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US Firms Expand Presence in Australia

Jun. 2, 2014 - 03:45AM   |  
By MARCUS WEISGERBER   |   Comments
Australian Footprint: After purchasing Qantas Defence Services in February, Northrop Grumman inherited maintenance work on C-130H Hercules aircraft.
Australian Footprint: After purchasing Qantas Defence Services in February, Northrop Grumman inherited maintenance work on C-130H Hercules aircraft. (Qantas Defence Services)
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WASHINGTON — As the Pentagon shifts its focus to the Asia-Pacific region, Northrop Grumman is expanding its footprint in Australia, which company officials want to make a hub for its logistics business.

Northrop purchased Qantas Defence Services in February. Through the purchase, the US-based company acquired the maintenance and logistics work already being done by Qantas, allowing it to diversify its program portfolio and expertise.

“There’s a couple of ways to survive in a global industry,” Steve Hogan, Northrop’s vice president and general manager for its Integrated Logistics and Modernization division, said May 28 at the National Press Club here. “You can try to bring a capability, one individual at a time. You can try to partner with a particular company or activity in a particular area of the country, or you can expand through acquiring capabilities in the areas you want to be in.”

Northrop inherited a Royal Australian Air Force contract to perform logistics work on Lockheed Martin C-130H transports, Airbus A330 tankers and Boeing 737 and Bombardier CL-604 VIP aircraft.

Moreover, Northrop is looking to expand its maintenance operations in Australia and throughout the region.

Australia is buying F/A-18 Super Hornets, EA-18G Growlers, F-35 joint strike fighters and MQ-4C Triton UAVs. Northrop builds components for all of these aircraft and is the prime contractor for the Triton. Having a larger presence in Australia will allow work to be done there.

“We’re cutting down on logistics time between sending boxes all the way back to the United States that could be repaired forward in that capability,” Hogan said.

Northrop wants to bring its Large Aircraft Infrared Countermeasures program — a defensive system used on C-130 aircraft, which are widely dispersed — to the region, Hogan said.

Beyond Australia, Northrop hopes to use the facilities there to service equipment in other parts of the region, Hogan said.

Northrop is not the only US company expanding its presence in Australia. Exelis announced in late May that it would establish an Asia-Pacific regional headquarters in Melbourne. The company plans to build a research-and-development, testing and systems integration facility there that is expected to create more than 60 new jobs.

“The new regional presence in Australia will ensure greater in-market resources to better meet evolving defense and security needs and provide in-country sustainment support,” the company said in a May 21 statement. “Additionally, it will further the company’s continued research and development of emerging solutions in the areas of critical networks, ISR analytics and electronic warfare for the global aerospace, defense and resource industries.”

In January 2013, Exelis purchased C4i, an Australian company that specialized in IP-based secure defense communications.

Seeking US Partners

US companies are not only looking to Australia for potential business. Australian companies are looking to become suppliers for major US companies.

Ric Smith, a former Australian defense secretary who chairs the state-run Victoria Defence Council, led a group of small Victoria-based companies to the US last month for meetings with large US prime contractors, including Northrop Grumman, Honeywell, General Dynamics and Lockheed Martin. The purpose of the trip was to familiarize American firms with the Australian companies and look for supply-chain partnering opportunities.

“The global supply chain is alive and well,” Smith said May 22 while in Washington. “In effect, in Australia we’ve chosen to support that rather than to require offsets in many of our major purchases. The belief [is] that this is longer term and better for the economy, more sustainable, grows the competitive companies and doesn’t suddenly come to an end when the project comes to an end.”

Some of the companies Smith’s group is pitching already perform tooling and composite work for US-based firms, such as Boeing and Lockheed Martin, Smith said.

Some of the companies — such as Marand, which supplies the F-35 joint strike fighter vertical tails to BAE Systems — are experienced in the field, while others are new to the market.

The group is also encouraging US prime contractors to expand their presence in Australia’s southeastern state.

Many of the small companies have both commercial and defense business. For example, Nezkot does composite work for track bikes and builds flaps for Boeing’s 787 Dreamliner. It also does work on Boeing’s F/A-18 program.

“Their company has produced bicycles that have won more Olympic medals than any other brand, but they’re doing this work in defense as well,” Smith said. “It’s typical of where I think industry is going.” ■

Email: mweisgerber@defensenews.com.

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