APPENDIX BAE Systems

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APPENDIX

 

BAE Systems

 

Introduction

 

BAE Systems Australia (henceforth BAE Systems) is critical to the nation’s defence capabilities, providing cutting edge technological solutions and contributing to the country’s domestic security and military influence. BAE Systems Australia, a subsidiary of BAE Systems plc, is the largest Australian defence contractor.[1] BAE Systems Australia provides many products and services to the Australian Defence Force (ADF) including Fast Jet support, Military Flight Training, Autonomous Systems, Guided Weapons (naval air defence) and Communications, Command & Support.

BAE Systems Australia Holdings Limited is a wholly owned subsidiary of BAE Systems Plc, a United Kingdom-based defence, security, and aerospace company. Blackrock is one of the largest shareholders of the UK-based parent company, along with the Vanguard Group and Capital Research and Management Company, with the latter’s major shareholders including Vanguard, State Street and BlackRock (the “Big Three”).

This chart shows how BAE’s (UK) share price has surged in the last 3 years:



As part of the AUKUS trilateral agreement between Australia, the United Kingdom and the United States, it was announced in March this year that BAE Systems will play a key role in helping Australia to acquire its first nuclear powered submarines.

BAE Systems Australia is developing a new generation nuclear-capable hypersonic missile, Project Javelin. BAE Systems uses the facilities at Woomera Test Range in its weapons development projects in Australia.  BAE Systems Australia has a long history of weapons testing at Woomera in South Australia. The company's involvement in weapons testing in Woomera dates back to 1953, when two support teams from the United Kingdom's Bristol Aeroplane Company and the English Electric Company arrived in Adelaide to conduct early guided missile trials at the Woomera Test Range.

 

In 1960, the two British companies merged to form British Aircraft Corporation (BAC), which continued to conduct weapons testing at Woomera. In 1977, BAC was nationalized and renamed British Aerospace. British Aerospace Australia (BAe Australia) was formed in 1988, and it continued to conduct weapons testing at Woomera. Here are some of the controversies surrounding British weapons testing in Australia:

  • The environmental impact of the testing: Weapons testing at Woomera has had a significant impact on the environment. The testing has caused the release of pollutants into the air and water, and it has also damaged the soil and vegetation. The testing has also resulted in the deaths of animals, including kangaroos, birds, and reptiles.
  • The health impact of the testing: The people who live near the Woomera Test Range have been exposed to harmful pollutants as a result of the weapons testing. These pollutants have been linked to a number of health problems, including cancer, respiratory problems, and birth defects.
  • The lack of consultation with Aboriginal people: The Aboriginal people who live in the area around the Woomera Test Range were not consulted about the weapons testing. This has led to resentment and anger among Aboriginal people, who feel that their rights have been ignored.
  • The secrecy surrounding the testing: The Australian government has kept the details of the weapons testing at Woomera secret. This has made it difficult for people to understand the true impact of the testing.

The Australian government has taken some steps to address the concerns about British weapons testing in Australia. In 2017, the government announced that it would be phasing out weapons testing at Woomera. The government also said that it would be providing more information about the testing to the public. However, there are still concerns about the environmental impact of the testing and the health impact of the testing on the people who live near the Woomera Test Range. These concerns are likely to continue until the testing is completely phased out.

In 2000, BAE Systems acquired BAE Australia, and the company's weapons testing activities at Woomera were transferred to BAE Systems Australia. BAE Systems Australia continues to conduct weapons testing at Woomera today, and it is the largest weapons testing contractor in Australia.

In 2017, BAE Systems made a total contribution to Australian GDP worth AUD 1.2 billion and sustained 7,200 jobs.

On 29 June 2018 the Australian Government announced that BAE Systems "Type 26" had been selected to fulfil the Royal Australian Navy's Future Frigate requirement. The Government also announced that the ships were to be built in Australia with Australian specific modifications and would be named the "Hunter Class" in Australian service. The Hunter-class frigate is a future class of heavy frigates for the Royal Australian Navy (RAN) to replace the Anzac class. Construction was expected to begin in 2022, with the first of nine vessels to enter service in 2031.  The ships will be built by BAE Systems Australia at Osborne Naval Shipyard In South Australia. First steel was cut on prototype blocks in December 2021. This is to be followed this year with first steel being cut on blocks that will actually be used in ships of the class. However, as of 2022, the Hunter-class frigate project was running four years behind schedule and the cost of the ships was $15 billion higher than originally expected (the program was expected to cost AU$35 billion but rose to $46billion in 2020). These issues led the acquisition to be added to the Defence 'projects of concern' list.

