{"id":67270,"date":"2024-07-01T13:32:33","date_gmt":"2024-07-01T13:32:33","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2024\/07\/01\/australia-aims-to-boost-local-arms-production-so-far-its-leaning-foreign\/"},"modified":"2026-08-08T01:07:28","modified_gmt":"2026-08-08T01:07:28","slug":"australia-aims-to-boost-local-arms-production-so-far-its-leaning-foreign","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/global\/asia-pacific\/2024\/07\/01\/australia-aims-to-boost-local-arms-production-so-far-its-leaning-foreign\/","title":{"rendered":"Australia aims to boost local arms production. So far it\u2019s leaning foreign."},"content":{"rendered":"\n

CHRISTCHURCH, New Zealand \u2014 Travis Reddy wants to buy a Brazilian weapons manufacturer<\/a>.<\/p>\n\n\n\n

As the CEO of DefendTex, an Australian firm specializing in precision-guided weapons, rockets and loitering munitions, he\u2019s encouraged by a government-run program aimed at growing the domestic industry\u2019s capability to build long-range weaponry. The problem, though, is he can\u2019t get the financial backing expected from the Australian government\u2019s Guided Weapons and Explosive Ordnance Enterprise program.<\/p>\n\n\n\n

Instead, large defense contractors, especially those hailing from overseas, are receiving preferential treatment, according to a local analyst.<\/p>\n\n\n\n

\u201cThere\u2019s a tendency by government to default to the primes. Everything must go through Lockheed Martin, Boeing, Thales or whatever. Let\u2019s see what SMEs [small and medium enterprises] can do in terms of things like long-range missiles,\u201d said Malcolm Davis, an expert in capability development and military technology at the Australian Strategic Policy Institute. \u201cGive them a chance to actually demonstrate their capabilities.\u201d<\/p>\n\n\n\n

For months, DefendTex has been asking Export Finance Australia \u2014 the government\u2019s export credit agency \u2014 for a yearlong AU$70 million (U.S. $46 million) loan to acquire cash-strapped Avibras in Brazil. Reddy said he\u2019s depending on the government to assist, noting that domestic banks have refused to provide him a loan as a weapons manufacturer.<\/p>\n\n\n\n

DefendTex\u2019s exclusive negotiation period with Avibras has reportedly expired, as the timetable was to last until the end of June. Already the Chinese defense industry giant NORINCO is taking steps to buy the business. To sweeten the deal, NORINCO has expressed a willingness to manufacture Chinese weapons in Brazil.<\/p>\n\n\n\n

But Reddy said Australia could benefit from Avibras\u2019 extensive experience with guided weapons, gain intellectual property and quickly replicate manufacturing facilities on Australian soil. \u201cWe know that within 24 months we\u2019d achieve full-rate production in Australia: the full IP suite, the seeker, propulsion system, the whole box and dice.\u201d<\/p>\n\n\n\n

\"\"
A DefendTex-made D40 underslung grenade launcher-deployed drone flies through the air during an exercise in England on Oct. 13, 2020. (Leon Neal\/Getty Images)<\/figcaption><\/figure>\n\n\n\n

Referring to mounting geopolitical tensions in the Asia-Pacific region, Davis highlighted the government\u2019s slow response time with endeavors like the Guided Weapons and Explosive Ordnance (GWEO) Enterprise.<\/p>\n\n\n\n

\u201cAt the moment it seems to be moving very much at a snail\u2019s pace on a small scale, a very hesitant approach on the part of government, which I don\u2019t understand given the very adverse strategic outlook we\u2019re facing,\u201d he said.<\/p>\n\n\n\n

Backup plan?<\/h1>\n\n\n\n

The GWEO Enterprise program is the government\u2019s official vehicle to develop a sovereign capability for producing long-range strike weapons<\/a>. It currently boasts about 900 personnel and was formally created in May 2023 when Air Marshal Leon Phillips was appointed its inaugural chief.<\/p>\n\n\n\n

\u201cThe GWEO group was established to accelerate the development of a guided weapons and explosive ordnance manufacturing industry in Australia,\u201d Phillips told Defense News.<\/p>\n\n\n\n

