Yes you need that critical mass.
A challenge you see with the smaller country's like Sweden trying to do it all.
Mind you the Gripen is a good looking aircraft on many levels. Well done to them.
Cheers S
Royal Australian Navy Discussions and Updates 2.0
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A challenge you see with the smaller country's like Sweden trying to do it all.
Mind you the Gripen is a good looking aircraft on many levels. Well done to them.
Cheers S
Todjaeger
Potstirrer
Actually the one I had more in mind was France. IIRC at one point, after France's orders for Dassault's Rafale were completed, France made additional orders to keep Dassault producing the Rafale at a rate of 11 p.a. as France/Dassault sought foreign orders. The ongoing orders of 11 annually were intended to keep the Rafale production line running just enough so that it did not cease production and to maintain a core production group that could serve as a cadre to train more/new production workers should France need to resume and increase Rafale production.
If Australia trained to establish and then keep a domestic aircraft production capability going, then a steady stream of production orders will need to be booked, to keep the line running and supply chains moving along. Otherwise one would see an aircraft production equivalent of the "Valley of Death" which has already happened too often in Australian naval shipbuilding.
But the ADF is part of the public service: it's not civil service, but because it's a govt department it is still public service.
John Fedup
The Bunker Group
Canada tried that in the late 1950s and came up with the Avro Arrow. It was a good interceptor for its time but the GoD decided ICBMs and cost made it obsolete, BS in hindsight. The problem for Canada and Australia wrt fighters is small domestic markets and the prospects for export would be very difficult. Canada has the additional issue of meeting NORAD requirements which the US would rig to favour US manufacturing, a reason (supposedly) Dassault dropped out of Canada’s fast jet bid.
Lolcake
Active Member
Australia To Get One New Build Virginia Class Submarine, Two From U.S. Navy
New details about Australia's plan to transition to an all nuclear submarine fleet have emerged during intense questioning in Canberra.
www.thedrive.com
A must read article on the procurement of our new subs. 2 subs to be block 3 or 4 (more than likely block 4) and one will be a new build. A notable change in what was annouced previously.
8 ssn fleet of 2050s will encompass the Virginias
And I think this enabled France to sell lightly used AdlA Rafales to customers who wanted quick delivery, knowing there were new ones steadily trickling off the production line.
A common falicy is that the Australian government heavily subsidised the defence industry and manufacturing in general. The truth is this is far less the case in Australia than most countries, the exceptions being a handfull of projects whose outcomes fit the agenda of the government of the day, i.e. sexing up ADI and ASC for sale, keeping the WA Mafia happy.
If there were real subsidies and support, there would be multigeneratuonal projects producing and supporting the gear the ADF needs, as well as supporting exports. Instead we get politically and idiologically motivated chopping, changing, black holes, that cost both industry and the tax payer dearly.
If there were real subsidies and support, there would be multigeneratuonal projects producing and supporting the gear the ADF needs, as well as supporting exports. Instead we get politically and idiologically motivated chopping, changing, black holes, that cost both industry and the tax payer dearly.
Any evidence for this? Or is this your opinion?
You are seriously asking that?
Here's the evidence, we have no automotive industry, despite previously being a successful exporter.
We bought three DDGs from the US instead of building them here in the 60s. Finally built two more River Class DEs in the 70s but cancelled local destroyer, frigate and corvette programs.
Then we bought four FFGs from the US, having to virtually restart shipbuilding from scratch in the late 80s to build two more. They were followed by ten frigates, and inturn were meant to build eight or nine FFGs or a dozen large corvettes, instead there was another shipbuilding black hole in the 2000s until three FFGs called destroyers, were built in a new yard a decade later.
It's called history.
Anyone who thinks wasting money starting and stopping over and over again, drawing down capability or buying from overseas in between is subsidising a local industry, is either delusional or doesn't understand the concept of a subsidised industry.
I think we’re talking at cross purposes here. I’m referring specifically to Defence procurement.
Australia most definitely is at the lower end of protectionism by international standards. We have an open, liberal, trade exposed economy. Amongst other things (eg exports to China) the reform we undertook in the 80s and 90s set us up for the extraordinary economic performance we’ve had since, as it has directed our resources in areas where we have a comparative advantage (e.g. primary production, services) and away from ones where we don’t (e.g. low and middle skill manufacturing).
That said, we have a strong history of protecting certain industries - the car industry is a notable one - despite their being little economic rationale for doing so. This support was politically driven, futile, and a tremendous waste of money.
