Defence manufacturing suffers under high dollar; Thales to sack 60 Bendigo workers

Defence manufacturing has always been considered a steady, if not tight niche market for local industry; however last week’s announcement that at Thales will sack up to 60 employees at its Bendigo plant brings forth the reality that defence manufacturing is not immune to market forces as the industry has hoped.

According to Australian Manufcatruing Worker’s Union (AMWU) regional organiser Damian King, the number of redundancies at Thales Bendigo represented nearly 20% of the 350 strong workforce.

King blamed the job cuts on the Federal Government decision to source military utes from a German supplier rather than Thales, which largely stemmed from a high Australian dollar.

“These redundancies are the direct result of the Federal Government decision in December last year to buy all the new military utes from a German supplier rather than award Thales a significant amount of this work,” King said in a statement released last week.

“Thales missed out on this ute contract, not due to the quality and performance of the Bendigo vehicle but due to the high value of the Australia dollar versus the low Euro.”

Over the next few weeks Thales’ Bendigo facility will operate at a lower production rate than in the past. This has meant that it was necessary for the defence equipment and machinery manufacturer to downsize its workforce to meet reduced production volume.

The change in work flow and workforce was not unexpected, Thales said in a statement. The company has for foreshadowed the change in workload at its Bendigo facility in December.

King accused the federal government of taking the cheaper option instead of going for an “Australian company with a proven safety record”. As a consequence, about 60 jobs all up; 45 from the shop floor and another 15 in engineering, administration and technical areas are expected to go, he said.

Federal member for Bendigo Steve Gibbons was quoted by the Bendigo Advertiser saying that the redundancies were a direct result of Thales being overlooked for the Bushmaster contract.

“Winning the Land 121 Phase 3 contract would have meant around 200 Thales Bushmaster Utes manufactured at the Bendigo plant,” he told the the Bendigo Advertiser.

“The Land 121 Phase 3 contract, awarded to the German company Rheinmetall MAN, would have gone a long way to filling the gap between the conclusion of the current Bushmaster personnel carrier production and the start of the Land 121 Phase 4 Hawkei PMV-L program expected in two to three years”.

AMWU said it will hold discussions with Thales over the next couple of weeks to try to minimise the final number of redundancies at the Bendigo factory. Topics up for discussions will include the future build rate for Bushmaster vehicles bringing some sub-contracted work back in house and the possibility of non-vehicle engineering work.

King said the union will be seeking to learn what government expects the build numbers and rates for Bushmaster vehicles over the next two to three years will be, as this will also have an impact on future employment numbers at Bendigo.

In December last year, the government announced that a different contract – for a new generation of Protected Mobility Vehicles – had been won by the Thales Bendigo site. The contract was said to secure more than 200 jobs for the rest of the decade.