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Naval Group has “enforced its rights” in Australia, assures its CEO [Exclusif] – Economy



Does the sum of 555 million euros in compensation on a contract of 56 billion euros seem sufficient to you?

First of all, allow me to remind you that the amount of 56 billion represented the total cost of the program for all the stakeholders – Naval Group, Lockheed Martin, the shipyard, etc. – and in no way the amount that had been contracted with Naval Group. The numbers are not comparable. The agreement signed with the Commonwealth of Australia marks the end of the contractual and financial part of the program. It is not strictly speaking a compensation and I can tell you that the agreement is “fair” and equitable, and as I said at the time of the termination of the contract we have asserted all our rights .

What is this amount?

The Australian Prime Minister said at his press conference, the terms of the agreement are confidential.

Where will these 555 million euros be invested?

First of all, and as you have understood, it is not a net value to be invested since this sum covers in particular the costs incurred and to come on the program, for Naval Group but also for a large number of subcontractors. You know, stopping the AFS program required reviewing Naval Group’s strategy. This is what we did at the end of last year, focusing on the three pillars of our development, which are France, international development and innovation, and in the latter area in particular autonomous systems and drones. Naval Group is investing and will continue to invest in its skills, in its industrial tool, in innovation, in new technologies and products. We will have the opportunity later in the year to discuss these various subjects with our Board of Directors.

A desire to resume constructive business relations between France and Australia

Can the coming to power of Australian Prime Minister Anthony Albanese initiate new contracts for Naval Group in Australia?

No one can predict the future, Naval Group remains present in Australia through its subsidiary Naval Group Pacific based in Adelaide to conduct research activities and related partnerships with university laboratories. I note that there is a desire to resume constructive business relations between France and Australia, which will certainly benefit French companies.

Is the final closure of Naval Group Australia (50 employees against 350 following the order for 12 submarines in 2016) still scheduled for this summer?

The cessation of the activities of Naval Group Australia, a company whose sole purpose was the program of future submarines, will take place in the coming weeks. Today, 50 employees are still present there, they notably contributed to the discussions to find an agreement. But about 350 people were working full-time on the program in

Australia. Following the end of the program, the Australian authorities supported the transition of the teams with the implementation of a “Talent Pool” to offer as many people as possible a job in other companies in Australia.

What conclusions do you draw from this whole affair?

We understood that the decision was political, we demonstrated to our Australian client that we had a solution that corresponded to the need expressed and we kept all our commitments in this regard. But the need has changed. Somehow, it is a source of pride for the company to have completed what we were asked to do and I would like to thank all those who for 5 years have worked in a remarkable way on this project, and of course since September 15, the teams that have made it possible to reposition them for the most part within the company.

The end of this negotiation allows us to look resolutely to the future

Naval Group is a strong and resilient company and has been able to bounce back. The year 2021 has certainly been a year of contrasts, the Australian program has stopped but Greece has chosen us for the construction of three defense and intervention frigates (FDI) plus an optional one, which will be built in Lorient .

In our order book, we also have, for France, the FDI, the Barracuda submarines, the 3rd generation submarines or the new generation aircraft carrier. And for export, we are working on the Greek frigates, the submarines in Brazil, but also on the mine countermeasures solution for the Belgian and Dutch navies, of which we are putting the second platform on hold this Tuesday morning on the Kership shipyard in Lanester (56). The end of these negotiations allows us to turn resolutely to the future at a time when our customers, and in particular the French Navy, need us to support them in their current or future commitments.

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