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Future Submarine Industry Skills Plan



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Minister for Defence and Minister for Defence Materiel - Joint Media Release - Future Submarine Industry Skills Plan

3 May 2012

Minister for Defence Stephen Smith and Minister for Defence Materiel Jason Clare today

announced more details on the Future Submarine Industry Skills Plan.

The Future Submarine Project is the biggest and most complex Defence project Australia has

ever embarked upon.

It will involve hundreds of companies and thousands of workers.

It will involve Federal and State Governments, Defence, industry, universities and the

Australian public working together for generations to come.

The skills needed will include systems design, naval architecture, propulsion and combat

system engineering, production engineering, project planning and control, production

scheduling, material procurement, risk management, budget control, financial accounting,

contract management, systems integration, and trade skills such as welder, boilermaker, and

electrician.

In December the Minister for Defence and the Minister for Defence Materiel announced that

the Defence Materiel Organisation would develop a Future Submarine Industry Skills Plan.

Today, the Government released details of how that work will be undertaken.

The Future Submarine Industry Skills Plan will identify what is required to build and sustain

the skills required to successfully deliver Australia’s Future Submarine capability.

The Plan will:

• Determine the type of skills required to successfully deliver the Future Submarine

Project;

• Determine the size and profile of the workforce required to successfully deliver the

Future Submarine Project;

• Determine the current capacity and capability of the Australian shipbuilding industry,

in terms of skills and workforce;

• Determine the current productivity of the Australian shipbuilding industry and

establish comparable international benchmarks;

• Analyse the naval shipbuilding projects currently in the Defence Capability Plan and

calculate the effect these projects will have on growth of the capacity and capability of

the Australian shipbuilding industry;

• Analyse current education and training programs, including apprenticeships, and

calculate the effect these programs will have on growth of the capacity and capability

of the Australian shipbuilding industry;

• Propose alternate scenarios for sequencing Defence projects that will better deliver

the capacity and capability required to successfully deliver the Future Submarine

Project;

• Propose improvements to the education and training programs that will better deliver

the capacity and capability required;

• Propose other actions required to deliver the capacity and capability, including

industry productivity, required to successfully deliver the Future Submarine Project;

and

• Propose a management arrangement within Defence, particularly the DMO, for the

ongoing management of a sustainable naval shipbuilding program.

The plan will be developed by a team be led by the Chief Executive Officer of the Defence

Materiel Organisation Mr Warren King.

It will be supported by an Expert Industry Panel headed by Mr David Mortimer, AO.

Mr Mortimer has over 40 years of business experience. He is the former Chairman of

Leighton Holdings Ltd and the former CEO of TNT. He is the current Chairman Australia Post

and Crescent Capital Partners.

Mr Mortimer is the Chair of the Defence Industry Innovation Board and is a Director of the

Defence Strategic Reform Advisory Board. From 2004 to 2008 he was also Chairman of the

Defence Procurement Advisory Board.

In 2008 Mr Mortimer was appointed by the Federal Government to conduct the Defence

Procurement and Sustainment Review known as the Mortimer Review.

The Mortimer Review made 46 recommendations to improve the capability acquisition

process, increase investment in Defence industry skills and incorporation of improved

commercial practices into Defence procurement.

These recommendations along with those made as part of the Kinnaird Review in 2003 and

reforms announced by the Government last year have made a significant impact of the

Defence project approval process which last year saw a record 49 projects worth in excess of

$6 billion approved by the Gillard Government.

The Expert Industry Panel will include representatives of DMO, Navy, the Department of

Industry, Innovation, Science, Research and Tertiary Education, Skills Australia, unions, the

CEOs of the four principal Australian naval shipbuilding companies; ASC, Austal, BAE Systems

and Forgacs Engineering and the CEOs of the principal naval systems integration companies:

Lockheed Martin, Raytheon, Boeing, Thales, Saab Systems and BAE Systems.

This group will consult widely with State Governments, Australian industry, industry

associations, universities and other academic organisations and think tanks to develop this

plan.

The Panel will commence their work this month and the Plan will be presented to Government

by the end of the year.

Media Contacts:

Minister Smith’s Office (02) 6277 7800

Minister Clare’s Office (02) 6277 7290

STUDY INTO THE DEVELOPMENT OF SKILLS REQUIRED FOR

AUSTRALIA’S FUTURE SUBMARINE PROGRAM

TERMS OF REFERENCE

1. 1. AUTHORISATION

1.1. The Minister for Defence and Minister for Defence Materiel [others] have

commissioned this study to develop a plan that will produce the skills across Defence and

Australian industry required to successfully deliver the Future Submarine Project.

