May 7, 2015

Minister Andrews Phone Call to Minister Nakatani

Japanese Defence Minister Gen* Nakatani throws himself from a parachute training simulator. Can Nakatani face the probable submarine sale to Australia challenge?
* Note that Gen (his first name not a previous rank) used to be a Captain in the Japanese Army's ranger-parachute corps. He can do things that no other Defence Minister would dare attempt. (Photo Courtesy Getty Images)
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A whole series of news articles on May 6, 2015 and May 7, 2015 have reported Australian Defence Minister Andrews' phone call invitation to Japanese Defence Minister Nakatani. This was a formal courtesy call for Japan to provide secret technical information in response to Australia's future submarine "competitive evaluation process". Minister Nakatani undertook to provide information in the next few weeks and reminded Minister Andrews of Australia's and Japan's increasingly close security-defence relations. This follows Minister Andrews visits to the German Defence Minister and TKMS on April 23, 2015 and to the French Defence Minister and DCNS on April 24, 2015.

As an aside Japanese-Australian relations have been formalised in the Japan-Australia Joint Declaration on Security Cooperation of March 2007 and the more recent Agreement Between The Government Of Japan And The Government Of Australia Concerning The Transfer Of Defence Equipment And Technology of July 2014

On the Andrews-Nakatani telephone call Japanese media reports include NHK on May 6, 2015 and Japan Today on May 7, 2015 and Australian reports of May 7, 2015, included AFR and SMH so far.   
Some issues arising from these articles and also previous issues raised in Submarine Matters include:

- the phone call is a major stage in an established series of Australian indications that Australia has already picked Japan. Major indications started during Prime Minister Abe's July 2014 visit to Australia.

- The Japan Today article puts a different emphasis on the phone call. It appears much more like Andrews is asking for Australia to become part of the future Soryu Mark 2 (Lithium-ion battery) Project. 

- As Australia will be Japan's first major defence customer Japan will be unused to a defence sales process. 

- Japan would certainly be unused to the concept of "jointly develop[ing] a submarine with another country". There can be no pure "off-the-shelf" one-size-fits-all submarines as country customers always request a range of adjustments for specific mission needs.   

- Within the sales process Japan is probably suffering indecision regarding when and how to supply sensitive technical information to sell a major weapons system. The Japanese Government wants to know that Japan has been selected before it supplies all of the technical information desired. Perhaps Japan is already confident it has been selected so is happy to supply almost all.

- Lithium-ion batteries (LIBs) and removal of Stirling air independent propulsion (AIP) will be the most major technical changes in the Soryu Mark 2 "28SS" (first one probably lauched in 2020). Japan cannot be certain how LIBs will perform operationally in a submarine let alone one not built. It is unknown whether Japanese submarine (JS) Asashio TSS-3601, previously an AIP testbed, has been refitted as a LIB testbed?

- As LIBs will be lighter than existing lead-acid batteries and Stirling AIP removed this will (or should) allow more diesel fuel to be carried to provide Australian Soryus with the approximately 12,000 nautical mile range required by Australia.

- Japan and Australia cannot be certain how efficiently the US combat system (sensors, database and weapons) will operate when mated to a Japanese submarine for the first time.

- Japan's political-military-industrial establishment will need resolve and sometimes muddle-through  all the political, legal, Japanese public relations and procedural processes that will arise in the sale of Japan's first major weapons system to a foreign country.  

- Communication, language and cultural differences between Australia and Japan need to be faced and resolved. 10,000s of technical manual pages will need to be translated - not just at a literal level but the level of nuance for certain understanding.  This would include many Australian managers, technicians and naval officers learning Japanese and visa versa. Ideally 50? Australians will need to train in operational Japanese submarines. This will be much harder than English speakers understanding French and German language and personnel.

- Against these possible differences it must be noted that Japan has proven a creative and reliable  business partner in the commercial sector (from car factories in Australia to ships and iron ore and coal buying) so partnering Australia in the defence sector is not impossible. Also the Japanese military would be used to liaising in English with their American allies (since 1951). So this can extend to Japan-Australia liaison.

- A possible stumbling block so far is Japan getting used to the idea that China is more important economically to Australia than Japan is. If Japan bought more minerals and resources from Australia then:
  = Japan may surpass China in economic importance to Australia, and also
  = a sort of balance of trade dynamic "submarines for minerals/energy" could develop between Japan and Australia. A precedent exists in the trade dynamic of American weapons for Saudi oil.

