Australia Mulls Japan Submarines Under China’s Cautious Gaze

[Hindustani78]

Australia Mulls Japan Submarines Under China’s Cautious Gaze - Bloomberg

Australia is considering buying top-secret technology from Japan to build a fleet of new generation submarines, a move that would risk reigniting diplomatic tensions with China only recently smoothed over.

China and Japan are competing to build their domestic arms industries, and for China the export of Japanese military technology is particularly sensitive given their wartime history and territorial disputes. Choosing Japan to play a role in the multi-billion dollar submarine project could prompt a stern response from Australia’s biggest trading partner.

Australian Defense Minister David Johnston has confirmed “unsolicited proposals” to build the submarines had been received from Japan, Germany, Sweden and France, with a decision on the replacement of the country’s aging diesel-powered submarines expected by March. Alongside Australia, countries such as Vietnam and India are expanding their submarine fleets as China seeks greater military clout in the Pacific.

“The government’s preference seems to be the Japanese, but there are still lots of hurdles,” said Mark Thomson, a defense economics analyst at the Australian Strategic Policy Institute. “Japan hasn’t exported sensitive military technology before and while a deal would mean ties between two close U.S. allies would strengthen, it would be seen in China as a dark cloud.”

Australia needs to replace its six Collins-class diesel electric submarines by 2026, according to Johnston, who is looking for a cheaper option after scrapping the previous Labor government’s plan to build 12 submarines locally, which Thomson estimated would cost around A$36 billion ($29.6 billion). He hasn’t ruled out any options on where the craft, designed to better help Australia patrol the Pacific Ocean and Indian Ocean, will be built.

 

[Kylin]

So is this why Abe is so eager to change the Constitution so Japan may save its economy by selling weapons?

 

[ChineseTiger1986]

So is this why Abe is so eager to change the Constitution so Japan may save its economy by selling weapons?

Japan's economic blackhole is too big, a mere 20 billion bill won't save it.

 

[IsaacNewton]

Way too expensive. USA can build a Nuclear submarine for 2.5 billion dollar. While the Soryu class is very impressive, it should not cost this much.

 

[Hindustani78]

Australia to replace its six Collins-class diesel electric submarines , So Australia will keep them in service or sell to some other country ?

4,200-ton Soryu, or Blue Dragon, is the world's largest diesel-electric submarine, jointly built by Mitsubishi Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd. The vessels are driven by an ultraquiet air-independent propulsion system that allows them to operate underwater for almost two weeks at a time.Soryu submarines can travel for up to 11,000 kilometers (6,835 miles) before having to return to base.

 

[ChineseTiger1986]

Japan's economic blackhole is too big, a mere 20 billion bill won't save it.

The Japanese toys are always overpriced.

 

[Aepsilons]

Good decision, Australian friends !

 

[ashok321]

Way too expensive. USA can build a Nuclear submarine for 2.5 billion dollar. While the Soryu class is very impressive, it should not cost this much.

Which American shipyard makes Non nuclear conventional submarines?

 

[Hindustani78]

Japan firms to be a surprise no-show at Australian submarine event| Reuters

By Tim Kelly and Nobuhiro Kubo

TOKYO Sun Mar 22, 2015 5:03pm EDT

(Reuters) - Two Japanese firms that until recently were the frontrunners to win a multi-billion dollar contract to build Australia's new submarines have rebuffed an invitation to attend a gathering of top Australian naval officials and politicians this week.

The no-show by Mitsubishi Heavy Industries and Kawasaki Heavy Industries at an event called Australia's Future Submarine Summit, held amid intensifying competition for the deal, exposes a potential weak link in Japanese Prime Minister Shinzo Abe's more muscular security agenda: Japan Inc.

While Abe wants Japanese firms to vie for overseas orders after he lifted a decades-old ban on arms exports last year, such companies are showing little appetite for doing business in foreign markets after being restricted to local sales for so long, Japanese defense officials and experts said.

That isolation, imposed after Japan's defeat in World War Two, has left the country's industrial heavyweights with few contacts in foreign defense departments and made weapons a small part of their operations. Experts say they also worry about being called "merchants of death" at home, where Japan's wartime role remains a sensitive issue, should they start selling state-of-the-art weapons abroad.

"Winning deals overseas means having to develop contacts in foreign governments or seek joint ventures, and that is a bit much for them, so they are holding back," said a Japanese Defence Ministry official who declined to be identified.

A source involved in organizing the conference in Adelaide said Mitsubishi Heavy and Kawasaki Heavy, makers of the Soryu-class stealth submarines, had declined an invitation.

