Australian Defence Industry

[Todjaeger]

I was wonder what the observers thoughts are on the state of Australian defence companies.

From what I have gathered and read, most of the work carried out by Australian defence companies is for the ADF, with a relatively low level of export occurring. It also appears that most of the systems is use by Australia are imported, or licensed production of a foreign design. The only indiginously designed system in use that I am aware of is the Armidale patrol boat.

I was wondering what members thoughts were on the effect of using foreign designs on a defence industry as well as if that could/would increase the costing per system for Australia & the ADF?

 

[Aussie Digger]

I was wonder what the observers thoughts are on the state of Australian defence companies.

From what I have gathered and read, most of the work carried out by Australian defence companies is for the ADF, with a relatively low level of export occurring. It also appears that most of the systems is use by Australia are imported, or licensed production of a foreign design. The only indiginously designed system in use that I am aware of is the Armidale patrol boat.

I was wondering what members thoughts were on the effect of using foreign designs on a defence industry as well as if that could/would increase the costing per system for Australia & the ADF?

Actually Australia builds the majority of it's major defence acquisitions internally, current examples include the Armidale Class Patrol Boats (indigenous design), ANZAC class frigates, Air Warfare Destroyers, LHD Amphibious Warfare vessels, landing craft heavy (indigenous design), Wedgetail AWACS, MRH-90 helicopters, Tiger ARH helicopters, Bushmaster infantry mobility vehicles and numerous smaller components including virtually all our ammunition requirements (excluding precision guided weapons other than Penguin ASM warheads) LAV-25 turrets.

Other relatively recent (last 25 years) build programs have included our current F/A-18 fleet, Huon class minehunters, 4x FFG frigates and Collins Class submarines.

Most of these (other than those indicated) are totally or partially based on foreign designs and "modified" to suit our requirements. Our industry is also heavily designed to support and "upgrade" our equipment allow us a substantial degree of "self-reliance".

It'd be nice if we could design and build our own defence equipment, but unfortunately the cost is prohibitive in nearly all cases. The sales base within ADF is simply not large enough to justify the investment.

I think it's about right at the moment, though project management within Industry in Australia is a massive issue at present with repeated delays in many projects and cost overruns.

 

[Todjaeger]

I'm aware that much of what the ADF uses is/was built in Australia. What I was wondering about is the effect of building mostly foreign designed equipment on export sales and therefore the cost per unit and length of production.

For example: Huon class MHC built by ADI's Newcastle facility.
The Huon is an Australian version of the Italian Lerici MHC which is itself an enlarged version of the Italian Gaeta MHC. Malaysia uses a version of the Gaeta and nearby, Thailand uses a version of the Lerici. In order for ADI to fufill the Huon order, it needed to setup facilities able to work and build with GRP. From what I've read, now that the Huon order has been completed the facility ADI setup is not seeing much use and has been reducing staff. As the stuff gets reduced, more people with experience working with GRP will be lost and/or their working knowledge of GRP construction will fade. What this can/will mean is that for the next project for the ADF involving GRP a facility will need to be created or re-tasked which will increase the startup costs (and therefore cost per unit) also the amount of time needed to start the project. If ADI could've received orders for the Huon, or a vessel similar to the Huon from outside of the ADF, the Newcastle site could continue construction of vessels, therefore retaining the knowledge needed in case Australia decided it wanted/needed additional GRP hulled vessels.

In a similar vein there is the Collins SSK.
ASC built six for the RAN which chose not to exercise options for a further two, and as I understand it, the Collins production line was closed. Canada had been looking at acquiring four patrol subs to replace older diesel subs that were becoming obsolete or nearing the end of service life. Understandably, Canada decided to not go with the Collins due to technical/developmental issues. However, if Canada had chosen to get four Collins submarines, that would've kept the production line open longer, giving the RAN more time potentially to decide it wanted the two additional SSKs and also might have driven the cost-per-unit down enough so that the options might have been exercised.

Basically what I'm wondering is this. Does Australian defence industry reliance on orders from the ADF, which are of limited quantity and duration, make it more difficult and expensive for the ADF to engage in future purchases due to the defence industry needing to re-tool and re-skill for each order? Also, is the reliance on non-native designs having an impact on the Australian defence industry's ability to land foreign orders?

