From the Source: Ron Fisher, Managing Director, Raytheon Australia | ADM May 08

1 May 2008

As Managing Director of Raytheon Australia, Ron Fisher heads a company with 1,300 employees, an enviable reputation for systems integration skills, and a strong vision for the future.

He was interviewed by ADM's Senior Correspondent, Julian Kerr.

Profile Ron Fisher
1963 Emigrated from the UK
1966 Joined the RAN as a sailor
1975 Commissioned as an Officer in the RAN (specialising in Warfare)
1989 Retired from the RAN as LDCR
1992 Deputy General Manager Naval for Rockwell Systems Australia
1993 General Manager Base Operations Rockwell Systems Australia
1996 Australian Country Manager for Raytheon Company
1998 President of Raytheon South Asia
1999 Established Raytheon Australia, becoming Managing Director

ADM: What are the parent company's expectations of Raytheon Australia?

Fisher: The expectation is that we continue to delight our customer and grow our business through strong performance and program execution.

Our view is if you perform and meet your commitments the customer will come back and that will generate growth.

Raytheon Australia has been growing at 12 per cent every year for the past five years and what we like to see in our company is double digit growth.

Raytheon Australia has been very fortunate in achieving this.

ADM: Do you anticipate the same rate of growth continuing over the next five years?

Fisher: Yes is the answer.

We have a commitment from Raytheon Corporation to support our growth through "Reachback" and Raytheon Australia's five year plan has a target of $1 billion in sales by 2012.

Today, we're $560 million.

ADM: Raytheon Australian expanded rapidly in its early days due to a series of strategic acquisitions.

Are you still on the lookout for such acquisitions and if so, in what technology domains or business areas?

Fisher: Like all businesses we are always seeking opportunities.

We were very fortunate that the organisations we have acquired over the past few years have been a marvellous fit both in a personnel and strategic sense.

In the technology domain we, like our parent, are reviewing an "adjacent markets strategy" for Australia.

An example is Information Operations and Information Assurance where the Raytheon Corporation is a leader.

The UK government recently awarded a program called e-Borders to Raytheon.

This program is a comprehensive air sea rail and border security program.

Today our business is in two key areas, Mission Systems Integration and Mission Support.

When talking about Mission Systems Integration our definition is "Multiple systems working seamlessly together to meet a single goal".

Our broad domain knowledge and advanced systems engineering capabilities enable us to identify and synthesise and deliver all the elements to meet urgent mission needs.

Successful missions often require complex technologies to be deployed in extraordinarily demanding circumstances.

Mission Support spans them all with systems and solutions to ensure flawless performance.

In Australia we today undertake this role across the ADF through information management, maintenance, repair and obsolescence management.

ADM: What do you see as the inherent obstacles to defence industry growth in Australia?

Skills? Technology access? Size of the domestic market? Export market access?

Fisher: There are many obstacles to defence industry growth and as you have said they range from skills and development to access to technologies.

There has been a lot of coverage with respect to skills shortages.

There is no doubt Australia is facing a skills shortage but when you dissect this, it is high in some areas and low in others.

In my case, Raytheon Australia has excess capacity in the avionics technical sector and aerospace engineering and a surge capability in systems engineering.

With respect to the size of the market being a constraint, my view would be yes only because we have had a flood of new entrants into the Australian market space over the last couple of years.

The government and DMO have been keen to help defence industry expand into the export market.

The constraint with this is time. It just takes time.

Raytheon Australia is in the export sector already as we undertake systems engineering tasks in Canada in the naval sector.

ADM: You referred to an excess of skills.

What fields are they in, and what are you going to do about it?

Fisher: We have a strong avionics technician workforce in Queensland which we call a "national asset" - we have 120 of them.

Today they work on F-111s, and as the F-111s wind down we are establishing how best we can deploy this most important skill set to ensure the investment of the government is not lost.

Our systems engineering capability is strong.

We have delivered early on the Collins Replacement Combat System and were recognised by DMO as a huge success.

