Part 1 of 4 Parts
In 2016, Australia began negotiating a contract with France’s Naval Group for the construction of twelve conventionally power Barracuda submarines. The French government is the majority shareholder for the Naval Group. There were extensive disagreements on the budget for the project which resulted in the contract being formally signing being delayed until 2019.
The original estimate for the project was about thirty six billion dollars. By 2021, the estimated cost had risen to sixty six billion dollars. A doubling of cost in five years was of great concern for Australia.
One factor that complicated the deal was the insistence by Australia that the Naval Group do much of the construction work in Australia. Former Australia Prime Minister Malcolm Turnbull announced the deal in 2016. He said that ninety percent of the construction would happen in Australia. He claimed that two thousand eight hundred jobs would be created for Australians. By 2021, the Naval Group had lowered the percentage of construction that would take place in Australia to sixty percent.
Another complicating factor turned out to be a culture clash between France and Australia. In 2021, the Naval Group admitted that the two nations did not see eye-to-eye on the submarine project. The Naval Group said that I was designing courses for French expatriates in Australia so they could learn how to "behave, how to understand, and decode," Australia culture.
One example of the difference in working practices between the two countries was reveals when Australian officials were stunned by what the French called “la rentrée”. This is the name give to the process by which French workers in Australia would prepare to restart work after the whole company stopped working in August to take a month-long vacation.
On the other hand, French officials were surprised that Australian officials expected meetings to start on time. The French have a practice known as “diplomatic 15 minutes” This means that anyone who shows up for a meeting within fifteen minutes is considered to be “on time.” The French workers also had a habit of requesting more time because they needed long lunch breaks.
There had been hints since the beginning 2021 that Australia wanted out of the French submarine contract. In April, the Australian government refused to sign a contract for the next phase of the French submarine project. The Naval Group was given until August to answer Australian concerns and comply with Australian demands.
Australia signaled in June that it was looking for a way to cancel the Naval Group contract. Australian Defense Secretary Greg Moriarty said, "It became clear to me we were having challenges ... over the last 15 to 12 months." He went on to say that the Australian government was considering its options including what alternatives it had if it was not able to continue with the French deal.
The French had ample warning for over a year that the Australians were upset about the manner in which the French were operating. They had been given notice that unless they satisfactorily answered the Australian concerns, the contract would not be continued.
Please read Part 2