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production was consecutive.
Additionally, the numbers in mid-2014 are not what they were in late 2013.
There won’t be 1,100 vehicles procured by LAND 400, not now. When the
requirement to replace the Bushmaster protected mobility vehicle (PMV) capability
was removed from the project’s scope, the total number of vehicles fell sharply
along with it. It is now anticipated that about 620 vehicles in total will be sought:
around 150 CRV, 450 IFV and perhaps some 20 manoeuvre support vehicles.
In determining an appropriate level of involvement for Australian companies in
the supply of major sub-systems and components for the CRV production phase,
if we briefly analyse the kind of local industry involvement which has developed
from a procurement program for the type of vehicle likely to be sought to fulfil the
CRV requirement, the supply of Patria Land Systems’ Armoured Modular Vehicles
(AMV) to Poland is instructive.
Several Polish companies have secured licensing and production agreements
whereby approximately 90 per cent of components for the Rosomak vehicle family
(local version of the AMV) are manufactured by Polish companies, including OTO
Melara 30mm gun turrets.
These agreements, however, were secured on the back of an initial 690 vehicle
order, which included no less than 359 30mm two-man turrets. Contrast this with
the 150-unit CRV order and it is evident that deep and sustainable immersion of
Australian industry in the build and/or assembly of the CRV will be a significant
challenge. Economies of scale matter.
Even with a full spares, training and support package, 620 odd vehicles should
not absorb $10 billion ($16 million per vehicle), regardless of how much the
LAND 400 platforms are talked up as complex “systems”.
As an example, Croatia procured 126 8x8 AMV from Patria in 2009 for
approximately 200 million Euro (AUD $296 million). In October 2013, Poland
ordered an additional 307 AMV for USD544 million (AUD $588 million), around
120 of which will be the IFV variant equipped with a 30mm gun turret – a
configuration similar to what is indicative of the CRV capability.
CrunChing the numbers
Clearly LAND 400 has no hope of replicating the level of employment of the local
automotive industry, where around 220,000 vehicles were produced in Australia
in 2012, employing 45,000-50,000 across the sector (car makers and supply
It is noteworthy that under Project LAND 121 Phase 4 Thales Australia is
planning for full rate production of some 1,300 Hawkei PMV-Light spread over 4
or 5 years to create 700-800 jobs in total, including around 350 at the company’s
Bendigo facility. In scale, the CRV build phase for 150 vehicles will be one eighth
that earmarked for Hawkei. Whilst direct comparisons are difficult at this stage,
the disparity in vehicle numbers produced between the two projects suggests that
it might be fortunate if LAND 400 generates 200 jobs.
Citing industry-agreed estimates that each automotive manufacturing job
sustains three subsequent supply chain positions, the creation or retention of
500 or even 600 supply chain jobs may well be a good outcome for LAND 400.
The small CRV order will also shorten the duration of the manufacture/assembly
phase and it is most unlikely those same 200 jobs will still be in place when
production of the IFV rolls around post 2020, even if the CRV and IFV prime
contractor end up being one and the same. The contract and manufacturing/
delivery phase is so far into the future and thus subject to a myriad of changes,
fluctuations and schedule slippage that for business, and especially SMEs, it is
too far into the future to be considered an actual plan.
Full rate production of the small CRV order may not be at a pace which
the automotive industry supply chain is accustomed to and may be slow by
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