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The Forum > Article Comments > Hypocritical debate over ASC's capacity to even 'build a canoe' > Comments

Hypocritical debate over ASC's capacity to even 'build a canoe' : Comments

By Brendan O'Reilly, published 1/12/2014

I know enough people in the services and in the Defence bureaucracy to be certain that ASC is definitely not held in high regard and that, if our Navy seeks value for money, it should buy its submarines overseas.

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If ASC don't get new orders then ideally there would be other jobs for the workers while the management is sidelined. I understand that affects some 2,200 whereas Holden and parts supply jobs could affect another 13,000. They seem to have been forgotten. Compounding SA's economic woes is the likely steep increase in the price of natural gas from next year. It provides half of SA electricity despite or perhaps because of their large amount of wind generation.

In my opinion SA's best prospect is extending the uranium industry. That is go beyond mining to enrichment and power generation. Export predictable power to Victoria and NSW instead of frequently importing dirty coal power. Many of the skilled workers in car making and naval construction could move to the new industries. Otherwise SA will become a big retirement village with the young people having moved out.
Posted by Taswegian, Monday, 1 December 2014 9:08:24 AM
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The workmanship and cost blowouts of ASC are not the fault of the "workers" but are of course because of management and oversight. This should go right up to the ministers of defence.
If we are going to "offshore" our complete defence equipment requirements then let us go the whole hog and hire the US navy and air force to do our fighting for us.
I am sure that they would only be too pleased if we donated bases to them all around Australia in exchange.
Posted by Robert LePage, Monday, 1 December 2014 10:42:15 AM
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The lack of logic or economic expertise in the article is quite revealing, and probably explains why our economy is now spiraling ever downward!
First the author bags our ability to build subs/ships, all while ignoring the foreign orders for our very fast ferries, or the fact WE developed C.A.D. and C.A.C that drove the price of world beating (fits like a jigsaw) shipbuilding down through the floor boards!

Or that government involvement, and the political on again off again ordering, has virtually forced our own home grown expertise to relocate offshore; as their only means of employment longevity.

What does much much smaller Norway have what we don't?
Clear eyed pragmatism that places the national interest first perhaps!?
They don't have our iron ore resources, nor our locally invented direct reduction steel smelting!
Albeit, they may have encouraged some of our native expertise to their shores.

We should just crack on building these subs and ships here; and if we don't have all the expertise, emulate much small Norway and import it!

Simply put, and it's an economic fact, that money spent here, goes around and around in our economy, and up to seven times; doing economic work and economic stimulation before finally exhausting!

Please consider, get the Japanese or the Germans, with MUCH HIGHER labor costs, to build a dozen of them for us, with all the then inherent economic flow on benefits, (up to seven billion per sub) flowing through to them!
Why we can even ship the iron ore over; [fuss and fume over inevitable cost blow outs,] and then sail the subs made from it back here! Then refit them, with most of our native expertise gone, (half a bill per sub?) so we can work with our allies?

As a lamb chop chewing Kechovitch would say, you know it makes perfect sense!
It's the economy stupid!
Rhrosty.
Posted by Rhrosty, Monday, 1 December 2014 10:57:09 AM
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It does seem that the rhetoric on ASC had dramatically changed since the pre-election commitments from Senator Johnston :

http://www.senatorjohnston.com.au/Media/OtherMedia/tabid/71/articleType/ArticleView/articleId/326/Doorstop--Future-submarine-project.aspx
Posted by wantok, Monday, 1 December 2014 11:11:46 AM
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WHAT ASC STANDS FOR:

ASC has been established as a magnet for Federal government Dollars for the Air Warfare Destroyers and coming Future Submarine build.

Workers and managers in ASC who continue on their intentional go-slow, over-budget, over-time way-of-doing-things are true patriots for South Australia.

For ASC to cut costs or be more efficient is to deny South Australia an income.
Posted by plantagenet, Monday, 1 December 2014 12:35:26 PM
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It really does say it all, that Defence Minister, David Johnston is under attack for telling the truth.

Garbage Robert LePage, The workers at ASO are typical of union controlled government owned or funded manufacturing.

