Australia won't receive Aukus nuclear submarines unless US doubles shipbuilding, admiral warns

The Guardian

5 days ago

The US cannot sell any Virginia-class nuclear submarines to Australia without doubling its production rate, because it is making too few for its own defence, the navy's nominee for chief of operations has told Congress.
There are 'no magic beans' to boosting the US's sclerotic shipbuilding capacity, Admiral Daryl Caudle said in frank evidence before a Senate committee.
The US's submarine fleet numbers are a quarter below their target, US government figures show, and the country is producing boats at just over half the rate it needs to service its own defence requirements.
Testifying before the Senate Committee on Armed Services as part of his confirmation process to serve as the next chief of naval operations, Caudle lauded Royal Australian Navy sailors as 'incredible submariners', but said the US would not be able to sell them any boats – as committed under the Aukus pact – without a '100% improvement' on shipbuilding rates.
The US Navy estimates it needs to be building Virginia-class submarines at a rate of 2.00 a year to meet its own defence requirements, and about 2.33 to have enough boats to sell any to Australia. It is currently building Virginia-class submarines at a rate of about 1.13 a year, senior admirals say.
'Australia's ability to conduct undersea warfare is not in question,' Caudle said, 'but as you know the delivery pace is not what it needs to be to make good on the pillar one of the Aukus agreement which is currently under review by our defence department'.
Caudle said efficiency gains or marginal improvements would not be sufficient to 'make good on the actual pact that we made with the UK and Australia, which is … around 2.2 to 2.3 Virginia-class submarines per year'.
'That is going to require a transformational improvement; not a 10% improvement, not a 20% improvement but a 100% improvement,' he said.
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Under pillar one of the Aukus agreement, Australia is scheduled to buy between three and five Virginia-class nuclear-powered submarines from the US, starting in 2032.
The UK will build the first Aukus-class submarine for its navy by 'the late 2030s'. The first Australian-built Aukus boat will be in the water 'in the early 2040s'. Aukus is forecast to cost Australia up to $368bn over 30 years.
US goodwill towards Australia, or the import of the US-alliance, would be irrelevant to any decision to sell submarines: Aukus legislation prohibits the US selling Australia any submarine if that would weaken US naval strength.
Australia has already paid $1.6bn out of an expected total of $4.7bn (US$3bn) to help the US boost its flagging shipbuilding industry.
But the US itself has been pouring money into its shipbuilding yards, without noticeable effect.
A joint statement on 'the state of nuclear shipbuilding' issued by three rear admirals in April noted that while Congress had committed an additional US$5.7bn to lift wages and shipyard productivity, 'we have not observed the needed and expected ramp-up in Columbia-class and Virginia-class submarine production rates necessary'.
Caudle, himself a career submariner, said the US would need 'creativity, ingenuity, and some outsourcing improvements' if it were to meet its shipbuilding demands and produce 2.3 Virginia-class vessels a year.
'There are no magic beans to that,' he told the Senate hearing. 'There's nothing that's just going to make that happen. So the solution space has got to open up.'
The former prime minister Malcolm Turnbull, who first reported on Caudle's testimony to the Senate, told the Guardian that there was 'no shortage of goodwill towards Australia' from the US in relation to Aukus, but the realities of a shortfall of submarines meant there was a 'very, very high' probability that Virginia-class submarines would never arrive under Australian control.
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Turnbull said the language coming from US naval experts was 'framing expectations realistically', essentially saying that, without dramatic reform, the US could not sell any of its Virginia-class boats. With the Collins class nearing the end of their service lives, and the Aukus submarine design and build facing delays in the UK, Australia could be left without any submarine capability for a decade, potentially two, Turnbull argued.
'The risk of us not getting any Virginia-class submarines is – objectively – very, very high. The real question is why is the government not acknowledging that … and why is there no plan B? What are they doing to acquire alternative capabilities in the event of the Virginias not arriving?'
Turnbull – who, as prime minister, had signed the diesel-electric submarine deal with French giant Naval that was unilaterally abandoned in favour of the Aukus agreement in 2021 – argued the Australian government, parliament and media had failed to properly interrogate the Aukus deal.
'When you compare the candour and the detail of the disclosure that the US Congress gets from the Department of the Navy, and the fluff we get here, it's a disgrace. Our parliament has the most at stake, but is the least curious, and the least informed.
On Friday, the defence minister, Richard Marles, told reporters in Sydney 'work on Aukus continues apace'.
'We continue to work very closely … with the United States in progressing the optimal pathway to Australia acquiring a nuclear-powered submarine capability,' he said.
'In respect of the production and maintenance schedule in the United States, we continue to make our financial contributions to that industrial base.'
Marles cited the $1.6bn paid to the US to boost its shipbuilding industry already this year, with further payments to come, and said that 120 Australian tradespeople were currently working on sustaining Virginia-class submarines in Pearl Harbor.
'All of that work continues and we are really confident that the production rates will be raised in America, which is very much part of the ambition of Aukus.'
The Guardian put a series of questions to Marles's office about Caudle's Senate testimony.