He outlined the enterprise\u2019s two main functions: to establish a manufacturing industry, and to manage the acquisition, sustainment and support of weapons. According to the Defence Department\u2019s website, the government is spending $4.1 billion<\/a> to increasingly buy long-range strike systems and locally manufacture longer-range munitions.<\/p>\n\n\n\n

However, Reddy said the program\u2019s lean toward American defense companies<\/a> is hindering plans like his.<\/p>\n\n\n\n

Indeed, the government has appointed the Australian arms of the American firms RTX<\/a> and Lockheed Martin as GWEO\u2019s strategic partners.<\/p>\n\n\n\n

\u201cThe strategic partners and their U.S. parent companies are working with [the Department of] Defence to explore opportunities for greater partnerships and, to this end, are developing detailed, costed plans for manufacturing guided weapons and their components in Australia,\u201d Phillips said.<\/p>\n\n\n\n

The department has said it will consider those \u201ccosted plans\u201d in the second quarter of 2024.<\/p>\n\n\n\n

\u201cSupport and assistance from the U.S. is critical to the success of the GWEO Enterprise. At the Australia-U.S. Ministerial Consultations in July 2023, the principals agreed to deepen cooperation on Australia\u2019s GWEO Enterprise by collaborating on a flexible guided-weapons production capability in Australia. This cooperation is underway, and an initial batch of GMLRS [Guided Multiple Launch Rocket System] missiles will be manufactured in Australia by 2025,\u201d Phillips added, referring to a AU$37.4 million contract for Lockheed Martin Australia, announced in January 2024.<\/p>\n\n\n\n

\"\"
U.S. Marines fire GMLRS rockets from a High Mobility Artillery Rocket System during the exercise Talisman Sabre in Queensland, Australia, on July 19, 2021. (Lance Cpl. Ujian Gosun\/U.S. Marine Corps)<\/figcaption><\/figure>\n\n\n\n

James Heading, the director of programs at the Strategic Capabilities Office within Lockheed Martin Australia\u2019s missiles and fire control division, said further developing industry is critical and that GMLRS is a good starting point for the country. International demand for GMLRS is growing, especially in Ukraine amid its war with Russia.<\/p>\n\n\n\n

\u201cThat doesn\u2019t necessarily mean everything\u2019s manufactured in Australia,\u201d Heading added. For example, he noted, it might be five to 10 years before Australian industry can unilaterally build missile seekers for the GMLRS.<\/p>\n\n\n\n

Tenders for GMLRS production-related requirements in Australia close around the June-July time frame this year, which will lead to the assembly of GMLRS kits starting next year at the munitions storage base Defence Establishment Orchard Hills in Sydney. What will follow is the gradual introduction of domestically assembled components, before ramping up quantities, Heading said.<\/p>\n\n\n\n

To be clear, Reddy said, he doesn\u2019t take issue with the Lockheed deal, but does think the government needs a backup plan.<\/p>\n\n\n\n

\u201cI\u2019m not saying don\u2019t do GMLRS, don\u2019t do HIMARS [High Mobility Artillery Rocket System]. Do all of that and preserve 5% of your budget<\/a> [for] a plan B,\u201d he said, referring to government funding to support domestic industry acquisitions. \u201cThat would be the pragmatic approach to ensuring we get the best of both worlds. So if the world goes to hell in a handbasket tomorrow, we\u2019ve got something we can respond with.\u201d<\/p>\n\n\n\n

He argued that the purchase of Avibras would be a \u201cvery cheap\u201d insurance policy that does not detract from any long-term plans dependent on American firms.<\/p>\n\n\n\n

Davis agreed that there isn\u2019t a clear path from the Lockheed deal that would lead to more locally made, sophisticated capabilities. \u201cI think it\u2019s taken an inordinately long time to actually make any progress, and we\u2019re only talking about assembling GMLRS components here in Australia in 2025.\u201d<\/p>\n\n\n\n

\"\"
People fill shells at a government explosives factory in Australia in the 1940s. (Hulton Archive\/Getty Images)<\/figcaption><\/figure>\n\n\n\n

He said the government should encourage industry to pursue the local production of longer-range weapons like the Long Range Anti-Ship Missile, the extended-range variant of the Joint Air-to-Surface Standoff Missile, and the Tomahawk cruise missile \u2014 all of which are made by American businesses.<\/p>\n\n\n\n

