August 26, 2015

Japan On Steep Learning Curve to Sell Submarines

The Japanese submarine delegation for the briefing in Adelaide, August 26, 2015. Admiral (ret.) Takashi Saito is in the center.


With Germany and France having been engaged in selling weapons to Australia since the 1950s  Japan is feeling the competition. Arms sellers have to sell to many interest groups. The arms buying public are concerned about jobs and taxpayer's money. Arms buying governments, like the Abbott Government, also need to play a positive role in selling. The Abbott Government's reputation has been changing every 3 months or so - some times for the worse.

Below are some snippets reflecting what the Japanese submarine delegation experienced in Adelaide today.


UPDATE 1-Japanese officials struggle to woo Australia over 

submarine contract

Aug 26 (Reuters) - Japan's effort to charm Australian politicians and the public over its bid for a A$50 billion ($35.60 billion) submarine project appeared to stumble on Wednesday, with officials from Tokyo resisting pressure to commit to building the vessels in Australia.

Japanese defence officials and executives from Mitsubishi Heavy Industries and Kawasaki Heavy Industries made their first major pitch to build 12 stealth submarines for Australia's navy during public briefings for defence contractors and the media in Adelaide, a ship-building hub.

Once seen as the frontrunner to win the contract, the Japanese bid has since come under scrutiny because of Tokyo's unwillingness to commit to building any submarines in Australia, where manufacturing jobs are a hot-button political issue.

Rivals ThyssenKrupp Marine Systems (TKMS) of Germany and France's state-controlled naval contractor DCNS have both said they would build entirely in Australia, targeting members of the Australian government with the economic and political benefits of their proposals.

Both European firms have also courted the Australian defence industry and media in key cities.

Two sources present at separate meetings between the Japanese delegation and Australian officials said the Japanese did not seem to have much understanding of the political sensitivities and appeared to have lost ground to the rival bidders.

They said the delegation gave few details about the Japanese proposal beyond reassurances they would adhere strictly to the rules of the process.

"It seems like the (Australian) federal government just told them that they had to come down here and talk to us," one source told Reuters under the condition of anonymity because he was not authorised to speak to the media.

"I think they're really struggling to connect to the public. It's just not in their DNA to speak publicly about defence issues."

A defence industry source in Tokyo said the German bid was shaping up as the one to beat…..WHOLE ARTICLE

Natalie Whiting for Australia’s ABC, August 26, 2015 reported

Submarines contract: Japanese delegation in Adelaide for public relations offensive

A Japanese defence adviser has conceded the country needs to improve its public relations in order to win the contract to build Australia's next fleet of submarines.

…Japanese defence adviser and former submarines commander Yoji Koda said Japan initially failed to understand the public relations game its competitors were playing.

French and German companies bidding for Australia's $20 billion submarine contract have been courting both the Federal Government and public opinion via the media.

Japan had been avoiding that second battleground, but the current delegation will hold a news conference today in Adelaide, ahead of meeting industry officials and a visit to the defence construction facilities in Adelaide's north-west.

Retired rear admiral Yoji Koda now works as an adviser to one of Japan's shipbuilding companies and for the national security secretary.

It is the first time the pacifist country has competed in a defence bid such as this and he said being "rookies" had posed some problems.

"[The] Japanese team is gradually solving those problems, but still there are some areas [where] Japan is not so doing well," he said.

Public relations the new submarine battlefield for the Japanese

The Japanese have been criticised for being secretive, an issue which has been amplified by the PR offensive their German and French competitors launched.

Mr Koda said the Japanese team was now learning that approach.

"I strongly believe [with] the engineering capability or technology ... of building the larger submarine, I think Japan is still in the lead," he said.

