Defense contractors target Australia as it prepares to counter China

A Lockheed Martin Hercules airlifter at the Australian International Airshow and Aerospace & Defense Exposition on February 28, 2023.

Carla Gottgens | Bloomberg | Getty Images

As Australia, a close ally of the United States, prepares to counter China’s growing influence in the Indo-Pacific region, global defense contractors this week showcased advanced drones, long-range and military communications satellites at its biggest air show.

Companies are pushing for billions of dollars in procurement expected after Australia’s long-awaited Defense Strategic Review, or DSR, is released next month, setting out the force structure and equipment required at the course of the next decade.

Malcolm Davis, senior defense strategy and capability analyst at the Australian Strategic Policy Institute, said securing long-range strike weapons in three to five years should be the priority given China’s growing threat to Taiwan. and the strong likelihood that Australia will join the United States in a fight.

“When the DSR comes out, there will be diplomatic language that won’t necessarily target China by name, but I think everyone understands the reality that this has been driven by China, its rapid growth and military capabilities.” , he said on the sidelines. of the Australian International Airshow near Melbourne.

Like other countries, Australia is also increasingly focused on securing more local production and supply stocks after observing war-induced depletions in Ukraine.

The government’s aim is to “accelerate the procurement cycle” and act as quickly as possible once the review is made public, Defense Industry Minister Pat Conroy told reporters on Wednesday. . The federal budget is expected in May and the defense allocation is expected to increase.

At the air show, some defense contractors privately expressed frustration that the tight overhaul ordered last August, three months after a new centre-left government took office, had slowed down supply and delivery times.

Major decisions in the review’s toll include whether to order another squadron of Lockheed Martin F-35 fighter jets, up to four more Northrop Grumman MQ-4C Triton maritime surveillance drones, and a major contract for military satellite pursued by five groups, including Airbus and Boeing.

“Everyone reads the tea leaves, but we know a lot of capabilities will come out of this DSR,” said Stephen Forshaw, Airbus chief representative for Australia, New Zealand and the Pacific.

Australia ranked 12th in the world in military spending in 2021 with $31.8 billion, according to the Stockholm International Peace Research Institute. It is a major buyer of American equipment in particular, having operated alongside the United States in conflicts around the world. In 2021, it formed an alliance with the United States and Britain to buy nuclear-powered submarines.

The air show also highlighted how Australia’s small force is influencing American purchases. Australia has operated Boeing E-7A airborne early warning and control aircraft since 2009, as the first such customer. The US Air Force announced on Tuesday that it plans to buy 26 to replace its aging E-3s.

Boeing is also seeking to sell the Australian-developed MQ-28 Ghost Bat fighter-type drone to the US military, while the local branch of British firm BAE Systems this week unveiled plans for a smaller armed drone. also hopes to export.

Lockheed was selected last year alongside Raytheon Technologies to accelerate the manufacture and delivery of guided weapons to Australia.

In-country assembly, and eventually manufacturing, is central to the plan to build local stocks, said Ken Kota, vice president of Lockheed’s Australian Defense Strategic Capabilities office.

“The manufacture of guided weapons in particular has its own deterrent effect,” he said. “It’s very important for Australia to have that from a strategic perspective.”

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