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New AUKUS Agreement Will See Substantial Benefits for Connecticut

Australia Asia

Over 9000 miles away from Australia, Connecticut is likely to be a significant beneficiary of the recent AUKUS deal between Australia, the United Kingdom, and the United States. The agreement includes the sale of nuclear-powered attack submarines, manufactured in Groton, Connecticut to Australia.

Connecticut-based shipbuilder General Dynamics Electric Boat, located in Groton, is likely to be awarded large contracts for the construction of nuclear-powered submarines for Australia after the recently negotiated Australia, United Kingdom and United States (AUKUS) agreement. These vessels, which cost roughly $3 billion each, are expected to bring thousands of jobs and more federal funds to the state. Already an established hub for submarine construction, Connecticut owes this boon to geopolitical concerns thousands of miles away.

Defense industry watchers were stunned in September 2021 when Australia pulled out of a $90 billion dollar order for submarines from the French military ship maker Naval Group. In an extraordinary diplomatic incident, France recalled their ambassadors in Washington and Canberra. While the countries eventually mended their diplomatic relations, Australia paid over $830 million to the snubbed French contractor.

At the heart of this decision were growing Australian concerns about security in the Indo-Pacific region, specifically regarding the growing maritime strength of the People’s Republic of China. The deal with the French manufacturer, negotiated in 2016, was for 12 conventionally powered diesel-electric attack submarines. Instead, Australia wanted access to quieter and longer ranged nuclear-powered submarines.

Prior to cancelling the deal, the Australian government had secretly negotiated with the United Kingdom and the United States to partner in what is called the AUKUS trilateral security pact. This agreement will see the United States and the United Kingdom share their nuclear propulsion technology with Australia. This closely guarded knowledge has only once before been shared with an American ally-- in 1958, when the British received the technology.

For Australia, the plan is ambitious. The construction and utilization of nuclear-powered submarines requires infrastructure, experience, and manpower that the country currently does not possess. Australian shipyards have never constructed a nuclear-powered vessel. What’s more, it could take decades for the Royal Australian Navy to gain the experience to operate these vessels, and the service already suffers from a shortage of submarine personnel.

The three partner countries recently released a three-phased plan to provide Australia with this capability. In the first phase, submarines from the United States and United Kingdom will deploy to and operate from Australian waters, allowing Australian sailors to gain familiarity with nuclear-powered submarines and bolstering Australian maritime security. In the second phase, Australia will purchase three Virginia-class attack submarines from the United States with the ability to purchase two more if needed. In the final phase, Australia and the United Kingdom will jointly plan and construct a class of nuclear submarines, dubbed SSN-AUKUS, to become available in the late 2030s to early 2040s.

The second phase of the AUKUS plan is where Connecticut will likely benefit. Currently, all American submarines are constructed in two locations: in Groton by General Dynamics Electric Boat and Newport News, Virginia by Huntington Ingalls Industries. While it is not clear where the Australian boats will be built, construction orders are generally split between the two locations. These new contracts are expected to bring thousands of jobs to eastern Connecticut, and Electric Boats already projects that hiring will peak with almost 10,000 new jobs by 2033. On top of the direct construction jobs, the new submarines will also require software and training contracts provided by Connecticut-based companies.

No Connecticuter is probably more satisfied with this deal than Rep. Joe Courtney (CT-02). Alongside Senators Richard Blumenthal and Chris Murphy, Courtney wholeheartedly welcomed the announcement. As the chairman of House Armed Services Subcommittee on Seapower and Projection Forces, Courtney has been instrumental in bringing defense contracts to the region. Along with building Virginia-class attack submarines, the shipyards in Groton are also working on the new Columbia-class ballistic missile submarines that will serve as the sea platform of America’s nuclear deterrent. This has been vital to the state’s economy where defense spending provides roughly 8.2% of the state’s GDP.

Some concerns remain about the ability of the US industrial base to increase submarine production in the time required. Even prior to the AUKUS announcement, Electric Boat and Huntington Ingalls were only able to build 1.4 Virginia-class submarines a year on average, below the two per year goal. Similarly, construction of the Columbia-class is estimated to be 10% behind schedule. Yet with $14.6 billion set aside in the 2023 National Defense Authorization Act for submarine procurement, repair, and research & development, it is likely that “Two-Sub Joe” Courtney will get his boats.

Josh Downes is a participant in the Young Professionals Program at the East-West Center in Washington. He is a graduate student in the M.S. in Foreign Service and M.A. in Global, International, and Comparative History programs at Georgetown University.