"But at the same time there are several other things we need to take into consideration. One is the public relations so, yes, for the first time the Japanese team shows up at Adelaide and speaks to the public and also have a conference with [the] Australian team and I hope that will be convincing to the Australian people." WHOLE ARTCLE

In another ABC article of August 26, 2015, Leah MacLennan reported

Japanese submarine bid delegation visits Adelaide, denying any secret deal to win contract

…Masaki Ishikawa from the Japanese defence ministry said speculation of a secret deal had not come from Japan.

"We are not the one to be blamed for ... others speculating there may be a secret deal," he said.

"[We are] a little bit confused and perplexed why such speculation is still amongst the people's voices."

…At a news conference held during a visit to Adelaide, the Japanese delegation sought to end speculation a secret deal had been made even before the Federal Government mounted what it called a "competitive evaluation process".

The Japanese said they would ensure the Government had full details of their bid by the end of November.

Asked if construction in Adelaide was his preferred option, Admiral Takashi Saito said three options all were under serious evaluation.

"We are requested from the Australian Federal Government to come up with all three build options - Japanese, hybrid and Australian build options," he told reporters.

"Team Japan are considering and investigating all the possibilities to come up with all three build options and in that effort we are also seriously considering the Australian build option."

…South Australia's Defence Industries Minister Martin Hamilton-Smith…met Admiral Saito and said he made that position clear.

"He was very respectful, very receptive and the Japanese contingent under Admiral Saito made it very clear that they were considering all three options, including an Australian build and I commend them for it, as I did the Germans and the French," he said.

Chris Burns from industry body the Defence Teaming Centre said the push for a 100 per cent local build was "well received" when discussed with the Japanese delegation.

"They fully understand that we have to be part of the process from the outset and why we want to build our own submarines," he said.

"It's not just about jobs, it's about ensuring our security and the security of our country."

The contract for the future submarines is expected to be awarded by the Federal Government next year."



Anonymous said...

When all 3 bids are required to provide all 3 options (offshore, local or hybrid), isn't Canberra should be the one who decide where the submarines will be built? How come the media and SA will suppose MHI can be "committed" to build the submarines in Australia?

Peter Coates said...

Hi Anonymous

You are right. Japan cannot decide. The Australian government may well decide to divide submarine the build over all Australian states - not only South Australia.



Anonymous said...

Hi Pete

There are three issues: i) lacks of information collection ability of Japan, ii) increase in China’s accessibility on submarine technology of TKMS or DCNS, and iii) construction of more stable defense strategy.

JMSDF member said that NS70 (proof strength 690MPa) could satisfy Australia’s specification and they could not share NS80 (785MPa). But this opinion does not reflects the fact that BS812EMA (700MPa) for Collins is a bit stronger NS70 and that China has developed 980(785MPa) with the same composition as NS80 and superiority of NS80 is now losing. JMSDF thinks that Soryu is best, but some people do not admit. And, if China gets Type 214 technology, the situation surrounding submarine technology will change significantly. The Japanese mission’s failure to communicate local industries is another example of bad communication. JMSDF really needs improvement of communication ability.

JMSDF/MOD needs much more communication or information exchange with Australia to enhance strategic thinking. As possible and rapid improvement of Chinese submarines is expected, Japan should be offer more technology to Australia and more listen to voice of local industries. They really need job. If Japan worries about information security and quality management, she should formally request Australia improvement of these issues. Japan and Australia may have some problems in short period, but long term and strategic relation of the two countries is much more important.


Peter Coates said...

Hi Anonymous

The unstated strategic considerations criteria may already mean Japan has been chosen - third rate steel or not.

That aside - the three bidders (Japan, Germany and France) have been asked to offer design features or capabilities at the level of the Collins or better.

An Australian perception that Japan is offering third rate submarine steel (weaker than 25 year old Collins steel) might damage Japan's bid.

It would also be unfortunate if China is offered the best Type 214 technology by Germany, including Germany's superior fuel cell AIP technology and Li-ion Batteries. Australia's boast that Australia has the best equipment in the region would therefore be undercut by the realisation that China and Singapore have better conventional submarines.