The Austal corporation, builder of the two Hawaii Superferry ships has just won a $1.6 billion Joint High Speed Vessel contract from the U.S. Department of Defense to build up to ten similarly designed transport ships. Joan Conrow has several interesting posts on this on her blog. The nasty comments from some indicate that the analysis of the military-corporate interests behind the Superferry are hitting a nerve. Several months ago she did an excellent series on the Superferry’s military connections. Here’s an article from Australia about Austal’s new military contract:
Source: http://www.thewest.com.au/default.aspx?MenuID=3&ContentID=108252
Austal soars as US beds down lucrative contract
15th November 2008, 6:00 WST
Perth-based shipbuilder Austal is on top of the world after yesterday winning a landmark deal potentially worth $US1.6 billion ($2.5 billion) that will see it build up to 10 highspeed transport vessels for the US Department of Defence.
The group confirmed it had won an $US185 million contract to design and build the first 103-metre vessel under the Joint High Speed Vessel program with options to build as many as nine more.
The coup caps years of lobbying and investment by Austal, including the establishment of a shipyard in Mobile, Alabama, to undertake the sensitive US military work.
Austal shares surged 22.5 per cent on the announcement, leaping 36.5¢ to $1.98. The award is the company’s first as a prime contractor in the US.
The high-speed, shallow-draft vessels will be capable of transporting troops and equipment, including tanks, over 1200 nautical miles at speeds of more than 35 knots, for the US Navy, Army and Marine Corps.
They will be built in Mobile, where Austal chief executive Bob Browning is based, but much of the design work will be done in Perth.
Austal chairman and founder John Rothwell said yesterday it was “extremely unlikely” that 10 ships would not be built as a minimum under the contract despite the grim economic outlook.
“The concern that I think investors in Austal have had has been the stability of the earnings, the potential lumpiness of the business and I think what this does is it puts another product line into the mix, and I think it will probably give them great confidence,” he said. Mr Rothwell said the deal demonstrated that Austal could bid for programs in the US as a prime contractor and win them against very stiff competition.
“We are a foreign-owned company in the United States competing with US companies, and for us to win a contract of that size in our own right with what has to be the world’s most powerful navy certainly means a big tick for us,” he said.
Mr Rothwell said the current expansion of Austal’s facilities in the US along with its past experience with the country’s navy had counted in the company’s favour. The first vessel is due by November 2011.
Austal is completing work also on a 127m aluminium Littoral Combat Ship (LCS) for the US Navy as well as building a 113m high-speed catamaran for Hawaii Superferry. The shipbuilder rated its chances of winning a second LCS contract early next year as strong. Mr Rothwell said Austal’s 1000-strong workforce in the US would swell by an extra 500 employees as a result of the JHSV contract, potentially rising to more than 3000 workers in the near future.
His predictions follow Austal’s decision to cut 109 employees last month in response to falling global demand for its ships and ferries.
Mr Rothwell reassured investors there were no thoughts of “pulling up stumps” and moving the company’s headquarters to the US.
DALE MILLER
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