Australia asks BAE Systems to help save destroyer project

BAE Systems and two other companies have been commissioned by the Australian government to help reform its foundering Air Warfare Destroyer program.

Under the agreement with the government, BAE Systems will provide experienced shipbuilders and executives from its Australian and global businesses to turn around the project for three Hobart-class destroyers, which is plagued by cost overruns and delays.

"The Australian Government has made it clear that turning this program around is critical to the future of Australian naval shipbuilding," said BAE Systems Australia's chief executive, David Allott. "We look forward to supporting the government by bringing our global complex shipbuilding capability to deliver this important goal, while standing ready to support any future needs the Commonwealth might have."

Working with BAE Systems on the rescue effort from now until next July are Spanish shipbuilder Navantia and Raytheon Australia.

According to Minister for Defense David Johnston, the $7 billion AWD project could be nearly $498 million over budget, and the construction of the first two ships is months behind schedule.

The destroyers are being built by the Air Warfare Destroyer Alliance, composed of the government's Defense Materiel Organization, the Australian Submarine Corporation, a government-owned entity and principle shipbuilder for the project, and Raytheon Australia.