Redback 60% Australian ‘content’ – Conroy

Defence Industry Minister Pat Conroy has told ABC TV that the Hanwha Defense Australia Redback infantry fighting vehicles (IFV) to be built in Geelong will have around ’60 per cent local content’.

Responding to questions from Greg Jennett, he said the outcome of the $5 billion plus order was a ‘great day for Aussie manufacturing’.

Conroy said: “So, $6 in $10 of this very significant contract, one of the biggest in the Australian history, history of the Australian Army, will be spent locally.

“So, that will drive 600 direct jobs in Hanwha, most of them in Geelong, and then 1,000 in their supply chain and involving 100 Australian companies.”

Reprising the phrase local content is odd as it was a policy dumped many years ago in favour of smarter ones that encourage genuinely important local operations over local ‘make work’, and sourcing from a network of small Australian SME suppliers.

Conroy said Hanwha had already identified those hundred companies as part of the tender documents provided to defence.

“And I know they’ve partnered with – for example, with some very significant contractors in Tasmania, for example, in western Sydney, in Brisbane. So, this is an opportunity for a huge supply chain, building one of the most advanced pieces of army equipment in the world.

​HDA has said its manufacturing partners for the project included armour steel manufacturer Bisalloy in NSW and heavy equipment manufacturer Elphinstone in Tasmania, as well as local firms Penske and Corvus in Victoria.

Conroy declined to say that the Hanwha bid was the cheaper of the two options considered by the government – the second being one from Germany’s Rheinmetall.

“What I can say is that after two years of testing and evaluation, Defence recommended that the Redback vehicle best fit the needs of the Australian Army.

“So, the tender assessment of the actual platform drove the decision, and then there was compelling strategic and economic benefits from a local build.

“And that’s why it represented best value for money.”

​Jennett asked Conroy whether there were very large tooling costs for HDA to build, on average, two vehicles a month for about two years – the order is for 129 vehicles.

Question: But then what for Hanwha, if it’s all over in a couple of years?

​”Well, importantly, this is using a facility that’s been constructed for the contract to provide self-propelled howitzers.

“So, this is an expansion of a facility that’s already been built.

“Importantly, Hanwha have made it very clear to us they see very significant export opportunities out of this project – they intend to make their Australian base at Geelong the sort of Redback capital for the world.”

Conroy said there was an opportunity to manufacture parts or vehicles in Australia should Hanwha be successful in selling the Redback, which was designed for Australian conditions, elsewhere.

“And the importance of having a local manufacturer is it gives strategic flexibility for future governments, should the strategic circumstances dictate that, to possibly add more orders if that’s what they want to do.

“That’s not our decision…”

Further reading:
Defence announces IFV contract, but no word on who in defence is leaking

Picture: Hanwha Defense Australia