Even if Germany or France win this all represents Australia's greatest defence acquisition challenge. Whether the abolition of the Defence Materiel Organisation (DMO) makes the acquisition easier remains to be seen.

Pete

17 comments:

Anonymous said...

Hi Pete

Judging from the situation, Minister Andrews phone call was the diplomatic message that Australia selected Japan as a partner in next submarine development? Japan quickly responded to the message, deciding to offer classified information on submarine and to hold National Security Council for approval of submarine selling.

Regards
S

Anonymous said...

The communications, cultural differences are manageable if planned carefully. They can be very rewarding.
Over nearly 2 decades, I worked in a high tech industry with Japanese, French, German customers. As an English speaker, I always hired professional technical translators for face to face meetings. I am also backed up in my team by very able Japanese engineers. At the beginning, most of my high ranking Japanese customers can barely spoke English, but they made tremendous progresses in 1-2 years. Yes, certain things take longer, but that is how you develop a close mutual understanding of each other. After a few years, we become almost like family. Something that I cannot say the same with my French (although I speak French fluently) or German customers.
I am most impressed with my Japanese customers' attention to minute details. They always made 100% of their commitments, and I made sure I also met 100% of my commitments to them.
It always take time to develop a lasting and trusting partnership.

Anonymous said...

Dear Pete,

I doubt that any Australian would have to learn more than "Ein Bier bitte!" and "Die Rechnung bitte!" to learn something about a German submarine while in Germany.

For engineers it is a daily business to speak English to foreign costumers. All men and women on German submarine can speak English. Also a lot of different nations were trained on German submarines.

Regards,
MHalblaub

C.c.: Type 210mod is the best solution for Australia.

Peter Coates said...

Hi S

I think Andrews' phone call is a major stage in an established series of Australian indications that Australia has already picked Japan. Major indications started during Abe's July 2014 visit to Australia http://www.news.com.au/national/australia-to-sign-new-submarines-deal-with-japan-as-prime-minister-shinzo-abe-visits-tony-abbott-in-canberra/story-fncynjr2-1226980720135 .

The http://www3.nhk.or.jp/nhkworld/english/news/20150506_17.html article certainly puts a different emphasis on the phone call. It appears much more like Andrews asking for Australia to become a partner in the future Soryu Mark 2 (Lithium-ion battery) Project.

There is no pure off-the-shelf submarine as country customers always request a range of adjustments for their mission needs. In that regard Japan would certainly be unused to the concept of "jointly develop[ing] a submarine with another country".

I'll place the above in the text of my article.

Regards

Pete

Peter Coates said...

Hi Anonymous (May 8, 2:07AM)

Yes the many stages of the process of Australia (probably) acquiring Soryus will bring Japan and Australia closer together. No reason why it shouldn't be a positive process.

Japan has certainly proven a good business partner in the commercial sector (from car factories in Australia to ships and iron ore and coal buying) so partnering Australia in the defence sector is possible.

Also the Japanese military would be used to liaising in English with their American allies (since 1950). So this can extend to Japan-Australia liaison.

A possible stumbling block so far is Japan getting used to the idea that China is more important economically to Australia than Japan is.

If Japan bought more minerals and resources from Australia:
- Japan may surpass China in economic importance to Australia, and also
- a sort of balance of payments dynamic "submarines for minerals/energy" could develop between Japan and Australia.

There is a precedent of such a trade dynamic in American weapons for Saudi Arabian oil.

Regards

Pete

Peter Coates said...

Hi MHalblaub

Yes Germany is the main contender against Japan. In the 1980s Australia was very close to choosing Germany to build the Collins. But some strange alchemy caused Australia to choose Sweden at the last tender hurdle.

Germany's unmatched experience in selling reliable, low crew size subs should rate highly.

Regards

Pete

cc: a very enlarged Type 209 (no AIP but LIB please :)

Anonymous said...

Dear Pete,

this time the submarine will be chosen according to the same standards as last time: someone wants an US combat system. Everything else is secondarily.

To chose a submarine the best way would be to test the already available submarines. Did RAN ever send submariners to Japan, Israel, India, Brazil, to name just a few countries where Australia could get proper information?

I did not list Germany or France because these countries are no real costumers.

Regards,
MHalblaub

Anonymous said...