Australian Defence Minister Kevin Andrews and senior naval officials will attend the two-day event, which starts on Wednesday. A decision on the submarine project, worth A$50 billion ($38.8 billion) over the life of the vessels, is expected by the year-end.

"We don't plan to send anyone. The sub issue is in the hands of Japan's Defence Ministry," said a spokeswoman for Kawasaki Heavy. A Mitsubishi Heavy spokesman added: "We aren't sending anybody." They declined to elaborate.

POLITICS

Australian Prime Minister Tony Abbott had pledged ahead of his election in 2013 that up to 12 submarines would be built at state-owned shipbuilder ASC in Adelaide, before back-pedaling by signaling that cost and timely delivery were paramount.

After Australia and Japan agreed in June to cooperate on military technology, sources said Canberra began leaning towards buying an off-the-shelf version of the 4,000-tonne Soryu-class submarine to replace six ageing Collins-class vessels.

Abbott's government ruled out an open tender in December, appearing to put Japan in the box seat.

But Abbott then came under growing pressure from labor unions and the main opposition party, which both demanded a local build to boost Australia's languishing manufacturing industry.

Just before an internal challenge to his leadership in February, which he survived, Abbott promised something closer to an open tender in an attempt to shore up political support.

The reluctance of Mitsubishi and Kawasaki to chase Australia's biggest defense deal - they have let the Japanese government play the lead role in talks with Canberra up to now, according to Japanese Defence Ministry officials - is in contrast to Germany's ThyssenKrupp Marine Systems.

ThyssenKrupp, along with France's state-controlled naval contractor DCNS, have both expressed interest in the tender and said they would build in Australia.

Delegations from ThyssenKrupp have visited Canberra in recent months.

A ThyssenKrupp spokesman said the company would be represented at the conference. The event's leading corporate sponsor is Siemens AG, which makes electrical engines and fuel cells for ThyssenKrupp's submarines.

Abbott has also thrown open the tender, which he has called a "competitive evaluation process", to ASC.

"The sense I'm getting from Australia is that the competitive evaluation is weighted in Japan's favor, but it requires a proactive industrial approach," said a defense industry source who will attend the Adelaide meeting. "It's Japan's to lose unless they wake up to the opportunity."

MISGIVINGS

Dismantled by the United States after World War Two, Japan's defense industry re-emerged as a patchwork of manufacturers. At Mitsubishi Heavy, the biggest, defense accounts for just a tenth of revenue.

Corporate misgivings were on show at a Defence Ministry seminar in Tokyo in July to explain the end of the arms export ban three months earlier.

"Defence managers don't have much influence. Risky projects aren't going to make it past the board," one participant told Reuters at the event.

"No company has defense sales of more than 10 percent of overall revenue, there is a lot of resistance to doing anything new," said another.

Such reluctance has already stalled one potential breakthrough export deal.

Mitsubishi Heavy at the start of 2014 entered a tentative agreement with Britain's BAE Systems PLC, which is helping build Lockheed Martin Corp's F-35 stealth fighter, to supply rear fuselage components.

Unwilling to risk losing money on a tightly priced deal Mitsubishi withdrew, sources familiar with the talks told Reuters at the time.

"We need to get one or two successful deals done," said the Japanese Defence Ministry official.

(Additional reporting by Matt Siegel in SYDNEY and Georgina Prodhan in FRANKFURT; Editing by Dean Yates and Alex Richardson)

 

[Hindustani78]

Australia kicks off $39 billion submarine tender| Reuters

By Matt Siegel

ADELAIDE, Australia Wed Mar 25, 2015 1:59am EDT

(Reuters) - Australia has invited Germany, France and Japan to pitch for a contract to build its new submarine fleet, kicking off a contentious A$50 billion ($38.8 billion) project which has become a political football at home.

Signs of progress on the long-delayed project bode ill for Sweden despite a proposal from Australia's opposition party to overturn the Nordic country's earlier exclusion from the lucrative tender.

Speaking at a conference of Australian naval officials and politicians in Adelaide on Wednesday, Defense Minister Kevin Andrews said Germany, France and Japan had emerged as potential "international partners" for the project to replace Australia's six aging Collins-class vessels.

Andrews added that a "competitive evaluation" would take at least 10 months, after which the Defense Department would advise the government on preferred bidders.

An industry source in Australia said a letter had been prepared for bidders containing requirements including that a concept design be submitted within six months and details on how bidders would involve Australian industry in the program.

Germany's ThyssenKrupp Marine Systems (TKMS) and France's state-controlled naval contractor DCNS have both expressed interest in the tender and said they would build in Australia.