They do as little as possible, take as long as possible to do a job as badly as possible, for as much pay as possible. They produce garbage, so by association they are garbage. Having looked closely at their work, no amount of money would get my son to serve on anything built there.

Yes Rhrosty we did develop catamaran very fast ferries, but did you not notice, that was private enterprise, definitely not an overpaid, union controlled government shop.

I might mention I ran 2 of those ferries in the Whitsundays. I was extremely glad ours were built by NQEA in Cairns. A competitor in MacKay had one of those built on Tasmania. They chassed a single crack in the hull, one of many actually, for 56Ft before they finally stopped it by rebuilding a lot of that part of the hull. We had a number of cracks in the hull around one engine bay. We chassed the problem for months, had to rebuild that part of the hull in dry dock to fix it.

It was fortunate we had 16 Ft tides, so we could put the thing on the beach, beside the jetty once a fortnight for 6 months to patch it up. If we had been paying commercially for those patch up jobs, it would have sent us broke. Yes we can deign some great stuff, build some things, but I would hate to have to fight in most of the stuff. It is a big enough fight just to keep it floating.

The southern unionists NQEA had to employ to increase their local workforce when they got the patrol boat contract very nearly sent them broke, with their, claims, attitude & lack of ethics. You could not give them a government contract at any price today.
Posted by Hasbeen, Monday, 1 December 2014 12:48:29 PM
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David Johnston's under attack not for telling the truth but for making prejudiced comments that reveal his intention to break an election promise. His pathetic apology, for the offence rather than the untruth, made things worse.

Setting up ASC was difficult, and in hindsight we can say it wasn't worth it. But the Howard government managed to fix the problems, both in the submarines and the corporation. Now the ASC has the capability, though inevitably with this sort of project there will be teething problems every time a new design is introduced. But if no new orders come, the expertise will eventually be lost, and in future we will either have to spend a huge amount of money regaining the expertise or buying from overseas will be the only option for future governments.

Even if offshoring would save $20bn on the purchase price (which seems unlikely) they would not be $20 billion better off because there would be a substantial reduction in tax revenue from SA.
Posted by Aidan, Monday, 1 December 2014 1:27:08 PM
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Expertise, you're kidding Aidan, aren't you.

Rather than turn South Australia into a sheltered workshop for incompetent union bludgers, we should turn it into the welfare state.

We could transfer all retirement villages down there, it's not good for much else, & we could put all those displaced General Motors NON-workers, & the sub layabouts to community care on the minimum wage.

We could compulsorily move all those unemployed for over 2 years to SA for the same kind of work. That would fix the unemployment problem, or at least it's appearance. No one is going to admit to being unemployed if it means compulsory removal to South Oz.

OK, any other problems you lot need fixed?
Posted by Hasbeen, Monday, 1 December 2014 2:01:19 PM
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His only crime was saying the truth about the ASC. A canoe of theirs would be hazardous and such Union sheltered workshops cannot be allowed to risk the lives of Servicemen. Buy the things from overseas, have plenty of quality spares with all the savings and contract out maintenance.

Bugger the Unionists, they killed Servicemen in WWII with their wharf games, lets not have more deaths due to Lefties.
Posted by McCackie, Monday, 1 December 2014 2:28:11 PM
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That explains everything "neverwas" is a Queenslander.
Posted by Cobber the hound, Monday, 1 December 2014 3:14:10 PM
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No Hasbeen I'm not kidding. Expertise is very important, and its loss by government shorttermism is a huge waste.

Do you have any actual evidence at all that unions are responsible for any of ASC's problems?

People in SA want to work, but business investment is being dampened by interest rates set for the eastern states, and there isn't currently enough government spending to compensate.

_____________________________________________________________________________________________

McCackie, are you really saying that what unions in other states did seventy years ago should have any bearing on how ASC workers are treated today?
Posted by Aidan, Monday, 1 December 2014 3:19:38 PM
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Got it in one Aidan!
Perhaps if we could clean out Hasbeen's bludgers, we could do better than those places where the labor costs are higher. (Japan Germany)

I've always advocated that we should junk unfair dismissals by increasing work start, as the take it or leave it, offered only once, trade off.
Something that the ship building Scandinavians have tried, and it seems, with considerable success!

