Is Australia worried about US submarine production? Over to you, SECDEF

LONDON—When defense chiefs from the U.S., UK and Australia met reporters after their AUKUS meeting here on Thursday, they touted an agreement to share a submarine-hunting torpedo. But when asked whether Australia was concerned about the U.S. ability to produce its promised submarines, Australian Deputy Defense Prime Minister Richard Marles had little to say.

Instead, he deferred to U.S. Defense Secretary Lloyd Austin.

“First of all, in terms of our ability to meet the production objectives, of course we're concerned about that, and that's why we're investing more in the submarine industrial base, so that they can continue to expand capacity and place our efforts on a ramp that ensures that we can meet the objectives,” said Austin, who added that he has met with U.S. industry leaders to talk about how they’re using new funds intended to boost the submarine industrial base. “What I’m seeing is that we're investing in the right things, and we will be able to expand the capacity going forward and to meet our objectives.”

U.S. shipyards are up to three years behind on orders, according to a recent U.S. Navy study, which has cast some doubt on their ability to backfill the U.S. end of an agreement to sell Australia three Virginia-class submarines—with an option for two more—in the next decade. The sub purchase is part of the three-year-old U.S.-UK-Australia agreement known as AUKUS, an effort to foster cooperative technology development.

Australia has committed to an initial payment of $3 billion—perhaps one percent of the total it expects to spend to buy, support, and eventually build its own nuclear subs through the 2050s. 

That $3 billion is expected to start flowing next year into a special U.S. Treasury account, and the U.S. intends to invest two-thirds of it in its submarine industrial base, a senior U.S. military official told reporters ahead of the meeting. The money—alongside the $17.5 billion the U.S. has committed over five years to improve its submarine production—won’t go to shipbuilders directly. Instead, it will fund six areas that will produce “maximum return on investment” in the 16,000 companies that form the submarine industrial base.

“Things that take a long time in terms of infrastructure, in terms of long-lead items, in terms of vendor uplift, in terms of overall supply base management,” the official said. 

Getting the bulk of those funds upfront will “allow us to maximize the return on investment such that when we’re at the point in the 2030s to where we are selling ships, that we're back at the appropriate cadence. The Australians have helped us re-achieve the appropriate cadence, along with our congressional partnerships that have put a substantial amount of support behind that,” the official said.

It’s not clear that the cadence has been re-achieved just yet. In recent years, U.S. submarine production has failed to meet the demands of its own Navy, largely due to supply chain problems and a dwindling trained workforce. It’s a conundrum that has prompted the Navy to back splashy advertising campaigns and free training courses. Unusually, the Pentagon and Navy have committed up to $4 billion to two third-party firms—the consulting giant Deloitte and the nonprofit startup BlueForge Alliance—that have been hired to boot sub-building into a higher gear.

AUKUS progress

On Thursday, the defense chiefs also announced an agreement to equip all three nations’ sub-hunting P-8 maritime patrol jets with Sting Ray torpedoes.

John Healey, the UK’s defense secretary, also said the UK agreed to keep training Australian sailors on how to use and maintain nuclear submarines, and to continue negotiating with Australia on their own bilateral treaty to bolster the AUKUS agreement. 

“After the first course of 250 Australians was completed this month, and as part of that work, I can announce that Deputy Prime Minister Marles and I have agreed that negotiations will soon be underway for a new bilateral treaty to bind our AUKUS collaboration into law. This not only reflects our commitment to secure a secure Indo-Pacific region where international rules are respected. It also sends a very strong message that our defense alliance is one that will endure for many decades to come,” Healey said. 

This agreement, if finalized, will foster submarine production plans between Australia and the UK as the two nations work to develop the SSN-AUKUS type submarine. 

Marles said Australia has already obtained a site for his country’s future sub-building yard.

“In South Australia, we have seen land swaps take place with the South Australian government, such that we now have the site on which a production line will be established to build the future nuclear-powered submarines in Australia, the AUKUS variant, a variant that we will operate in tandem with the United Kingdom,” he said. 

Marles also noted last month’s work done in Perth on the Virginia-class submarine USS Hawaii, the first time a U.S. nuclear attack sub has been maintained outside the U.S. or an American base, and by non-U.S. citizens.

“All of this is happening under the banner of the AUKUS arrangement,” he said. 

Last year, the U.S. and British defense leaders announced plans to increase deployments of SSNs to Australia starting in 2027, and to embed Australian military and civilian workers in the American and UK industrial bases. Those plans are all on track, Marles said. 

“The very first step in what we announced in March of last year was an increased tempo of visits of nuclear-powered submarines to Australia. That is happening. The submarine rotational force west, which will take place from 2027, is on track. And we are working very closely with both our partners, along with the Western Australian government, to see that that is happening as well,” Marles said. 

Each of the defense leaders touted the submarine training as a progressing initiative. Australia has sent hundreds of sailors to the UK and U.S. nuclear-power schools to learn about how to operate undersea vessels in the future. The nation is also funding universities to add 4,000 slots for AUKUS-related disciplines, “to make sure that we are building the skills that are needed to deliver this project,” Marles said.

Healey stressed the technical complexity that goes into building a submarine, which contributes to how long they take to build—and makes the early steps each nation takes critical. 

“This is the, perhaps the most complex engineering and technologies on the planet, but there is an imperative to see every day counts. Because it’s what we do now—and in the weeks and months ahead now—that will determine whether or not, to time, towards the end of the 2030s, the first AUKUS submarines are built and put into operation,” Healey said. “And in our discussions, that theme ran throughout: timescales are tough, but they are essential. And that together, we are absolutely determined that we will deliver.”