Manufacturing firms say they have been left hanging in the breeze amid doubts over the rollout of the Australian Navy's $80 billion future submarine project.

Key points: Concerns are raised over how much local work will be created

Concerns are raised over how much local work will be created An SA company says it cannot afford to risk increasing its workforce

An SA company says it cannot afford to risk increasing its workforce ASC Shipbuilding has confirmed about 100 job losses from its Osborne shipyard

Yesterday the French company building the submarines, Naval Group, said it was not sure the boats' Australian industry content would reach 50 per cent.

"We didn't know the Australian market before we joined the program," the company's chief executive John Davis told The Australian.

"Now we have a much deeper insight, and we recognise there is a lot more work to be done than we anticipated."

The comments drew a swift rebuke from "disappointed" Defence Minister Linda Reynolds, who is scheduled to discuss the submarine program with her French counterpart Florence Parly today at a conference in Munich.

But the remarks have added to growing uncertainties about how much work the project will deliver for local defence companies.

MG Engineering managing director Anthony Brdar said he had hoped to have increased his workforce from 25 to 100 by now in preparation for work flowing from the project, but simply could not afford to take the risk.

MG Engineering managing director Anthony Brdar. ( ABC News: Isabel Dayman )

"It's very disappointing, because I believe our company has proven itself in defence naval contracts," Mr Brdar said.

"We were very much looking forward to these opportunities, and [we have] very much planned our workforce and its future around defence contracts."

After securing the future submarines contract in 2016, Naval Group's parent company DCNS said "over 90 per cent" of the build would happen in Australia, with work to be centred in Adelaide.

That figure was revised down to about 60 per cent last year.

Mr Brdar said Naval Group's doubts about local capabilities were "frustrating", because the French company had not even toured his facility.

"We would really like to welcome the [company] to come out and inspect the facility and … [see] what our capabilities actually are," he said.

"We have experienced staff who are capable of fabricating and manufacturing some of the best quality-built products from steel in this state and possibly nationally as well."

The MG Engineering workforce was expected to swell from 25 to 100. ( ABC News: Isabel Dayman )

In a joint statement released by Naval Group and the Federal Department of Defence, the company said its "current work" was focused on "understanding the capabilities in Australian industry for the manufacture of submarine equipment, which differ from the capabilities required to sustain existing equipment on our Collins submarine fleet".

Jobs slashed at ASC Shipbuilding

Concerns about the project have coincided with confirmation from Adelaide-based ASC Shipbuilding — owned by BAE Systems — that about 100 jobs would go from its Osborne shipyard.

The job losses have been attributed to the winding-down of the Air Warfare Destroyer project, not submarines, and follow other major cuts at the site.

The company hopes about half of those workers will be redeployed or moved into re-skilling programs.

Defence Industry Minister Melissa Price said the Federal Government would "continue to work with Naval Group and ensure they are held to account on their AIC [Australian Industry Content] obligations".

Ms Price said the Government would hold Naval Group to account. ( AAP: Lukas Coch )

SA Premier Steven Marshall defended his state's defence capabilities, but would not be drawn on whether contract negotiations should have been handled differently from the beginning.

"The Naval Group and the Federal Government made a commitment that this would be a local build, and we will be holding them to account for that commitment," he said.

"I'm quite sure, given the opportunity, we will win a huge amount of the work which is already destined to be done in South Australia."

SA Labor leader Peter Malinauskas said Naval Group's hint towards less local involvement in the build was a devastating hit to "future generations who want [those] jobs".

"We've got the highest unemployment rate in the nation and yet we know that the one beacon of hope that we've got is this naval shipbuilding program," he said.

"[South Australians] want to learn and they want to apply themselves and invest their life into this career."