However we have folk coming out of the F-111 program in the latter part of this year and we are looking for projects that can capitalise on their unique skills.

ADM: What involvement do you see Raytheon Australia having with the RAAF's Super Hornets when they arrive?

Fisher: I've had a series of discussions with various senior people in the DMO about this.

It's an FMS sale, and there's going to be a Performance-Based Logistics program.

We want to work with the DMO to ensure Australian industry is part of that supply chain.

It is recognised you won't need as many people as required today on platforms such as the F-111 but again we have the right people, with the necessary skill set who can ensure these platforms are supported.

Discussions so far have explored Raytheon Australia working on behalf of Raytheon Corporation through the FMS route to allow the transfer of knowledge into Australia.

ADM: Raytheon Australia seems to be more of a system integrator than a manufacturer.

Is this a fair call? Will it continue to be the way ahead?

Fisher: We have a saying here that our skill set is the "ability to modify, to enhance, and to adapt."

We're platform agnostic.

Recent examples are Collins, AWD, and our EW training aircraft.

Our EW aircraft is a great example of our unique skill set where we put together OEM subsystems to deliver a capability to the Navy.

So I like to say we modify it, we enhance it and adapt it to the local environment as specified by our customer.

In summary we see that as our skill set in Australia.

ADM: How do you work dealing with other companies' products and IP, for example in the AWD project?

Fisher: We sign non-disclosure and other agreements just like the rest of industry.

For example, we have US people as part of the AWD Alliance engaged and integrated with Lockheed on the Aegis weapon system.

These folk have signed an agreement that states they will not work on anything that could be seen as competition with Lockheed in other US or global markets for 12 months.

This is no different when we work with other OEMs.

ADM: How far do you rely on local supplier and sub-contractors in Australia?

Fisher: We have what we call a gene pool strategy.

If you look at Raytheon compared with other companies in Australia we're in every capital city.

It's more expensive to be in every capital city because of the infrastructure but the view we took a few years ago was we could then tap local universities, local workforces, and local SMEs.

A good example is Australian company, Micreo, which is part of our hub in Queensland.

Micreo is an SMEs that is now part of the Raytheon Corporation global supply chain.

We have a very active SME program, because my personal view is you can't do it all anyway.

Part of the corporate citizen role is to enhance skill sets in Australia; our commitment to that is to ensure we bring Australian industry along with us.

ADM: How do you decide whether to develop a capability in-house or seek it from an SME?

Fisher: Terry Stevenson (our head of engineering) is their champion.

If we've got to develop a capability, it goes to Terry.

He would say - can we do this with local industry, yes or no?

And if we can, then the answer is yes because what you don't want to do is ramp up a skill set when you have an already established skill set in Australia.

We use SMEs to complement us rather than to do a job.

We use SMEs to do engineering, logistics, test and trials - yes we could do it, but we use SMEs because it is the right thing to do.

ADM: In what areas is Raytheon Australia able to contribute into the parent company's global supply chain?

Fisher: We're currently doing systems engineering in Canada on a project called the Joint Support Ship, and we're bidding on behalf of the corporation for the Halifax modernisation program, which is like the Anzac upgrade.

We're on the General Dynamics Canada team, the RFT is out, and there should be a decision in the third quarter.

We provide field services support through the corporation for radar in Korea, and we have a couple of people in Iraq.

ADM: What are the biggest challenges you see emerging on the AWD program, either technically or in program management?

Fisher: With all large programs you have challenges.

That's not unique.

We have a strong Alliance team undertaking this program.

We at Raytheon Australia are fortunate to be able to "Reachback" into the skills of Raytheon Corporation where we can access experienced program managers and senior engineering folk who have been on the DDG-51, LPD17 programs and are engaged today on the DDG-1000 program.

So we expect challenges both in a programmatic and technical sense but we have the capability and "Reachback" to help us through.

ADM: There have been unconfirmed reports of tensions within the AWD Alliance.

