BY the mid-1980s, the cost of subsidising the many government factories was around $350 million annually; Lithgow’s subsidy alone was about $15 million per year, by 1989 it was $18 million and Lithgow was one of the more efficient.
Could the nation now afford the factory it supposedly could not afford to be without?
Despite inevitable social disruption, the facts dictated change.
The factories were ‘corporatised’, removed from Public Service control in the search for efficiency.
For many years however, in the minds of many public servants it was they who remained the factory’s overlords and directed its activities.
And in the minds of many union members governments, especially Labor governments, should still direct factory policies, and always with the workforce’s interests uppermost in mind.
Both were mistaken; the Board of Directors of Australian Defence Industries (ADI) struggled to impose the new reality; the Public Service and workforce struggled to accept it.
Workforce numbers continued to decline despite new weapons contracts: 610 people in June 1990, 120 at the end of 1996 and still falling, one source said eventually to 106.
This seismic shift in operational control into at least a break-even environment dominated the commercial, industrial and social climate of the factory until late 1999, when something even more unthinkable happened.
At the beginning of this period the major work was processing orders for 67,000 F88 Austeyr rifles and 4320 F89 Minimi light support weapons for the Australian and New Zealand forces.
Some F88 parts were bought in from local manufacturers with specialised plant better suited to certain processes; for several years much of the F89 was imported and assembled at the SAF, but the local proportion rose steadily.
For various international and political reasons outside ADI’s control, the anticipated export orders were limited to a few hundred or a few thousand here and there, much as with the L1A1 rifle in the 1970s.
So, with major contracts completed, the factory once again faced its familiar cyclic dilemma: what does this arms factory do when its products are not needed?
The factory’s role changed from major manufacture to mostly maintenance, then, and still, an essential support facility.
The final change occurred in November 1999 when the government went beyond ‘corporatisation’ to the next step: ‘privatisation’.
It sold its many munitions factories to private enterprise.
The Lithgow factory and some others were sold to the Transfield-Thompson-CSF partnership.
Transfield was an Australian company, Thompson-CSF a French military hardware conglomerate … cause for unease in some minds.
In 2006, the Transfield share was bought by Thales Australia, the renamed division of the French parent company.
As far as is known, the factory concentrates now on military hardware; the F88, through several revisions, remains the basic Australian infantry weapon.
Its manufacture, and the refurbishment of it and many other military weapons, remain a staple of the factory.
In late 2011 the workforce was at least 150 people, and growing.