There is a definite argument for industry support for defence manufacturing where those industries can reasonably form the core of a national mobilisation effort in wartime ie what are the things that we could reasonably manufacture in a timely fashion and expect to be in short supply (either high demand offshore or supply lines cut). Sovereign guided weapons, hawkei, IFV/ARV, SPH, maybe loyal wingman are all good examples of this, and it is acceptable for us to pay for higher labour costs / smaller production runs in Australia so we maintain the onshore manufacturing capability.
There are further good arguments for support for the set up of defence manufacturing where there are economies of scale from joining a larger supply chain with our close allies. SSN production and maintenance, and maybe Type 83 / Hobart replacement might fall into this category.
Outside of that all Defence procurement should be subject to rigorous cost benefit analysis, and if it’s a long lead time item, something we’re just not set up to produce or something someone else is excellent at doing already, we should probably just buy it off the shelf from offshore.
Speaking frankly I am sceptical about the value of manufacturing our own ships from top to bottom, but I think now that the investment has been made in ASC (which from what I understand has meant that Osborne is a truly world class shipyard) we should make sure, as you say, that we continue to ensure the viability of that facility by placing sufficient orders so that we get the efficiency benefits from it. That means lots of Hunters and Hunter derivatives on a predictable drumbeat for the foreseeable future. Again I am sceptical, particularly given the persistent rumours of cost blowouts, but if we’re going to be in we need to be all in.
I think that this also means that we need to seriously think about the business case for having any subsidies for ship production in WA. I can’t see a reason for doing this beyond the political.
Australia most definitely is at the lower end of protectionism by international standards. We have an open, liberal, trade exposed economy. Amongst other things (eg exports to China) the reform we undertook in the 80s and 90s set us up for the extraordinary economic performance we’ve had since, as it has directed our resources in areas where we have a comparative advantage (e.g. primary production, services) and away from ones where we don’t (e.g. low and middle skill manufacturing).
That said, we have a strong history of protecting certain industries - the car industry is a notable one - despite their being little economic rationale for doing so. This support was politically driven, futile, and a tremendous waste of money.
There is a definite argument for industry support for defence manufacturing where those industries can reasonably form the core of a national mobilisation effort in wartime ie what are the things that we could reasonably manufacture in a timely fashion and expect to be in short supply (either high demand offshore or supply lines cut). Sovereign guided weapons, hawkei, IFV/ARV, SPH, maybe loyal wingman are all good examples of this, and it is acceptable for us to pay for higher labour costs / smaller production runs in Australia so we maintain the onshore manufacturing capability.
There are further good arguments for support for the set up of defence manufacturing where there are economies of scale from joining a larger supply chain with our close allies. SSN production and maintenance, and maybe Type 83 / Hobart replacement might fall into this category.
Outside of that all Defence procurement should be subject to rigorous cost benefit analysis, and if it’s a long lead time item, something we’re just not set up to produce or something someone else is excellent at doing already, we should probably just buy it off the shelf from offshore.
Speaking frankly I am sceptical about the value of manufacturing our own ships from top to bottom, but I think now that the investment has been made in ASC (which from what I understand has meant that Osborne is a truly world class shipyard) we should make sure, as you say, that we continue to ensure the viability of that facility by placing sufficient orders so that we get the efficiency benefits from it. That means lots of Hunters and Hunter derivatives on a predictable drumbeat for the foreseeable future. Again I am sceptical, particularly given the persistent rumours of cost blowouts, but if we’re going to be in we need to be all in.
I think that this also means that we need to seriously think about the business case for having any subsidies for ship production in WA. I can’t see a reason for doing this beyond the political.
I am possibly going to sound quite rude but Australian manufacturing and trade wages are only high in comparison to much smaller economies.
We pay people who want to be project managers, but who have no qualifications or experience, more than we pay most engineers and technical people. They also get promoted faster. To me, paying people who actually make stuff a fair wage is pretty important for any first world country.
The average person has no idea just how skilled and competent our engineering and technical people are.
Thinking like:
"set us up for the extraordinary economic performance we’ve had since, as it has directed our resources in areas where we have a comparative advantage (e.g. primary production, services) and away from ones where we don’t (e.g. low and middle skill manufacturing)."
Shits me to tears.
It is arogant, condescending, illinformed and just plain wrong. It comes from a lingering colonial mindset and the fact that most of the power and money in this country is consentrated in finance and primary industries, despite those areas being. Low and middle skill manufacturing? Seriously, get stuffed.
Compare an XR-8 to a Mustang, compare a Hobart to an F-100. Australia exports high tech medical equipment, scientific equipment, power control systems, FMD the US DOD is getting cutting edge additive manufacture gear built here. How about our radars?
