The global head of French defense giant Naval Group said he had “productive” talks with the Morrison government after being confronted by the company’s commitment to Australian industry in a future $ 90 billion submarine program.
The main point:
Pierre Eric Pommellet has flown around the world, spending two weeks in mandatory quarantine in Adelaide, conducting face-to-face negotiations with ministers and officials in Canberra.
The government’s disappointment with the Naval Group grew over the company’s refusal to formalize last year’s pledge to spend 60 percent of the value of a massive contract on a local supplier.
After leaving separate meetings with Defense Industry Minister Melissa Price and Assistant Secretary of Defense Andrew Hastie, the visiting CEO remained optimistic about the progress of the deal.
“I am very happy to be in Australia, I have had a very productive meeting with all the Australian ministers,” Pommellet told the ABC.
The visiting French executive declined to say whether he thought the Naval Group was close to finalizing a deal with the Commonwealth.
“As I said, we had a very productive engagement,” Pommellet replied before leaving Parliament House.
Defense Secretary Linda Reynolds had to cancel her first face-to-face meeting with Global Naval Group CEO after being admitted to hospital on Wednesday morning.
Instead, Defense Industry Minister Melissa Price instead issued a brief statement following the talks with the French visitor.
“I emphasize to Mr. Pommellet that a clear commitment to Australia’s capabilities in the Strategic Partnership Agreement with the Naval Group is an absolute necessity for Australia.
“We have to achieve at least 60 per cent of the total contract value with Australian businesses.”
Minister Price also warned that the Morrison government would hold the Naval Group accountable for the commitment, “as the Australian public hoped for”.
“Based on my extensive legal experience as a construction attorney, I remind Mr. Pommellet that the finer details on contract matters,” he said.
Australian Navy Chief Admiral Mike Noonan also spoke with visiting French businessmen late Wednesday about a massive project to build up to 12 conventional powered submarines.
Finance Minister Simon Birmingham is scheduled to hold talks with Mr Pommellet on Thursday.
MILAN (Reuters) – Piaggio Aerospace Italy, which applied for creditors’ protection at the end of 2018, said on Wednesday that it had officially invited five bidders to make a buyout bid for the group.
The deadline for five bidders to submit non-binding bids was set for March 5, the company said in a statement, adding they were interested in buying the group’s aircraft and engine businesses.
Company special administrator Vincenzo Nicastro has sent out the letters as a further step in the company’s sales process, which began last year when Piaggio Aerospace initially withdrew expressions of interest from 19 international bidders.
“Having five applicants on the short list is very positive, especially if we consider that the pandemic has objectively discouraged many foreigners,” said Nicastro.
Nicastro said that a non-binding offer would be assessed by the Italian Ministry of Economic Development and then talks would start on arriving at a binding offer.
Reporting by Giulio Piovaccari, editing by Agnieszka Flak
Defense Secretary Linda Reynolds has expressed “frustration” and “disappointment” with the French company building Australia’s $ 90 billion future submarine as she prepares to confront visiting global bosses over important contract negotiations.
The main point:
The Naval Group’s global chief executive will meet Secretary of Defense Linda Reynolds on Wednesday
Despite the tense negotiations, the government insisted that the complex schedule for building the submarine went ahead as planned
Defense has dismissed concerns the Future Frigate Program might also face problems
A year after the Naval Group pledged to spend 60 percent of the massive contract value on local suppliers, the company has yet to immortalize that figure in a formal agreement with the Commonwealth.
At the same time, there are concerns that Australia’s ambitious $ 45 billion program to build a new anti-submarine frigate could disrupt a related Canadian warship project that is experiencing a huge cost and time boom.
The sources said Prime Minister Scott Morrison has become increasingly concerned in recent months about Defence’s ability to deliver major projects and has raised his concerns directly to the National Naval Shipbuilding Companies Department team.
Ahead of his meeting with the Naval Group, Senator Reynolds told Parliament he was annoyed at the slow progress of negotiations with France.
On Wednesday, the Naval Group’s global chief executive, Pierre Eric Pommellet, is expected to meet Senator Reynolds in Canberra after flying to Adelaide where he completed a mandatory two-week quarantine assignment.
“I am frustrated and I am very disappointed that the Naval Group has not been able to complete this contract with Defense, but it will not be done at the expense of Australian jobs, and Australian industry,” Senator Reynolds said Tuesday.
“This capability is too important for our nation to do that.”
The ABC understands that the Commonwealth is demanding an annual Australian Industrial Content (AIC) audit of a project to build 12 Attack Class submarines, but France has so far refused.
Despite tense and protracted negotiations, the government insists that the submarine’s complex construction schedule goes ahead as planned.
“Defense continues to work closely with the Naval Group to advance this project to ensure delivery is on time, within specifications and within budget,” a government spokesman told ABC.
