Military vehicle manufacturer Thales Australia announced on Tuesday that it would have to let go a hundred workers before Christmas, blaming the job cuts to the high-flying Aussie dollar and reduced manufacturing contracts secured by the company.

The Bushmaster assembler said that its Bendigo plant would be cutting down 100 employees in preparation for the permanent production stoppage of the troop-ferrying vehicle by next year.

Thales Australia spokeswoman Libby Noble told AAP that the company has so far delivered 850 units of Bushmaster ordered by the federal government and planned production of the company's new single-cab utility would not commence until 2012.

Ms Noble said that the company is currently undertaking discussion with employees and union leaders on the subject of redundancies as she stressed that within the next few days, "we will be talking to the employees about voluntary redundancies and we will be talking to the employees about voluntary redundancies."

Thales Australia explained that the job reduction was needed to cope with the projected slide in production that could last for a year and as the company implements modifications that would modernise its Bendigo facilities.

It added that the strengthening Australian dollar compounded its woes as locally produced products were losing substantial competitiveness due to the upward surge of the local currency.

The company said that it has no recourse but to face up with the imminent lower production prospect next year and the most immediate available solution for Thales at this time is to reduce its workforce, which it noted would be finalised by December.

Thales Australia admitted that the move "is unfortunate but unavoidable as the production workload will not sustain the current level of personnel, and the production process must be re-engineered to establish a more modern facility."

It gave assurance though that the company is presently coordinating with Victorian and federal authorities to facilitate for new job opportunities that could availed of for its affected employees.