HO Thales SA

MELBOURNE, Australia—Australia will buy a fleet of Hawkei light-armored vehicles for its army from French aerospace and defense contractor Thales SA in a 1.3 billion Australian dollar (US$916.4 million) deal.

Thales on Monday said it had signed a supply deal with Australia's government for 1,100 vehicles and more than 1,000 trailers.

Australia is seeking to modernize its military to cope with potential threats in the Asia-Pacific region and Middle East. Talks over a binding deal have been continuing since late 2011, when Thales was named as the preferred bidder for a contract then estimated to be worth A$1.5 billion.

The selection of Thales over rival contractors, including from the U.S., for the light-armored vehicle contract is a boost for Australia's defense industry as the vehicles will be built at the company's factory in Bendigo, a former gold-mining city nearly 100 miles from state capital Melbourne.

Australia's center-right government has been under pressure to do more to secure local defense jobs, after some missteps by senior lawmakers added to unease about rising unemployment nationally following the end of a decadelong mining boom. A former defense minister, David Johnston, was dropped from the government late last year after he disparaged the ability of thousands of workers at naval shipyard ASC to compete for warship and submarine contracts.

Approval of a home-built design for the Hawkei vehicles will buoy the hopes of shipbuilders that Malcolm Turnbull, who ousted Tony Abbott as prime minister and leader of the Liberal party last month, will prioritize local jobs over foreign shipyards, while also helping to deliver on a key conservative promise to boost military spending to 2% of GDP within a decade.

Mr. Turnbull said the order will create 170 jobs in Bendigo and another 60 in the state.

Thales said a 3½ year production phase for the vehicles is scheduled to begin from mid-2017, with the first deliveries planned toward the end of that year.

The powerful 4x4 vehicles, which can be adapted for different missions, will offer soldiers on operations increased protection and mobility over bulkier vehicles currently in use, Thales said. They will be the only vehicles that can be transported by Australia's military helicopters.

Write to Robb M. Stewart at robb.stewart@wsj.com and Rob Taylor at rob.taylor@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 04, 2015 23:25 ET (03:25 GMT)

Thales (EU:HO)
Historical Stock Chart
From Mar 2024 to Apr 2024

Thales (EU:HO)
Historical Stock Chart
From Apr 2023 to Apr 2024