Building guided weapons in Australia while thinking Iran

The Morrison government first announced plans for a sovereign GWEO enterprise in the 2020 Defence Update. This is now being implemented under the Albanese’s government’s National Defence Strategy and detailed in Sovereign Defence Industrial Priorities 4 (SDIP-4) “Domestic manufacture of guided weapons, explosive ordnance and munitions”.

Australia’s GWEO enterprise’s first phase (2023–25) involves detailed planning, early funding and a AU$37.4 million contract to initially manufacture a small quantity of Lockheed Martin Guided Multiple Launch Rocket System (GMLRS) munitions, starting in 2025. This phase will involve local assembly using components and materials imported from the US. The second phase (2026–30) will see an increasing number of Australian-made components used in local assembly. This will improve the supply chain resilience for the GMLRS but not for other weapons.

Importantly, it’s not until 2030 that the first guided weapon, the GMLRS munitions, will be mostly made in Australia. The timing is significant as the 2020 Defence Update declared Australia no longer would have 10 years of warning and the ADF should adjust its preparedness accordingly.

It is worrying that it will have taken 10 years to begin manufacturing a single relatively simple type weapon. Simple at least when compared to most other ADF guided weapons. There are now apparently further complications with Raytheon, one of the two strategic partners chosen in 2022 to be involved in the GWEO enterprise.

Given the slow pace of the GWEO and the partner difficulties, considering Iran’s sovereign GWEO enterprise may spark some innovative thinking.

Iran exports many different kinds of GWEO in the form of rockets, missiles and so-called kamikaze drones to its “axis of resistance” proxy forces across the Middle East, and increasingly to Russia. Iran’s export strategy includes transferring complete weapon systems, supplying weapon components to be assembled by the receiving entity, providing upgrade kits to modify existing GWEO stockholdings, and establishing manufacturing capabilities in the countries exported to.

Iran’s four element arms export scheme appears similar to that of other nation’s selling arms globally. Indeed, the first two elements noted are essentially the same as Lockheed Martin’s GMLRS arrangement with Australia. However, Iran’s scheme is based on a fundamentally different idea: that supply chains may be cut by external actors at any time and so must be made to be resilient.

VIEW ALL

Arms manufacturers traditionally want to lock the country they have sold arms to into sole-source, long-term supply arrangements as these are the most profitable. Iran’s scheme assumes supply chain disruption is more likely than not and plans are made accordingly. Iran’s assumption concedes that, unlike normal arms transfers, Iran’s are at times undertaken covertly, involve smuggling or are against international sanctions; all conditions that are difficult to guarantee regular resupply under.

A flow-on is that the weapon systems intended to be manufactured outside Iran are often simplified designs able to be built by semi-skilled personnel in rudimentary production facilities. Easing intellectual property transfer issues, the weapons exported are often developed and produced by Iranian state entities, including the Islamic Revolutionary Guard Corps. Simplification for local production is at its most extreme in Gaza where Hamas used Iranian designs and technical expertise to create a robust rocket-making industry using building construction materials and explosive fill sourced from unexploded Israeli Defense Forces bombs.

Such practices can appear bizarre but their underpinning ideas may have some relevance to Australia, a nation distant to its traditional GWEO suppliers.

Australia should plan on the possibility of its GWEO component and material supplies being, at times, highly constrained. In a major conflict, traditional suppliers may need to use their weapon components themselves and have none to spare for export; their manufacturing plants may come under physical or cyber attack and no longer be able to function or supply routes may be severed by hostile action. GWEO are only essential in times of crisis and war and it is in these times supply is most difficult.

The more complicated the components of guided weapons are, the more likely they are to be imported by Australia. Economies of scale work against Australia setting up complex item production lines in-country while arms makers prefer retaining manufacturing the high-value, high-cost items themselves.

Australia should therefore maintain appropriate-sized stockpiles of imported components sufficient to continue local high-rate GWEO manufacture for some time. A 6–12-month stockholding would allow for the initial shock of a major disruption to be overcome and new supply chains established. The stockholding would be determined by the assumed monthly rate of usage and, as shown in Ukraine, in a major conflict, this could be high.

Moreover, following Iran’s example, Australia working with the original manufacturer might attempt to simplify the GWEO intended to be built in Australia. A simpler design would be inherently less sophisticated and less capable, but in times of conflict, having a simple missile may be preferred to having none.

The simpler manufacturing can be made, the more alternative suppliers can be established in Australia enhancing GWEO supply chain resilience. Simpler designs might also mean that the original weapon manufacturer feels less threatened by another production line being set up. No company wishes to support building a rival.

A simpler design means costs may also be reduced. Russia is licence-manufacturing the Iranian Shahed drone, planning to lower unit costs from about US$300,000 to US$50,000 by making the design easier to manufacture.

In the same vein, Russia ran short of semiconductor chips used in its missile manufacturing because of sanctions. Russia then fell back to buying foreign consumer goods machines and stripping these of chips to use in missile production. Russia’s systems are designed to use commonly available chips, rather than unique kinds. Russian’s Orlan-10 military drone, for example, uses chips common in private and commercial building HVAC units and, accordingly, readily obtainable globally.

Australia’s civilian domain has vast numbers of devices using semi-conductor chips that, in wartime, could be similarly accessed to feed into an Australian GWEO production line. To access consumer chips, however, would require having already modified the GWEO design to be able to use such components.

Australians giving up their smartphones to allow the building of guided weapons for the ADF sounds comical but would simply imitate civilians in World War II giving up their German-made binoculars for use by Australian soldiers and the US Navy as their supplies were cut by war. The scale of the chip-sourcing problem may be understood when its noted that just the small man-portable Javelin anti-tank missile includes some 250 chips, and there was a shortage of these in 2022 when US production for Ukraine tried to ramp up.

Considering how Iran approaches GWEO design and manufacture is seemingly unconnected to building an Australian sovereign enterprise. However, the notion that GWEO supply chains may be cut by external actors at any time is as relevant to Australia under major war conditions as it is to Iran. Useful ideas can be found anyway, perhaps even in Iran.

Peter Layton is a visiting fellow at the Griffith Asia Institute, an associate fellow at the Royal United Services Institute, author of Grand strategy and co-author of Warfare in the Robotics Age.