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Aviation History
1986
1986 - 0085.PDF
The McDonnell Douglas F-18 Hornet was ordered at an opportune time for Australian industry for all the industry, GAF cannot afford to hold back. The Government understands this and is attempting to find ways to liberate the company. Though no direct confirmation of Government strategy on the future of GAF is given, rumours abound. A distinct possibility is that GAF, while remaining Government- owned, will be given greater independence, and be run, as one industrialist puts it, as a kind of "statutory corporation". It would take about two years to get an inde pendently managed and self-supporting GAF according to David Main, GAF's project manager on the F-18 Hornet programme. Another possible solution to the GAF conundrum would be privatisation and merger with the HdH/CAC team. Of the two this is the most unlikely. Privatisation is an uncomfortable proposition for the governing Labour party, although the Government welcomed wholeheartedly HdH's introduction of Australian equity. But industry also recoils from a merger of the three manufacturers. As Peter Smith explains, HdH would not be interested in taking over GAF and the financial and overmanning problems with which it is currently saddled. And in the long term, HdH sees it as undesirable to have the aerospace industry merged into a single organisation. "There must," says Smith, "be an element of competition between the two. Not head to head competition, but a certain amount on the margins." The history of Australia's basic trainer, the A.IOB, shows the sort of problems that a merged industry would invoke. When the Royal Australian Air Force put out its requirements for a new basic trainer to replace the ageing CT-4, the three compa nies got together to produce an all- Australian solution. The RAAF required FLIGHT INTERNATIONAL, 4 January 1986 69 aircraft, at an estimated total project cost of A$150 million. The three compa nies formed the Australian Aircraft Consortium (ACC) to produce what began life as the A.10 Wamira I side-by-side basic trainer, the first military aircraft to be designed in Australia for nearly 30 years. Some four years later the trainer programme has been transformed. Once a one-horse race, subsidised by Govern ment, it became a full-blown international competition, with the Australian industry pressed to compete with overseas compa nies with considerably more experience in design, development, production, and marketing, and with orderbooks to fall back on. The Government sat down in Novem ber last year to weigh the Pilatus PC-7, the Pilatus PC-9, and the competitively reconfigured A.IOB managed by HdH holding a 60 per cent share and with GAF subcontracting with a 40 per cent share. Shorts of Northern Ireland, offering the Tucano, withdrew from the competition in September. Praise and pitfalls In August 1984, Senator Button praised industry for forming the Australian Aircraft Consortium. "The consortium approach does have problems," Button warned, "but it allows firms to pool their skills and resources, accepting risks that would otherwise be unacceptable." For all the pitfalls that the consortium approach did provide, it gave industry the oppor tunity to pull together and begin the vital process of rationalisation. The big hurdle, as Button expressed it, was that Austra lian industry was fragmented with many small firms. The problem that soon emerged from the consortuim approach was that there was no one single authority leading the programme. Management decisions were split and shared, and the RAAF had a direct voice in the development of the aircraft. Throughout, the close involve ment of the Service in the project meant that the level of detailed design was constantly being raised without, says Smith, clear indications of the cost consequences. Cost and time schedules slipped, and a Government committee reported that the estimated total project cost had risen from the original A$150 million to A$380 million. By the time the Government decided to review the entire project, the Government, the RAAF, and industry were equally relieved that the ball had been stopped from rolling away with itself. "The programme really did need review," says one HdH spokesman. The Government wanted a single prime contractor to manage the project and guarantees of cost control. The HdH/CAC merger, which was coincidental with the trainer review, meant that HdH now controlled two-thirds of the trainer consortium. The Government invited HdH to take control, to offer a fixed price for the 69 aircraft and to compete against Pilatus and Shorts. Tenders were re-bid on September 16, and from that time Canberra was besieged by lobbiers. A decision was expected by mid-November, but on November 26 Smith and the HdH chairman, Mr R. Kingsford-Smith, were summoned to Canberra to confer with Defence Minister Kim Beazley. On the previous day Smith explained the reasons for the meeting to Flight. "There are still some mis understandings on cost," he said, adding that the Minister wanted proof that HdH could "fix-price a contract of that size". The trainer presented Kim Beazley with something of a problem. He is committed to seeing industry advanced, but he has also to be mindful of priorities in a tight defence budget. The RAAF was eager to seek as cheap a solution to the trainer programme as possible, so that funds could be saved for priority programmes like the purchase of AEW and air-to-air refuelling. If the cheapest solution was to be found from the three contenders, then the Pilatus PC-7 was ideal for the RAAF's next trainer. If a more advanced type was sought, then still the balance could have swung in favour of Pilatus. Latest unofficial estimates of the total cost of the project put the PC-7 at A$170 million, the PC-9 at A$240 million, and the A.IOB at A$270 million. And the PC-9 had been gaining popularity within the DoD because of the attractive offset package, Australia's A.IOB basic trainer—almost certain death at the hands of the PC-9
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