and procedures to use the Hurricane and Spitfire effectively. Importantly, also, the RAF learned in peace time how to operate, sustain and repair its new generation of aircraft (including solving critical gun freezing problems at high altitude), not something you want to learn in a hurry, ‘on the job’. 

Fighter Command learned how to fight as a single complex, integrated organism of which the fighters were a critical part, though by no means the only one. Victory in the Battle of Britain was a collective achievement that couldn’t have happened if production of the Hurricane and Spitfire had been delayed. 

So how does this relate to the F-35? Early versions of the Hurricane and Spitfire were barely good enough for the job, but operational experience showed where investment was most needed in performance and combat capability improvements. Many of those improvements, such as reflector gunsights on the early Hurricanes and metal ailerons on the Spitfires, were retrofitted. 

The same applies to the F-35: if we accept that the aircraft will need to be developed through its service life to remain both relevant and superior, then we need to understand that a stated level of capability is merely a waypoint on a journey, not a final destination. It’s more important to have a design and platform that can be enhanced continuously and a mechanism for capturing constantly the creativity, technical smarts and operational insights that will guide each subsequent stage on the journey. In the meantime a less than ‘perfect’ aircraft can still provide sterling operational service and will provide invaluable training for both pilots and air forces.

Here’s a final thought from the 1940s: the Spitfire remained in production for a decade, through 24 marks; it saw the introduction of a new engine, Rolls-Royce’s Griffon which had nearly twice the power of the early Merlins, and finished with twice the take-off weight and twice the range of the initial version. Almost every aircraft since then that has had an extended production and service life has enjoyed similar growth in operational capability. The final capability in each case has been unforeseeable to the original designer of the aircraft in question, but usually resulted in the aircraft themselves becoming legends. Think F-86 Sabre, F-4 Phantom, F-15, F-16, F/A-18, Hunter, Harrier, Canberra, Su-27, MiG-21, Tornado strike variant and Mirage III and 2000. 

Having something that’s good enough today can be more valuable than having something that’s perfect tomorrow. Firstly, you need to survive today in order to have any hope of making it as far as tomorrow; secondly, we can’t foretell the future, so nobody really understands what ‘perfection’ will mean tomorrow in any case. So we need to design for what we can see and credibly predict; once the aircraft (or tank, or submarine) is in service we can predict the next developmental stage with much greater confidence. We can build an upgraded design to meet the new challenge, but we should also incorporate as many as possible of these changes on existing aircraft (or tanks, or submarines). 

If that means concurrent development and manufacture, then so be it. If the alternative is an interminable wait for a mythically perfect machine which enters service too late to be relevant, that’s unacceptable. 

ENDS