How France sank Japan's $40B Australian submarine dream | Hacker News Reader

How France sank Japan's $40B Australian submarine dream

reuters.com

105 pointsaltstar65 comments

The only one who kept the deal with Japan alive was Tony Abbott because of his personal friendship with Japanese PM.

Mitsubishi Heavy Industries doesn't have an experience to build submarines overseas and there were significant risks leaving someone to "learn on the job".

USA has been (correctly) pressuring Australia to select vendor on its merit and not to take into account geopolitics. Geopolitically, Japan is a lot more important to Australia than France. This is the reason Japanese believed for so long they had the deal in the bag.

With Abbott losing his job, it became easier for France or Germany to hop in. Especially when new prime minister had agenda of damaging previous PM. I think Abbott must feel terrible about Japan not getting the contract but it only shows deals like these should be done at arm's length. Abbott even wrote personal letter to Japanese PM to apologize.

MHI always wanted to build them in Japan, and it was clear that the proposal for a local build of Japanese subs was going to be very expensive.

I don't think Turnbull had/has any agenda to damage Abbott. He is ambitious, yes, but once he had the job he didn't do anything else.

It's worth noting that the likely loss of the submarine build to be done in Japan was one of the primary reasons the SA liberals almost all switched to supporting Turnbull.

> USA has been (correctly) pressuring Australia to select vendor on its merit

I am almost certain the USA is disappointed with Australia's selection, as US companies would have supplied several critical battle systems. In fact Australia "could experience significant difficulty getting the most advanced US combat systems" thanks to selecting the French over the Japanese.[1]

http://www.theaustralian.com.au/national-affairs/defence/cau...

This article claims USA will still supply combat system for submarines.

> Australia may have awarded France a bumper contract to build its next generation of submarines, but its highly secretive combat system will come from close ally the United States.

http://www.dailymail.co.uk/wires/afp/article-3567774/France-...

Interestingly enough, France used to make the same naïve mistakes the Japanese did : follow too closely the bid "rules", not lobbying enough, not taking political landscape into consideration, not attending to "social events", etc.

Having worked in the areospace industry, I've seen France lose some "in the bag" public markets by letting other countries lobby and spin bid's technical specifications to their advantage.

It seemed they learned the lesson, at least for this bid.

I have to say I am feeling rather upbeat about France these days. I know France has a huge number of problems, but French businesses seem to struggle through them and do well.

The French play hard ball, they also still value stuff they make themselves and that combined with government policy of making as much domestically as they can when it comes to military gear has paid off.

The UK could learn alot from them. Sadly we never seem to.

Agreed.

We never seem to realise that some government intervention might be a good thing when it comes to strategic industries or related.

Instead we get told the service industry will save us and that financial services is where we go.

End result, GDP growth with everyone but the top percent in London get proportionally worse off.

'struggle through and do well' is how I'd describe the country.

Losing the Saudi Arabia deal is very intensive learning experience.

Please! France knows how to play hardball in aerospace and has been doing so since at least the mid 90s. French assets were involved in industrial espionage against Boeing and feeding results back to Airbus. (That is not to say that the US didn't/doesn't do the same).

Here's one commentator's take on the matter, from the Australian Financial Review:

Can there possibly be an upside to [Prime Minister] Malcolm Turnbull's decision to squander billions of taxpayers' dollars building 12 French submarines in [the state of] South Australia?

It's hard to think of one.

Of course, there are potentially critical South Australian seats at stake in the coming election and Turnbull no doubt believes it's worth every penny to ensure that the Australian people are not deprived of his greatness.

But surely there were cheaper ways to buy off the South Australians.

With a 30 to 40 per cent local cost premium as a starting point and the history of the Collins class submarine to go by, the federal government could have hired all the Australian Submarine Corporation (ASC) workers to do nothing and the taxpayer would have been billions of dollars better off – because at least they wouldn't have been making grossly overpriced submarines.

http://www.afr.com/opinion/columnists/alan-mitchell/turnbull...

Christopher Pine had better be worth it.

Pyne. Turns out he delivered this and is pro-marriage equity. Maybe he wasn't as bad as I thought (although his attempt at education reform when education minister was a debacle).

> With a 30 to 40 per cent local cost premium as a starting point and the history of the Collins class submarine to go by

It's a popular myth that the Collins class subs were a failure. They were actually a great success (once the teething problems were ironed out) and, from memory, came in at only around $50m over budget.

Yes this is true - the problem is we can't crew them.

Why? Australian ambition too big for its population size? Not enough people willing to serve? I would think competition to get into the submarine service, among military people, would be high.

Is submarine crew a good position in the military? Seems like a shit gig to sit in a metal can with no sunlight for months at a time but maybe that's just me.

It's slightly better paid and a chance to do some "real" operations even in peacetime, e.g. surveillance on rival nations (a lot of this during the Cold War), delivering and extracting SOF, being first on station in the event of a crisis, live-firing cruise missiles, etc etc. Everyone's motivated differently I guess.

