The Victorian state government and defence company BAE Systems want to build a fleet of next-generation military vehicles at the former Holden site in Melbourne's inner-west.

Victoria's Andrews government has signed a Heads of Agreement with the British multinational defence company, proposing to make and maintain 225 new Combat Reconnaissance Vehicles and by extension creating what it claims to be thousands of manufacturing jobs - albeit with indeterminate terms.

BAE Systems is one of the short-listed bidders for the Australian military vehicle contract. The other candidate for the $5 billion publicly funded LAND 400 Phase Two contract is German company Rheinmetall, which has selected Queensland as its preferred site.

So, either way, Australian jobs. Yet the Holden angle is the one that has naturally piqued our interest.

The Victorian Labor government was on the hustings today pushing conservative party prime minister Malcolm Turnbull to choose it as the preferred site, citing runs on the board such as the Bushmaster and Hawkei vehicles already manufactured at Thales in the regional city of Bendigo.

"Our research and development expertise, highly-skilled workforce and supply chain makes Victoria the natural home of vehicle manufacturing," the government said.

The new fleet of military vehicles will replace the current Australian Light Armoured Vehicle fleet.

Victorian defence companies would get a large share of the work, with BAE Systems agreeing to partner with Marand, MOOG Australia, Motec, AME Systems, RUAG Australia, DVR Engineering and APV to build vehicle components. Some of these suppliers worked with Ford, Holden and/or Toyota making cars here.

Victoria’s defence sector is claimed as being worth $8 billion to the local economy every year, and is made up of about 20,000 people and 400 businesses.

The state government's pitch was part of a wider announcement from BAE Systems Australia regarding its plan to make a 'defence hub' at the Fishermans Bend site, to be "the biggest of its type in the nation".

The hub will apparently enable up to 1000 engineers and highly skilled technicians to "design, develop, deliver and maintain" new defence platforms and systems for the Australian Defence Force. More than 200 people will be employed during the build phase of the LAND 400 program, it says.

Oddly, the state government claimed that: "the LAND 400 Phase Two project is worth around $5 billion and would create more than 2000 manufacturing and supply chain jobs in Victoria". Hmm.

BAE said that integral to the development will be a bespoke LAND 400 advanced manufacturing centre that will include a simulation and training and a test facility.

"Once in service, the centre will be used to upgrade and maintain the vehicles over their 30-plus year service life," it says. The defence hub will also be a node for the Commonwealth for Land programs and possible future export customers.

BAE Systems is the Original Equipment Manufacturer of M88 (Hercules recovery vehicle), M777 (155mm, 39mm towed gun) and M113 (armoured personnel carriers).

The hub will also include a "globally competitive" aerospace business that develops autonomous systems, electronic warfare, hypersonics and weapons technology including the nation’s most defence successful defence export, Nulka: a decoy that lures enemy missiles away from ships.

Quotes:

Victorian premier Daniel Andrews:

“Victoria is the traditional home of vehicle manufacturing, and this project would create thousands of jobs at a time when our automotive sector is in transition. Our message to Malcolm Turnbull is simple – bring this work to Victoria. We have the workforce, the track record and the supply chain to get it done.”

Minister for industry and employment, Wade Noonan:

“Victoria’s automotive workers deserve certainty at a time when local car manufacturing is coming to an end. This project is the perfect opportunity to harness our highly-skilled manufacturing workforce and build the next generation of combat vehicles that will help keep our troops safe.”

BAE Systems Australia CEO, Glynn Phillips:

“The creation of this new defence hub will provide sustainable, long-term, highly skilled work for Australians and further develop and grow the nation’s Sovereign Industry Capability. I am delighted that we can be part of Victoria’s ambition to develop a defence industry that is globally focused, supporting the transition to a stronger and more diversified economy that will benefit all Australians.

MORE: General Motors Holden puts 37.7-hectare Port Melbourne site up for sale – end of an era