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French Wooing

France pulled out all the stops to win the contract, with Defence Minister Jean-Yves Le Drian spending nearly a week in February touring Australia and President Francois Hollande set to host a state dinner for the nation’s governor-general Tuesday night. Defence is one of France’s biggest industries, providing about 165,000 jobs.

The Shortfin Barracuda submarine designed by state- controlled DCNS will replace Australia’s aging Collins Class vessels and will be diesel-electric powered.

“They are going to dump jobs into Adelaide as hard as hell and that is really going to drive up the price,” said Richard Bitzinger, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. “The French must have come up with a really good way of helping the Australians build the submarines.”

The French bid “included superior sensor performance and stealth characteristics, as well as range and endurance similar to the Collins Class submarine,” Australian Defence Minister Marise Payne said.

The head of Japan’s Acquisition, Technology and Logistics Agency, Hideaki Watanabe, told reporters the outcome was “extremely regrettable.” Mitsubishi Heavy Industries said it was a shame that Japan’s proposal “had not been fully understood.”

Shares in the company were down 3.6 percent in Tokyo, while Kawasaki Heavy Industries dropped 2 percent. ThyssenKrupp, based in Essen, Germany, fell as much 5.1 percent and was down 2 percent as of 9:49 a.m. in Frankfurt.

“We are naturally disappointed but we stand ready to provide support for Australia’s future submarines project with our unrivaled experience, leading technology and track record in building submarines in the customer’s own country,” Thyssenkrupp Marine Systems Australia chairman John White said in a statement.

With files from Isabel Reynolds and David Tweed.