I believe that the only Australian built vessel or vehicle to land foreign sales is the ADI Bushmaster for the Royal Netherlands Army which is getting 25 units.

Very interested in any feedback.

 

[scraw]

Basically what I'm wondering is this. Does Australian defence industry reliance on orders from the ADF, which are of limited quantity and duration, make it more difficult and expensive for the ADF to engage in future purchases due to the defence industry needing to re-tool and re-skill for each order?

Certainly it makes things more expensive having to build that skill base again and again. Ask gf about Collins and welders, I'm sure he can give you a couple of paragraphs.

Also, is the reliance on non-native designs having an impact on the Australian defence industry's ability to land foreign orders?

Not really IMO, for the big orders we don't have the capacity, for small ones we really need to get our house in order in terms of management and Govt. I'm sure pretty much any Aussie poster will be prepared to tell you we don't do defence procurement well and don't support home grown tech anywhere near well enough. My view is there are more fundamental issues at play than building something of a modified design.

That said their have been some successes, Austal being a reasonable example.

 

[chargerRT]

I believe that the only Australian built vessel or vehicle to land foreign sales is the ADI Bushmaster for the Royal Netherlands Army which is getting 25 units.

I read that the US Marines were trialling/have trialled the ADI Bushmaster.Any news any1?
And the US Army were interested in the ADI high mobility excavator(read:a very fast tractor!).

 

[icelord]

I

For example: Huon class MHC built by ADI's Newcastle facility.
The Huon is an Australian version of the Italian Lerici MHC which is itself an enlarged version of the Italian Gaeta MHC. Malaysia uses a version of the Gaeta and nearby, Thailand uses a version of the Lerici. In order for ADI to fufill the Huon order, it needed to setup facilities able to work and build with GRP. From what I've read, now that the Huon order has been completed the facility ADI setup is not seeing much use and has been reducing staff. As the stuff gets reduced, more people with experience working with GRP will be lost and/or their working knowledge of GRP construction will fade. What this can/will mean is that for the next project for the ADF involving GRP a facility will need to be created or re-tasked which will increase the startup costs (and therefore cost per unit) also the amount of time needed to start the project. If ADI could've received orders for the Huon, or a vessel similar to the Huon from outside of the ADF, the Newcastle site could continue construction of vessels, therefore retaining the knowledge needed in case Australia decided it wanted/needed additional GRP hulled vessels.

At present the ADI facility is used for construction of large luxury vessels, through a multi million dollar deal to continue production and increase newcastles profile. the site after the huon, constructed the landing craft, as stated an indiginous design. Commercial boats are constructed at present, with several contracts in the process of being acquired.
ADI also constructed the fireking based on the bushmaster design, with 15 ordered by South Australia bush fire brigade(wat would u want 2 protect in SA?) With the closure of Sydney in a few years as a working harbour, newcastle will pick up a lot more of the work, including ship construction.

There is no current requirement for a complete ADF only facility, with many of the current used for commercial building. Reliance is not solely on defence, with many companys setting up contracts to follow defence projects, keeping the skills in the area. But its not a downside, moving of skilled workers around aus allows different ideas and unique statergies, as well as these workers heading overseas with the same return benefit. Its no point on relying on 8 ships, and only 6 are built, either way, you'll need to modify or move on. Other nations may see a positive in using the same facility, but most companies would prefer to diversify designs and meet new challanges.

 

[Sea Toby]

While many nations have had success selling submarines and patrol boats as exports, not to many have been successful selling frigates abroad. Australia has had some luck selling new patrol boats abroad outside the Pacific Patrol Boats: to Kuwait, Hong Kong, and the Philippines. In a joint construction program Australia sold two frigates to New Zealand, and currently two offshore patrol vessels. Russia and China have been successful selling frigates and submarines too.