It's relatively "elite," for people that care about that.

If the Australian Navy is anything like the British navy, getting sailors into the submarine service and getting them to stay there is awfully tricky. The RN tries very hard to make submarine service all volunteer, which constrains the pool further. By and large, it's a far less pleasant working and living environment than a surface vessel, and a number of submariners also cite the massively constrained communications as a reason for being thoroughly sick of it. Extra pay only goes so far.

The problem is Australia is too large for a dozen submarines to patrol. That kind of duty is pretty arduous, and if you don't give the men enough R&R they quit.

Indeed. You can watch a Collins class sub take out a US Destroyer during war games, in this relatively short video.

https://www.youtube.com/watch?v=nqFVOL7mLd4

As someone from SA: we needed those jobs. I'd like it to be different, but there isn't room in SA for long term economics at the moment - Holden closing is putting too many people out of work, and too many suppliers out of work too.

And the cost difference simply isn't true. They are comparing the SA full lifetime cost (including maintenance) vs the overseas build-only cost, as the maintenance was always planned for SA.

That cost difference doesn't seem bad considering you'll get to tax the income once earned, and you have to imagine investing in this could give rise to some cottage industries that will contribute to the area for generations.

You could make an electric cargo trike for every single person in the country, plus have some money left over. Some of that left over money could go into building bike paths.

What an amazing country where every single person would have free transport.

Less people would be dying because of obesity, and air pollution. Two of the biggest killers. Actual things that are killing Australians right now. Not imaginary ones.

So you don't believe Australia should have any form of maritime defense or offense force?

Air pollution is the least of anyone's concern in Australia. Life expectancy is amongst the highest in the world.

As a cyclist I'd love to see that business in SA too. I don't see why a government should build that business though, but I accept the argument that the government should be responsible for defense.

Additionally I think submarines aren't a terrible thing to spend money on for a country like Australia.

The subs are an insurance policy for our heavily trade-dependent economy. We need to be able to project monitoring and intelligence gathering over a very large part of the world - including the key trade routes near to us that no less than a half-dozen nations are currently posturing over.

That is the reason we went from 6 submarines to 12.

Considering our size, our island status, the nations we are surrounded by etc. our 1.8% of GDP spent on defense is a bargain in international terms (we rank past 50th on that scale)

As for building the next-generation sub in South Australia - stimulating an economy that has been disproportionately impacted by the decline in manufacturing has to take precedence over the relationship between two prime ministers (which is the dumbest possible reason to spend $50 billion).

Hopefully the investment will not only avoid queues at welfare offices (likely to cost more over time - especially with pension and healthcare obligations) but could lead to the development of next-generation industries, including the first local lithium-ion battery manufacturing plant.

http://insidestory.org.au/keeping-the-sea-lanes-open-a-cost-...

> Vague claims about economic interests loom large in such discussions, but attempts to pin them down to concrete realities are generally ignored.

There have been two defense white papers in 3 years, they're both about 200 pages long and that is just the overview of the strategic thinking. It is hardly 'vague'

His argument - on the other hand, involves plugging a number that is literally made up into a discredited formula that doens't apply to this situation and then arguing the logical fallacy of what we don't know we don't know but it could be bad.

Gets me thinking about how much of past centuries violence is still here but channeled and diffused through dissuasion and heavy armory like these subs.

General Douglas MacArthur once said: "The history of failure in war, or in any other human endeavor, can be summed up in two words: 'too late.'" This quote fits perfectly with the story.

Doesn't looks like France sank Japan's bid...Japan sank themselves by thinking they won why clearly the bidding process just started.

Everyone is positioning this as though Abbott was selling out Australia to advantage his Japanese buddies.

In reality, the current administration is selling out Australians as a whole, to advantage specific workers in South Australia. Those workers are building the submarines in a MUCH less productive fashion. Some estimates are that the submarines will cost %40 more than if built in Japan. And this is a huge contract, worth tens of Billions of dollars. It is not unfounded to say that this contract is the equivalent of a charity payment of $15B or more to specific (small) groups of Australian shipbuilders.

Such a move only makes sense in two contexts: 1) a ruling party needs to win political support from a faction controlled by the benefitted labor group; or 2) the country decides as a policy that it makes sense to develop an indigenous industrial capability in the sector (or to prevent the loss of the capability if it exists).

The first concern is lame. The second one is also not compelling when you think of the opportunity cost of those Billions. The same Billions could be used to develop a domestic drone capability, or any of a hundred other technology infrastructures. Or, if we just think about the money as a bribe, you could bribe far more citizens with other forms of direct payments, which would cut out the private contractors who are the ones who will benefit disproportionately now.

This is not about France vs. Japan. It's about economic logic vs handout politics.

Aren't submarine props usually classified? Meaning you don't just let people take pictures of them?