Hi Pete

Japan’s participation in competitive evaluation process was widely reported here in Japan. But there were big misunderstandings in Sankei Shinbun, 5th biggest news paper in Japan. The repoter said
(1a) ‘“If you compare the French and German subs in terms of performance, Soryu class subs are seen as overwhelmingly advantageous”
(2a) “Unfounded story that performance of Soryu is insufficient prevailes in Australia.”
(3a) “Performance of Soryu is 80% of that of Nuclear subs.”
As I could not accept such an opinion, I complained Sankei Shinbun.
(1b) 1a does not reflect the fact. AIP submerged range and speed of German subs (30days at 5knot/h) are superior to Soryu (14days at 2-2.5knot/h), etc.
(2b) Australia government reported that no submarine satisfied future submarine requirements. In fact, Soryu’s range is much shorter than German or current Collins subs, etc. Aussie criticizes performance of Soryu based on the fact.
(3b) 3a is simply against commonsense on performance of conventional subs.

Not only Japanese journalism, Australian journalism shows mistake. Like, “there is little information on Soyu”. But, we know outlines of hull structure/steel/welding, cells, indurance, and anti-vibration/sound absorption system.

Regards
S

Peter Coates said...

Hi MHalblaub

I agree that the US provision of its combat system (including weapons) is a key deciding factor. The combat system is especially (though quietly) important as it is a “key” to many US and Japanese installed undersea sensor arrays throughout the region. More on arrays in future weeks as ANU Press has recently published a major work on that subject.

Australia has sent submariners to Japan about the propulsion system. The RAN head of the Future Submarine project might attend Australia’s upcoming and regular “2+2” talks with Japan which includes Defence Ministers. Those talks may next occur in Tokyo around June 2015.

See http://dfat.gov.au/geo/japan/Pages/japan-country-brief.aspx “The JDSC also established the regular '2+2' talks between foreign and defence ministers. At the fifth 2+2 talks in Tokyo on 11 June 2014, Ministers agreed on recommendations to enhance security and defence cooperation, including the conclusion of negotiations on a defence technology and equipment agreement.”

When Minister Andrews visited TKMS-Kiel on April 23, 2015 the TKMS presentation included information on the Dolphins supplied to Israel and 209s being built for Egypt. Defence attaches may talk and visit about India and Brazil.

If first-sale issues cause major delays in the Japanese sale Australia may go to Germany or France. Japan having an actual large sub in production (with the Soryu) is a legitimate selling strength for Japan.

Regards

Pete

Peter Coates said...

Hi S

Looking at those issues in order:

(1a) Yes its hard to compare Soryu performance to design board TKMS 216 performance or to the mainly design board conventional DCNS “Barracuda”. Although if the DCNS sub weighs the publically quoted 4,750 tonnes (surfaced) it should be automatically eliminated as a choice.
(2a) Yes there is growing Soryu performance data – being provided by Japan to the RAN – and even this blog is recording more detail. Also one must consider that data (on the future Soryu Mark 2s (28SS) and TKMS and DCNS subs) are necessarily estimates.
(3a) Issues on AIP seem to draw the most mistakes and false claims. One major mistake is that there are distinct “AIP subs” that don’t even have diesel engines.
(1b) yes German diesel-LIB + AIP performance will be superior however dangers of AIP must be considered AND Japan may be quietly developing its own AIP.
(2b) Yes the current Soryu Mark 1 (16SS) are too short in range. Although the Mark 2 may be much longer range – to not only satisfy Australian requirements but also satisfy Japanese longer range requirements.
(3a + 3b) Yes the claim that AIP approaches nuclear performance is the result of selling company propaganda, navy claims and the usual ignorance of many/most journalists including those from Australia

Also see my response above over the upcoming 2+2 Australia-Japan talks (from http://dfat.gov.au/geo/japan/Pages/japan-country-brief.aspx )

Regards

Pete

Anonymous said...

Hi Pete

Refit of Asashio (TSS-3601) for LIBs will not be conducted. Because Ministry of Defence requested the 27SS (LIBs + AIP Soryu) building cost for FY2015 submarine budget allocations, but did not request the TSS-3601 refit cost.

Regards
S

Peter Coates said...

Thanks S

How about Oyashio (was SS-590 now TSS-3608)?

http://datab.us/i/Oyashio%20class%20submarine indicates it was converted to a training submarine as recently as 6 March 2015?

Regards

Pete

Anonymous said...

Hi Pete

FY2014 budgetary assessment of submarine building cost is 51,996,801,000 yen for one 16SS (lead acid batteries+AIP Soryu), and FY2015 budgetary request is 65,964,619,000 yen for one 27SS. I coud not find submarine refit section in FY2015 budgetary request for warship renovation cost. So we can judge that TSS-3608 refit cost for LIBs is not also requested. I do not why 27SS is so expensive.

