Shipbuilder Forgacs says it will close in 2015 unless naval shipbuilding project decisions are expedited
By national security correspondent Michael Brissenden
Updated 4 hours 58 minutes ago
Forgacs Carrington Air Warfare Destroyer project
PHOTO: Forgacs in Newcastle does refit and maintenance work for the Navy. (ABC News: Dan Cox)
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MAP: Newcastle 2300
One of Australia's major shipbuilding firms has warned that it will be forced to close its Newcastle site by the middle of next year unless the Federal Government expedites decisions on future naval shipbuilding projects.
The shipyard's closure would put 900 people out of work.
Forgacs Engineering Pty Ltd conducts refit and maintenance work for the Royal Australian Navy and since 2009 has been constructing hull blocks for the Hobart?class destroyers.
That work is now coming to an end and unless decisions are made on future naval contracts then, according to the company's chief executive officer Lindsay Stratton, Forgacs will become the first casualty of the so-called "Valley of Death".
Decisions on new naval contracts, from patrol boats all the way to a possible Fourth Air Warfare Destroyer, were put on hold by the previous government.
The Abbott Government says it will make its decisions on any new contracts after it produces a new Defence white paper in the first months of 2015.
But Mr Stratton says that would be too late for his "family owned business".
I go to bed every night thinking about what the hell we are going to do with 900 people if we are not going to get the extension of these programs.
Lindsay Stratton
"I go to bed every night thinking about what the hell we are going to do with 900 people if we are not going to get the extension of these programs," he said.
"From a Newcastle perspective that's a big deal, 900 jobs in that region."
Mr Stratton says that if the Government sticks to its plan to delay any future contracts until after the white paper is released, it will have to lay off 300 people in three months' time, another 300 a few months after that and close its doors completely by August next year.
"Our wages bill is $10 million a month. We can't hold on to those people, as terrible and sad as that sounds. We can't."
Defence minister says local industry 'must be cost effective'
Without new contracts Forgacs will soon begin losing skilled staff and Mr Stratton says it takes two years to train a welder and five years to train a boilermaker.
Defence Minister David Johnston he says is very responsive to the concerns.
But in a speech this week to the Australian Defence Magazine conference in Canberra, Senator Johnston warned industry that they must "deliver productivity".
"We must be cost effective, so our earned value figures must be right up around a dollar for dollar," he said.
Many see that as a warning to local industry to lift its game.
Senator Johnston also made it clear that there is not much money around at the moment.
He told a Senate estimates hearing on Wednesday that because of the previous government's cuts to resourcing, the new government is currently "paddling under the water as fast as we possibly can to deal with what is virtually a crisis in resourcing for Defence".
"It's been a hospital hand ball. The change of government has yielded the fact that there are virtually no plans to create a shipbuilding enterprise," he said.
The Government, he said, plans to produce an industry policy to accompany the white paper when it is released next year.
http://www.abc.net.au/news/2014-02-...ose-unless-defence-decision-expedited/5286356
Some more workers to be liberated.
