More than $40million worth of work on the F-35 Joint Strike Fighter due to have been carried out by a failed Melbourne firm may leave Australia.
Lockheed Martin vice-president Stephen O'Bryan stopped short of guaranteeing work contracted to Production Parts would be reallocated to other Australian suppliers yesterday.
Asked if the work would definitely stay in Australia he said, ''We are doing our best to make sure that happens. There's still work to be done in making sure we do best value.''
He said Lockheed Martin was talking to Marand, a Victorian-based JSF contractor currently developing an aerostructures manufacturing facility near Geelong. Mr O'Bryan was in Canberra to deliver an upbeat briefing to Australian media on the current status of the JSF project.
His visit is part of an international effort to get the word out the program is tracking well against new schedules adopted at the start of the year.
With testing of all three variants of the plane now on schedule, Lockheed Martin was further buoyed yesterday by news the United States Government had submitted an F-35 proposal to the Japanese Government for consideration.
Tokyo is expected to make a decision on an order for 40 to 50 planes by December.
Production Parts also held contracts to make parts for the alternate JSF engine, the F136 that had been under development by General Electric and Rolls Royce.
The cancellation of that engine was one of the reasons given for the company's collapse.
It went into liquidation, with the loss of 85 jobs, earlier this month.
Asked if GE and Rolls Royce were still working on the second JSF engine Mr O'Bryan said that was a question for them.
''The F136 is not funded,'' he said. ''[As far as Lockheed Martin is concerned] there is only one engine on the F-35 project - the F135.''
There are concerns other small Australian aeronautical firms may go to the wall with speculation mounting the US Government may cut or defer its JSF order.
The president of the Australian Industry Defence Network, Graham Priestnall, said the collapse of Production Parts was symptomatic of problems across the industry.
''At least 10 of our members in the last six to eight months have either closed their businesses altogether or moved out of Defence,'' he said.
The loss of Production Parts had been a significant blow.
''It is very sad to see an Australian small to medium enterprise that has developed a lot of capability come on these hard times,'' he said. ''AIDN will be keeping a close eye on how the JSF program goes in relation to our members' participation.
''Any reduction in the number of planes ordered or delays in schedule does have the potential to adversely affect Australian [small to medium enterprises] that have signed up for the [JSF] project.''
Lockheed Martin's Mr O'Bryan said the company had taken pains to ensure suppliers - such as Production Parts - were given the information they needed.
''We have done a lot of work, and we continue to work with our suppliers, on the profile giving them a lead time with the help of the US Government and the [international] partners to understand when the quantities will come so they will invest smartly,'' he said.
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