Rheinmetall might be best known in Australia for their vehicle programs, but the German company is looking to expand their Australian footprint in other technology areas. ADM Managing Editor Katherine Ziesing spoke to Rheinmetall Defence Australia managing director Gary Stewart about how the business is growing.
Profile - Gary Stewart
1989 Joined Royal Australian Air Force as an engineering officer cadet
1992 Graduated UNSW (ADFA) with Bachelors Degree in Electrical and Electronics Engineering
1993 RAAF F/A-18 systems engineer
1998 RAAF Test and integration engineer, AIR 5400 (ASRAAM)
1999 Senior Systems Engineer, Ball Aerospace Australia
2001 Program and Finance Manager, General Dynamics Land Systems Australia
2004 Program Manager Canada APC, General Dynamics Land Systems Canada
2008 Managing Director General Dynamics Land Systems Australia
2014 Joined Nova Systems
2016 Chief Operations Officer, Rheinmetall Defence Australia
2017 Managing Director Rheinmetall Defence Australia
ADM: Rheinmetall Defence Australia (RDA) is a relatively new concept, less than a year old. Can you explain how all the Rheinmetall businesses in Australia now fit together?
Stewart: On the surface it looks like it’s a relatively new construct but it’s actually something that we’ve evolved over the last 3-4 years. Our first foray into Australia was over 40 years ago with our weapons and ammunition business, and like most global defence primes we’ve had various parts of our business enter Australia for specific projects and programs.
Rheinmetall Manned Military Vehicles Australia (RMMVA) is our largest and most visible footprint on the ground, delivering the Land 121 program to the Australian Army but we’ve also got Rheinmetall Electronics that is providing professional services to Defence Science Technology Group and also running all of the Abrams team simulators for the Army. So we do quite a variety of things, niche areas, and then Logistic Solutions Australasia provides ILS and project management professional services, both to us and to CASG as well.
Over the last decade we have essentially entered Australia through various acquisitions or projects; and in parallel Rheinmetall itself has embarked on a One Rheinmetall transformation program. We’re bringing a different approach to all of our markets where we say we can actually achieve more and understand and service our customers better if we work together as a team and work together with the customer.
The visible change last year was the announcement of RDA, but it’s really bringing a common leadership to all of our current activities in Australia and then providing that same leadership and expertise across all of our companies to all of our Rheinmetall businesses, whether they’re defence, automotive, simulation, cyber, weapons, fundamental research.
ADM: Can you give us an update as to how the various phases of Land 121 are progressing?
Stewart: We reached a fairly significant milestone in the last quarter of 2017; we finished our last design review with the customer. We’re now through all of the design and we’re in full rate production for most of the vehicles, modules and shelters, or we’re doing final qualification and acceptance with the Australian Army.
We have successfully fielded into 7 Brigade in Brisbane. We’re now delivering into other units around Australia and we’re standing up the field service technicians and the through life support arrangements for moving from acquisition into the support mode.
Final delivery is, under the current phase, in 2019 and we’re just now waiting for the decision around Land 121 Phase 5 Bravo as to what the final scope and approach looks like for that. We did some work with CASG and Army at the end of last year to work through various options and that’s now in the government process for consideration. We’re looking at a decision point sometime between now and June.
ADM: Given your experience on Land 121, what lessons learned are you applying to your Land 400 campaign?
Stewart: Probably the biggest element that makes a real difference to a program is relationships. Contracts don’t solve problems, people solve problems. That’s probably been the one biggest learning and benefit of the last three years with working with CASG, Army, ourselves, both here in Australia and back in Europe, and with our industry partners here too. If you look at the Land 121 program we’re bringing ostensibly an off-the-shelf military vehicle, we’re adapting with Australian unique module shelter requirements, fitting that into a fairly rigorous design and system engineering process with the Commonwealth but also introducing it into a rigorous configuration management and drawing environment for Rheinmetall as well.
There are a lot of moving parts and a lot of pinch points at all levels. So a key relationship behaviour was to be open and transparent. Things didn’t always go right, both on our side and on the customer side, but we had a very good peer to peer relationship, whether it was at the CEO level, the project director level, the project engineer level or the project team and we were able to solve problems really at the lowest possible level with the Commonwealth, and that’s taken years to get to.
But having had that experience we took that into how we approached Land 400 and we really tried to live that with the risk mitigation activity (RMA) and with the planning for what Land 400 Phase 2 could look like. It’s really important as Land 400 has a demanding schedule and it’s a much more complex undertaking with the nature of the systems and technologies that are being integrated.
Another lesson learnt was to understand the local industry capability. It looks like there’s this wonderful industry network around Australia that’s ready for Land 400 and Land 121 future phases and other projects, but the reality was we’ve come to that point after 3-4 years of consistent work.
It’s been much more focused over the last two years with the release of the Defence Industry Policy Statement and the emphasis on Australian industry capability during Land 400 RMA. But if we hadn’t already had a strong foundation with good Australian companies on Land 121 we wouldn’t have had the confidence within the company to say okay, we know Australian industry is capable and let’s make sure we’ve got the right connections happening, both technically and from a procurement perspective to explain the technologies that we want to bring in, identify the companies that have experience in those areas and also identify those companies that don’t have it yet but can be worked with to grow into that capability.