Just because you don't know how to do it doesn't mean none of us do.
The other thing that shits me is this attitude that there is no knowledge or skill in Australia. Well I can categorically state that I have worked with some of the world best and I have never worked outside Australia.
Some came from overseas, some where born here. They have one thing in common, when they work overseas they are regarded as competent capable professionals, when they work here they are labelled and treated as if they are lazy, stupid, rent seekers.
Why is that, simple, there is a pervading narrative among the non technically minded members of Australian society, be they beer swilling bogans, or mincing upperclass twits, that Australians cant do complex, can't do high tech, can't do quality. I call bs.
The biggest problem in Australia is dumb arses who think all techos, engineers and scientists or morons, for the simple reason, that they are themselves, too dumb to realise that other people are smart.
You’re missing the point, and have completely mischaracterised what I’m saying. I’m certainly not saying we can’t do complex, high tech, quality. It’s that we can’t do it as cheaply as others can.
We absolutely can and do do extremely high quality manufacturing very well, and we have many success stories - like CEA. High skill, high quality, high value add niche manufacturing is absolutely what will justify our high wages.
Making Dunlop volleys does not. Hence why textiles are now done on the subcontinent.
Like it or not, making XR8s will not either, no matter how good they were. They were simply not price competitive. Don’t take it up with me, take it up with the consumer who isn’t willing to pay for it.
I don’t know where this chip on your shoulder came from, but frankly I don’t know anyone who looks down on engineers and scientists. Like literally never come across it. It’d be a remarkably stupid position to take.
But this is all a sideshow to the simple fact that Australian taxpayers fork out big dollars for Defence, and ADF members put their careers and the lives on the line, and both are entitled to make sure we’re acquiring the best possible capability for the best value for money. Whether that’s locally produced or not is a secondary consideration. If it can be - fantastic. But it often feels like we’re putting the cart before the horse in some of these decisions and making sure the political pork gets doled out takes precedence.
We had an extended period of time during the mining construction boom where China's hunger for resources distorted our economy. Instead of doing the smart thing (that many other countries did) and investing back into the country and protecting the industries that would be competitive once the boom was over, we have a massive party and pissed it all up against a wall.
I have not missed the point, infact I and others have been ranting against the rank stupidity and short sitedness exhibited by so many in this country. It's not hard to read history but it does seem to beyond many.
It's called Dutch disease, not Australian one, tons of countries have fallen for this, or better said you can count on a hand the countries that haven't fallen for it. To be honest the fact you still haven't had a negative cycle of your economy is commendable, considering the size of your population and the distance to the rest of the developed countries.
All IMHO
All IMHO
Todjaeger
Potstirrer
I would argue that your apparent positions on the value of Australia being able to produce small production runs of certain pieces of defence kit, like PGM's, SPH, IFV's domestically vs. domestic naval shipbuilding are opposite of what is realistically viable.
One must keep in mind that there are a few ways to measure the 'value' of domestic defence/naval production capabilities. The first is of course the economic or financial cost, and for a number of things Australia is just not going to be able to competitively produce XX materials or kit because of domestic production costs and wages. Let us also look at that realistically though, by asking this question, "would it be reasonable for Australia to have China export ship and armoured vehicle hulls to Australia, because that (is perceived to be) costs less than having that done domestically?
The second 'value' comes into play if and when Australia might want or need a specific type of defence kit and there are no facilities with available production spots for what Australia wants/needs and able to deliver in the time frame Australia requires. Or put another way, there is value to Australia in being able to have domestic production of kit, which might cost more financially, if that kit can be produced when needed vs. relying on importing the same or equivalent kit which might not be available when required for a whole host of reasons.
One thing which is a factor is how long a production facility (and therefore the workforce) can be kept occupied or engaged with meeting production orders. This is one of the significant problems with small production runs, especially for very specialized and/or complex kit that tends to have long service lives.
Take SPH's as an example, and keep in mind that most of the numbers I am taking from the WAG Institute. Now suppose the order for LAND 8116 SPH's gets cut down to perhaps just 18. Now further suppose that the Australian facility setup to produce those SPH's will be run at a fairly low production rate, delivering one SPH every two months or so, then we would be talking about the facility taking about three years to complete the LAND 8116 order. Now how long are these SPH's expected to serve in the RAA? Given that LAND 17 began replacing the M198 howitzers used by the RAA since the ~1983 in 2011 with M777 howitzers, then a roughly 30 year service life barring attrition loses sounds fairly reasonable. If the Australian facility does actually take three years to complete the RAA SPH order, that would result in the facility becoming largely idle absent further orders for either the RAA or export, until the SPH's start getting close to their expected end of service life and need replacement. I do not consider it realistic for Australia to keep a production facility going for 25+ years with a trickle of orders for kit in an effort to main a sovereign production capability. Alternatively, such a heavy industry production facility might be able to be re-roled to produce something else which is similar and therefore providing justification to maintain the facility and keeping the workforce active and engaged whilst also potentially enabling the facility to be re-roled again should there be a need for future defence production.