1. 2. PURPOSE

2.1. The purpose of these Terms of Reference is to specify the scope of the study into the

development of skills to successfully deliver the Future Submarine Project.

1. 3. CONTEXT

3.1. The Future Submarine Project is a major national undertaking and is of a scale,

complexity and duration never before experienced inAustralia. About 2,000 workers will be

directly employed in the construction of the submarines, while two or three thousand more

will be working in the industry supply chain to support the project.

3.2. The skills needed will include systems design, naval architecture, propulsion and

combat system engineering, production engineering, project planning and control, production

scheduling, material procurement, risk management, budget control, financial accounting,

contract management, systems integration, and trade skills such as welder, boilermaker, and

electrician.

3.3. These skills will be generated from experience in designing and constructing other

warships for the Navy, as well as from the various education and training programs available

to people in Defence and industry, including trade apprenticeships.

1. 4. OBJECTIVES

4.1. The purpose of the study will be to design a unified plan for naval shipbuilding

projects, education and training programs and other actions that will sustain and grow the

competence and proficiency of the Australian shipbuilding industry so that it can successfully

deliver the Future Submarine Project.

4.2. The broad objectives for this study are to:

4.2.1. determine the type of skills required to successfully deliver the Future

Submarine Project;

4.2.2. determine the size and profile of the workforce required to successfully deliver

the Future Submarine Project;

4.2.3. determine the current capacity and capability of the Australian shipbuilding

industry, in terms of skills and workforce;

4.2.4. determine the current productivity of the Australian shipbuilding industry and

establish comparable international benchmarks;

4.2.5. analyse the naval shipbuilding projects currently in the Defence Capability Plan

and calculate the effect these projects will have on growth of the capacity and capability of

the Australian shipbuilding industry;

4.2.6. analyse current education and training programs, including apprenticeships, and

calculate the effect these programs will have on growth of the capacity and capability of the

Australian shipbuilding industry;

4.2.7. propose alternate scenarios for sequencing Defence projects that will better

deliver the capacity and capability required to successfully deliver the Future Submarine

Project;

4.2.8. propose improvements to the education and training programs that will better

deliver the capacity and capability required;

4.2.9. propose other actions required to deliver the capacity and capability, including

industry productivity, required to successfully deliver the Future Submarine Project; and

4.2.10. propose and management arrangement within Defence, particularly the DMO, for

the ongoing management of a sustainable naval shipbuilding program.

1. 5. METHOD OF CONDUCT

5.1. The review will be managed by the CEO DMO and the review team led by General

Manager Programs, DMO.

5.2. There will be an Expert Industry Panel Chaired by David Mortimer AO and comprise

representatives of the DMO, Navy, DIISRTE, Skills Australia, unions, the CEOs of the four

principal Australian naval shipbuilding companies; ASC, Austal, BAE Systems and Forgacs

Engineering and the CEOs of the principal naval systems integration companies: Lockheed

Martin, Raytheon, Boeing, Thales, Saab Systems and BAE Systems.

5.3. The review will naturally consult widely, capturing input from all levels of the

Australian shipbuilding industry including the manufacturing sector as well as platform and

combat system designers. The review will engage with industry associations, unions,

companies currently involved in shipbuilding as well as those that may wish to become

involved in the shipbuilding industry.

5.4. The review will examine shipbuilding projects now underway and those described in

the Defence Capability Plan (DCP), The naval shipbuilding projects in the DCP encompass

landing craft, supply and support ships, offshore combatant vessels and frigates, along with

the future submarines. Other future shipbuilding activity inAustraliamight include a major

modification of existing ships and submarines to extend their service life. The naval

shipbuilding program should be configured to grow industry’s capability and capacity so that

it can proficiently deliver the largest and most complex of all the upcoming projects, the

Future Submarine Project.

5.5. The review will assess the need for skilled workers for the Future Submarine Project.

Discussions will be held with various tertiary institutions on the development of courses to

develop skills specific to shipbuilding. The review will also discuss with companies and

vocational institutions the role of apprenticeships, temporary visas or skilled migration in

boosting the number of skilled workers. An assessment will also be made of skills funding

programs offered by Federal and State governments.

5.6. The review team will also involve companies with expertise in specific aspects of

shipbuilding, such as productivity benchmarking, to assist in its analysis.

1. 6. TIMING

6.1. The review will commence in May 2012, with work to establish the detailed scope of

the tasking. Consultation with the interested parties, that is tertiary institutions, state

governments and industry groups, will take place in June and July.

6.2. The review will present a report for Government consideration by the end of the

year.