THALES and the Department of Defence have sent a delegation to engage with Austrian manufacturer Steyr Motors, the supplier of Hawkei engines.
It comes after Thales advised Bendigo staff of a three-week production shutdown in April.
A defence spokesperson said the delegation would engage with Steyr Motors to 'reinforce the need for continuity of engine supply'.
"Thales has informed defence that the Hawkei engine supplier, Steyr Motors, is undergoing restructuring following its decision to enter voluntary administration," they said.
"Thales has been working closely with staff, suppliers, unions and defence to minimise the disruption to the production schedule."
Thales planned to extend a two-week break scheduled around Easter and Anzac Day by a week due to a delay with engine supplies.
"Some delays to the production schedule are unavoidable and outside our control," the company said.
Thales said there would be no requirement for staff to take leave without pay.
"Defence continues to work with Thales to assist with its workforce management issues, whilst protecting its rights under the contract," a department spokesperson said.
"This includes consideration of planned work being rescheduled to assist with re-distribution of the production workload."
Member for Bendigo Lisa Chesters it was 'a disaster' that could have been avoided if the federal government had insisted on more local content.
"If these engines were made in Australia, the federal government could have intervened and helped to resolve the situation sooner or, at the very least, ensured that Thales manage the roll out of this $1.6 billion contract better," Ms Chesters said.
She said it was disappointing workers would be forced to take leave because of the government's incompetency.
"They need to be held accountable," Ms Chesters said.
The defence spokesperson said Steyr Motors was selected after a global search to identify an engine capable of meeting the necessary power-to-weight requirements for the contract.
"Thales has confirmed that given the lightweight performance requirements of the Hawkei vehicle, no suitable Australian manufacturer was identified," the spokesperson said.
It was understood the department was assisting Thales by bringing forward alternative work.
"Thales is fully committed to delivering the world-class Hawkei to the Australian Defence Force and securing the employment of our workforce behind the defence force," a Thales spokesperson said.
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