Angles and Dangles - Why Japan Lost the Australian Sub Contract

A SYMBOL OF HAPPIER TIMES - HMAS Onslow, one of Australia's outstanding Oberon-class boats from the Cold War, at permanent anchor at the the National Maritime Museum, Sydney

Australia, Japan, Defence, Submarine, Thales, DCNS, Raytheon, Tony Abbott, Shinzo Abe, Arms Trade

In what is already being described as the "defense deal of the century," the government of Australia has awarded the French defense concern DCNS a AUS$50 billion contract to build their next generation of fleet submarines. The decision has also been described as a snub to the government of Japan, who for some reason was expected by many to win the contract. However, a more jaundiced look at both the politics and practicalities of Australia's submarine requirements reveal that Japan probably never had a chance.

When the decision was finally announced, a number of political concerns were aired, some more relevant than others: some argued that the Malcolm Turnbull cabinet did not wish to offend China; others pointed to recent controversies over Japan's continued whaling (notwithstanding the fact that they never bombed a Greenpeace vessel in an allied port), and so on. But the most relevant political concerns around the decision concern jobs in southern Australia, Japan's initial reticence to transfer technology, as well as a desire to disavow the mutual ham-handedness of the negotiations between Japan and Australia (particularly by Turnbull’s predecessor Tony Abbott).

There may also have been some insider political aspects to this deal as well: it should be noted that DCNS is partially owned by Thales, another French defense concern which is already a major defense contractor for Australia. While there may have been some insider maneuvering going on, the fact that DCNS and Thales share some institutional history and management resources should also point to a smoother development cycle for the new submarines. By this same logic, it seems likely that Raytheon, one of the American competitors for the accompanying combat systems contract, has a head start in their competition – given that they are also partially owned by Thales.

But more than anything else, the decision reflects hard lessons learned by Australia with their previous generation of submarines, the Collins class. Unlike many of her neighbors, Australia has security commitments straddling both the Western Pacific and Indian Oceans, into Central Asia. While European-style littoral patrol submarines with relatively small hulls have been popular with Australia's neighbors, she needs something bigger – something with the capability of the nuclear attack submarines operated by the United States, Great Britain, and France. But because of political concerns, nuclear propulsion is a no-go in Australia.  Collins reflected an attempt to take an excellent Swedish littoral-oriented design and turn it into a blue water patrol submarine,  by scaling up the hull.  The end result was a myriad of engineering problems which truncated the useful life of the class. Had Australia chosen either the German or Japanese competitors, they would've had to make the same mistakes all over again. Meanwhile, the French offering is essentially a nuclear attack submarine without the nuclear propulsion, offering the range, endurance, and crew comfort required for Australia's missions.

Now that the contract is done, it may be worth considering what could be done to mollify Japan. After all, they will remain an important ally with common security goals. Japan is also set on turning its outstanding technology base towards defense exports. Rather than trying to sell Australia an unproven scaling up of a relatively new design, Japan should probably concentrate on offering weapon systems which are are both well proven and competitive in price; a prime example of this is the Kawasaki P-1, their new maritime patrol aircraft. Maybe, just maybe, Turnbull could see it in his heart to broker a deal between Japan and New Zealand, whose P-3 Orion aircraft are growing long in the tooth. Then New Zealand could sell their Orions to the Philippines. The reactions to this from China and Russia would provide endless amusement for defense analysts worldwide.