
How France sank Japan's $40B Australian submarine dream - altstar
http://www.reuters.com/article/us-australia-submarines-japan-defence-in-idUSKCN0XQ1FC
======
lubos
The only one who kept the deal with Japan alive was Tony Abbott because of his
personal friendship with Japanese PM.

Mitsubishi Heavy Industries doesn't have an experience to build submarines
overseas and there were significant risks leaving someone to "learn on the
job".

USA has been (correctly) pressuring Australia to select vendor on its merit
and not to take into account geopolitics. Geopolitically, Japan is a lot more
important to Australia than France. This is the reason Japanese believed for
so long they had the deal in the bag.

With Abbott losing his job, it became easier for France or Germany to hop in.
Especially when new prime minister had agenda of damaging previous PM. I think
Abbott must feel terrible about Japan not getting the contract but it only
shows deals like these should be done at arm's length. Abbott even wrote
personal letter to Japanese PM to apologize.

~~~
flashman
> USA has been (correctly) pressuring Australia to select vendor on its merit

I am almost certain the USA is disappointed with Australia's selection, as US
companies would have supplied several critical battle systems. In fact
Australia "could experience significant difficulty getting the most advanced
US combat systems" thanks to selecting the French over the Japanese.[1]

[http://www.theaustralian.com.au/national-
affairs/defence/cau...](http://www.theaustralian.com.au/national-
affairs/defence/cautious-us-gives-japan-edge-in-subs/news-
story/1103e531ed8bc463e43f77abd8165006)

~~~
lubos
This article claims USA will still supply combat system for submarines.

> Australia may have awarded France a bumper contract to build its next
> generation of submarines, but its highly secretive combat system will come
> from close ally the United States.

[http://www.dailymail.co.uk/wires/afp/article-3567774/France-...](http://www.dailymail.co.uk/wires/afp/article-3567774/France-
build-Australia-subs-US-arm-them.html)

------
luch
Interestingly enough, France used to make the same naïve mistakes the Japanese
did : follow too closely the bid "rules", not lobbying enough, not taking
political landscape into consideration, not attending to "social events", etc.

Having worked in the areospace industry, I've seen France lose some "in the
bag" public markets by letting other countries lobby and spin bid's technical
specifications to their advantage.

It seemed they learned the lesson, at least for this bid.

~~~
danieltillett
I have to say I am feeling rather upbeat about France these days. I know
France has a huge number of problems, but French businesses seem to struggle
through them and do well.

~~~
noir_lord
The French play hard ball, they also still value stuff they make themselves
and that combined with government policy of making as much domestically as
they can when it comes to military gear has paid off.

~~~
gaius
The UK could learn alot from them. Sadly we never seem to.

~~~
noir_lord
Agreed.

We never seem to realise that some government intervention might be a good
thing when it comes to strategic industries or related.

Instead we get told the service industry will save us and that financial
services is where we go.

End result, GDP growth with everyone but the top percent in London get
proportionally worse off.

------
tomhoward
Here's one commentator's take on the matter, from the Australian Financial
Review:

 _Can there possibly be an upside to [Prime Minister] Malcolm Turnbull 's
decision to squander billions of taxpayers' dollars building 12 French
submarines in [the state of] South Australia?

It's hard to think of one.

Of course, there are potentially critical South Australian seats at stake in
the coming election and Turnbull no doubt believes it's worth every penny to
ensure that the Australian people are not deprived of his greatness.

But surely there were cheaper ways to buy off the South Australians.

With a 30 to 40 per cent local cost premium as a starting point and the
history of the Collins class submarine to go by, the federal government could
have hired all the Australian Submarine Corporation (ASC) workers to do
nothing and the taxpayer would have been billions of dollars better off –
because at least they wouldn't have been making grossly overpriced
submarines._

[http://www.afr.com/opinion/columnists/alan-
mitchell/turnbull...](http://www.afr.com/opinion/columnists/alan-
mitchell/turnbulls-submarines-buying-the-south-australian-
vote-20160428-gohksu)

~~~
tmnvix
> With a 30 to 40 per cent local cost premium as a starting point and the
> history of the Collins class submarine to go by

It's a popular myth that the Collins class subs were a failure. They were
actually a great success (once the teething problems were ironed out) and,
from memory, came in at only around $50m over budget.

~~~
danieltillett
Yes this is true - the problem is we can't crew them.

~~~
a3n
Why? Australian ambition too big for its population size? Not enough people
willing to serve? I would think competition to get into the submarine service,
among military people, would be high.