In the past decade the United Kingdom has sold new mineshunters and small frigates abroad. Germany has sold MEKO designed new frigates, corvettes, and offshore patrol vessels abroad, plus submarines. France has sold new frigates and submarines abroad. But in many of these sells, some of the ships and submarines are being built abroad. Since the cost of warships are so expensive, unless its a rich oil nation, many nations wish to build as many warships as they can to keep as much of their expenditures in country. While the Germans appeared to have sold the most submarines, many of them are now being built abroad.

There are many nations which choose to buy used vessels instead as the price of new warships are unaffordable. The Netherlands, unable to sell new warships, are selling off their vessels early so they can keep their shipyards busy building new warships. Lately, the British have been selling off their vessels early too.

While Australia is a large nation geographically, its not so large in population. Outside of a few weapon systems, it doesn't have the financial wherewithal to fund every development program. Other nations which used to fund every development program find it difficult to do so in today's world, sharing development costs with other nations.

Its a fact Australia and New Zealand could buy their warships for less abroad. Fortunately, building warships and modules at home provides an important economic boost to overcome buying a lesser price warship from abroad. Other nations see this economic benefit too.

The days when the United Kingdom built 25 Leander class frigates for themselves and another 10 of them for export are over. Even the very small nation of New Zealand is attempting to reap as much of their defence spending economic benefits by building warship modules and their patrol boats in New Zealand. There are many nations much larger than New Zealand with much more industry capabilities.

 

[renjer]

Basically what I'm wondering is this. Does Australian defence industry reliance on orders from the ADF, which are of limited quantity and duration, make it more difficult and expensive for the ADF to engage in future purchases due to the defence industry needing to re-tool and re-skill for each order? Also, is the reliance on non-native designs having an impact on the Australian defence industry's ability to land foreign orders?

I believe the answer to both these questions is 'yes'. However, a country's defence industry cannot be judged in purely monetary terms or success in securing foreign orders. More importantly it is a demonstration of a country's continuing political will to preserve its sovereignty. I would cite Singapore as an example of this.

I think the lessons of Cold War about outspending your opponent has been taken to its extreme. Programs like the F-35 probably owes its success more to the economics of mass production than its capability. I hope shutting down the Collins line does not mean that the GOA will not pursue an indigenous successor class to it.

 

[Todjaeger]

What I am talking about isn't so much about outspending an opponent as in the cold war, and I believe it's fairly clear that Australia intends to maintain it's sovereignty.

What I am wondering about is if there are different things, ideas really, that if applied to Australian industry, would make defence dollars go farther. For example, the SEA 4000 AWD project is anticipated at providing 3 DDGs for A$6 billion. If, by applying different processes a way was found to get those same 3 DDGs for A$5 billion instead, then the remaining A$1 billion could possibly be used to procure a 4th DDG. Or the money could be used elsewhere in the ADF or government like increasing the pay for personnel or research, etc. etc.

The impression I have gathered regarding the industry in Australia is that the different companies (and there don't seem to be many of them) tend to be competing against each other and against overseas companies for ADF orders. As a result of this competition, it appears that when one company wins a project the other companies start shutting down the capability they had to fulfil whatever the project was. Then, when that sort of project next appears or something else requiring a similar skill set, companies then need to expend money to rebuild the capacity.

In some areas Australian industry has done well. Parts for every ESSM are made in Australia (the fin assembly I believe) and the warhead for the Penguin AShM. Also Austal & Tenix have had success selling small patrol boats to different countries in Asia and the Mid-East. Where the problem seems to be is finding something for defence facilities to do to maintain the needed skills between ADF orders.

Any idea how often Tenix or one of the other yards constructs a freighter for the civilian market? That is one way to maintain skills and facilities to build large vessels. As I understand it the Anzac project (construction phase) is basically complete with the final vessel to be comissioned next year. The facilities that were used to construct the modules have either been retooled to work on other projects or shut down. Once the 2nd Protector class OPV has been delivered to the RNZN (planned for Oct. 2007) there won't be any construction of large ocean going military vessels in Australia until the start of the SEA 4000 construction phase which starts around 2010 with 1st delivery in 2013. Will there be non-military work done to keep the workers employed during 2008 & 2009?

