Engineering company Varley Group has won a $40m subcontracting deal to build army trucks, after missing out on the contract last year.
The Newcastle Herald reports that Rheinmetall MAN Military Vehicles GmbH of Germany, a joint venture company of Rheinmetall AG and MAN Truck & Bus AG, won the contract to supply the ADF with advanced logistical vehicles in July last year.
The overall contract for around 2500 protected and non-protected logistical vehicles is worth about $ 1.6 billion. The contract specified that 35 per cent of the content must be Australian.
However, according to Paterson MP Bob Baldwin, a Federal government probe into Rheinmetall’s subcontracting process was set up. Its aim was to find out if the work was actually to be done by an Australian company.
Rheinmetall decided to reverse its original decision and award the work to Varley Group before the investigation concluded.
The contract means that the Hunter-based Varley will build 800 military truck bodies. It is expected to create 75 trade and engineering jobs and will also involve 15 to 20 years of ongoing maintenance.
‘‘It proves, too, that we are competitive with overseas suppliers, not only in our design skills and price but, what they’ve finally found out, is that Australian companies are a lot easier to work with,’’ Varley chief executive officer Jeff Phillips told the Newcastle Herald.