Australia ‘intends’ to build its new nuclear submarines in Adelaide – but unions are demanding clarity over the sinking of a $90 billion deal

Australia ‘intends’ to build its new nuclear submarines in Adelaide – but unions are demanding clarity over the sinking of a $90 billion deal
Stefani Reynolds/Bloomberg via Getty Images
  • Australia has entered a landmark new pact with the United States and the United Kingdom which will allow the nation to develop nuclear submarines.
  • The deal has wrecked Australia’s existing plan to upgrade its fleet with conventional subs built in South Australia.
  • The federal government says it intends to build the new subs in Adelaide, but unions representing those shipbuilders are calling for clarity over the deal.
  • Visit Business Insider Australia’s homepage for more stories.

South Australia’s shipbuilding workforce is demanding transparency over the federal government’s landmark nuclear submarine agreement, which has scuppered the nation’s existing $90 billion submarine construction plan.

In a rare virtual appearance alongside United States President Joe Biden and United Kingdom Prime Minister Boris Johnson, Australian Prime Minister Scott Morrison on Thursday revealed a new, trilateral defense pact.

A key pillar of the new AUKUS alliance will be Australia’s entry to the nuclear submarine club, with the U.S. and U.K. poised to share their closely-guarded naval expertise with the nation.

The alliance will see Australia acquire at least eight nuclear submarines for use by the Royal Australian Navy, marking a dramatic escalation of the nation’s maritime defense capabilities.

The broad-reaching pact between the U.S., the U.K., and Australia comes in response to China’s rising influence in the Indo-Pacific region, and simmering anxiety from Australia’s allies.

While avoiding direct mention of China, Morrison said the world is becoming “more complex, especially here in our region, the Indo-Pacific.”

“This affects us all, he said in a statement. “The future of the Indo-Pacific will impact all our futures.”

Closer to home, the new deal has already impacted the future of Australia’s agreement with French manufacturer Naval Group to construct a new fleet of conventional submarines in Adelaide.

That deal, signed in 2016, promised to upgrade Australia’s aging diesel-electric Collins class fleet with a dozen Attack class submarines for the projected cost of $90 billion.

The submarines were to be constructed in Adelaide, drawing from a shipbuilding workforce which had delivered the Collins class through the 1990s.

$2.4 billion has already been spent on the project, Morrison said Thursday.

Australia’s decision to pursue a new class nuclear subs was a “major disappointment for Naval Group,” the French company said Thursday.

It also presents a major disruption to Adelaide’s shipbuilding workforce, who operated under the assumption Attack submarines would be constructed through the 2030s.

The project was a focal point for the state’s manufacturing capacity, which is still reeling from the abandonment of Australia’s automotive construction industry.

In a joint statement, Morrison, Defence Minister Peter Dutton, and Foreign Affairs Minister Marise Payne said it is the federal government’s intention “to build the nuclear-powered submarines in South Australia, maximising the use of Australian workers.”

“The Government is committed to finding a role… for each and every skilled shipbuilding worker impacted by this announcement,” they added.

Separately, South Australian Premier Steven Marshall said the state will continue to upgrade and maintain the Collins class fleet, “which will secure local jobs beyond 2026.”

Even so, unions representing those workers are concerned over the dramatic new plan.

The decision has means “the futures of thousands of workers’ jobs have been thrown into doubt”, said Glenn Thompson, assistant national secretary of the Australian Manufacturing Workers’ Union.

“We need the Morrison Government to come clean on the detail – on how this will create a sovereign industry capability, secure jobs and critically, what will happen with existing workers.”

South Australian workers are currently left with an “empty promise” to build the new submarines in Adelaide, he said, while demanding clarity over how Australia intends to bolster its nuclear know-how.

Such concerns were shared by SA Unions state secretary Dale Beasley, who feared for Naval Group employees rattled by the news.

“Engineers, scientists, IT professionals, trades and clerical workers have moved to SA for these jobs, and some have even moved with their families to France,” Beasley said, 7NEWS reports.

“What comes next for them?”