I would separate government ship and sub building, and re-float them as completely autonomous corporations, able to tender for Government work!
And given all the local advantages, for less than building the things in Japan or Germany.

The government needs to play its part and just crack on with supplying cheap energy, like say thorium power, connected to micro-grids, which in effect would supply power for less than half what Australian Industry is currently expected to pay!

We built the snowy Mountain scheme by employing the people we needed from wherever!
Rather than local lay-abouts, who I would have wait six months before able to get job start.

If that's too tough? Why they could always find a place in the defense force, which wouldn't moddy coddle them I assure you.
There'd be no nose furniture, no party drugs or playing computer games until early morning; and then sleeping in until after 11am.

They'd be up and running before breakfast in the first light, doing forced marches during the day, camping out and learning how to make fire without matches, if they wanted a hot meal, or boiled water.

And they'd carry all their food, water and camping gear on their backs, only resupplied once a week or so.
They'd learn the value of disciple, cooperation, being a team player, and eventual self reliance, and indeed, all the inevitable self esteem they'd get from all that.

The principle problems with the Collins class, was crewing them!
Having to wait for sit down money, would likely change that and the notion of service!
We've already changed the (British disease) culture on our wharves, thanks to armed and determined ex service men!
Cheers, Rhrosty.
Posted by Rhrosty, Monday, 1 December 2014 3:25:11 PM
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Yes Aidan, I had a vessel being built at NQEA, & the 2 catamarans under warranty while they were building the Patrol boats. I knew some of the management well, & some of the top trades people, who were visiting us sorting out a few niggles with the new cats.

I was well aware of the problems the southern unionists caused, & some of the stupid strikes delayed our work.

I am also aware of the problems my son, managing a department of Garden island naval dockyard is having trying to patch up the ships they built.

Have you ever asked yourself why we would send a slow supply ship, Success, to the gulf if any of the destroyers were actually fit for purpose?

I'm sure there are some good people there, but they are cowered. I know a couple of people who argued against yet another strike at the Gladstone power house construction in the day, were belted into silence by southern unionists. We had a real problem with union thugs in Oz then, & still have today.

Yes I know we should build a big dam at the SA border, & keep Vic, NSW & Qld water where it fell. SA could wither away, like a prune, & cease being such a costly problem. Ultimately we'll have to, but meanwhile we'll just keep bleeding water & money to keep this old settlement mistake, sort of afloat.
Posted by Hasbeen, Monday, 1 December 2014 4:11:10 PM
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Hasbeen, are you sure those "southern unionists" are from SA not Victoria?

Far from being a "settlement mistake", SA always kept itself afloat while its rivals all had to rely on convicts. SA avoided most of the union trouble that other states had, and for a long time had lower wages than they did. That's seldom now an option (the IR system now being overwhelmingly under Federal control) and SA doesn't get much in return for having to contend with interest rates that are inappropriately high.
Posted by Aidan, Monday, 1 December 2014 4:48:21 PM
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Our cow try lost much of it's ability to produce quality workmanship and remain competitive, when big brother intervened in the workplace and restricted employers rights to employ the best person for the job, or at least pay them more than the poor producing worker.

I'm sure there is a link between Australia's manufacturing decline and unfair dismissal laws, that when introduced created chaos within many workplaces.

It's not rocket science you know, we can't have top wages and conditions, poor work ethics and poor productivity rates and stay competitive. Something had to give. The sad part is that many manufacturers are still manufacturing, they're just not doing it here.
Posted by rehctub, Monday, 1 December 2014 5:40:55 PM
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We should forget the lot and buy 8 Virginia Class nuclear submarines. There is no more isolated country on Earth.

How long will our nuclear phobia continue?
Posted by dane, Monday, 1 December 2014 8:45:26 PM
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No Aidan, I have no idea which state supplied those trouble maker non workers. I think they float around the country looking for companies with government contracts, funding, or government owned companies. This makes the employer vulnerable, or means a slack no penalty workplace, where they can sleep of last nights binge.

