Washington DC 13 March 2023
BLUF — There will be no increase in total hulls until the 2040s at the very earliest. There maybe an increase in hulls in the water due to additional maintenance capacity.
It strengthens deterrence of China in the sense that it sends a clear signal that their actions and words have consequences. The region is bandwagoning against them not because they want to spend billions on guns at the expense of butter, but because China’s aggression makes defense improvements prudent to deter future aggression. It's good for the US in that AUS is reimbursing US tax payers for 3-5 boats that are already in the water and would end up in the region anyway. It also opens the funding floodgates to build a safe deep maintenance capacity - Guam is all we have right now and it's a sitting duck. For the UK they get US tech for their next gen boats and the first major post Brexit trade deal. For AUS it is a game changer. it gives them a capability and reach unimaginable before now. It gives them a gateway to SLCM-N one day in the future.
The White House has released the details of the deal.
3 Virginia SSNs with option for 2 more starting in the early 2030s
The Viginias’s will be used boats not the latest variants coming off the line.
SSN-AUKUS - to be designed, built and operated by the UK and AUS with US technology inputs but the US will continue its own designs. This is a rebranding of the British SSN-R program.
AUS Navy personnel will embed with US and UK subs and the respective industrial bases, starting this year.
USN port visits will increase this year with RN visits to start in 2026.
Establishment of Submarine Rotational Forces West, in 2027 with US and UK boats forward rotated to AUS, but under each nation’s own C2 arrangements.
SSN-AUKUS to be jointly built in the UK and AUS based on UK SSN-R which is still in concept development and not previously expected to enter service until the 2040s, now projected in the 2030s for the UK and 2040s for AUS.
BAE systems builds the boats in the UK and already has ship yards in AUS with an established history of building warships. Submarines are a different proposition but this means they will not be starting from scratch as happened when Australia first started the Collins program that the SSNs will replace.
THE CATCH
The deal is subject to “Congressional approval”
Starting in the early 2030s, pending Congressional approval, the United States intends to sell Australia three Virginia class submarines, with the potential to sell up to two more if needed. This step will systematically grow Australia’s sovereign SSN capability and support capacity.
When pressed on Congressional support, a senior administration official said “we’ve also seen enthusiasm on the whole from our Congress as well”. This hesitancy underlines there have never been any guarantees when it comes to Congress. That is true in normal circumstances and more so under America First. Like the isolationists of an earlier era that prevented the US from adopting its own plan for world peace (seen as a causal factor in WWII), contemporary America Firsters may kill the deal if they get their hands on the leavers of power.1
Alternatively, if there is accountability for the attempted coup in the US, America First may whither over time and the threat to Australia and other allies will recede accordingly. So too would the threat to the US debt ceiling and defense budgets, permitting stability in strategic planning. Thirdoffset rates this as unlikely but it could happen. If that were the case, then the risks associated with the US side of the deal would ease substantially providing real surety to AUS and the UK.
Big Wins
The deal is a big win for global security and industry in all three countries. It will enhance industrial capacity in the US in the short term, and grow capacity in all three countries. It will deliver a secure deep maintenance capability to the Indo-pacific region that is currently limited to Guam - which is within easy range of PLA missile forces.
All the intermediary steps, like rotations of crews, skills, and boats, seem reasonable and achievable provided sufficient emphasis is put behind making ITAR flexible and responsive. Two characteristics it is not well known to possess.
The delivery timeframe for the Virginia’s are projected to be much faster than expected. While not addressed by the White House release or the speeches made today, it seems likely that AUS will not be sold new boats. While this means it will not get the latest variant with VLS launch capabilities, it does take some pressure off US production lines and may therefore be seen as less of a threat by Congress. Australia, for its part, must guard against a repeat of the “rust bucket”LST fiasco of the 1990s.2
Indeed, Australian money may help boost production of Virginia’s for America - provided the shipyard personnel gap can be solved.