I think that is just for certain US designs. If France is building them for another country, they can't be that secret.

A few years ago, you could see an uncovered Trident submarine screw on Microsoft Maps (it wasn't Bing yet).

http://www.ogleearth.com/navyprop.jpg

Trident is a type of SLBM. Is that an Ohio class sub?

http://www.seattletimes.com/nation-world/virtual-earth-image...

It looks like it was an Ohio class.

Awesome! I have never seen a real picture of the screw before.

It is not too hard to understand. If you are inexperienced fighting with the big boys you will lose. As an Australian I hope we get something useful out of the tens of billions we are about to spend.

If I read correctly, the subs are going to be built in Australia. So, you got, at least, jobs creation.

Yes we will get some very expensive jobs - the open question is are we going to get some submarines that are able to get out of the dock on a regular basis and not be detected from 1000 km away.

In the big picture, France has experience in nuclear submarines, the stealthiest ones (for France, India and Pakistan). I don't know how much of that technology in going into the Aussie ones, but the skill is there.

Unfortunately we are not building nuclear subs.

We are instead turning established French nuclear subs into diesel electrics.

That is the hope. I have a bad feeling that this will not be easy, cheap or quick.

It seems to me to be a smaller change to an existing design than that proposed by Japan.

When submerged, diesel electric is even quieter than a nuclear sub as there is no nuclear plant noise.

Separate to the build-quality problems of the Collins class, Australia has struggled to crew the ships.

Some reports say that the Collins class has 60 people on board. These recent articles have had me thinking - I doubt you need so many people.

With the space/storage situation, there is even less excuse to avoid automation than anywhere else. You should be able to shift the bridge with six or seven people (including officers). You'd need some people to maintain systems, and that should be cross-skilled work. Medical, kitchen.

:-) I like to think there's a submariners forum somewhere and they're asking why Twitter needs thousands of programmers. Like, what do all those people do all day?

I mean, with your minimal crew who's going to feed the badger? http://www.theguardian.com/uk/2012/aug/21/life-on-board-nucl...

As a programmer, I also wonder about Twitter ;)

I think everyone wonders about Twitter's head count. But, you know, nuclear reactors at 1,500 ft are child's play compared to 140 character messages.

Kidding aside, it'd be interesting to get Twitter's ops team headcount for comparison.

Reading about old battleships in WWII with complements of over 2000, I've always wondered what you need that many sailors for. Obviously they're necessary, but it's still a lot of people.

> Consider a submarine where everything is automated.

We're not quite there yet but there have been some interesting developments.

The Soviet Project 705 ( Alfa ) class was highly automated with a crew of only 30. All were top-tier officers ( no NCOs or ratings ), partly due to systems-mangement training requirements and partly because most of their shoot / no-shoot decisions would have been war-starters due to the types of missions assigned.

The Swedes are also keen on automation for their small littoral submarines; the Näckens had only 19 crew, but without the need for long endurance at sea.

Warships have historically been over-crewed for normal operations, because when one catches fire you really, really need as many people as you can get to fight it.

This would be a good example of why you need a large crew besides normal operations. https://en.wikipedia.org/wiki/USS_George_Washington_(CVN-73)...

The fire lasted 12 hours. You need more than one group of people to fight fires for that long. You can't realistically man hoses that long with a small crew not to mention everyone is at battle stations during something like that and putting out fires primarily relies on the people on duty that day since everyone can't just stop doing their jobs in scenarios where for example they're already in a combat mission.

The Collin class is based on a scaled up version of the the Swedish Västergötland-class, which has a complement of 18 officers and 6 conscript. I could imagine the Collin class to need more personnel if it sails longer, but I don't know if 60 is excessive or not.

There are also technical reasons for the DCNS winning the bid: the Germans have no experience in building subs of this size, able to cross oceans (they build small coastal subs to cruise Baltic sea); the Japanese have no experience of anaerobic diesel-electric propulsion.

If you want to be strong in Asia you should work with the country in the region, i.e. Japan. France is a powerful country in this regard, but also not a very reliable one (cancelled Israel and Russia deals, for example).

I am sure there is more to it than just one businessman being smarter than the other one. Or AU leadership being strategically smart.

I believe it is a "divide and conquer" type of thing, one of "the great games" at play.

Since your handle is "democracy", you'd do better mentioning the reason why we cancelled those deals in the first place.

It's not like we're "unreliable", it's that there is still some (tiny) human component in our dealings with those countries. And I think it's both very naive but refreshing.

There is a tiny difference between standing on high moral grounds and being a reliable business partner, though a very small, almost unnoticeable to some.

sounds like Abbott and Costello Met Frankenstein :)

I'm confused, we're supposed to support an arms deal, while the word is having a hell of a time keeping it all together? Are we not past this boys and testosterone thing? It's not the 12th century.

Lets grow up kids. Just get to Mars already.

Reply on news.ycombinator.com