There was a lot of high volume love lost in early May when Austal did not win a $5.58 US Torpedo boat defence contract, despite a useful Australian Commonwealth Defence win.*
... Despite the new contract, the AFR implied the Austal’s Perth shipyards division was still sailing very close to the edge and needs another defence contract to ensure survival.
That would put a hole in the hull?
It would be good to hear of good news regards Austal’s tender to build the two new Spirit of Tasmania ferries?
(https://www.abc.net.au/news/2020-07...ies-could-be-built-in-australia-jobs/12476538).
cheers
https://www.afr. com/companies/manufacturing/us-navy-torpedo-hits-austal-share-price-20200501-p54p0k
US Navy torpedo hits Austal share price
Brad Thompson and Andrew Tillett
May 1, 2020 – 1.45pm
Austal Limited has missed out on a huge contract to start building new guided-missile frigates for the US Navy in a blow only partly softened by a Morrison government order for six new patrol boats.
The US Navy awarded the $US795 million ($1.23 billion) frigate contract to Fincantieri, a rival of Perth-based Austal.
One of the Littoral combat ships built by Austal for the US Navy. Supplied
Austal chief executive David Singleton said the decision was disappointing and the company would focus on existing orders and finding new work for its shipyards in Mobile, Alabama.
The US Navy had been scheduled to pick one of four bidders by the end of September but brought forward its decision to go with Fincantieri, which has shipyards in Wisconsin, and a frigate design based on ships operated by the French Navy.
Austal had put forward an enhanced version of the Littoral combat ship (LCS) it currently builds for the US Navy.
The Austal share price plunged more than 16 per cent to $2.82 in early trading on Friday, despite the consolation prize of a $324 million contract with the Royal Australian Navy.
Austal has US Navy contracts to build LCS and expeditionary fast transport (EPF) vessels at Alabama through to 2024.
Mr Singleton said there might also be opportunities to build EPF variants, including a hospital ship, and unmanned vessels, which he said were the future of naval warfare.
The US Navy design and construction contract awarded to Fincantieri covers one ship in what could become a nine-ship pipeline of work worth $US5.58 billion.
New patrol boats
The US blow came as the Morrison government ordered six new patrol boats in a deal that will secure the future of Austal’s shipyard at Henderson, south of Perth.
The deal, badged by the government as a stimulus measure for the coronavirus-ravaged economy, is a stopgap to maintain border patrol capability while the new Arafura class of patrol boats is built in Adelaide then Perth.
The Australian Financial Review revealed in February that the government was in talks with Austal to ease pressure on the defence budget as it sought "innovative" financing options for projects from defence contractors.
The acquisition will also deliver a much-needed boost to local defence sub-contractors after the government faced an uproar from the industry over missing out on work for large submarine and frigate projects.
"These vessels will not only enhance national security, but will provide important economic stimulus and employment continuity during the COVID-19 pandemic," Defence Minister Linda Reynolds said.
An Austal Cape class vessel built for Australian Border Force.
"The ability to build more of these vessels in Australia will deliver Australian industry content of more than 65 per cent, providing significant opportunities for Australian industry and defence, as well as more than 1200 workers in the broader Australian supply chain."
Defence Industry Minister Melissa Price said the deal would secure the jobs of 400 shipbuilders at Austal's Perth shipyard.
Options put forward by Austal included leasing the new Cape class vessels to the navy, but the government will buy them from the shipbuilder.
No decision has been made but they could eventually be transferred to the Australian Border Force.
Australian Border Force already operates eight Cape class vessels, and the navy leases a further two.
The delivery of the new Cape class vessels means the navy will not have to extend the life of the Armidale class patrol boats currently in service.
The Armidales, also built by Austal, have had to work much harder and had issues with hull cracking because of the heavy workload intercepting asylum seekers during the Rudd and Gillard governments.
Ordering the Cape class boats will allow the Armidales to be decommissioned sooner.
Austal is building Guardian class patrol boats on behalf of the government to be given to Pacific nations and East Timor, but without a new Defence Department contract, its future building ships in Perth had been in doubt.
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