An agreement between Australia and Germany to build Rheinmetall Boxer armoured vehicles for the German Army at Ipswich in Queensland has been thrown into doubt. It follows the German company’s failure to win a major Australian Army contract.
Rheinmetall Defence Australia had offered its KF41 Lynx for Australia’s Project LAND 400 Phase 3 infantry fighting vehicle requirement, but was beaten out by South Korea’s Hanwha Defence Australia with its AS21 Redback vehicle.
In 2018, Rheinmetall won the LAND 400 Phase 2 requirement to supply 211 Boxer 8×8 combat reconnaissance vehicles to Australia, with 186 of the Boxers to be built at the company’s new Military Vehicles Centre of Excellence (MILVEHCOE) at Ipswich. If successful on Phase 3, it planned to also build the Lynx vehicles at Ipswich.
Before the Phase 3 decision was handed down on 27 July, Germany held talks with Australia about the possibility of building 100 Boxers – to be called Heavy Weapon Carrier in German service – in Australia for the German Army.
Due to the ongoing war in Ukraine, Germany – like many European nations – has been ramping up its military capabilities, and is lacking production capacity and manufacturing workers at many of its own facilities.
In March, Germany’s Parliamentary State Secretary to the Federal Minister of Defence Thomas Hitschler visited the Australian Army’s 2nd/14th Light Horse Regiment which operates the Boxer at Gallipoli Barracks in Brisbane. On 23 March, he signed a Letter of Cooperation on Boxer Heavy Weapon Carrier vehicle production with Federal Minister for Defence Industry Pat Conroy in Canberra.
“We are excited about the prospect of Boxers for the German Army being built in Brisbane, using suppliers across Australia to assist in the production,” Mr Conroy said in a 23 March release.
In July during a visit to Germany, Prime Minister Anthony Albanese confirmed an in-principle deal was to be signed on 10 July. Later that month at MILVEHCOE, the Chief of the German Army Lieutenant General Alfons Mais and Germany’s Head of Equipment Department Ministry of Defence, Vice Admiral Carsten Stawitzki toured the facility and test drove an Australian-built Boxer while visiting for Exercise Talisman Sabre.
But following the LAND 400 Phase 3 decision, it was speculated Rheinmetall may not go ahead with the German build at MILVEHCOE, although Defence officials and Australian ministers remained confident it would proceed.
Now it appears the deal may be in jeopardy. The ABC reported on 7 September that Germany’s Business Insider was quoting government sources in Berlin who said “the procurement of new Boxers planned jointly with Australia has been stopped”.
The ABC report said despite the signing of a letter-of-cooperation for the planned production of the German vehicles in late August, Australian industry sources said negotiations with Berlin had been “suspended”.
On SKY News on the weekend, Defence Minister Richard Marles described the report as “speculation”, and said the government would “continue to work with Germany in relation to the provision of those vehicles”.
He said when companies bid for a defence contract, they knew that “for every tender who wins, there is a tenderer who loses”.
“Defence industry companies know this better than anyone, it’s part of the process,” he said.
“Rheinmetall is a fantastic company and the Boxer they are currently making for Australia is a fantastic vehicle, and we will continue to work with Germany on the prospect of making them for Germany.”