But the GWEO Enterprise isn\u2019t just about American-made weapons. For example, the Spike missile by Israel\u2019s Rafael Advanced Defense Systems and the Naval Strike Missile by Norway\u2019s Kongsberg are both candidates for domestic production.<\/p>\n\n\n\n

\u201cGWEO is really about giving industry the opportunity to participate,\u201d Heading said, noting gaps in Australia\u2019s defense industry are due to capacity rather than ability.<\/p>\n\n\n\n

To overcome these issues, Davis suggested the government further prioritize the GWEO program as well as incorporate lessons from the Russia-Ukraine war.<\/p>\n\n\n\n

\u201cWe should actually be looking at how can we, ourselves, develop the long-range strike capabilities that can support the needs of the ADF [Australian Defence Force], the needs of our allies and partners, and offer us an export capability as well,\u201d he urged. \u201cOnce again, there seems to be this lack of boldness and vision on the part of the government just to even think beyond the most minimalist application of GWEO in the near term.<\/p>\n\n\n\n

\u201cI don\u2019t understand why their perception of GWEO is so constrained and so limited.\u201d<\/p>\n\n\n\n

Preparing for war<\/h1>\n\n\n\n

Part of the problem is Australia\u2019s peacetime mindset, Davis said.<\/p>\n\n\n\n

\u201cWe assume that nothing bad will happen in this decade, and that we\u2019ve got 10 years to wait. Ironically, we\u2019ve said in past defense whitepapers that we no longer have 10 years of strategic warning, but that mindset of 10-year strategic warning time is still pervasive in the defense organization and within government,\u201d he explained.<\/p>\n\n\n\n

\u201cThere needs to be recognition that we might have two, maybe three years to prepare for a major war,\u201d he added. \u201cSo what can we do in the next two to three years in terms of mass production of capabilities? That\u2019s going to take some risks, it\u2019s going to take a bit of vision.<\/p>\n\n\n\n

\u201cMy concern is that those decisions won\u2019t be made and we\u2019ll end up going into a next war in 2027 or 2028 with what we\u2019ve got \u2014 and not much to show for GWEO.\u201d<\/p>\n\n\n\n

\"\"
An Australian-manufactured BLU-111 detonates at the Port Wakefield testing area in South Australia. (Australian Defence Department)<\/figcaption><\/figure>\n\n\n\n

To be sure, the program hasn\u2019t been idle, Philips said, noting several major achievements to date, including upgrades to infrastructure and technology at the government-owned Mulwala and Benalla munitions factories operated by Thales Australia; remediation of the Port Wilson wharf to enable large-scale imports and exports of weapons; commissioned construction of additional storage and distribution infrastructure; and domestic production of 500-pound BLU-111 bombs.<\/p>\n\n\n\n

In addition to the GMLRS contract, Phillips also pointed to accelerated acquisitions of Tomahawks, JASSM-ERs, Naval Strike Missiles and sea mines from overseas.<\/p>\n\n\n\n

But these foreign purchases by the government don\u2019t help with situations like Reddy\u2019s.<\/p>\n\n\n\n

\u201cThey\u2019re not taking any steps to develop a domestic, sovereign alternative to the kind of weapons they need,\u201d he said. \u201cIn the event of high-intensity conflict, will Australia as a nation have the ability to manufacture the ordnance that it needs to keep the Australian Defence Force capable of conducting its mission? The overwhelming answer is no.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Are the government\u2019s efforts to sovereignly produce guided weapons misguided?<\/p>\n","protected":false},"author":7,"featured_media":118700,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-post-featured-layout","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":45,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[45,160,11,12,49,36,38],"tags":[],"coauthors":[3492],"class_list":["post-67270","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia-pacific","category-daily-news-roundup","category-global","category-industry","category-techwatch","category-newsletters","category-special-reports"],"acf":{"subheadline":"","legacy_arc_id":"7UDCAZMQJVEODNH22RNQQAWMGU","arc_canonical_url":"\/global\/asia-pacific\/2024\/07\/01\/australia-aims-to-boost-local-arms-production-so-far-its-leaning-foreign\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"featured-layout","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"\nAustralia aims to boost local arms production. 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