Rheinmetall wins $5bn contract, jobs on the way

The Boxer is a state-of-the-art wheeled vehicle whose modular design permits a wide variety of mission specific configurations. Image: Rheinmetall

German contractor Rheinmetall has won a $5 billion contract to build more than 200 light armoured vehicles for the Australian defence forces at its new facility in Ipswich, west of Brisbane.

The Federal Government estimates the acquisition will create 330 jobs in Queensland, along with 170 roles in Victoria and 140 in New South Wales.

Announcing the contract at the Enoggera Army Barracks in Brisbane this morning, Prime Minister Malcolm Turnbull said the project would create up to 1,450 jobs over the 30-year life of the vehicles.

“Australian industry will secure two thirds of the total $10bn investment required to acquire and maintain the fleet,” he noted.

Queensland’s State Development Minister, Cameron Dick, said the acquisition was great news for the state.

“This contract will result in a $1 billion benefit directly to the Queensland economy and it’s not just building this equipment, it’s about building a manufacturing base for Queensland so we can win more contracts in the future, including more export-orientated contracts.”

The announcement follows a three-year tender and testing process by the defence ministry, where Rheinmetall’s Boxer Combat Reconnaissance Vehicles (CRV) beat off competition from its British rival BAE Systems, which was set to build the light armoured vehicles in Victoria.

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Rheinmetall will supply its Boxer CRV vehicle to replace the Australian army’s ageing light armoured vehicle fleet. The CRVs will be used by the defence force for a range of missions, including enforcing regional stability and peacekeeping to high-threat operations.

Under the company’s offering to the Commonwealth, Rheinmetall will build a majority of the vehicles in Queensland. The first 25 vehicles will be built in Germany in a move Rheinmetall says 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.

While the first 25 vehicles are being built overseas, Rheinmetall will establish its manufacturing hub, the Military Vehicle Centre of Excellence (MILVEHCOE) in Brisbane.

Rheinmetall has partnered with several Australian SMEs for the project, including Melbourne’s Heuch, Cablex and Tectonica Australia, Burnie-based Direct Edge, Brisbane-based G&O Kert, Melbourne/Brisbane-based Hilton Manufacturing, Perth-based Hoffman Engineering, Melbourne-based Nezkot Precision Tooling and Engineering, Adelaide-based Plasteel and Adelaide-based Redarc.

Rheinmetall has also partnered with BlueScope and Bisalloy Steel, which will see the companies deliver thousands of tonnes of armoured steel for the LAND 400 Phase 2 project.

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