by Peter Yule
the government procurement organisation. Gunnar Öhlund, now
Kockums’ technical director, says that: ‘Kockums was used to a
smooth process with the customer based on trust and a long work-
ing relationship – you agree and shake hands and that is that.’
The problems that inevitably arose in designing and building sub-
marines were resolved by the joint efforts of the three organisa-
tions, which were closely linked by ties of friendship and many
years of working closely together.
Chicago Bridge & Iron (CBI) was one of the world’s lead-
ing engineering contractors, working each year on hundreds of
projects around the world for a wide variety of customers. The
company specialised in lump-sum ‘turnkey’ projects in the oil, gas,
petrochemical and mining industries, and had submarine experi-
ence in fabricating hull sections for American submarines. Ross
Milton, who joined CBI in 1971, saw its ‘modus operandi’ as
‘moving onto construction sites and building up to say 400 peo-
ple, constructing a section of an oil refinery to a schedule and a
cost and then moving out’.
Wormald in the 1980s was one of Australia’s largest diversified
engineering conglomerates, with interests in many areas including
electronics and fibre optics. Its managing director, Geoff Davis,
was well-connected in Australian business and politics and the
company did much to organise the submarine project’s Australian
sub-contractors.
The fourth original partner, the Australian Industries Develop-
ment Corporation, was initially a largely silent partner, concerned
primarily with the financial aspects of the project.
These vastly differing backgrounds made it almost inevitable
that there would be difficulties in setting up a harmonious joint
venture. One interesting reflection from the Swedish side is that
S E T T I N G T O W O R K 1 9 8 7 – 8 9
121
they were surprised at the rigid hierarchies of the Australian
and American companies. Roger Sprimont says that he found
Australians to be genuinely friendly and easygoing, but he found
hierarchy more important in the corporate world than it was in
Sweden. Like the other Swedes he was amazed that the first chart
of the management structure of ASC showed what model of com-
pany car each level of management could have.
Despite these differences, there was a good corporate spirit
as people from the four companies worked together with new
recruits to get the project moving. Looking back on the early days
of the project, Ross Milton recalls:
We had a lot of esprit de corps in those days. They were
exciting times. It was the biggest thing that ever happened in
Kockums’ world and they were keen as mustard to do a good
job. We all were. It was easily the biggest project any of us
had experienced.
When the contract was signed, the Australian Submarine Cor-
poration was little more than a name and a letterhead, with no
employees, and operating from offices borrowed from Wormald
in the Sydney suburb of Brookvale. Yet this company was prime
contractor for a multi-billion dollar new submarine project, com-
mitted to building a new submarine design on a site that was little
more than a polluted swamp, using sub-contractors from 10 coun-
tries including many Australian companies that had no previous
experience of military work.
The members of ASC’s board played an active and energetic
role in the early phases of the company’s operations, particularly
until the senior management positions were filled. Geoff Davis
was the chairman and he often smoothed over potential disagree-
ments between Kockums and CBI. Unfortunately for the project
he was forced to resign as chairman in October 1987, following a
change in the ownership of Wormald. He was succeeded by Roger
Sprimont, the leader of the Kockums bid. Sprimont provided ASC
with charismatic and inspiring leadership, although naturally he
did not have the same depth of contacts in Australian business and
politics as Geoff Davis. Sprimont’s departure from the project in
November 1989 when he was appointed to a senior position with
the Swedish Hagglunds group was a major blow for the project.
The early loss of two outstanding leaders had a serious impact on
122
T H E C O L L I N S C L A S S S U B M A R I N E S T O R Y
the project and they were never fully replaced. The later history
of the project would have been very different if one or both had
remained involved.
The schedule for building the submarines was always seen as
being ambitious, and ASC had to plan rapidly to mobilise peo-
ple and resources to get the project moving. Olle Holmdahl of
Kockums recalls that CBI played a crucial role at this stage:
It was very important for ASC to have CBI on board for the
early years. They had submarine expertise . . . they knew steel
construction, and they were experienced project managers.
They knew how to set up projects in new countries. Kockums
did not have the skills, people or experience to do this. So it
was CBI people who did all of the work in setting up the
project.1
CBI, working with Bath Iron Works, a leading American naval
shipbuilder, set up ASC’s planning systems and designed the facil-
ities to match the proposed production techniques and the work
flow. Ross Milton recalls that CBI studied the way Kockums built
submarines and adopted some of their methods, but in many cases
they thought their own methods would be more efficient.
