Both the Navy and Air Force have been the focal point of 2018 for defence and defence industry with the arrival of Australia's first two F-35 Joint Strike Fighters, the turning of the sod for Australia's future submarine and future frigate shipyards in South Australia, the announcement of BAE's Type 26 Global Combat Ship as the successful SEA 5000 bidder, Army has operated largely under the radar, despite major modernisation updates.
The $5.2 billion LAND 400 Phase 2 program has been a focal point for Army in 2018 and will deliver 211 Rheinmetall designed and manufactured, 8x8 wheeled Boxer Combat Reconnaissance Vehicles (CRV) to replace the ageing ASLAV vehicles that have served with the Australian Army in East Timor, Afghanistan and Iraq.
The ADF will introduce several variants of the Boxer, with the reconnaissance variant accounting for 133 of the 211 vehicles, equipped with Rheinmetall’s cutting-edge Lance turret system and armed with a 30mm automatic cannon.
The Boxer CRV was selected after rigorous trials conducted by the ADF. The Boxer CRV was chosen in 2016 as one of two candidates for risk mitigation activity trials, where the 8x8 wheeled armoured vehicle performed convincingly in the categories of survivability, mobility, firepower, and command and control.
Boxer CRV will enable Army to locate, monitor and engage with enemy forces and ensure Australian soldiers are protected in combat. The vehicles will fill seven different roles on the battlefield: reconnaissance, command and control, joint fires, surveillance, ambulance, battlefield repair and recovery.
Following a hotly contested LAND 400 Phase 2 competition between Rheinmetall and BAE Systems Australia, Defence Connect announced that Rheinmetall had successfully secured the $5.2 billion program with the Commonwealth.
Under the company's offering to the Commonwealth, Rheinmetall will build a majority of the vehicles at the company's specialised Military Vehicle Centre of Excellence (MILVEHCOE) in Queensland.
The first 25 vehicles will be built in Germany in a move Rheinmetall said will support the transfer of technology. Australians will be embedded into teams in Germany to learn the necessary skills before transferring back to Australia for the build of the remaining 200 CRVs.
LAND 400 Phase 2 will also see Rheinmetall partner with Australian steel giants, BlueScope and Bisalloy to deliver specialised, armoured steel for the Boxer CRVs.
BlueScope’s Port Kembla steelworks is already working alongside Rheinmetall and Illawarra steel processing company Bisalloy Steel to be in a position to potentially deliver multiple grades of armoured steel for processing and supply to local and export military vehicle programs, including LAND 400 Phase 2.
Testing carried out by Bisalloy, BlueScope and Rheinmetall is part of a certification and qualification process to meet the performance standards of armoured steel required by Rheinmetall. Bisalloy and BlueScope are aiming to be the first companies in the southern hemisphere to be qualified to deliver this steel.
As part of Rheinmetall's commitment to supporting the development of Australia's sovereign defence industry capability, the company announced the first major Australian supplier to support the manufacture of the Army's future Boxer CRVs.
Melbourne-based specialist vehicles company Supacat Asia-Pacific has signed a partnership agreement with Rheinmetall for the design and manufacture of sub-systems for the Australian fleet of Boxer armoured vehicles.
Rheinmetall Defence Australia managing director Gary Stewart said, "Supacat brings immense experience across a range of areas critical to our program and it’s entirely appropriate they are the first company to formally join our program following contract signature with the Commonwealth."
Supacat in Australia is an innovative producer of high mobility military vehicles, specialist vehicles and maritime products. The company has an established presence in Australia and partnered with Rheinmetall through the risk mitigation activities conducted as part of the selection process for LAND 400 Phase 2.
The partnership agreement will at least double Supacat’s engineering workforce, with the creation of at least 20 new engineering roles.
Defence Industry Minister Steven Ciobo said the new vehicles represented a significant project that is producing high-tech, highly-skilled jobs, some 1,450 of them across Australia.