What's the situation?

Fisher: Let me clear the air.

The Alliance is ASC, DMO and Raytheon Australia.

John Gallacher, Ron Fisher, Warren King, and Andrew Cawley are very close friends; we get on well with each other, it's a good relationship.

We have a sound relationship with our suppliers.

There's always talk about the Raytheon-Lockheed Martin tension but you ask (Lockheed Martin Managing Director) Paul Johnson - Paul and I were in the Navy together and we get on very well and he would agree with me there is no tension.

If you go into the Hobart class Systems Centre you'll see the Lockheed Martin guys working alongside the Raytheon guys.

Those reports are just bar talk.

ADM: Why does the Australian AWD program, alone of all the AEGIS customers outside the United States, need a Combat Systems-Systems Engineer such as Raytheon?

Fisher: That's not quite true.

If you look at the Spanish model, they have a company called FABA.

Remember the reason we wanted to do this was that from an Australian perspective, you can have somebody in country that can modify and adapt.

The Aegis weapon system is sacrosanct.

With respect to relationships, we've had six interface working groups with the US Navy and Lockheed and everybody has signed up.

There are nine Australian-proposed interface changes to the AEGIS systems which were considered by the USN as low-risk.

We want to put on the Harpoon Block II - that is not part of the current Aegis weapon system, so we're doing that.

We want to do a dual EO/IRST and they don't have that really on the Aegis system.

We want to change out the Raytheon AN/SLQ-32 EW system and put something different on, and we want Nulka.

It's companies like ourselves who can do that and keep the integrity of the Aegis weapon system intact.

It was a deliberate strategy by government not to muck with Aegis but be able to put on those unique Australian things we needed for our environment, and that's what I'm doing here on behalf of the Australian government and what FABA does on behalf of the Spanish government.

ADM: Have there been any ITAR difficulties?

Fisher: No. Like all ITAR issues, it's the planning.

We did the Technical Assistance Agreement (TAA) and we planned to have people and other companies on it.

As an example, we'll be giving SMEs the logistics work, and they're on the TAA.

ADM: Does Raytheon Australia's role in the AWD Alliance strengthen the company in other areas, either domestically or abroad?

Fisher: Yes. It tells our customer that we can deliver on complex programs.

We've introduced processes and disciplines into this project that the customer has never seen before, and we've shared those with the Alliance.

And overseas, delivering the Collins replacement combat system ahead of schedule has given us credibility.

The reason I'm doing the Halifax job is because of my ability to systems integrate in Australia.

ADM: Does the work on the Collins submarines and AWD feed at all into the parent company's work on, for example, the DDG-1000 and future US Navy submarines?

Fisher: Neither to DDG-1000 nor US Navy submarines.

What is does for us is allow the corporation to use Australia as kind of a launching pad for other countries such as Canada and Saudi.

I've spoken about Canada but let me say a few words about Saudi.

We have a relationship with Samsung Techwin on Land 17 and as a result of this Samsung Techwin has asked us to join them in Saudi Arabia as their partner using the Australian Land 17 model.

You may not be aware of this but Raytheon has a very strong relationship with the Kingdom and the Corporation is helping both Raytheon Australia and Samsung Techwin to ensure we are successful in Saudi.

ADM: How do you envisage the Raytheon Australia of 2016?

Fisher: We're going to be known as the Mission Systems Integrator and the Mission support house for the Australian Defence Force.

If you want anything modified, adapted or enhanced, the first thing you'll think about is Raytheon.

We would like our customer, when they look at us in 2016, to say, "This company has got a pedigree in systems integration and mission support.

"If I've got something complex to integrate or sustain I'll give it to Raytheon because I know it'll be done."

By 2016 we expect to be a 3,000-strong company using SMEs as a natural extension and an integral part of our team.

Our style in 2016 will be like it is today.

Honour our commitments, be a corporate citizen leader, engage and integrate a network of SMEs, and maintain a skilled workforce that is seen as a natural extension of the ADF.