While Kockums appreciated CBI’s ability to get a project
moving quickly, there were some conflicts over the systems they
adopted. Some of the Swedes thought that CBI ‘planned in too
much detail – they were planning way ahead for the delivery of
the smallest item even before they were designed [and] this caused
some confusion later – CBI planned minutely but without suffi-
cient knowledge of submarine systems’.2 Paul-E P ˚alsson, the pres-
ident of Kockums, felt that ASC should have used the planning
and procurement controls that Kockums was familiar with, and
that the Kockums people with ASC accepted CBI’s methods too
early and too easily. On the other hand, CBI was concerned that
Kockums was not moving quickly enough to keep to the schedule
and not providing information in time to enable ASC and CBI to
meet their contractual obligations.
One of the most urgent tasks for ASC was to assemble the
workforce needed to build the submarines. The core of the new
management was seconded from ASC’s shareholders, with Ray
Hill of CBI becoming the first general manager, and other senior
positions being filled by Jeff Rubython and Roger Mansell of
S E T T I N G T O W O R K 1 9 8 7 – 8 9
123
Wormald, Ross Milton, Jim Berger, Jim Muth and Graeme Ching
of CBI and Bath Ironworks, and John O’Neill and Olle Holmdahl
of Kockums. However, most
of these people left the project or
returned to their parent companies when CBI and Wormald were
bought out and the shareholding arrangements in ASC changed.
There was a major recruiting program for staff at all levels.
The first chief executive, Don Williams, began work on 1 January
1988. A civil engineer with a background in railways and a doc-
torate from Imperial College in London, he came to prominence
for his work on rebuilding Melbourne’s West Gate bridge. Before
coming to ASC he was general manager of Australian National
Railways.
Although views on Williams have been coloured by later
events, there is general agreement that he was ‘a great influence
and a good one for the early part of the project’.3 He was intelli-
gent, a good public speaker, politically astute and had many con-
tacts in Canberra. He was somewhat aloof from his staff, but
drove the project forward with enormous energy. Oscar Hughes
saw him as ‘a visionary in the context of doing things for Australia
[who] fought hard to make ASC a success’.
From late 1987 a large number of engineers and other profes-
sionals joined ASC. Martin Edwards had worked for DSTO at
Salisbury, north of Adelaide, for eight years before joining ASC in
January 1988. There were two intakes that month of people who
were to be seconded to Sweden, to work either for Kockums or at
the ASC project office in Malm ö. After a brief induction program
about 24 ASC staff were sent off to mid-winter in Sweden. Most
of them were young, with the average age being in the mid-20s.
Edwards worked with the design team at Kockums for more than
two years before returning to Adelaide.
Jack Atkinson had worked for the Department of Defence as
a software engineer for 14 years before joining ASC in 1988. He
came as a senior systems engineer to work on the weapons system
integration. Software quickly came to be seen as one of the main
risk areas of the project and ASC built up a far greater capabil-
ity in the area than originally planned. Ron Dicker, who had led
the Signaal combat system bid, recalls that he was on holiday in
Italy when Roger Sprimont called. He was concerned about the
combat system contract and needed experience and knowledge to
monitor Rockwell and protect Kockums’ interests. Dicker set up
124
T H E C O L L I N S C L A S S S U B M A R I N E S T O R Y
a weapons system department in ASC to manage the weapons sys-
tem sub-contracts and their integration with the combat system
and the integration of the combat system into the submarine, and
to monitor Rockwell’s progress.
As the project advanced ASC began to employ people with
production expertise. Many brought their knowledge of subma-
rine mechanical engineering from the Oberon refitting program at
Cockatoo Island. Among them were Charlie Yandell, who became
production manager, Robert Lemonius, to be submarine manager,
and Alan Saunders.
Another source of expertise was the United Kingdom. The Aus-
tralian project appeared to offer more secure employment than
Britain’s uncertain submarine building program. Doug Callow
had been with Vickers for 26 years and was project manager
for the Trident nuclear ballistic missile submarines when Don
Williams recruited him in 1992. Jock Thornton was an ex-Royal
Navy nuclear submarine engineer, while Charlie Yandell had
been production manager at Scotts of Greenock before going to
Cockatoo Island.
Many engineers came to ASC in the late 1980s immediately
after graduating. Simon Ridgway was employed straight from uni-
versity and spent his first year working in a small group headed
by G öran Christensson from Kockums, developing the program
for outfitting the submarines.
If recruiting professional staff with submarine experience was
difficult, it was even harder to build a skilled workforce. Although
manufacturing industries around Adelaide had been particularly
hard hit by Australia’s worst recession since the 1930s and many
were attracted by the security of a large military program, the
skills required were distinctly higher than in most other areas.
