At a time in which most Australian naval shipbuilders are facing an uncertain future, Austal is the shining exception.
Julian Kerr | Mobile, Alabama, US
True, the bulk of Austal’s revenue is derived from US Navy contracts with its wholly-owned shipyard subsidiary in Mobile, Alabama, where some locals certainly regard Austal as a US entity in which Australians happen to have invested money.
Forming a US Board of Management gained Austal USA a US security clearance and cleared the way for it to act as prime contractor for its two major US Navy construction contracts, the Littoral Combat Ship (LCS) and the Joint High Speed Vessel (JHSV).
Nevertheless Austal’s corporate headquarters, Design Authority and concept design development team remain firmly ensconced at Henderson just south of Fremantle, together with 600 construction personnel.
The company’s sole stock exchange listing – since 1998 – is on the ASX and the continuing development of Austal’s 130-acre site at Mobile is underwritten by a consortium of Australian banks which presumably shares the company’s confidence in its future.
This optimism and the company’s US status was graphically underlined at the mid-June christening in Mobile of the fifth LCS to be constructed by Austal USA – the first two as a subcontractor to General Dynamics, the third and subsequent ships as the prime.
Away from the razzamatazz of the christening, round-the-clock work continued nearby on future LCS and JHSVs whose construction has made Austal the largest manufacturer in southern Alabama, the fifth largest shipyard in the US, and boosted annual worldwide corporate revenue to more than US$1 billion.
The overall USN LCS program currently comprises 32 ships – 16 Independence class aluminium hull trimarans designed by Austal and built by Austal USA, and 16 steel monohull Freedom class being produced by Lockheed Martin. Two ships of each variant have entered USN service and 20 more LCS, evenly split between the two variants, are currently under contract.
The LCS itself is a fast, relatively lightly-armed, shallow-draft platform with interchangeable anti-surface, anti-submarine and mine countermeasures mission packages.
The trimaran construction of the 127-metre, 2,800 tonne Independence ships is unique to the US Navy and provides the largest flight deck, barring aircraft carriers, of any current USN surface combatant. The variant has a top speed of more than 40 knots and a 3,500 nautical mile (6,482 km) range at 15 knots.
As of June, seven of the Independence class were under construction at Mobile and work was yet to begin on three more as part of a 10-ship US$3.5 billion block buy contract awarded in 2010.
Two of those seven will be delivered to the USN later this year and two more, including the Gabrielle Giffords, will be handed over in 2016. To date five Austal-designed Spearhead class JHSVs have been completed for the USN’s Military Sealift Command and six additional ships have been funded, of which three are under construction, as part of a US$2 billion package.
These 103-metre aluminium catamarans, used for fast intra-theatre transport, can carry up to 312 troops in airline-style seats over 1,200 nautical miles (2,222 km) at 35 knots. Their 18,000 sq ft open plan mission bay can accommodate cargo up to the size and weight of Abrams main battle tanks, although offloading such cargo via a slewable stern ramp can currently only take place in very light seas.
As of mid-year, Austal held an impressive US$3 billion order book, about 80 per cent of it derived from the US.
This secures major revenues through to 2020 with good prospects of US income continuing strongly beyond that date, thanks to the JHSV being considered for a wider range of missions and a US decision to acquire 20 upgunned LCS variants with increased survivability that will be redesignated as frigates.
While the new frigate configuration has yet to be finalised and contracts for procurement starting in 2019 are yet to be awarded, Assistant US Navy Secretary Sean Stackley, responsible for research, development and acquisition, has said the ships will be bought from both Austal and Lockheed Martin to ensure continued competition.
Certainly such competition is a strong driver of processes and procedures at Austal’s Mobile facility. While most shipbuilders favour a keel-up fabrication process, Austal takes a different approach to ensure easy access to the internal compartments of the ship.
"To date five Austal-designed Spearhead class JHSVs have been completed for the USN’s Military Sealift Command and six additional ships have been funded."
Uncut metal enters at one end of two separate 150-metre long moving production lines and modules emerge at the other end, ready to enter one of three assembly bays; one for the LCS, one for JHSVs, and the smaller original bay being used for excess capacity.
During production each module – 43 for the JHSV and 37 for each LCS – progresses through work stations where cross-functional trade teams install components, outfitting, piping, ductwork, machinery and electric cables prior to final assembly, consolidation and launch.
Each work station is abutted by feeder shops to minimise the time taken to collect materiel, and completion of each module is followed by a formal meeting to discuss lessons learnt.
“If you build your ship in pieces you can get all your outfitting done, it’s up there on a jig, it can be open,” Austal USA President Craig Perciavalle said to ADM.
“You can also flip modules; we’ll build things inverted to let gravity help. Instead of working overhead to install piping you have it on the ground which greatly increases efficiency.
“We do testing on the modules – air testing, structural testing, and in most cases the lights are on and the modules are painted before they move to the assembly bay, and you’re then done with that area of the ship.
“There’s a rule of thumb – it’s one hour to do something in the module manufacturing facility, five hours to do it in the assembly bay, and once you put it in the water it may take about eight hours so we get as much done as we can early on to maximise the efficiencies.
“When we launch the ship it’s anywhere between 85 to 93 per cent totally complete,” Perciavalle said.
Launching is a multi-step process in which modular transporters are used to lift the entire ship almost three feet in the air and move it about 400 feet on to a moored deck barge.
The barge is then towed about 1,000 metres to where the ship is transferred to a floating drydock which is then submerged and the LCS or JHSV floated out.
The ship is subsequently towed back to the Austal facility and moored in front of its assembly bay for final outfitting prior to preparation at the nearby vessel completion yard for builder’s trials and delivery.
Following delivery the ships go through a post-delivery availability period of 30 days for a JHSV and 120 days for an LCS. During this time additional work will be completed and navy crews progress onboard training in preparation for final handover.
Australian business
Notwithstanding the success of Austal’s US operation and the parlous state of most naval shipbuilding in Australia, Austal Chief Executive Andrew Bellamy believes it’s a myth that constructing ships in Australia necessarily involves a premium of 30-40 per cent.
“The cop-out in all of this is that people think we can’t manufacture productively in Australia, and it’s not true,” he commented. “We can demonstrate that because we’re concurrently building high speed support vessels for the USN in Alabama and two similar 72-metre support vessels for the Royal Oman navy at our Henderson yard, and with the Australian dollar at 75-80 US cents the cost is similar.
“And because we’re exporting those two high speed vessels to the Middle East against international competition, we can be pretty confident that not only are we competitive in the US but we are also competitive internationally.”
Bellamy pointed to a lack of focus on exports as part of the Australian sector’s problem, together with an unhealthy expectation that facilities would be filled by government.
The right answer was to fill any gaps in domestic demand with exports rather than hurriedly bringing forward projects. One major future opportunity was a pending multi-billion dollar Saudi Arabian requirement for a range of ships for its east coast fleet, Bellamy said.
Austal had already held discussions on this program with Saudi officials, and he believed that at least part of the requirement could be built in Australia should government and local industry mobilise itself appropriately.
“We’ve got excess capacity which needs filling. It’s too easy to fall into the trap that says we can’t do this in Australia and export it. If we can’t, someone else certainly will,” Bellamy commented.
Disclaimer: Julian Kerr travelled to Mobile as a guest of Austal.