As part of the Wedgetail project, once the issues regarding the Northrup Grumman MESA L-band radar are straightened out, four of the 737 airframes will be modified in Australia for use as Wedgetail AEW&C. Once that valueable experience is gained, what will be done to maintain an Australian capacity to modify or refurbish large aircraft?

I completely understand that while Australia is roughly the size of the lower 48 United States, it's population is only that of the state of New York and therefore Australia isn't able to afford the same kinds of military development or expenditures. However it seems that for the Australian projects there isn't a project that is wholely Australian, and I have to wonder if that is costing Australia money in terms of having to import items as well as limiting opportunities to export. And with the potential of having a limit placed on the ability to export, I wonder if that in turn makes projects in Australia cost even more money.

 

[renjer]

What I am wondering about is if there are different things, ideas really, that if applied to Australian industry, would make defence dollars go farther. For example, the SEA 4000 AWD project is anticipated at providing 3 DDGs for A$6 billion. If, by applying different processes a way was found to get those same 3 DDGs for A$5 billion instead, then the remaining A$1 billion could possibly be used to procure a 4th DDG. Or the money could be used elsewhere in the ADF or government like increasing the pay for personnel or research, etc. etc.

You are asking a lot of questions. Perhaps you would like to share some of your proposed solutions. I am sure those involved in the Australian defence industry would be very interested to hear them. I know people in my country's would be since stretching each dollar is something every defence professional worldwide is trying to do.

I completely understand that while Australia is roughly the size of the lower 48 United States, it's population is only that of the state of New York and therefore Australia isn't able to afford the same kinds of military development or expenditures. However it seems that for the Australian projects there isn't a project that is wholely Australian, and I have to wonder if that is costing Australia money in terms of having to import items as well as limiting opportunities to export. And with the potential of having a limit placed on the ability to export, I wonder if that in turn makes projects in Australia cost even more money.

You are repeating yourself. Perhaps you may want to definitively state your opinions on these matters rather than wonder about them?

 

[Sea Toby]

Yes, buying Australian built equipment is more expensive, but its a price Australians pay for technology transfer, independent maintenance, and job creation. Australian companies have won many offsets recently, building parts for an entire line of equipment worldwide, not just for Australia. For example, every Boeing airliner built in America has parts built in Australia.

My recently deceased Aunt Clara explained it to me this way. Back during World War II when Australia tossed the budget into the air and wished to buy cruisers, destroyers, and submarines, none were available on the world's market. Australia had a devil of a time buying fighters, even less luck buying bombers, especially long range bombers. Without any automobile assembly line, Australia had to buy tanks from abroad. The lesson was well learned, and ever since World War II Australia has been attempting to build a military industrial complex.

The first Australian car rolled off an Australian assembly line in 1947, after the war. Australia has built up its industries one by one with a lot of government aid. Tenix, ADI, and now ASC were at one time owned by the federal government, then sold off in parts, with the goal to sell off these companies entirely. Austal has found a market selling fast ferries throughout the world.

As you noted above, this process hasn't been easy. Australia cannot sustain its warship building program internally, these shipyards have to build civilian vessels, and provide drydock maintenance too. Its the same with aircraft and other military weapon systems also, especially with half life upgrades. Tenix and ADI aren't just shipbuilders, they also build other military weapon systems, and are engaged in building dams, buildings, highways, etc.

Compare Australia to the Netherlands, the closest European nation in population and wealth. The Netherlands are in the same situation as the Australians. While the Dutch shipbuilders have had some success with exports, they have not been able to sell enough.

Finally, many exports are supported by the financial clout of a nation. The Chinese, Russians, British, French, Germans, and Americans have exported many weapon systems using foreign aid and/or low interest rates. Unfortunately, nations such as Australia and the Ukraine don't have this financial wealth to compete.

 

[Todjaeger]

Unfortunately I can't claim to really have any solutions. What I do see is what appears to be a potential problem, namely maintaining industrial capacity. The Australian government also seems to consider it a problem, since they launched SADI http://www.defence.gov.au/dmo/id/sadi/index.cfm

I also recall discussion going around about Australia deciding to go with one shipyard for naval vessels. While going sole-source might guarantee continuous production capacity, I shudder to think what could happen if something unexpected occurred. Gulf state (US) shipyards after Hurricane Katrina are a perfect example of something "unexpected". I would prefer, if possible that Australia maintain at least two shipyards with naval construction experience and that they be in different geographic areas.