On 6 September 2023, Australian Greens senator David Shoebridge referred the RAN's troubled Hunter-class frigate program to the National Anti-Corruption Commission in a potential test case of its powers to examine the integrity of the process that led to the selection of the British Type 26 despite its being only a paper design at the time. An auditor-general’s report, released in May 2023, unearthed several issues with the procurement process. This included that BAE’s frigate, which only existed on paper, was shortlisted in 2016 alongside two rivals despite being identified by officials as a high-risk option and that bureaucrats failed to keep key documents on their decisions that handed the contract to British shipbuilders with an untested design. The Hunter-class frigates are facing further uncertainty while the Albanese government waits for a review of the navy’s surface fleet of warships to be completed this month, with informed speculation that the number of vessels to be built in Adelaide may be reduced from nine to six. 


What is this to do with Lockheed Martin?

 BAE and Lockheed have a very recent history of sizeable joint projects in Australia:

  1. The US Joint Strike Fighter (JSF) Program in the US which commenced production in 2006. The resulting product is the F-35 Lightning II Joint Strike Fighter, a stealth fighter jet executed in three variants – the F-35A for the U.S. Air Force, the U.S. Marine Corps’ F-35B, and U.S. Navy’s F-35C. Lockheed Martin developed the chosen airframe concept and remains the prime manufacturer of the aircraft, engaging contract partners for integral systems.[2] That partnership extends to Australia’s acquisition of F-35 aircraft and operations now based at Williamtown, NSW.[3]

  2. BAE Systems Australia has secured a January 2023 contract (worth over A$1.6 million to BAE Systems Australia) with Lockheed Martin to activate an F-35 Asia-Pacific Regional Warehouse at its Williamtown aircraft sustainment operations.[4] In 2016 Defence advised that Australia's current F-35 Program total approved budget was AUD$17.1. Within that, AUD$2.6 billion was contingency funding and the remaining AUD$14.5 billion includes the cost of the 72 F-35A aircraft, the support systems, training, weapons, and infrastructure, but not sustainment costs.[5]

  3. In April 2023 BAE Systems announced that it will produce Block 4 electronic warfare systems for future Lot 17 F-35 Lightning II fighter jets under a $491 million contract deal with Lockheed Martin.

  4. In May 2023 it was announced that BAE Systems Australia and Lockheed Martin had signed a Combat System Integration (CSI) Collaboration Agreement (CCA) to support CSI in surface vessels fitted with the US Navy’s Aegis combat management system – produced by Lockheed Martin.

In the UK:

  1. In April 2023 Lockheed Martin Corp and BAE Systems Plc (UK) won a F-35 jet maintenance support contract worth 161 million pounds ($200 million), creating 140 jobs in Britain.[6]

  2. In June 2003 the Lockheed Martin Corporation and BAE Systems, Europe's biggest military company, agreed to work together to develop systems for defending against missile attacks. Lockheed and BAE already work together on the United States missile-defence program, and both are on a team studying the feasibility of a multinational missile-defence system for NATO.[7]

 

Similar joint contracts and/or partnerships occur in the United States, Taiwan, Japan and Canda, amongst others.  Both Lockheed Martin and BAE Systems have relocated the centre of their Asian operations to Japan “as Tokyo prepares to sharply boost defense spending in the face of East Asia's worsening security situation.”[8] Japan's defence ministry made a record spending request on 31 August 2023 of 7.7 trillion yen ($52.67 billion), for fiscal 2024, the latest step of a plan to boost defence spending by 43 trillion yen over five years[9]. This may also be to distance them from Singapore which has longstanding and substantive relations with China. China will conduct joint military training with Singapore from end-August to mid-September 2023 based on their annual plans, the Chinese defence ministry said in a statement on Monday (28 August 2023). The joint training will be held in Singapore and covers courses from close combat to hostage rescues, the statement said, adding it will enhance cooperation between the two armies.[10]

BAE Systems have now announced (1 September 2023) the establishment of armament manufacturing in the Ukraine. The British defence company BAE Systems is setting up a local entity in Ukraine and has signed deals with its government to help ramp up its supply of weapons and equipment. BAE said it would work directly with Kyiv to explore potential partners for a plan to ultimately produce 105mm light artillery guns in Ukraine and to better understand Ukraine’s requirements. As the UK’s biggest defence contractor, BAE has manufactured much of the equipment that Britain and other governments have provided to Ukraine as it fends off Russia’s invasion. Britain is a key defence supplier for Ukraine and in May became the first country to start supplying Kyiv with long-range cruise missiles. Other western defence companies have been weighing opportunities to make weapons in Ukraine against the possible security risks.[11]


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