The Naval Group has also restated its commitment to Australian industry ahead of Pommellet’s meeting with the Minister of Defense.
“Naval Group Australia is fully committed to maximizing the capabilities and content of the Australian industry in the design and construction of the Attack Class fleet,” said a company spokesman.
“We continue to have productive discussions with our Commonwealth partners on how best to achieve this common goal and include our commitments in the Strategic Partnership Agreement for Australia’s future submarine program.”
Defense insists a $ 45 billion warship program is on track
The Department of Defense has dismissed concerns that Australia’s $ 45 billion Future Frigate Program might also face problems, as warship-related projects in Canada face stiff scrutiny for costs and blast schedules.
However, the Canadian Surface Combatant project to build 15 British-designed warships is already facing significant delays and cost increases, with a price tag rising to $ 70 billion.
On Wednesday, the Canadian Parliament Budget Office will release a report on the controversial project, and a day later Canada’s auditor general is expected to produce a table report on the country’s National Shipbuilding Strategy.
Independent Senator Rex Patrick said warning signs in Canada should be taken seriously in Australia.
“The Canadian frigate and the Australian frigate are based on the same design, it is likely that similar problems will occur here in Australia,” Senator Patrick told the ABC.
A Defense spokesman said the department was closely monitoring developments in Canada and Britain.
“Defense has a close and cooperative relationship with defense partners in Canada and the UK and regularly discusses various topics related to the Global Combat Ship program which is distributed across the three countries,” the spokesman said.
“As the leading country currently building the Type 26, the UK provides lessons learned into the Australian Hunter Class program.”
Australian Defense and Industry Network chief executive Brent Clark said local firms also appeared to be losing jobs in a $ 45 billion Future Frigate Program.
“Australian companies could be at a disadvantage because they were asked to quote only a small number of programs, whereas overseas supply chain companies were asked to cite the entire global program,” he said.
BAE Systems has dismissed the statement, claiming that it has exceeded its goal of at least 58 percent Australian content and insisting that the company is “very confident of maximizing Australian industry engagement”.
“The Hunter Class Frigate Program is a program that will not only deliver the nine most modern anti-submarine warfare frigates, but is also designed to put the shipbuilding industry into a sovereign position,” said a spokesman.
“To achieve that we need an Australian company involved.”
DUBAI (Reuters) – Any communication between Tehran and Washington about US citizens detained in Iran has been made through the Swiss embassy which deals with US interests rather than through direct contact, a spokesman for the Iranian foreign ministry said on Sunday.
Saeed Khatibzadeh was responding to statements on Sunday by White House national security adviser Jake Sullivan, who said the United States had begun communicating with Iran over Tehran’s detention of US citizens.
“This news is not true as stated and there is no direct dialogue between Iran and the United States in any field,” said Khatibzadeh, according to the ISNA Student News Agency.
Earlier a news site quoted an unnamed source as saying: “The Iranian government has not discussed American detainees with Washington. All messages have been exchanged through the Swiss embassy in Tehran. “
Switzerland represents US interests in Iran because Washington and Tehran do not have diplomatic relations.
“Our priority is the release of Iranian prisoners in the United States,” said Khatibzadeh.
Iran’s elite Revolutionary Guards have arrested dozens of dual nationals and foreigners in recent years, mostly on espionage charges. Human rights activists accuse Iran of using them as bargaining chips, something Tehran denies.
Tehran has repeatedly said it is ready for a full prisoner exchange with the United States. It said Iranians detained in the United States, mostly for violating sanctions, were detained unfairly.
Written by Parisa Hafezi; Edited by Edmund Blair and Frances Kerry
WASHINGTON, February 19 (Reuters) – Lockheed Martin Co., the United States’ biggest arms maker, has raised interest from Croatia regarding the purchase of stealth F-35 jets, a Lockheed executive said on Friday.
Greg Ulmer, executive vice president of Lockheed’s Aeronautics unit, told reporters “they have shown interest” in buying the jets, which make up a large share of Lockheed’s revenue.
Croatia is evaluating US, French and Swedish bids for fighter jets as it looks set to modernize its air force, which now flies Russian-made MiG-21 jets dating from the past in former Yugoslavia.
Croatia wanted to buy 12 second-hand F-16 fighter jets from Israel, but failed after Israel said it here in 2019 could not get approval from the United States for the sale.
Other international customers for the fifth-generation F-35 include Canada, Finland and Switzerland, who are running competitions for future jet purchases. Additional customer prospects for the Lockheed F-35 include Greece, Spain, Eastern Europe and Middle Eastern countries, Ulmer said in a media conference call.
Lockheed has also seen international interest for as many as 300 fourth-generation F-16 fighters on top of its current production stockpile of 128 jets, Ulmer said. (Reporting by Mike Stone in Washington, DC; Editing by Dan Grebler)