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Aviation History
1988
1988 - 0427.PDF
So the biggest brace of ventures the industry has ever seen outside the F-18 project are on hold. Their importance is that they would give twice the length of production that is available from any military project and steady cashflow right through those 20 years. The industry would be close to complete stability with these and a smaller aircraft project. The aircraft industry today relies on producing components for overseas aircraft and on the F-18. When the F-18 project was finalised five years ago, the Minister for Defence Support of the day, Mr Howe, announced that local industry would benefit by A$600 million. Much of this, of course, would go to the avionics and allied industries, but the cashflow for the three aircraft makers would be sufficient for Canberra to invest A$115 million in new industry infrastructure and equipment. The GAF (that is, the Government) invested A$8 million in a chemical milling plant unique in Australia as the main item in a A$57 million update for the project. As prime contractor, that was only to be expected. CAC had to provide a A$7 million test cell for the GE F404 engine, which was largely its responsibility. At HdeH a combination of Government and company investment for F-18 equipment exceeded A$10 million. HdeH actually has a wider spread of contracts than the other two organisations, dealing not only with CAC and its successor, but also with ten US contractors. It should be explained here that much of the more costly equipment used by the three Australian aircraft makers since the Second World War has been Government- owned and was supplied under rental agreements to be used for agreed work. In the last few years the firms concerned have bought out some of this equipment. Nearly half a century of this sort of system has prepared Australian aircraft firms for the complexity of the F-18 contract system with the USN. As the F-18 project progresses, the firm must bid each year for the continuance of their contracts against American and other foreign firms, while new production opportunities appear. Asta recently secured an A$8 million order for F-18 wing flaps, some of the 55 shipsets to be sent to McDonnell for use there. Asta's problem is to secure sufficient work abroad outside the Hornet project to keep these facilities working at the proper capacity; at the moment they are not even being half used. Asta also recently signed its first Airbus Industrie contract with BAe, for 300 ship- sets of wing fixed shrouds for the A320. HdeH is a fiery seeker of overseas contracts, as shown by its success with Boeing some time ago when Boeing had trouble with its American manufacturer of complete leading-edge flaps for 747s. HdeH met the competitive price Boeing laid down and HdeH last year delivered the first shipset ahead of time. The Australian aircraft industry today depends for its daily bread and butter on what its frantic sales teams can secure in the way of component contracts for foreign aircraft, with AIP (Australian Industry Participation) contracts provid ing steady income over a number of years. When the RAAF or a major airline orders a new aircraft, the foreign manu facturer must agree to give Australia up to 30 per cent of the value of the order to Australian industry. The 30 per cent is a target, but the public servants concerned in Canberra play a tough game. The foreign manufacturers find, however, that these public servants tend to change the basis of discussions, often at a moment's notice. AIP does not provide the whole of the 30 per cent solely for the aircraft makers, as much of the work goes to the avionics industry and other technical equipment makers. The tendency now is to insist on transfer of technology, as with the F-18. (There is even a tourism encouragement element in the Hornet agreements.) A fundamental problem faced by all three parties is the ability of the Australian aircraft makers to cope with the amount of work that may be available, a situation which foreign manufacturers have not been slow to identify. Having been concocted by well-meaning politicians and public servants, the system has some strange anomalies. Because F.50s are not to be operated on major routes, Fokker has no problem about AIP content of that contract at all. No operator of non-major routes, such as a commuter airline, is involved with AIP. BHP could sign a contract for 50 Canadair Chal lengers and not a cent in AIP would be involved, as these aircraft are not oper ating for hire, nor, as in the case of the F.50, are they subject to Government guarantees for the operator's payments to the manufacturer. Where the Government can squeeze the pips is when one of its departments wants to order aircraft. When Fokker sold F.28s to what is now the Department of Trans port early in the AIP story, Fokker had to give the GAP a sole-source order for flaps that has only recently been completed— sole-source for the lifetime of the prod uction line. Fokker is generally regarded in Australia with respect and affection. Government policy is now quite candidly aimed at forcing foreign aircraft makers to increase the pace of their flow of technology into Australian industry. Salesmen will face increased pressure in this area of agreements. Meanwhile, the three Australian aircraft makers continue to invest in new equipment, to the degree that Lockheed officials, for instance, have said that some of the Australian equipment is more modern than some of their own. The results are worthwhile: in the past 15 years HdeH alone has signed contracts with Boeing worth a total of A$500,000, and Boeing is considered to be the tough est customer of all. The greatest optimist is the lively Senator Button, Minister for Industry, Technology, and Commerce, who says that the aerospace industry, including the three aircraft makers, should increase exports to a peak of A$l • 4 billion by 1995. But he expected most of the growth to be seen outside the airframe and aero-engine sectors. Senator Button particularly wants foreign aerospace firms to set up in Australia, using the AIP bludgeon to achieve that end. In contrast to former governments, which rejected oppor tunities to participate in the original F.15 project, refused Fokker's offer of an Australian F.27 production line, and in general behaved like British politicians whenever a new aircraft venture turned up, Button's intentions, at least, are heart ening. Just how far Australian politicians will go in helping the airframe/aero-engine makers is hard to judge. But one looks back to the ill-fated GAF Nomad, since abandoned by Cabinet decision. It is a matter of historical record that the Portuguese would have ordered 200 en bloc to help them stay in Angola and Mozambique, and South Africa was also talking about 100 to help damp down Namibia. If politics had not prevented those sales, Australia would have had for the first time a home-grown transport with a well-filled orderbook. • What might have been: the almost-completed prototype of the indigenous A.10, which was dropped in favour of the PC-9 FLIGHT INTERNATIONAL, 20 February 1988 ,15
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