Prime Minister Malcolm Turnbull said the changes were needed to ensure ASC is in the best position to help deliver 54 new vessels, including new submarines.

“We are spending $195 billion on defence procurement over the next decade. That will give us the capability to be safe, but it will also secure our economic future because these industries are at the cutting edge of technology,” he told reporters in Canberra today.

ASC welcomed the announcement, saying the formal separation of the businesses “builds upon the company’s already successful operating model and positions the company to support Australia’s future shipbuilding and submarine capability”.

ASC chairman Bruce Carter said the board had “effectively been operating separate submarine and shipbuilding businesses for the last two years”.

“This operating model has enabled each business to focus its attention and allocate resources to deliver on their programs and pursue opportunities for future work. It has been a major contributing factor in the company’s turnaround in the Collins Class submarine and Hobart Class air warfare destroyer programs,” he said.

Carter said there will be no change to ASC’s involvement in its current programs.

“The separation of ASC into three businesses will ensure that the company is best-placed to support the future needs of Australia’s naval industry.”

– with AAP