The government faces a damaging row over defence procurement, amid claims the Defence Material Organisation is reflexively opposed to Australian defence industries.
The row centres on defence equipment manufacturer Thales Australia. Thales produces the Bushmaster armoured vehicle, one of the clear successes of the Afghanistan conflict, at its Bendigo plant, which employs over 200 people.
As the Bushmaster production contract nears an end, Thales has bid for a component of the Army’s Land 21 program to source 2300 medium and heavy trucks, just over half of which will need to be fitted with protection for operational deployment. Thales is offering a single cab variant of the Bushmaster, which was initially rejected by the DMO before the Rudd Government overhauled the contracting process on entering office. Thales’s vehicle is up against civilian vehicles from Mercedes-Benz and M.A.N, which will be fitted with armour.
Despite a troubled development phase, the Bushmaster is credited with savings dozens of Australian lives in Afghanistan — Defence sources say between 40 and 50 — as well as those of a number of Dutch soldiers, who started demanding the Bushmaster over armoured versions of civilian transports, which have proven ineffective at resisting blasts from roadside bombs compared to the Bushmaster’s v-hull. Over 100 have been sold to the UK and the Netherlands. Over 30 of the vehicles have been destroyed in Afghanistan.
The Land 121 Phase 3 decision was due by the end of the year, but was recently delayed until March. Bendigo MP Steve Gibbons has started campaigning within the government and publicly for the Bushmaster variant.
Gibbons is an assiduous local member who has turned Bendigo from a marginal seat — John Brumby lost it in 1990 — into one with a nearly 10% margin for Labor. But he was also one of the few Caucus members to openly rebel under Kevin Rudd, leading the successful fight against the removal of Parallel Import Restrictions on books. The Australian printing company McPhersons is a major employer in the Victorian town of Maryborough, in Gibbons’s electorate.
He appears to have an even stronger hand with Thales, given the Bushmaster’s excellent record of saving lives in IED incidents and the poor record of armoured-up civilian transport equipment like the Mercedes and M.A.N competitors. “Obviously we’re a small player in international defence manufacturing and have no capability for most of the big ticket defence requirements like aircraft, missiles etc,” Gibbons told Crikey. “However, we do have significant industrial capabilities in ship building and repair, ordnance and armoured vehicles. The Bushmaster is arguably the best in the world for its combination of mobility and protection. It has saved scores of Australian lives in Afghanistan.
“Despite this, there remains a strong bias against Australian armoured vehicle manufacturers from sections of the DMO.”
The left-wing AMWU has also been lobbying for Thales within the Government.
The Phase 3 project is considered a crucial bridging project for Thales to the Land 121 Phase 4, which is a light protected vehicle to replace the ADF’s Land Rovers. Australia has already contributed funding to a much-delayed US project to develop a light vehicle to replace its Humvee fleet but has also provided prototype funding to local manufacturers, including Thales for its Hawkei light vehicle.
The AFR revealed yesterday that Defence Minister Stephen Smith had been warned by the employer heavyweight Australian Industry Group of job shedding and skill loss in the defence manufacturing sector due to delays in project approvals. Thales is one of those companies identified, as it axed 100 jobs in October.
So where’s the row?
Gibbons has been a very good advocate, if this article is any indication. If the alternatives to the Bushmaster have no redeming features, as the article suggests, then the argument will be easily won.
The brass in DMO cannot retire to become ‘consultants’ for a small Australian company, which is why Thales is being treated poorly.
There is more at stake here. The other Australian companies that make the defensive equipment for the Bushmaster, its occupants and surrounding troops and vehicles, like CROWS which sits on top and fires projectiles to intercept incoming RPG’s, hand thrown grenades and other threats. http://www.eos-aus.com/?pid=76
Other variants of CROWS are also able to fire laser ordinace to pinpoint accuracy on moving targets up to 5km away, despits wind, velocity and the fact both vehicles may be moving.
A small Australian company? Its parent is the French Thales Group, a company employing around 70,000 people.
What a load of crap. Thales and Gibbons are playing a purely political game here. The single cab is not the Bushmaster that you see running around Afghanistan saving lives.
The protection is different, the role and mission for the other phase of the project are very different and it’s bloody expensive compared to the other contenders to boot.
The single cab is twice the price of the other contenders. Do we only want value for money when it suits us? What utter crap.
And you’re right Jeremy, Thales is hardly a small concern. They’re the second largest Defence company in Australia in their own right.
But they’ve had a run of bad contracts with Defence over the past few years. They phaffed the FFG upgrade, know they’ve lost the upcoming munition contract and recent maritime efforts (sonars on AWD for eg).
They need vehicles to keep the business viable and are using every trick in the book to make sure they get Ph 3 of Land 121 and have high hopes for Ph 4. Ph 4 I can understand as the Hawkei is a worthy vehicle to put forward in a COMPETITION but they can’s compete on price in Ph 3.
It’s not about jobs in freakin Bendigo for Thales. It’s about what’s best for the Defence forces and the men and women who risk their lives based on decisions from the government of the day. Jobs in Bendigo mean nothing compared to that.
Hopefully politicians will not be swayed by short term job arguments. But I won’t hold my breath on it.