Production rate today: 1.2
Production rate with Australian funds (projected): 2
Production rate needed to build subs for Australia: “needs to go above 2.0 attack boats a year if we’re going to be in a position to sell any to the Australians.” CNO Admiral Gilday.
The Administration has presented a budget to boost sub production but it is DOA in Congress.
The Navy and Marine Corps’ budget would increase from the $244.7 billion Congress enacted for fiscal 2023 to nearly $256 billion in the next fiscal year. The new money would fund improvements to shipyards, submarines and upgrades to the fleet to make ships more lethal and survivable.
Australian funds are more guaranteed than US funds to build US boats before Australia is given a bite at the apple. Craig Hooper writes that AUS should be sold new boats while the US updates maintenance capabilities.
America is currently unable to maintain the 68 submarines it currently has. America’s prolific sub-builders have simply outpaced the U.S. Navy’s ability to operate the growing U.S, submarine force. A quick glance at the piers show that America has too many submarines than it can maintain… and is moving far too slowly to build out the maintenance capacity needed to safely operate the undersea fleet.
The timeline for the SSN-AUKUS seems the least realistic element of the entire deal. Prior coverage of the SSN-R program on which the AUKUS boats are based, has put UK delivery in the 2040s. This has been updated today to the 2030s, with AUS deliver in the 2040s - whether from an AUS shipyard or the UK was not clear. As noted yesterday by Thirdoffset, the US will provide technology but will not be joining the others in a UK based platform. The first, most important, element here is that the UK and AUS boats are the same. Any attempts to mix and match different solutions on a new design and build will be a recipe for certain disaster in terms of cost and timeline blow-outs - by factors of 200%+. This should be avoided at all costs.
Given the extensive timelines and multiple factors involved, Thirdoffset suspects that in a decade or so, the Virginia’s will be seen as the preferable solution overall and the SSN-AUKUS will be quietly sidelined, just as happened to the French subs. This may coincide with a future assessment that Australian industrial development will be stretched to maintain the Viginias’s but judged not capable of new builds. Thirdoffset hopes this is not the case, but the history of AUS defense procurement suggests it is more likely than today’s announcement being realized in full. Certainly SSN-AUKUS with US technology but not entire submarines, is more likely to escape the ire of America First.
Only time will tell which is the greatest enemy of these subs - America First or the People’s Republic of China.
Watch the 3 leaders deliver the announcement in San Diego here
UPDATES
Update - AUKUS should be expanded to destroyers and include Japan and ROK - 6 Oct 2023
Update - New Three Part Series in Defense News on AUKUS issues launches with the first installment - AUKUS standoff: Australia, UK wait on Congress to approve pact - 6 Sept 2023
Key Points
US politics is the greatest threat to AUKUS.
“The Canada solution” - Pro AUKUS groups want to
Extend the ITAR exemption enjoyed by Canada to AUS and UK.
Make AUS and UK part of the US Defense Production Act
“U.S. President Joe Biden promised Australian Prime Minister Anthony Albanese during a May meeting that the U.S. would do this, but Congress has not acted on this legislative request from the Pentagon since then.”
AUKUS open to NZ
AUKUS “in some form” open to India and other “countries to offer “niche areas” when collaborating with the three allies on disruptive technology.” said Kurt Campbell. “We are in conversation with a variety of countries who are interested.”
Virginia SSNs v AUKUS SSNs
An interesting bit of stray voltage might indicate that Thirdoffset’s assessment that AUS will settle on US SSNs instead of transitioning to a UK design built in AUS from scratch, emerged when Rep. Joe Courtney of Connecticut, the top Democrat on the House Armed Services Committee’s sea power panel, told Defense News
“Australia is prepared to make investments we want to make in terms of building up Virginia production tied to this AUKUS goal post.”
In one of the more ridiculous political attack jobs, half of the Senate GOP caucus, including McConnell, wrote the following unserious letter to President Biden
“The administration’s current plan requires the transfer of three U.S. Virginia-class attack submarines to Australia from the existing U.S. submarine fleet without a clear plan for replacing these submarines,” the senators wrote. “This plan, if implemented without change, would unacceptably weaken the U.S. fleet even as China seeks to expand its military power and influence.”
