Austal Finalizes Large Contract to Build Australia’s Landing Craft Heavy
Austal Defence Shipbuilding Australia highlighted the announcement by the government’s Deputy Prime Minister and Minister for Defence, Richard Marles, and Minister for Defence Industry, Pat Conroy, as the finalization of a large contract to build the country’s new Landing Craft Heavy (LCH) vessels. It was expecting to sign the contract, valued at approximately A$4 billion (US$2.8 billion), later on Friday while highlighting it was the second major contract for the company under its Strategic Shipbuilding Agreement (SSA) with Australia.
The Australian Government confirmed the selection of Damen’s Landing Ship Transport 100 (LST100) as its preferred design for the Australian Defence Force’s Landing Craft Heavy project in November 2024, with the vessels to be built by Austal. The design calls for an approximately 100-meter (330-foot) long vessel with approximately 3,900 to 4,000 tonnes displacement. It will have a capacity for over 200 soldiers, plus six Abrams tanks or nine Redback Infantry Fighting Vehicles.
Construction of the Landing Craft Heavy vessels will be undertaken using Austal facilities and the Common User Facility at Henderson in Western Australia. Construction is scheduled to commence in 2026, with the eighth and final vessel scheduled for delivery to Australia in 2038.
“Constructing the Landing Craft Heavy vessels at Henderson will create and develop thousands of new, skilled jobs in Western Australia and provide further opportunities for the local defence industry supply chain,” noted Paddy Gregg, Austal Limited CEO.
It is the second major order for the Australian armed forces. Austal also completed in December 2025 a contract for approximately A$1 billion to complete the detailed design and build 18 Landing Craft Medium (LCM) vessels at Austal’s Henderson, Western Australia, shipyard. Construction of the first LCM is scheduled to commence in 2026, with the 18th and final vessel scheduled for delivery in 2032.
Austal has sought to develop its work for the Australian military following its long-standing programs for the United States. It also cited the Strategic Shipbuilding Agreement as a defense when South Korea’s Hanwha Group proposed an acquisition of Austal. Management has questioned whether, because of its role in building for the Australian and U.S. military, a change of control would be permitted. Australia, however, permitted Hanwha to become Austal’s largest shareholder.
“While Austal's U.S. business has traditionally accounted for a large share of our defence order book in recent years, this contract reflects the growing strength and success of Austal’s Australian operations — and Australian industry — within the national shipbuilding and sustainment enterprise. This LCH construction contract balances out the split and provides greater geographic diversity of earnings. It also provides earnings and employment stability for the next 12 years,” said Austal Defence Australia Executive General Manager – Strategic Shipbuilding, Gavin Stewar.
Austal also notes that Austal USA is presently constructing up to 12 smaller Landing Craft Utility vessels for the US Navy at its Mobile, Alabama, shipyard.
Austal USA Appoints its Fourth President in Five Years
Naval shipbuilder Austal USA announced Thursday that president Michelle Kruger has stepped down from running day-to-day operations and assumed an advisory role, to be followed by retirement in June. The company's COO has taken over management as interim president, effective immediately.
"Austal USA is deeply grateful for Michelle Kruger’s vision, commitment, and the lasting impact that she has made on our organization as company president over the last two years," the firm said in a statement. "Congratulations on this momentous milestone and best of luck with the adventures ahead of you as you enjoy your retirement."
Austal is a key partner in multiple Navy shipbuilding initiatives, from the aluminum-hulled LCS and EPF to steel-hull auxiliaries like the T-AGOS program to modules for other defense primes; the company has a wide and deep portfolio, and has been growing rapidly.
Kruger, a USMMA grad and marine engineer by background, worked on LCS sustainment at NASSCO and then transferred over to Austal in 2022, taking a role running Austal's service business, then president in 2023. During her tenure, she oversaw the launch of a major facility expansion for construction of midsize government vessels and submarine modules for the Virginia- and Columbia-class programs. The infrastructure program, upon completion, will give Austal a total of one million square feet of space in seven assembly bays.
Kruger will now serve in an emeritus capacity until June, when she will retire. Her transition was announced one week after Austal Ltd. had to cut profit guidance by 18 percent because of an accounting error at the Austal USA unit. Austal USA's offices had reportedly double-counted incentive payments on its T-ATS fleet tug contract for the U.S. Navy; when the error was found, Austal had to reduce its revenue projections accordingly. Its stock has fallen by 23 percent in the past month.
Austal USA's COO, Gene Miller, has taken over from Kruger as interim president. He is the fourth Austal USA executive to assume the top role in five years, and the third to begin work after a predecessor's sudden departure.
Kruger became interim president in August 2023 after the resignation of Rusty Murdaugh, who departed after Austal lost money on the same fleet tug (T-ATS) contract, its first experience with steel shipbuilding. Losses on the tug order prompted Austal Ltd. to temporarily halt stock trading and make a cut in earnings projections, followed shortly after by Murdaugh's exit.
Murdaugh had started as interim president in 2021 after the ouster of former president Craig Perciavalle, who was later indicted on charges of accounting fraud related to alleged misreporting of construction costs on the LCS program in 2013-16. In 2024, Austal USA pleaded guilty to one count of securities fraud and one count of obstruction of a federal audit in connection with these events; it appointed an independent monitor, paid a $24 million fine and paid $24 million in investor restitution to settle the criminal charges. Court proceedings continue for Perciavalle and two other suspects.
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