Australian Defense Minister Linda Reynolds warns Naval Group to meet contractual obligations

Relations between the Federal Government and the French company designing Australia’s future submarines have hit a new low, with the Defence Minister declaring she will hold the group to account on its local industry commitments.

Defence Industry Minister Melissa Price has previously said there is no specific percentage requirement of Australian industry content included in the contract.

The Minister’s blistering attack followed comments from France-based Naval Group questioning the capability of local suppliers, and suggestions Australian businesses may not get half of the value of contracts under the $80 billion program.

Naval Group Australia chief executive John Davis told The Australian newspaper on Thursday that the company “didn’t know the Australian market before we joined the program”.

A furious Defence Minister Linda Reynolds expressed her disappointment at the comments and said she would discuss the Government’s expectation of strong Australian industry involvement when she met her French counterpart in Europe on Friday.

“I am disappointed by the comments attributed to Naval Group Australia on the Future Submarine Program as they do not reflect the strong collaboration between Naval Group and Australian industry on this program of national significance,” Senator Reynolds said in a statement.

“Our Government will hold Naval Group to account for the commitments they signed on for to work with Australia’s world-leading defence and shipbuilding industry.”

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Senator Reynolds said “the maximisation of Australian industry involvement through all phases of the submarine program” was outlined in the Government’s Strategic Partnering Agreement with Naval Group, signed last year.

“The actual proportion of Australian content on the submarines will be determined as the design of the submarine is completed,” Ms Price told Parliament.

In 2016, Naval Group (then known as DCNS) beat rival bids from Germany and Japan to build 12 new submarines for the Royal Australian Navy over the next three decades.

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