Austal, under takeover threat, awarded new $779 million US Navy contract


By Peter Roberts

Perth international shipbuilder Austal has been awarded a $779 million (US$516 million) US Navy contract modification for the construction of the lead ship of the T-AGOS (ocean surveillance) programme, T-AGOS 25.

The company, the largest Australian owned and controlled prime defence contractor, said the contract modification exercised an option for ordering long lead time materials to continue/complete the design and construction of the lead ship of the new class.

Austal, which builds aluminium and steel naval vessels at its shipyard in Mobile, Alabama, is under takeover threat from predator, Korean company Hanwha, with the government apparently comfortable with the loss of sovereign control of our most important defence industry asset.

The latest contract illustrates the value of the intellectual property held by Austal, and the hypocrisy of allowing another country to take over the company, given the government’s daily protestations of its dedication to sovereign defence enterprises.

The award of the T-AGOS contract to Austal was announced on 19 May 2023, when the company was awarded a US$113,906,029 fixed-price contract for detail design of the Auxiliary General Ocean Surveillance Ship T-AGOS 25 Class for the USN.

That contract included options for detail design and construction of up to seven T-AGOS 25 class.

Austal said: “If all options are exercised the cumulative value of the contract is US$3,195,396,097.

“T-AGOS ships, operated by United States Military Sealift Command (MSC), support the antisubmarine warfare (ASW) mission of the commanders of the Atlantic and Pacific Fleets by providing a platform capable of passive and active anti-submarine acoustic surveillance.”

Allowing this Australian company to be taken over for the paltry valuation at the time of the Hanwha bid of $797 million on the ASX would be lunacy.

It has taken decades to build Austal’s capabilities to the stage where it is poised to win $4.8 billion in work from building this one type of ship alone – and Austal builds numerous classes of vessels for the USN.

If we let defence companies fall to foreign ownership at such a stage we are left not with a sovereign defence sector supposedly desired by Canberra, but a sovereign component supply network.

Further reading:
Austal snares US$3.2bn ship building contract
Marles would let Austal fall into overseas hands – I would not

Picture: Austal/Auxiliary General Ocean Surveillance Ship T-AGOS 25 class

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