"We've already got the draft contract. We've got the statement of work," Philip Stanford, the chief executive of TKMS Australia told Reuters in an interview on the sidelines of the Future Submarine Summit.

"We've got all of the data descriptions which tell us what we need to do and they've sent us through classified channels the functional performance specifications ... It literally is happening as we speak."

Harry Dunstall, chief of the Australian military's Defense Materiel Organisation, told the conference that after the bidding contracts had been signed, there would be an eight-month period during which the companies would prepare their preliminary design proposal and present it to the government for consideration.

The two Japanese firms that until recently were considered the frontrunners for the project, Mitsubishi Heavy Industries and Kawasaki Heavy Industries, rebuffed an invitation to attend the Adelaide conference.

GEO-STRATEGIC IMPLICATIONS

After originally promising to build the fleet of up to 12 submarines in Australia, Prime Minister Tony Abbott backpedalled, signaling that cost and timely delivery were paramount.

Sources then said Japan was in the box seat to sell off-the-shelf submarines to Australia, marking what would be Tokyo's re-entry into the global defense export market and strengthening ties between two of Washington's strongest regional allies.

Abbott changed position again during an internal challenge to his leadership in February, promising something closer to an open tender to be completed by the year-end in an attempt to shore up political support.

Presenting a detailed, bipartisan approach to the project, Labor Party Leader Bill Shorten argued Sweden should be involved. The government excluded Sweden, which worked with Australia to build the Collins-class vessels, citing its lack of recent experience.

Under Shorten's proposal, a 12-18 month process would begin with Australia inviting Germany, France, Japan and Sweden to make initial proposals, each receiving A$7 million from Australia for their involvement.

Australia would then select one to two submarine builders to provide full designs and fixed price contract bids. Those parties would receive an additional A$8 million each to provide the more detailed final tender bids.

One of Shorten's proposed non-negotiable conditions was that the submarines be built and maintained in Australia.

Andrews called the Labor plan a "complete fantasy".

"We have said there will be a significant Australian involvement and that is our position and we are getting on with the job," he said.

(Additional reporting by Tim Kelly in TOKYO; Writing by Jane Wardell and Li

 

[Brainsucker]

Way too expensive. USA can build a Nuclear submarine for 2.5 billion dollar. While the Soryu class is very impressive, it should not cost this much.

Soryu cost 2.4 billion each?

 

[wiseone2]

Australia Mulls Japan Submarines Under China’s Cautious Gaze - Bloomberg

Australia is considering buying top-secret technology from Japan to build a fleet of new generation submarines, a move that would risk reigniting diplomatic tensions with China only recently smoothed over.

China and Japan are competing to build their domestic arms industries, and for China the export of Japanese military technology is particularly sensitive given their wartime history and territorial disputes. Choosing Japan to play a role in the multi-billion dollar submarine project could prompt a stern response from Australia’s biggest trading partner.

Australian Defense Minister David Johnston has confirmed “unsolicited proposals” to build the submarines had been received from Japan, Germany, Sweden and France, with a decision on the replacement of the country’s aging diesel-powered submarines expected by March. Alongside Australia, countries such as Vietnam and India are expanding their submarine fleets as China seeks greater military clout in the Pacific.

“The government’s preference seems to be the Japanese, but there are still lots of hurdles,” said Mark Thomson, a defense economics analyst at the Australian Strategic Policy Institute. “Japan hasn’t exported sensitive military technology before and while a deal would mean ties between two close U.S. allies would strengthen, it would be seen in China as a dark cloud.”

Australia needs to replace its six Collins-class diesel electric submarines by 2026, according to Johnston, who is looking for a cheaper option after scrapping the previous Labor government’s plan to build 12 submarines locally, which Thomson estimated would cost around A$36 billion ($29.6 billion). He hasn’t ruled out any options on where the craft, designed to better help Australia patrol the Pacific Ocean and Indian Ocean, will be built.

What is China's problem if Japan sell weapons to third countries ? They should mind their business

 

[Jlaw]

Japan's economic blackhole is too big, a mere 20 billion bill won't save it.

the saving grace is that US allow the japs to print a lot of useless yen to a certain point without drastically devaluating their currency.
It pays to be a good bitch.

 

[Aepsilons]

lol, we also own about 7% of US national debt, around $1.2 Trillion. Its more like the US & Japanese economies are interlinked.

What is China's problem if Japan sell weapons to third countries ? They should mind their business

Nothing but diplomatic tit for tat. In the end, the Chinese have no say in our external dealings with regional pertinent partners.