Australia's Defence, Science and Technology Organisation (DSTO) has proposed a domestic "mega-merger" of international defence and aerospace firms operating in the Australian defence market. The proposal has been put to Australian Defence Industries, Boeing, Lockheed Martin, Raytheon Systems, Tenix Defence Systems and Thomson-CSF. All six are being asked to respond to an issues paper within the next two months.
The proposed merger would see the creation of a joint venture company that would receive preferential treatment on all Australian defence systems projects, including the Project Air 6000 replacement for Royal Australian Air Force General Dynamics F-111s and Boeing F/A-18 Hornets.
The DSTO is not usually involved in formulating Australian defence industry policy. It admits that the proposal is deliberately provocative and intended to increase international industry co-operation in the Australian defence business environment. The organisation has warned before that Australia lacks the level of advanced military systems capability to support projected enhancements to the Australian Defence Force's war-fighting technology.
The six companies have greeted the proposal with caution, officials from two of them accepting that the move aims to spark debate, but expressing concern at the level at which the paper has emerged, and the request for detailed responses. Government policy has previously steered away from attempting to mandate industry structures.
Source: Flight International
