Austal wins $670 million US submarine contract from defence industry giant

Austal will take on hundreds of more workers in the US after winning a near $700 million contract to help build nuclear-powered submarines for one of the world’s biggest defence contractors. The $US450m ($670m) deal with General Dynamics will fund the expansion of facilities at Austal’s shipyard in Mobile, Alabama to enable the Australian-listed shipbuilder to make more and bigger modules for the US Navy’s Columbia and Virginia-class submarines. Austal shares leapt as much as 12.6 per cent to be 27¢ higher at $2.51 as at 1.15pm. Austal said on Monday the funding from General Dynamics Electric Boat would support the design and construction of a new module fabrication and outfitting facility at Mobile by 2026 to support the US Navy goal of delivering one Columbia-class and two Virginia-class submarines annually. When fully operational, the expanded plant would support about 1000 jobs. It is expected that hundreds of new jobs will be offered alongside workers redeployed from elsewhere in the Mobile shipyard, which already employs about 4000. Austal chief executive Paddy Gregg said the new contract was a vote of confidence in the Australian group, which has been making submarine command and control modules for General Dynamics since 2022. General Dynamics, the US Navy’s primary builder of submarines for more than a century, assembles the Columbia and Virginia-class vessels in its Connecticut shipyard, but it has opted to subcontract the production of multiple modules to Austal, hoping that the outsourcing will accelerate production timelines. “General Dynamics Electric Boat has recognised that Austal USA is a solid partner to deliver high-quality components for Virginia and Columbia-class submarines,” Mr Gregg said. “This growing partnership demonstrates confidence in Austal USA’s commitment to meet the needs of the US maritime industrial base and support the most critical needs of the US Navy.”