I don't think they are particularly SA origin, but they gravitate to places like ASC, or the car industry, where government handouts were funding ridiculous wages for process workers, worth about $35,000 a year or less.

They have now infested SA & Vic, & would take a huge effort to clean out.

We had an instance of this garbage a while back when the Labor government directed that one of the amphibious ships, Kanimbla I think, go to the floating dry dock in Newcastle, rather than Garden Island, which had all the facilities & experience. This was to please the unions.

The crew, who all lived in Sydney, had to be accommodated in pubs, at huge expense, the dock did not even have welders qualified to do much of the required work, & it almost appeared the union only wanted the work, so they could strike & delay the ship as long as possible.

I could go on, but it does get boring, when I appear to be talking to a wall.
Posted by Hasbeen, Tuesday, 2 December 2014 12:13:13 AM
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The main problem for ASC is the A. Australia is the owner of ASC but only foreign customers can put real pressure on such a state owned company. Australia can’t put any pressure on ASC for cost overruns or whatever.

ASC’s economic problem was already condensed within one sentence: “With respect to overheads, for every 1.3 production workers ASC had one office worker; Kockums, by comparison, had 3.1 production workers per office worker.”

The only solution for the Collins-class replacement to be within Australia’s financial limits is a foreign company as main contractor. Japanese companies have no experience to license build submarines. A failed license build was the main problem for Collins-class. Kockums did and does build good submarines but a license build is something quite different. That is the reason why Japan is going to build its submarines at home.

To keep the jobs and knowledge in South Australia just DCNS or TKMS offer sufficient experience in license build of submarines. DCNS or TKMS should setup a new company right next to the current ASC submarine wharf so the workers and engineers don’t have to move that much. I don’t think unionized workers would be a big problem for companies from France or Germany with experience to local unions.

$36 billion was an estimation by ASPI for a new submarine fleet build by ASC. This year TKMS offered to build such a submarine fleet for $20 billion. What is within range of ASPI’s estimations: https://www.aspi.org.au/publications/what-price-the-future-submarine-by-andrew-davies/Policy_Analysis99_Submarine_costs_mk2.pdf
Price estimation was $8.8 billion for 12Type 212/214 submarine at 2,000 tonne therefore $20 billion for 12 submarines at 4,000 tonne with some development costs is reasonable. $36 billion is lunatic but I expect an ASC build submarine would even be more expensive because the development risk was not covered by ASPI’s estimation.

ASC’s workers and engineers can build a canoe but it would be expensive and delivered late due to management errors. Get the workers and engineers out of ASC and kill the rest.
Posted by MHalblaub, Tuesday, 2 December 2014 1:24:33 AM
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Hi MHalblaub

Noting this is your first ever OLO post - welcome to OLO :)

My spies tell me you are an authentic expert on submarines - particularly propulsion systems.

Costings for Australia future submarines (SEA 1000) is more an art than a science because:

- few or no-one knows for sure how many subs the Australian Government wants (my money is on 6 with an option for 2 more just like the Collins)

- few or no-one knows exactly what characteristics (eg. range, Lithium-ion batteries and VLS?) the Australian Government wants (or needs) for the submarines

- the exchange rates for Australian dollars to German or Japanese currency shifts greatly over a 20 year payment plan (from choosing, designing and final launching)

- difficult to extrapolate today's dollars to 2035 dollars

- difficult to differentiate between foreign content in labour and parts to Australian content labour and parts

- difficult to differentiate between "upfront purchase price, "training costs" "spares", "breakdown" "sustainment" etc

- difficult to quantify the POLITICAL, TECHNICAL AND FINANCIAL RISKS OF NO JAPANESE SALES RECORD for Japan's first major defence customer.

Will our current Prime Minister's good feelings about the current Japanese Prime Minister Abe be seen as a compelling reason in 20 years' time?

Regards

Pete
Posted by plantagenet, Tuesday, 2 December 2014 12:37:19 PM
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