Where do they think the RAN will be operating their fleet? The Med? US SSNs operated by AUS will be in the same seas doing the same missions but paid for and operated by AUS. There will be no net loss of hulls. There is a very clear plan for their replacement - the US production line - which BTW has been given a boost of $3bn from AUS. Attack subs are not F-150s. Their production rate is essentially fixed even with additional money - for many reasons including natural limits on industrial and human capital.
Moreover, the real solution is to ramp up maintenance and repair rates of existing boats in the US fleet that have been backlogged for years. That does not impact production and yet gets more hulls to sea. AUS should get the next boats off the line freeing up US resources to tackle a realistic maintenance upgrade plan.
Update - The Navy’s undersea mess - 19 July 2023
From the Bunker POGO Newsletter
July 19, 2023
Turns out the Pentagon is no better at keeping its submarine fleet afloat (PDF), so to speak, than it is at keeping its F-35s flying(PDF). Nearly 40% of the Navy’s 49 attack submarines aren’t ready for war because of bottlenecks at naval shipyards. “The number of [attack subs] either in depot maintenance or idle (i.e., awaiting depot maintenance) has increased from 11 boats (about 21% of the [attack sub] force) in FY2012 to 18 boats (about 37% of the [attack sub] force) in FY2023,” the Congressional Research Service reported July 6 (PDF). “The Navy states that industry best practice would call for about 20% of the [attack sub] force to be in depot maintenance (and for none to be idle) at any given moment.”
The Navy’s nuclear-powered attack subs prowl the world’s oceans, keeping a wary eye on possible foes. Outfitted with torpedoes and cruise missiles, they’re smaller, and more numerous, than the “boomer” submarines that carry long-range nuclear-tipped missiles. Their readiness rot is especially striking given the U.S. Navy’s key role in checking China’s ambitions in the western Pacific.
The backlog is due to too few workers and space at the four government-operated naval shipyards. It’s another example of the Pentagon’s tilt toward buying new weapons rather than keeping those it already has primed for action.
Update - Senate Bill Sets Up AUKUS Sub Buy as U.S. Industrial Capacity Questions Linger - 14 July 2023
Update - USN estimates it will be 5 years before VA subs hit 2 per year! - 31 March 2023
Update - 22 MAR - Former Prime Minister Malcolm Turnbull agrees with Thirdoffset on threat of American politics to sub deal and grand strategy generally
Just this week Australians have been reminded of how dependent we are on our American ally. Indeed, the AUKUS agreement has doubled down on that dependence. So the subversion of American democracy threatens Australia, and Australian security, as much as it threatens the United States.
Update - 15 MAR - Former PM Paul Keating SHREDS his own party over AUKUS
Anthony Albanese, Keating argued, was played by his British and American counterparts this week. "At the Kabuki show in San Diego, there's three leaders standing there. Only one is paying. Our bloke, Albo."
Senior members of the Government were labelled "seriously unwise ministers" who had just made "the worst international decision" by a Labor government in 100 years would have stung.
Joe Biden was described as a president who "can hardly put three coherent sentences together". Australian security agencies were "ning-nongs" and "dopes".
Full interview here
Brief history of AUS sub program problems
Is it too soon for satire?
SSN AUKUS might look like this
Being under indictment or even jailed is not a restriction for running for office in US elections, unless the crimes involve invoke the 14th Amendment.
Offered at a bargain basement rate, evaluated by the RAN as seaworthy, and ended up being more rust than steel requiring much more money than buying new off the shelf vessels.
Nicely written Adam. The US are currently generating Subs at 1.2 per year, below the 2 expected. Taking 3-5 will deplete the stocks further. When will the 3 enter Australian service? Would it have been a better option bringing the Japanese into the agreement and buying Submarines from them? Less crew, easier to maintain- just as a stop gap until the AUKUS Subs are available?