Recce

This aside, the lead up to the F/A-18 Hornet program saw an investment in plant and infrastructure by Government that transformed the then GAF, CAC and HdH into highly competitive aerocomponent manufacturers able for the first time ever to bid competitively against worldwide competition for a piece of the world’s massive aircraft market-estimated to be worth around $90 billion annually over the coming decade.

The Hornet program thus was the catalyst that made us competitive whilst offsets fed industry contracts that helped keep them active as major military programs inevitably wound down. With the coming of domestic airline deregulation late last year though, something had to change as offset provisions no longer applied to airliners imported for use within Australia. Thus only Qantas and the ADF are now offset applicable and only by companies which do not sign ten year agreements with the Federal Government under the terms of the previously mentioned Market Access Arrangements.

Already Both Boeing and Airbus have come to the party while the three major engine manufacturers, GE, Rolls and Pratt & Whitney, are expected to formalise major agreements before year’s end. McDonnell Douglas, with an excellent track record on the military side has unfortunately had little joy in placing its airliners into local livery, though if and when it does it will certainly also enter into an MAC.

Australian industry is already well represented aboard the world’s major airframe programs. HdH builds all the 747 leading edge slats, 757 wing ribs and 737 ailerons. With the latter ramping up to a 21 per month output, the enormity of this contract alone is something to behold. Hawkers also are responsible for the wing ribs (via BAe) for the A300, A310 and A320 in addition to flap access panels for the A310 and landing gear fairings for the A320. HdH will also build the wing ribs, winglets and wing to fuselage fairings for the A330/340. They also build elevators for all MDC MD-80 jetliners. Around two-thirds of the company’s total output is exported. Aerospace Technologies of Australia, the other major player, builds the 757 composite rudder and Krueger flaps for the 747 in addition to being a joint partner with Aerospatiale on major components for the Airbus A330/340 undercarriage assembly unit. The latest Boeing contracts will see ASTA being responsible for the production of the massive Boeing 777 rudder while HdH take responsibility for the equally massive (nearly the area of a 737 wing!) horizontal tailplane. Both feature heavily into composites and open the door to new areas of expertise previously only the domain of the major manufacturers.

Furthermore, according to the Association of Australian Aerospace Industries, the two industry leaders presently subcon- tract out around 30% of their contract value while this is expected to increase to closer to 40% as they expand. This flow-on effect has positive implications for the dozens of smaller spe cialist firms that have also built up a degree of aerospace expertise over the past decade. .

However, getting aboard the big international programs is a very risky business due to the large degree of up-front cash required and the traditionally long pay back periods associated with aerospace manufacturing. HdH know this full well via their gutsy involvement as a major partner with McDonnell Douglas Helicopters on the promising MDX helo program. The $100m invested now for instance, won’t turn a profit till nearly a decade out. That’s the way it is and that’s the way it always has been due to the long lead times required to take a major project from concept to operational service.

What the AAAI continues to campaign on, on behalf of one of the very few efficient and export orientated elements of Australia’s often tardy manufacturing base, is that the Government should provide soft long term loans to enable companies in this sector to be able to ‘buy a piece of the action’ under the terms of joint venture partnerships on the major international programs. This is, for instance, no different to what is done in almost every other country and is why Spain, Brazil, Indonesia, Japan and dozens of other nations now have very strong aerospace manufacturing sectors.

Government has already moved encouragingly to establish the recently announced (refer p. 8 May 91 AA) Aerospace Structures Co-operative Research Centre with a $21m grant spread over seven years. This teaming of the best brains within the Australian aerospace manufacturing and R&D sectors should make quite a difference to the overall long term expertise levels of AAAI member firms that hopefully will be translated into the ability to gain many more high value contracts against fierce international competition.

However, the fact remains that to get aboard a major project with a viable commitment takes hundreds of millions of dollars. As is done abroad as ‘ops normal’ behaviour, it is time the Federal Government also enabled our major players the financing options long available to their international competitors.

After all, when it can happily finance an annual $4 billion deficit by Australia’s hopelessly inefficient rail system it should be able to invest what is comparably a pittance in an industry sector that is not only totally export orientated but at the very leading edge of technology.