Reece

Their report makes damning reading to all who have long suspected GAF of being about as dynamic and efficient as a Fleet Street print union. The committee found breaches of primary accounting practices, levels of inefficiency in almost every department, low staff morale and productivity, gross overmanning and inadequate accounting and managerial procedures at every level of the operation. Our full report on the findings of the committee appears elsewhere in this edition.

One recent example of inefficiency that could cost the taxpayer substantially in the longer term is the debacle concerning the poor performance in the manufacture of F-18 flap and flap shroud assemblies. Up to 900 of these could ultimately be supplied by GAF to McDonnell Douglas in the USA, a contract valued at upwards of $100m and one that Australia desperately needs. Unfortunately, the committee found that delivery performance on the units was below par. So bad in fact that several recent RAAF F-18s have had to enter flight test with US-built flaps and shrouds – a farce that is costing Australia dearly in both monetary and credibility terms!

The Department of Defence, who are now responsible for facilities like GAF via their Office of Defence Procurement have warned the GAF workforce that they stand to lose the entire F-18 shroud offset if their performance does not vastly improve. Furthermore the completed units had to be air freighted to the US, instead of being shipped by sea, in an effort to satisfy MDC requirements on the St. Louis production line. It is worth pointing out that MDC can more than ably manufacture all its own shrouds from in-house facilities and for Australia to win offsets such as this, it must perform to rigid international standards of competitiveness in terms of both quality and on-time performance. As we pointed out last issue in our fea1ure on offsets – they have to be earned in a very tough marketplace.

Over the years we at Australian Aviation have seen many instances of frustrating inefficiency at GAF. We might add that it is not always the direct fault of GAF but rather more a by-product of an archaic and inflexible system that instructs it to compete in an aggressive world while blindfolded by bureaucratic red tape that only government ownership can perfect.

Example: Throughout the Nomad programme, which incidentally was axed principally to make way for Wamira workload and F-18 offsets that we could now possibly lose, the factory was constantly held up by Canberra bureaucrats not approving the purchase of succeeding batches of components to ensure a smooth production routine. Normally, a company would pre-buy its major components, such as engines, avionics, components, etc in large lots to provide a firm forward price and minimal disruption, if any, in delivery. This is particularly important in the case of engines which constitute the single biggest expense in buying non-airframe hardware. This delay situation served time and again to lower morale at GAF, as the axing of the programme was always imminent in one form or another while at the same time it disrupted any attempt at efficient forward planning and usually meant that GAF had to pay a higher price than it might have had if forward purchasing by normal commercial standards had been employed.

Example: It’s 1982 and Nomad is axed, few cry but how do you sell the 22 aircraft still to be produced? Obviously, reduce the price greatly and have a ”fire sale” as all out-of-production aircraft tend to depreciate heavily. No, GAF goes against the counsel of its marketing people and actually increases the price by one-third result 22 unsold Nomads in long-term storage at Oatlands, all paid for by you and me! But there is more, due to the fiasco concerning the poor performance on the flap shroud programme, the DoD reported that there is a strong possibility of being declared an unsatisfactory supplier to the US Dept of Defence which would have immediate ramifications on our attempts to sell the Nomads to the US Coast Guard, the only serious buyer that is presently looking at them!

Example: This may seem trivial to some people, probably it is, but it does epitomise the entire thought process associated with a government-owned body such as GAF. At the Farnborough air show of 1978 GAF senior marketing people, along with the Dept of Trade, were hoping to use the opportunity to promote Australian wines which would be served to VIP guests, etc. Obviously a good PR exercise which would have added an extra touch of Australiana to the chalet and enhanced our sophisticated image· with potential clients. The Barossa Valley wineries were also keen to supply the wine at cost so everything was covered. Trade was all for it, GAF was all for it, the vintners were all for it. What happened – nothing, it was, to quote the frustrated words of a senior marketing executive of the time, “simply too hard to actually make happen, their budget was not available to be spent in Australia”, can you believe that! What transpired was that Australia finally ended up buying expensive foreign wines and missed a great promotional opportunity.

And so the story continues.

The report by the JCPA focuses on the problems afflicting GAF, it also offers some solutions though its principal recommendation is to make the organisation a statutory body that has to return an operating profit. With the taxpayer having already funded an investment of more than $50m in recent times for upgraded plant and equipment, this would not seem too much to expect. Our full report elsewhere in this issue makes for fascinating reading.