Lucrative Deal Reached with Australian PM
The French manufacturing industry received a boost this spring when Australia chose Naval Group, a French naval contractor, to build 12 submarines for the Australian fleet. Beating out companies from Japan and Germany, Naval Group's contract will help grow government coffers, as the company is 62% owned by the French government.
The €34 billion deal will bring 4000 jobs into Cherbourg over a six year period and approximately 5000 jobs to Australia. The relationship between France and Australia strengthens France's influence in the South Pacific, a region that is growing increasingly important for commercial shipping routes and military operations.
Though the submarines will not be nuclear powered, the Shortfin Barracuda is based off the nuclear-powered Barracuda. The Shortfin's diesel propelled engine is being designed and built by Lockheed Martin. The entire enterprise is international in scale but France is on top of the heap.
The contract is not without controversy. Unfortunately Australian newspapers published documents that Naval Group deemed sensitive. The nature of the submarines and their role in defense requires discretion between parties. In terms of maintaining their competitive edge in a tight defense market, Naval Group cannot afford a leak of their designs to their competitors. Despite this hiccup, Prime Minister Malcolm Turnbull calls the contract the "largest and most ambitious project in Australian history."
President Macron's statement indicates that the contract is not only financial but also strategic in nature. It builds on the Franz and Quad regional defense agreements and provides protection to New Caldonia, a French territory.
President Macron met with Australian Prime Minister Malcolm Turnbull and both men asserted that the contract and their countries' continuing relationship is a healthy one. Nor is it short lived. The first submarines are expected to roll out in between 2030 and 2035, with the last submarine leaving the factory by 2050.
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