Austal wins more US Navy construction contracts

Austal’s bold move to invest in steel shipbuilding at its Mobile, Alabama shipyard continues to pay off with the company awarded further construction contracts from the US Navy.

Austal has been awarded a $225.5 million contract option for the construction of two additional Navajo-class Towing, Salvage and Rescue Ships (T-ATS), adding to two previous contracted ships.

Austal Chief Executive Officer Paddy Gregg said the contract came as the company has begun construction of the first ship of the class earlier this month.

Gregg said: “It’s a great sign of confidence by the navy in the Austal USA team’s ability to deliver both steel and aluminium ships simultaneously.”

The construction of the $100 million steel capability at Mobile – helped along with $50 million from the US defence department – has seen Austal announce a string of new contracts.

Earlier this month Austal won a massive $4.3 billion contract to build up to 11 Offshore Patrol Cutters (OPC, pictured) for the United States Coast Guard (USCG).

This added to a myriad a myriad of shipbuilding programs for the United States Navy and United States Coast Guard, with construction continuing on the:

• Aluminium Independence-variant Littoral Combat Ship (LCS)
• The aluminium Spearhead-class Expeditionary Fast Transport (T-EPF)
• The steel hulled Navajo-class Towing, Salvage and Rescue (T-ATS) ships
• And an Auxiliary Floating Drydock Medium under contract for the United States Navy.

The one drawback of the additional contract is that it increases Austal’s reliance on a single customer – US orders now account for the majority of Austal’s profits.

As @AuManufacturing pointed out recently, this plus the low Australian dollar and sharemarket marks Austal as ripe for takeover by an American defence contractor.

As @AuManufacturing argued then: “The potential for a string of takeovers of our most promising firms is a familiar story for Australia.

Stock markets rise and fall and those with deep pockets need only wait to pick up local technologies cheap.

But if we are ever going to build sovereign defence industry capability, we simply cannot let these companies fall to foreign predators.”

Picture: Austal/Navajo-class Towing, Salvage and Rescue Ship

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