From a previous post in this thread (Sorry, don't remember who) the poster seemed to think I was advocating for an ADF only facility or facilities. In point of fact this is the opposite of what I would like to see. It seems to me that too much of the defence industry is dedicated to serving the ADF only, instead of the world defence and civilian markets.

By comparison, consider the South African defence industry. Population wise approximately twice that of Australia, with a total GDP right behind Australia but per capita considerably behind. In terms of their industry they seem to have had a fair amount of success landing orders for things like the Nyala RG-31 with 200 on order between the US & Canada. I also believe that South Africa will be making some of the components used in the A400M, and as far as I'm aware, the SAAF isn't going to be an A400M user.

Is the industry looking too much internally and therefore missing opportunities outside of the ADF, or do the opportunities not exist? I lack the background and knowledge to know one way or the other.

For example, ADI has a 365m graving dock at Garden Island, Sydney. Per the ADI website, it's the largest in the southern hemisphere. Having said that, what is it being used for, and is it operating at capacity? If it's not operating at or near capacity, why? Is the facility too old, too small, too expensive, too far away or any other reason?

Again, going back to South Africa. Denel makes some of the best tube artillery in the world, with the new G6-52 able to fire velocity enhanced rounds out to around 50 miles away. Does Australia have a similar excellence in something? From reading, Australia seems to have surpassed the US in certain areas of EW. Is that something that can be marketed?

I know, I know, again with the questions. What I would like to see Australia doing is more joint collaboration for projects outside of Australia. The ESSM is a good example. Not sure about the JSF or LCS, since much of them doesn't seem to be taking place in Australia.

 

[icelord]

]
I also recall discussion going around about Australia deciding to go with one shipyard for naval vessels. While going sole-source might guarantee continuous production capacity, I shudder to think what could happen if something unexpected occurred. Gulf state (US) shipyards after Hurricane Katrina are a perfect example of something "unexpected". I would prefer, if possible that Australia maintain at least two shipyards with naval construction experience and that they be in different geographic areas.

Reading many defence industry magazines and newsletters, they have a few adverts for WA, Vic and NT industry with ship building in mind. This is obviously to entice industry, but their are several areas that maintian ship building already, most prominant are South Australia, where the collins was built, and Victoria where the ANZACs where completed.

For example, ADI has a 365m graving dock at Garden Island, Sydney. Per the ADI website, it's the largest in the southern hemisphere. Having said that, what is it being used for, and is it operating at capacity? If it's not operating at or near capacity, why? Is the facility too old, too small, too expensive, too far away or any other reason?

At present, the upgrading of the ANZAC class frigates, with HMAS Melbourne i believe being currently in dry dock, while Sydney has finished trials and back in operations. Then you still have the rest of the ANZAC class, and then it moves on to other RAN ships. FORGACS in Newcastle has always got some RAN vessel in dry dock, this is a mainly Civilian owned dock, family generation type company, a lot of their work covers civilian and defence, so even if Garden Island is there, the Navy still contract out to Forgacs for minor repairs or upgrades, so theirs always use for it. Not being from sydney, i can not say the same for G.Is dock but civilian use is possible, plus Garden Island Perth(original huh) also has dry docks and was a short while ago had Collins subs up for maintanence.

Back during World War II when Australia tossed the budget into the air and wished to buy cruisers, destroyers, and submarines, none were available on the world's market. Australia had a devil of a time buying fighters, even less luck buying bombers, especially long range bombers. Without any automobile assembly line, Australia had to buy tanks from abroad. The lesson was well learned, and ever since World War II Australia has been attempting to build a military industrial complex.