Robert Lemonius recalls: ‘We’d take a very good high pressure
vessel welder who’d worked on pipelines and engineering projects
and things like that and in some cases spend anywhere between
eight and 12 weeks on developing those skills before they would
be allowed to actually undertake production welding.’ ASC gave
a great deal of attention to training its workers, bringing them
up to the required standard and teaching them new processes and
procedures.
One of the most urgent tasks for ASC was to let hundreds of
sub-contracts. Contractually, at least 70 per cent of the cost of the
S E T T I N G T O W O R K 1 9 8 7 – 8 9
125
submarines had to be spent in Australia. This meant either that
foreign sub-contractors had to establish subsidiaries in Australia
or that the sub-contracts had to be given to Australian compa-
nies. Contracts manager Roger Mansell succeeded in negotiating
the required Australian content even though ‘the major overseas
suppliers were keen to retain as much work as possible for their
own people, and they were reluctant to share commercial infor-
mation with potential rivals’.4
Tore Svensson of Kockums recalls that he visited a number of
companies in Australia with no experience in defence that had
built their expertise from scratch and developed good products.
Sometimes it was decided that work could not be done in Australia
and had to be done in Europe, especially for the first submarine,
but Kockums and ASC assisted many local companies to raise
their quality standards, to their long-term benefit.5
ASC shareholders, with the exception of AIDC, all took on
major sub-contracts. Kockums had contracts to design the sub-
marines and to build two hull sections and two interior deck
assemblies for the first submarine. CBI was to fabricate the plate,
frames and bulkheads, and Wormald was contracted to design
and project manage the new yard at Osborne and provide the
submarines’ fire-fighting system, and had several major contracts
related to the ship control system. Geoff Davis of Wormald notes
that ‘the shareholder agreement allowed that each shareholder
who undertook work . . . was entitled to a minimum margin of
10 per cent’. For Wormald the opportunity was available to secure
contracts worth over $600 million, but many of these were not
followed up after Geoff Davis’s resignation.
The largest sub-contract was with Rockwell for the combat sys-
tem. This was far from a normal sub-contract and the relationship
between ASC and Rockwell was never a normal contractor/sub-
contractor relationship. The combat system contract and the sub-
marine contract had been negotiated parallel to but completely
separate of each other. Security arrangements prevented ASC from
/>
viewing the combat system specifications, so it had to approve the
sub-contract and establish the submarine–combat system interface
document with Rockwell sight unseen. After three months nego-
tiations ASC reluctantly accepted the sub-contract. Ron Dicker
says: ‘Rockwell had of course no incentive to change even a
comma in the contract they had negotiated between themselves
126
T H E C O L L I N S C L A S S S U B M A R I N E S T O R Y
and the Commonwealth’ so the ‘process resulted in a “special”
relationship between Rockwell and the Commonwealth to the
detriment of ASC’s ability to pro-actively manage the combat sys-
tem contract’.
Most of the other major sub-contracts had been foreshad-
owed in the project definition study phase: diesel engines from
Hedemora, weapons discharge system from Strachan & Henshaw,
propulsion motors and generators from Jeumont-Schneider, ship
management systems from Saab Instruments, and masts from Riva
Calzoni. All these firms had further large sub-contracts with Aus-
tralian companies.
The decision to award the contract for diesel engines to
Hedemora was later strongly criticised, and even at the time
it was the subject of debate. The two contenders for the con-
tract were Hedemora of Sweden, a small private company, and
MTU [Motoren- und Turbinen-Union Friedrichshafen GmbH] of
Germany, now part of the Tognum group. Kockums’ design stud-
ies showed that the submarine could be considerably shorter with
Hedemora engines. The required power could be delivered by
three Hedemoras arranged abreast, but would need two banks
of two MTU engines. Greg Stuart was convinced that there were
technical advantages in the Hedemora engine. He recalls that:
I had extensive discussions with MTU’s chief designer, Herr
Dr Jost, who acknowledged that MTU was behind
Hedemora and at that time could not offer a low risk
turbocharged submarine diesel to meet the RAN’s depth and
sea state requirements . . . Hedemora on the other hand was
able to demonstrate, from memory, a 12-cylinder version of
the Collins diesel under simulated variable snort conditions
based on the RAN supplied sea state profile. The diesel
operated without a problem for the trial duration.6
The situation became complicated in 1987 when the Swedish navy
switched from Hedemoras to MTU engines for the new Gotland