[1]http://www.mod.go.jp/e/d_budget/pdf/261003.pdf, “Defence Programs and Budget of Japan Overview of FY2015 Budget Request” page 5
[2] Details of Defence Programs and Budget.

Regards
S

Peter Coates said...

Thanks S

Regarding "I do not why 27SS is so expensive." The higher cost may be due to 27SS being an experimental model rather than the first of a production run. Basically Japan cannot cost 27SS as one unit in a production run of 10 over ten years. This is because 27SS may represent a unique combination of AIP and LIB that may not be repeated. That is if 28SS onwards are no AIP but LIB subs.

Also 27SS may carry much of the LIB introduction costs - which relate not only to new batteries but a whole new electrical system (wiring etc throughout the sub).

Thanks for the detail. The ability of Japan to give precise and rapid answers regarding a submarine (the Soryu) already in production is a major advantage over the German and French competitors.

Meanwhile Germany's suspected entry the TKMS 216 is a paper submarine only - while France's "conventional Barracuda" is very underdeveloped and if 4,750 tons (surfaced) is just too heavy (equaling too expensive) to be considered.

Regards

Pete

Anonymous said...

Hi Pete

According to the latest Japanese government report, LCC (life cycle cost) of 28SS seems to be cheaper than reported. EPCO (Equipment Procurement and Construction Office) of MOD (Ministry of Defence) submitted “FY 2014 Annual Report for LCC (life cycle cost) Management” in March 30th 2015. LCC includes unit price in production and total costs in conception, development, production, operation/maintainance and desposal. Aim of LCC management is to optimize LCC of equipments. This report showed LCCs of various equipments (from Jet Fighter to 28SS).

1) Coclution
LCC of two diesel+LIBs submarines for 24 years is ca. 207 Byen (=2.1 BAUD), cheaper than reported cost which is ca. 1.1 BAUD (one submarine) for 15 years service (Reuters Japan Nov19, 2014).

2) Explanation ( http://www.mod.go.jp/epco/about/pdf/26lifecyclecost_houkokusyo.pdf page 77-80)
2-1) page78 table 3
Two FY 2015 type (diesel + LIBs), which JMSDF gets one in FY2015 (to be commissioned in FY2019) and another in FY2016 (ibid FY2020). Development cost is based on basic design of analogous subs. Building cost is based on latest analogous subs. Operation/maintainance cost is based on demonstrated cost for analogous subs.

2-2) page79 figure 4
LCC estimation (100,000,000 yen vs FY; H26=FY2014----H56=FY2044).
Solid line is LCC estimation, dashed lines are LCC estimation +10% and -10%.

2-3) page80 upper figure; cost for each stage of life (unit=100,000,000 yen)
Development cost (H26=FY2014) =0. Building cost (H27-32) =1288 (16 for first year, 1,272 for product). Operation/maintainance cost (H32~50)=783(40 for operation, 783 for logistics support), Disposal cost (H50-)=1.

Regards
S

Anonymous said...

Hi pete

Deviation (-+10%) of estimation is based on the case of US Department of Defence. Costs include consumption tax which is 8 and 10% for FY2014-2016, and for FY2017-, respectively.

Regard
S

Peter Coates said...

Hi S

Thankyou for all your research. I need to do a separate article to do all your analysis justice.

From your May 13, 11:43 comment:

"Defence Programs and Budget of Japan Overview of FY2015 Budget Request" http://www.mod.go.jp/e/d_budget/pdf/261003.pdf is especially useful on many topics - as it is a summary in English. It includes (on page 4) the important point:

Japan will
"・ Implement life extension measures for Oyashio-class submarines in order to increase the number of submarines from the current 16 to 22 ships."

This is important because Australian subs are expected to last about 30 years so building of 28SS Soryus to last 30 years will be important.
----------------------------

From your May 16 comments:

That "LCC (life cycle cost) of 28SS seems to be cheaper than reported." may be good news. Australia, as a possible customer, would appreciate "cheaper" rather than more expensive :)

Thankyou for http://www.mod.go.jp/epco/about/pdf/26lifecyclecost_houkokusyo.pdf

I aim to do an article on Tuesday on this information you have provided from Japan. Meanwhile Germany and France appear to have little to offer publically.

Regards

Pete