Admiral Daryl Caudle, the US Navy's nominee for chief of naval operations, has told Congress that the United States cannot sell any Virginia-class nuclear submarines to Australia unless it doubles its current production rate. Testifying before the Senate Committee on Armed Services, Caudle said the US is currently building Virginia-class submarines at a rate of about 1.13 per year, well below the 2.33 needed to meet its own defence requirements and have enough boats to sell to Australia.
Under pillar one of the Aukus agreement, Australia is scheduled to buy between three and five Virginia-class submarines from the US, starting in 2032. However, Caudle stated that a "100% improvement" in shipbuilding rates is required to fulfil the pact. He noted that efficiency gains or marginal improvements would not suffice, saying, "That is going to require a transformational improvement; not a 10% improvement, not a 20% improvement but a 100% improvement."
The US Navy estimates it needs to build Virginia-class submarines at a rate of 2.00 per year for its own requirements, and about 2.33 to have enough to sell to Australia. Current production is at 1.13 per year. Caudle emphasised that there are "no magic beans" to boost the US's sclerotic shipbuilding capacity, and that creativity, ingenuity, and outsourcing improvements are needed.
Australia has already paid $1.6bn out of an expected $4.7bn to help the US boost its shipbuilding industry. However, a joint statement from three rear admirals in April noted that despite an additional $5.7bn from Congress, the needed ramp-up in submarine production rates has not been observed.
Former prime minister Malcolm Turnbull, who first reported on Caudle's testimony, said there is a "very, very high" probability that Virginia-class submarines will never arrive under Australian control. He warned that with the Collins class nearing the end of their service lives and the Aukus submarine design facing delays, Australia could be left without any submarine capability for a decade or more.