"This is the first contract of approximately 40 local suppliers involved in key acquisition and sustainment activities in the Boxer Combat Reconnaissance Vehicle project," Minister Ciobo said.
The LAND 400 Phase 2 decision and competition was not without its controversy, however. For Victoria, the selection of Rheinmetall and the creation of MILVEHCOE in Queensland was seen as a major betrayal.
Victoria's Minister for Industry and Employment Ben Carroll said the awarding of the contract is a slap in the face to the state's workers transitioning from the automotive industry, as well as the already-established industry manufacturing the Australian Army's Bushmaster and Hawkei vehicles.
"We are the home of manufacturing in Australia and have the skills, knowledge and expertise to deliver the best and safest military vehicles for our Defence Force – but Malcolm Turnbull has betrayed Victoria yet again," Minister Carroll said.
Victoria’s defence sector is estimated to be worth $8 billion to the local economy every year, and is made up of about 20,000 workers and more than 400 businesses.
At the announcement of the decision, Minister Pyne confirmed that of the $5.2 billion for the project, $1.8 billion of the acquisition is in Queensland and $635 million of it will be in Victoria. The government has tipped up to 1,450 jobs will be created, with at least 330 in Queensland, 170 in Victoria and 140 in NSW during acquisition.
Following the announcement of Rheinmetall's successful bid, Defence Connect spoke with Rheinmetall managing director Gary Stewart to outline why the German powerhouse chose Queensland as the base for developing its local specialist manufacturing presence.
Five states approached the German defence giant with their proposals, and last year it was down-selected to two; Queensland and Victoria, the latter being the base chosen by Rheinmetall's LAND 400 Phase 2 competitor, BAE Systems Australia.
While much has been said of the state versus state mentality around securing lucrative defence projects, Stewart said the professionalism was to be admired.
"It had already got politicised around which state could do the work and at the time, it was more of an Adelaide versus Melbourne debate or South Australia versus Victoria, and we didn't want to get caught into a political maelstrom, so we went to all the states and said, 'We are looking to establish a Military Vehicle Centre of Excellence that will first and foremost support the Australian customer and ensure that they continue to have the best capability that can be delivered, that will become a global design and manufacturing centre for Rheinmetall, for turrets and tactical systems'," Stewart explained.
Stewart said the proposals from both states were "extraordinarily strong", but what pushed Queensland over the line rather than Victoria was multi-faceted; location, export and business opportunities with Singapore, design and manufacturing experience and the state's aerospace sector.
"We did down-select to Victoria and Queensland around this time last year and we looked at them, both of them, much more closely and on balance; we decided Queensland. And it wasn't just because of location, but we looked at things like, two of the three brigades that will be operating the LAND 400 vehicles are in Queensland. You then complement that with Singapore's investment into Queensland and there's going to be this concentration of military vehicles within Queensland that will need ongoing support, maintenance and upgrade," Stewart said.
Then defence industry minister Christopher Pyne and defence minister Marise Payne confirmed that Israel-based Rafael would provide the company's Spike LR2 anti-tank guided missile (ATGM) system for the Army's Boxer CRVs.
The Spike was selected after an independent comparative evaluation of potential missile options for the vehicle was conducted by the Defence Science and Technology Group. The missile will offer long range, light weight, high resistance to countermeasures and higher technical maturity in the anti-tank role.
"The Spike missile is the best anti-tank guided missile for the Boxer. It will give the Boxer the range and lethality it needs to fight and win the land battle," Minister Payne said.
Varley Rafael Australia has committed to building the Spike LR2 in Australia, employing up to 70 Australians directly with hundreds more in the supply chain.
Minister Pyne elaborated on this recent joint venture to deliver Australia's next-generation anti-tank system, saying, "This commitment by Varley Rafael Australia is a great vote of confidence in Australian industry, and will bring jobs and high-tech knowledge to Australia’s defence industry."