That could be quality, performance, scale. The more time we spend engaging now will pay dividends when we’re actually setting up and executing work. That’s been a really important lesson from an industry perspective.
And the other major lesson was to ensure we have realistic planning. Everybody wants everything done yesterday, both internally and with the Commonwealth, and that’s understandable and fair. The other reality is when something goes wrong or when a pinch point occurs, the first idea for a solution is rarely the right one. You’ve actually got to sit down and say, okay, this is what happened, how can we now adapt, correct and fix the immediate problem but then stop it from happening again.
ADM: Obviously Land 400 is a major campaign for the company but what is the company doing in Australia outside the big vehicle programs?
Stewart: One of the nice things over the last couple of years is we’ve seen a convergence of the Commonwealth’s thinking and planning. The Integrated Investment Program and the Defence Industry Policy Statement give a high level roadmap of where Defence is taking its capabilities over the next 20 years. Whilst people think Rheinmetall is trucks and tanks, we’re actually quite a broad technology, automotive and security company.
Yes, Land 121 and Land 400 are the major movements at the moment but we’ve got exceptional air defence and maritime point defence weapons systems with the Millennium Gun. We’ve got a whole spectrum of active and passive protection, but also multi-spectral defensive suites for navy ships and other applications. We’re putting a multi-spectral self-protection suite into the NZ frigates and it’s got a direct application and carries across to what can be applied on Australian Navy vessels too.
The Assegai artillery ammunition contract with NIOA was also recently announced. NIOA is a great example of an Australian company looking globally. Working with them was the right way to approach that program but we’ve also got whole families of ammunition natures and weapons systems that will meet what we’re seeing as future requirements for small arms, medium arms and large calibre weapons.
We’re doing a variety of tank upgrade programs with our existing Leopard customers, but we’re also doing a design study with the UK for their Challenger 2 life extension, taking those technologies and putting them into a different tank. These have potential applications for Land 907.
Our simulation and training business is seeing a lot of development and growth in Singapore and other areas and we see opportunities to offer collective training and full training solutions as well, and then we’ve got some fairly niche technologies in cyber.
We’ve just been awarded the Soldier Systems Replacement Program for Germany. So we look to those other vehicle, land, cyber, maritime arenas and we believe we’ve got good technologies. With our One Rheinmetall approach we can now work with the customer to understand if we have the right technology or capability to meet their needs, and then we can introduce that into an Australian industrial network that can actually deliver that and support it and improve it over life, locally rather than go back overseas.
ADM: Parallel to One Rheinmetall is the One Defence push in the wake of the First Principles Review. Has that had a meaningful effect on how industry deals with Defence? How would you characterise that relationship now?
Stewart: It’s a big change program. We’ve seen good progress so far, and we’re seeing parallels with our own internal One Rheinmetall program: how does the customer fundamentally change the way it supports Defence policy whilst that Defence policy is evolving and how does it work more effectively with industry to delivery better overall outcomes.
I guess the most immediate experience has been what we’ve gone through on the Land 400 industry engagement activities and I would say, again, it didn’t always go to plan but because there was a shared objective, we were able to understand what is the art of possible and figure out a way of doing that. And so it’s something that is going to take time. Everyone is committed to making it work and I think there are some further opportunities downstream around looking at how Defence and industry can adopt a more enterprise approach.
At the project level we still see very much an emphasis on looking at a particular phase or project focus for a capability outcome rather than broader defence enterprise benefits. For example there may be capability and economic advantages to connecting phases or cross-domain programs together to derive a better overall outcome for Defence, rather than looking at it specifically from a land and sea solution.
Those dots aren’t obviously connected yet, even though a lot of the big capability decisions are going to get made in the next few years. We’d like to see a rapid way for Defence and industry to identify if connecting phases or programs together could reap broader benefits for Defence and Australian industrial capability, and act on that if appropriate.
ADM: With the government’s new defence export strategy, what role do you see for RDA in that space?
Stewart: I think that we’ve been embracing it wholeheartedly over the last couple of years. We’ve had the benefit of learning about the capability and capacity of Australian industry with Land 121 Phase 3 Bravo trucks and shelters. And our early approaches for Land 400, Millennium Gun and other major programs took this experience and identified companies that could build our existing products and components in Australia.
But then we joined the Global Supply Chain Program in October 2016, and that really put a different emphasis on how we looked at Australian companies. For a start, it allowed us to look specifically at family owned Australian companies and businesses that have been operating in Australia for a long time.
We turned the lens around and said let’s not just look at finding Australian companies that can help us satisfy an AIC objective for an Australian program but rather identify companies that can contribute to our current global production and product development projects. So we looked at companies like Cablex in Victoria who are now supplying electronics devices and cabling into our Boxer production lines for Germany and Lithuania.
We’ve invested in companies like Tectonica and SupaShock to develop new designs into our future products. And we’re now finding great little companies like PWR Cooling on the Gold Coast that are looking at cooling technologies for our new tracked vehicles.
If we have those Australian companies actually involved in the design of the product then they’re in at the ground floor and their systems are part of the internal development, prototyping, testing and qualification so that they’re now the solution for the production programs globally.
The release of the Defence Export Policy in January this year was serendipitous because it really reinforces a lot of the things that we’ve been now living and breathing over the last two years.
This article first appeared in the March edition of ADM.