22/06/2020 - 11:28

Austal in $100m US plans

22/06/2020 - 11:28

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Austal will invest up to $US100 million in its Alabama shipyard after securing $US50 million through US defence production laws intended to support the local steel industry.

Austal in $100m US plans
Austal's shipyard in Alabama build vessels for the US Navy.

Austal will invest up to $US100 million in its Alabama shipyard after securing $US50 million through US defence production laws intended to support the local steel industry.

The Henderson-based shipbuilder said the US government had invoked the Defense Production Act to expand steel shipbuilding capability through capital projects over the next two years, beginning this month.

The program was in response to COVID-19, Austal said.

But details are yet to be bedded down.

“It is likely that Austal will match the DPA Agreement funding, which would take the total investment to circa $US100 million,” the company said in a release. 

“These investments will also have long-term benefits for US Navy shipbuilding while accelerating pandemic recovery efforts in the Gulf Coast region.

“(This) investment will protect jobs and bolster the local economy in a region hit hard by the COVID-19 pandemic and ensure critical capabilities are retained in support of US Navy operational readiness. 

The US federal government has used the Defence Production Act liberally in response to the pandemic.

The Act gives the president significant power to mobilise industry for civil defence and war activity.

In recent months, the Act was invoked for mass production of ventilators as the pandemic took hold in the country.

Austal's Alabama shipyard has been used for building littoral combat ships for the US Navy.

Shares in Austal were up 10 per cent to $3.69 at the time of writing.

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