I'm unsure and to tired to check the book on the shelf right now, but the , the bandicoot:gun , HMAS Arunta
http://www.diggerhistory.info/pages-armour/allied/bandicoot.htm and the...boomerang fighter were built here as we could'nt get our hands on aircraft, tanks or ships from our motherland(UK) hence the famous cartoon of churchill and curtin where curtin asked for equipment while a japanese soldier was standing in the door and churchill going on they could'nt supply us, yet the board said plenty of this this and this. anyway, these along with a few other small but all important pieces were, as u said, the start of not quite a military industrial complex, but ADI so that we would not rely to much on others coming to our aid. Australian CANVAS Tanks were our first all aussie built Armour, made from wood and canvas(hmm, light light armour?):lol

 

[Todjaeger]

From a post in a separate thread.

Http://www.stopshot.com.

Not interested in the glass, but the fiberglass technology which provides ballistic protection against small arms in the 5.56mm range. Use that as a spaced "flexor" plate and you get the standoff to help defeat ATGMs and RPGs. Its beautiful as you absorb a hell of a lot of kinetic energy from your soviet era 14+mm anti aircraft projectile before it hits the main armor, and its light.

Because it is Kiwi technology; I would also seriously look at junking the GM powerplant and making a replacement engine out of that Christchurch shop, "Mace Engineering". They have a pivotal 2 stroke engine which basically would halve the weight of the power plant for the same horse power.

W

Does anyone know of any other Australian or New Zealand products that could be developed or applied to defence systems? Granted something like a pivotal two-stroke enginge might require that the vehicle be designed around it, but if the products are good enough, it might be worthwhile.

 

[Big-E]

Does AU even have a domestic def industry? I thought most of their brains were working with US firms... not that that's a bad thing.

 

[Todjaeger]

Does AU even have a domestic def industry? I thought most of their brains were working with US firms... not that that's a bad thing.

There are a number of Australian defence firms, though many of the larger ones are really Australian subsidiaries of international defence firms. Boeing Australia, Thales Australia, etc. etc. Austal for instance is an Australian firm (not a subsidiary as far as I know) and is a partner on LCS.

 

[icelord]

There are a number of Australian defence firms, though many of the larger ones are really Australian subsidiaries of international defence firms. Boeing Australia, Thales Australia, etc. etc. Austal for instance is an Australian firm (not a subsidiary as far as I know) and is a partner on LCS.

LCS is designed by Austal, an Aus. defence company, and i think it may be in the process of a sale last i heard, to thales perhaps? or some big euro firm.

Does AU even have a domestic def industry? I thought most of their brains were working with US firms... not that that's a bad thing.

Aus has a small number of large companies its deals with, as well as a vast network of small contractors, and most international companies benefit more if they partner up with Aus companies, as they are givin preference over a direct purchase on foreign designs or equipment, case in point, the LHD proposals.
A lot of smaller companies deal small parts to other countries when it can't get a contract here, a newcastle company is currently building decompression chambers for the USN out of a shed in the hunter valley, and several small companies are working on certains aspects of the JSF, aus being one of the few countries to get several contract, much to others countries disliking.

 

[gf0012-aust]

Austal is completely and solely Australian. Thales are not trying to buy in, and Austal are not interested in any suitors. (At least thats what my contacts in Austal are saying)

They would actually run the risk of losing entry into some US projects if they had a French partner. This has already unofficially occurred with ADI due to french shareholder issues.

I can't see Austal making the same mistakes.

 

[Todjaeger]

Can someone list the major Australian defence companies, and specify which ones are publicly traded, as well as which ones are independent companies and which are subsidiaries?

I remember reading Government report which mentioned that there are 10 main defence companies the ADF deal with, and that 8 of them are subsidiaries of foreign defence firms. However, trying to narrow down which companies are which becomes... cumbersome. Any help on this would be appreciated.

 

[Aussie Digger]

Can someone list the major Australian defence companies, and specify which ones are publicly traded, as well as which ones are independent companies and which are subsidiaries?

I remember reading Government report which mentioned that there are 10 main defence companies the ADF deal with, and that 8 of them are subsidiaries of foreign defence firms. However, trying to narrow down which companies are which becomes... cumbersome. Any help on this would be appreciated.

Probably the most extensive list of Australian Defence companies can be found here:

http://www.yaffa.com.au/defencesuppliers/browse.php

This site lets you navigate through all the listed companies and provides links to their websites. All the info you seek should be able to be obtained that way.

Cheers.

AD