From my POV, I just do not consider it a realistic expectation that Australia would spend coin placing 'make work' orders to keep a production facility running for a generation, on the off chance that there is a need to re-order replacements or to have the facility able to produce a future generation of kit.
Now naval shipbuilding in Australia can be a bit of a different story and for a few reasons.
One of the first is that economic or financials costs for naval shipbuilding, particularly when there is high domestic content, is quite a bit different. I recall there having been studies done for Australia whilst the ANZAC-class build programme was still underway, that determined that even with a 30% increase in the costs associated with building naval vessels in Australia, the overall economic return made it advantageous for a domestic build vs. importing. When one then also factors in the through life, maintenance and upgrade costs and the importance in having facilities and especially an experienced work force to conduct such work, paying an even higher premium can still end up being financially worthwhile.
There are some additional considerations for Australian naval construction as well. One of the first is that there are currently ~46 vessels either in the RAN, or operated by or on the behalf of the RAN. With that many vessels in service, and the potential for an even greater number in the future, there should be plenty of work available for an Australian naval yard and the work force occupied. Of course this is provided that AusGov does not end up deciding to reduce, delay, or outright cancel domestic build programmes, or if various polies did not and do not work towards their own local self interests by establishing or relocating defence production facilities to their own districts, or refusing to fund programmes that would utilize existing facilities and work forces that are in Opposition territories. That is in fact one of the other considerations, that there have been a number of instances where it appears that defence procurement decisions were made based upon what was good politically for those in power, and not upon what would deliver the best kit and capability to the ADF or at the best cost to Australia.
Had things been done differently in the past, Australia most likely could have avoided several of the boom-bust cycles in naval shipbuilding. A more holistic approach could have led to increased flexibility and capacity in shipbuilding, improved build quality, whilst also reducing costs because there would have been less need to recruit and transfer a skilled workforce around.
100% agree with all of the above.
The only justification I can see for some of the “make work” programs is for it to provide the kernel of a war economy. It’s worth paying for that option value, but the cost of that option needs to be minimised. We don’t do that by spreading our already sub scale operations across multiple sites (e.g. WA / SA for shipbuilding, QLD / VIC for armour).
Consolidate at one site, make it as efficient as possible.
Completely agree with this! We could’ve been in the same position as Norway, but instead we frittered it away on unnecessary middle class welfare.
I wouldn’t discount the distortionary impact of the property market as well. The amount of our economy that is centred on fundamentally unproductive activity is extraordinary. I read a piece that the average Ray White real estate agent is paid $170k a year, which is extraordinary for a glorified door opener. Our banks are also way too big as a result of the size of the average mortgage.
Now we’re stuck with a high cost, low productivity workforce, a deteriorating fiscal position (which can be fixed with political will) and the worlds worst household debt (which will shortly end in tears).
Bringing this back to Defence - our economy appears on the precipice of a very significant structural change, much like it was in the late 80s / early 90s. How we handle this change - particularly whether we let the ticket clipping, and corporate and government bloat be wrung out of the system - will determine whether we continue this upward trajectory, or slide into stagnation. I certainly hope we get the leaders we need to do this, as the ability to afford the ADF (and everything else to ensure our security and prosperity) is on the line.
Yes, but you completely miss the point,and I can't be bothered trying to explain what I mean. Past service personnel who have seen the change understand.
John Fedup
The Bunker Group
Canada has these issues as well. Unlike Norway, Canada's province of Alberta pissed away their Heritage Fund (oil royalties) largely on tax breaks. I doubt Canada will get the necessary leaders to sort our looming problems. Sadly our neighbour to the south has an even bigger problem looming in 2024.
Service and financial industries are notoriously difficult to gain productivity improvements. Mining is only productive due to the massive investment in automation (you ever seen a car tipper). Farming is in many cases, reliant on low paid migrant labour.
The irony is the productivity commision, after decades of sprouting the"efficiency" of offshoring, is now saying the economy is struggling to improve productivity as the only real gains can be made are in science, technology, high tech manufacturing and heavy industry.
Yep, after decades of saying the opposite, they have finally woken up to the fact that productivity is actually reliant of investment in plant, equipment, process, and skills.