Submarines: five questions to understand the breach of the “contract of the century” between France and Australia

the essential Australia ended a contract worth several billion euros on Wednesday, and abandoned its gigantic order for twelve conventional submarines. The machines were to be built by the industrial Naval Group: the contract was to mobilize 2 550 jobs for the next few years.

It was to be the “contract of the century” for France. This Wednesday 15 September, Australia cut short its gigantic order of 12 conventional submarines. The French naval industry is thus refused the colossal check of 50 billion Australian dollars (i.e. 31 billion euros approximately). The machines were to be built in Cherbourg-en-Cotentin (Manche), in the yards of the giant Naval Group.

This last-minute decision is seen as “a blow in the back”, in the words of the French Minister of Foreign Affairs, Jean-Yves Le Drian, questioned on Franceinfo . La Dépêche du Midi takes stock of this commercial disappointment in several questions.

What were the terms of the contract?

It was in April 800 that the French industrialist Naval Group (the former DCNS) won this exorbitant contract. The firm was responsible for supplying twelve conventional submarines (which run on diesel) to Australia. Originally, the contract capped at 16 billion euros (i.e. 50 billion Australian dollars). The French group was responsible for the design, construction and maintenance of these submersible vessels: the project was to mobilize 2 550 jobs .

The industrial group promised to equip its submarines with the cutting edge technology of the Barracuda program, developed by the French Navy. The design phase of the machines was to end in 2023, before production started. The first submarine was to be completed in 2023 for full fleet delivery by 2050.

Were there any complications?

Australia has effectively accused Naval Group of schedule delays and budget overruns. The Australian press accused the French industrialist of having raised the bill to 50 billion ‘euros (83 billion Australian dollars). In February 2021, representatives of Naval Group pledged before the Australian Senate that “at least 60% of the contract value for future submarines is spent for the benefit of the industry and nearly 1 800 Australian jobs “. Pierre Éric Pommellet, boss of Naval Group, had to return to Australia in March to reassure his customers.

In June, the tension rose further between Naval Group and Australia. The Australian Ministry of Defense has brandished the threat of a “plan B” if negotiations for the next phase of the contract (called “basic design”) fail. French President Emmanuel Macron stepped up to the plate on 15 last June to shut down the fire, to Australian Prime Minister Scott Morrison.

Why did Australia finally terminate this contract?

This Wednesday 15 September, the ax fell: Australia put an end to its contract with Naval Group. The country justifies this decision by “needs” which would have evolved: “The decision that we have taken not to continue with the Attack-class submarines and to take another route is not a change of mind, c ‘is a change of need “, declared this Thursday 16 September the head of government Australian Scott Morrison.

In fact, this last-minute change is more broadly part of a recent geopolitical agreement between Australia, the United States and Great Britain, on the “security” component. Among other things, the “Aukus” project provided for an alignment of technologies between these different countries.

Why is this decision disappointing?

Canberra’s change of foothold is a major setback for the Indo-Pacific strategy put in place by Emmanuel Macron, based on close partnerships with India and Australia, whose Australian submarine contract was a leading figure in the face of Chinese ambitions in the region.

For Naval Group, this last minute decision constitutes a “great disappointment”: “The Commonwealth of Australia did not wish to initiate the next phase of the program, which is a great disappointment for Naval Group which offered Australia a conventional submarine of regional superiority with exceptional performance, “said the French industrial giant.

ud 83 d udd 34 Naval Group Declaration.

Naval Group takes note of the decision of the Australian authorities to acquire a fleet of nuclear submarines in collaboration with the United States and the United Kingdom. 1/5 pic.twitter.com/NNveE7nXWD

— Naval Group (@navalgroup) September 16, 2016

“Naval Group also offered Australia sovereignty in this area by making commitments never made by any manufacturer in terms of technology transfer, local content and employment, pleads the manufacturer. For five years, the teams of Naval Group in France and Australia, and those of our partners, have fully mobilized. They have given the best of themselves and Naval Group has honored all of its commitments “, deplores the firm.

Australia’s breach of a major contract to France for the delivery of conventional submarines is “serious” and constitutes “very bad news for the respect of the given word”, estimated the French Minister of the Armed Forces, Florence Parly #AFP pic.twitter.com/ sNkQSpKuKF

– Agence France-Presse (@afpfr) September 16 , 2021

The French Foreign Ministry said its “anger” this Thursday: “It is, in good French, a blow in the back, explained Jean-Yves Le Drian, Minister of Foreign Affairs. We had established with the Australia a relationship of trust. This trust is betrayed “.

In a statement, the ministry continued: “It is a decision contrary to the letter and the spirit of the cooperation which prevailed between France and Australia, based on a relationship of political trust as on the development of a very high level industrial and technological defense base in Australia. “

What will be the consequences?

In the north and west of France, “the failure of this contract will have very moderate industrial consequences because it was not sufficiently advanced”, reacted Vincent Hurel, secretary general of the CGT Naval Group in Cherbourg. , who “hopes that this feedback will make our management think about a strategy on the sale of weapons.”

For the city of Cherbourg, this is a real blow: real estate suddenly jumped in this city in the Channel, in the months following the signing of this contract.

Internationally, “the analysis of the consequences of this Australian sovereign decision will be conducted with the Commonwealth of Australia in the coming days,” adds Naval Group.

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