~~~
codyb
Is submarine crew a good position in the military? Seems like a shit gig to
sit in a metal can with no sunlight for months at a time but maybe that's just
me.

~~~
gaius
It's slightly better paid and a chance to do some "real" operations even in
peacetime, e.g. surveillance on rival nations (a lot of this during the Cold
War), delivering and extracting SOF, being first on station in the event of a
crisis, live-firing cruise missiles, etc etc. Everyone's motivated differently
I guess.

------
antr
General Douglas MacArthur once said: "The history of failure in war, or in any
other human endeavor, can be summed up in two words: 'too late.'" This quote
fits perfectly with the story.

------
fma
Doesn't looks like France sank Japan's bid...Japan sank themselves by thinking
they won why clearly the bidding process just started.

------
TheMagicHorsey
Everyone is positioning this as though Abbott was selling out Australia to
advantage his Japanese buddies.

In reality, the current administration is selling out Australians as a whole,
to advantage specific workers in South Australia. Those workers are building
the submarines in a MUCH less productive fashion. Some estimates are that the
submarines will cost %40 more than if built in Japan. And this is a huge
contract, worth tens of Billions of dollars. It is not unfounded to say that
this contract is the equivalent of a charity payment of $15B or more to
specific (small) groups of Australian shipbuilders.

Such a move only makes sense in two contexts: 1) a ruling party needs to win
political support from a faction controlled by the benefitted labor group; or
2) the country decides as a policy that it makes sense to develop an
indigenous industrial capability in the sector (or to prevent the loss of the
capability if it exists).

The first concern is lame. The second one is also not compelling when you
think of the opportunity cost of those Billions. The same Billions could be
used to develop a domestic drone capability, or any of a hundred other
technology infrastructures. Or, if we just think about the money as a bribe,
you could bribe far more citizens with other forms of direct payments, which
would cut out the private contractors who are the ones who will benefit
disproportionately now.

This is not about France vs. Japan. It's about economic logic vs handout
politics.

------
GunboatDiplomat
Aren't submarine props usually classified? Meaning you don't just let people
take pictures of them?

~~~
blackguardx
I think that is just for certain US designs. If France is building them for
another country, they can't be that secret.

A few years ago, you could see an uncovered Trident submarine screw on
Microsoft Maps (it wasn't Bing yet).

[http://www.ogleearth.com/navyprop.jpg](http://www.ogleearth.com/navyprop.jpg)

~~~
brobinson
Trident is a type of SLBM. Is that an Ohio class sub?

~~~
blackguardx
[http://www.seattletimes.com/nation-world/virtual-earth-
image...](http://www.seattletimes.com/nation-world/virtual-earth-image-
reveals-trident-subs-secret-propeller/)

It looks like it was an Ohio class.

~~~
brobinson
Awesome! I have never seen a real picture of the screw before.

------
danieltillett
It is not too hard to understand. If you are inexperienced fighting with the
big boys you will lose. As an Australian I hope we get something useful out of
the tens of billions we are about to spend.

~~~
Fiahil
If I read correctly, the subs are going to be built in Australia. So, you got,
at least, jobs creation.

~~~
danieltillett
Yes we will get some very expensive jobs - the open question is are we going
to get some submarines that are able to get out of the dock on a regular basis
and not be detected from 1000 km away.

~~~
cturner
Separate to the build-quality problems of the Collins class, Australia has
struggled to crew the ships.

Some reports say that the Collins class has 60 people on board. These recent
articles have had me thinking - I doubt you need so many people.

With the space/storage situation, there is even less excuse to avoid
automation than anywhere else. You should be able to shift the bridge with six
or seven people (including officers). You'd need some people to maintain
systems, and that should be cross-skilled work. Medical, kitchen.

~~~
DanBC
:-) I like to think there's a submariners forum somewhere and they're asking
why Twitter needs thousands of programmers. Like, what do all those people do
all day?

I mean, with your minimal crew who's going to feed the badger?
[http://www.theguardian.com/uk/2012/aug/21/life-on-board-
nucl...](http://www.theguardian.com/uk/2012/aug/21/life-on-board-nuclear-
submarine)

~~~
tajen
As a programmer, I also wonder about Twitter ;)

~~~
ethbro
I think everyone wonders about Twitter's head count. But, you know, nuclear
reactors at 1,500 ft are child's play compared to 140 character messages.

Kidding aside, it'd be interesting to get Twitter's ops team headcount for
comparison.

------
wazoox
There are also technical reasons for the DCNS winning the bid: the Germans
have no experience in building subs of this size, able to cross oceans (they
build small coastal subs to cruise Baltic sea); the Japanese have no
experience of anaerobic diesel-electric propulsion.

------
democracy
If you want to be strong in Asia you should work with the country in the
region, i.e. Japan. France is a powerful country in this regard, but also not
a very reliable one (cancelled Israel and Russia deals, for example).

I am sure there is more to it than just one businessman being smarter than the
other one. Or AU leadership being strategically smart.

I believe it is a "divide and conquer" type of thing, one of "the great games"
at play.

~~~
VeejayRampay
Since your handle is "democracy", you'd do better mentioning the reason why we
cancelled those deals in the first place.

It's not like we're "unreliable", it's that there is still some (tiny) human
component in our dealings with those countries. And I think it's both very
naive but refreshing.

~~~
democracy
There is a tiny difference between standing on high moral grounds and being a
reliable business partner, though a very small, almost unnoticeable to some.

------
panini_tech
sounds like Abbott and Costello Met Frankenstein :)

------
brooklyndude
I'm confused, we're supposed to support an arms deal, while the word is having
a hell of a time keeping it all together? Are we not past this boys and
testosterone thing? It's not the 12th century.

Lets grow up kids. Just get to Mars already.

