Thales is preparing to enter full-rate production of about 50 Hawkei vehicles a month until mid-2022, sustaining more than 200 jobs in its Bendigo workforce.
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The project plans to build 1100 Hawkei vehicles and 1058 associated trailers, with delivery expected from mid-2021.
In 2015, Thales landed the project to supply the vehicles but reliability and design issues, plus delays in production led to setbacks.
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When built, the vehicles will be the only ones armoured to protect soldiers from blasts and still be light enough to be lifted by Chinook helicopters.
More than $50 million has been invested in the production line and development of the Hawkei vehicle, Thales said.
The defence manufacturer's chief executive Chris Jenkins said a demanding testing process was undertaken, amid the challenge of keeping facilities operating during the COVID-19 pandemic.
"Our whole organisation has been focused on delivering Hawkei and its world leading capability to the Australian Defence Force," Mr Jenkins said.
"I want to thank all of our Australian suppliers. By backing Hawkei, the ADF and the government, they are backing the ability of Australian industry to design and manufacture advanced capability in Australia."
Minister for Defence Senator Linda Reynolds said the Hawkei vehicle has performed exceptionally well throughout comprehensive ballistic and blast testing.
"This is a highly effective capability being delivered in partnership between Defence and industry that builds on Thales' iconic Bushmaster, which has been highly successful on operations overseas and exported around the world," Senator Reynolds said.
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Senator for Victoria Sarah Henderson said the vehicle's production is a welcome boost to the state's economy.
"For many small-to-medium enterprises, work on the Hawkei has provided business continuity and enabled investment in people and facilities, as well as diversification into other Defence projects and adjacent industries," Senator Henderson said.
Minister for Defence Industry Melissa Price said the project demonstrates the government's commitment to maximising opportunities for Australian defence industry.
"The manufacture and ongoing support of the Hawkei vehicle creates significant long-term opportunities for Australian industry, including potential export opportunities, as we have seen with the Bushmaster vehicles," Minister Price said.
Eighteen of Thales' 25 key suppliers are based in Victoria, including Ballarat's Albins Performance Transmissions, for the vehicle cross drive, steering rack, castings and shafts.