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IAN McPHEDRAN
July 06, 2009 12:01am

AUSTRALIA is set to lose $2 billion worth of hi-tech contracts as local companies and governments are reluctant to join the global supply chain for a new-generation fighter plane.

American giant Lockheed Martin this week will send out executives from its headquarters in Texas in a last-ditch attempt to find Australian firms willing to manufacture composite skins and other parts for the massive F-35 Joint Strike Fighter (JSF) program.

The Government has refused to assist companies wanting to join the JSF project. Senior Australian industry sources said there was a deep mistrust of defence companies within the departments of defence and industry, so ministers were not getting the full story.

“Unfortunately, the Government is not seeing the big picture in terms of hi-tech manufacturing skills,” one key player said. “It is enormously embarrassing how we are looking a gift horse in the mouth.”

Taxpayers will spend $16 billion to buy up to 100 of the new generation stealth fighters.

Prime contractor Lockheed wants local firms involved in aspects of construction. Those include composite skins, assembly of vertical tail fins, machining metal parts and electronics – creating hundreds of jobs. The potential through-life value for Australia in support contracts is up to $9 billion with more than 2000 technical and engineering jobs.

Nine countries have signed up to buy the JSF.

Estimates put the global buy at more than 3000 aircraft.

“This work is sole sourced to Australia, it is not a global competition but unless there is a decision in the next few weeks it will go elsewhere,” an industry source said. Several state governments have expressed interest, but none has committed funds to support their companies.

Head of Lockheed’s JSF project, Tom Burbage, was surprised by the lack of support after five years of effort by the company. “Our objective is a noble one,” he said. “Australia is not at risk of losing it to another country. They may be at risk of not having anybody that wants to do it.”

Initial potential partner Hawker pulled out in favour of civilian work and discussions with Australian Aerospace have bogged down.

Lockheed now is looking at WA company Quick Step Technologies. Unless a solution is found this year, Lockheed will go to its sub contractors in Britain, the U.S. and Europe to get the work done.

http://www.news.com.au/adelaidenow/story/0,22606,25737444-2682,00.html

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