Trouble at the docks? (part II)
27 Sep 2012|

Earlier this year, Mark Thomson and I wrote a paper that highlighted the challenges in maintaining continuity in Australia’s submarine force. One of the things we didn’t discuss at any length in that paper was the simultaneous challenge in maintaining the workforce required to actually build whatever future submarine is chosen. As Mark pointed out recently, the workforce that’s currently building the Air Warfare Destroyers (AWDs) is already nearing its peak. Even with the deferred delivery times announced recently, the demand for the workforce will have pretty much dissipated by 2019 at the latest.

That’s a problem. If a decision on the future submarine was made today—and it won’t be—work wouldn’t start on a build until around 2020, even with a very favourable timetable. So the naval shipbuilding workforce faces what’s sometimes called a ‘valley of death’—a period in which there’s no warship work around. Of course, given the skills shortage in the wider economy, the folk involved aren’t likely to be unemployed long. They’ll simply find themselves working elsewhere.

Shipyard productivity isn’t something you can just turn on and off. The RAND Corporation has benchmarked the performance of shipbuilders as a function of the number of years’ experience that they have. There’s a clear improvement of productivity as experience is gained—a brand new worker is less than one third as productive as a ten-year veteran (see the graph below.) Conversely a workforce that’s new to the job won’t meet best practice. We’ve probably seen the consequences of that in the AWD program; a shipyard that did sterling work turning out Anzac frigates in the 1990s has struggled with the basic construction of hull modules for the latest generation of ships. The net result has been a delay to the delivery of the vessels and a redistribution of work among the participating shipyards.

Shipyard productivity curveSource: based on data in RAND report MG725 Sustaining key skills in the UK naval industry

So there’s an incentive to keep at least some of the workforce involved in the business of building naval vessels until the future submarine comes along. The question is how we do that? One school of thought is that we should continue production of AWD hulls, fitted out as the future frigates that will replace the Anzacs. By bringing that forward, the idea is that the yards will continue to have an assured workflow, with benefits in retention of the skilled workers and managers we’ll need for the submarines. Other benefits would include a level of commonality of vessels and their basic systems (propulsion, power and housekeeping systems at a minimum) across the fleet. Those benefits are likely true, but the real question is whether that’s an efficient plan overall, once the costs as well as the benefits are taken into account.

Those costs include the earlier than planned retirement of the Anzacs that would inevitably follow, meaning that the costs of upgrading the Anzacs would be amortised over a shorter period and the larger vessels will likely have a larger crew. But the elements of the plan that need the most thought are the system requirements for the new frigates. The AWDs, like all surface combatants, are multi-role, but they’re optimised for wide area air defence. According to the 2009 Defence White Paper, the future frigates will have as their core task anti-submarine warfare (ASW), thus providing an overdue boost to a long neglected capability area.

At the very least, the Aegis air defence system will be replaced, meaning that the ships will need a new radar and combat system. As well, they would greatly benefit from a second helicopter, requiring some redesign in their superstructure. The sonar systems fitted to the AWDs should be quite capable, but mightn’t be the best solution for a dedicated ASW ship. All these changes are doable, but experience should teach us not to take any redesign and integration work for granted. There are also some engineering questions to be asked about the suitability of the AWD hull and propulsion systems for the ASW task, for which reduced radiated noise from heavy machinery and flow around the hull is required to reduce the detection range of the vessel by a hostile submarine. It might be the case that a modified AWD isn’t as effective in the role as a different design and the level of compromise would have to be looked at carefully.

The UK tested a similar idea in the first half of the 2000s, looking to take advantage of their Type 45 destroyer design as the basis for a future multi-role vessel. Many of the same advantages were being sought—continuity of work in shipbuilding and reduced fleet running costs. But as the concept was developed, the costs and risks of the modifications required were found to outweigh the benefits and the idea was quietly shelved.

That doesn’t mean it’s a bad idea for us to pursue. We’re starting with a different vessel, a different set of circumstances in our shipyards and different capability requirements. (Not to mention our strategic situation and national finances.) We need to do our sums. Letting the shipyard workforce run down before building it up again later has obvious costs, and the work of RAND and others will allow that to be quantified. And there’s likely to be political pain in seeing a significant part of some state economies wind down. But there are costs in moving to fill in the workflow gap by a program like an evolved AWD as well.

Like all expenditure of government funds, the correct approach is to do a cost-benefit analysis of the competing options. As unexciting as that might sound, if we don’t do that rigorously, we run the risk of letting the workforce tail wag the capability dog.

Andrew Davies is senior analyst for defence capability at ASPI and executive editor of The StrategistThis post is an excerpt of a talk presented at the Australian Defence Magazine Defence Workforce Participation Summit today.

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