Analysis and Commentary

Why selling Austal to a foreign bidder ‘beyond explanation’ – by Allen Roberts

Analysis and Commentary

Australian Manufacturing Forum member Allen Roberts is incensed that the federal government is comfortable with foreign takeover of our most important sovereign defence manufacturer, shipbuilder Austal, as is @AuManufacturing. Tasked in the Forum with detailing his concerns, minus expletives, Allen reports.

Leaving out the expletives, let’s focus on a few obvious strategic points.

The government is committing Australian taxpayers to the biggest increase in defence spending in decades.

Irrespective of your views on the morality or logic of that choice, they are also trumpeting loudly, and investing in Australian advanced manufacturing at the same time.

Over history, military spending has been the source of more advances in technology than any other single source.

To turn your back on an advanced and strategically important component of that mix is beyond explanation.

Austal shareholders have a right to a return on their investment.

Matching or increasing that return to ensure it remains Australian would be cheaper for taxpayers in the long run, than allowing it to ‘go foreign’ leaving us naked of the potential intellectual and skills capital it generates, and probably having to start again.

Austal occupies a logical adjacent engineering, technical and strategic space to the AUKUS programme. (I think AUKUS is a monumentally silly idea, but that is a different topic.)

The benefits to retaining the bases of intellectual and skills capital both projects are building, to cross pollinate and innovate should be huge.

A sale will piss that away. Short term gain, long term pain.

Having a sovereign company as integrated into the US defence ecosystem as Austal, must lead to identification of all sorts of ‘accelerants’ to Australian engineering and innovation, and even more money from contracts such as that snared by Austal.

Walking away from that is, again, monumental strategic stupidity.

Only one very modest expletive!

Allen Roberts is a catalyst for thinking differently for enterprises facing change. In a career of more than 40 years he has worked with manufacturers creatively, and been an advocate for deeply considered change. Allen is Director of consultants StrategyAudit.

Further reading:
Austal, under takeover threat, awarded new $779 million US Navy contract
Hanwha bids to take Austal into foreign ownership

Picture: Austal/Mobile, Alabama shipyard

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