Mr Brendan Roberts CEO, EADS Australia Pacific
Brendan Roberts was appointed CEO of EADS Australia Pacific early last year. A former RAAF fighter pilot and Staff College graduate, he spent a decade as Canberra-based general manager of French aerospace export agency SOFEMA. Brendan Roberts spoke to ADM Canberra Correspondent, Daniel Cotterill, in January.
PROFILE
Commanded 75 Sqn (Mirage III)
Commanded 1 Sqn (F-111)
RAAF Staff College Graduate
USAF Air War College Graduate
Former General Manager, SOFEMA
ADM: You have been intimately involved in two major acquisition projects, Air 87 and Air 9000, both with successful outcomes for EADS but both with protracted decision cycles. From that perspective, what are your views on the Commonwealth's progress with acquisition reform?
Roberts: I think things are becoming more specific. Under the current leadership Dr Gumley has made it very clear that in his opinion, schedule - both time schedule and budget schedule - is very important, and he's made it very clear that he wants no marketing songs sung by proposing companies. They should mean exactly what they say and then deliver on exactly what they say, and I could not agree with him more. It is the exact kind of statement we need to have. So from that point of view there's progress being made.
Keep in mind that this is a requirement by the CEO of the Defence Material Organisation on industry. They have also had beefed up, under the Kinnaird Review, the capability requirements and the nexus between force capability and DMO has been strengthened very much, so that we should get, in the end, a fairly uncomplicated specification of what they want. We have been through all the processes, including the multiple pass system through the government, so there should be no question mark when the government gives its green light, as to what is to go ahead.
So far this has not proven entirely to be the case, keeping in mind that this is fairly early days and you will have a constant and continuing divergence and convergence of views within the Defence Department and DMO, the result of which is lack of clarity from our point of view. So I would say that the progress so far, keeping in mind that the new CEO has only been in his job barely a year, is mixed at this point. However his desired way ahead, we would have absolutely no argument with at all.
ADM: Much has been said recently about the quantity and level of skills available to defence industry in Australia, have you had difficulty in recruiting the people or partners needed to fulfil your commitments here?
Roberts: The answer to that is mixed. Technically, so far we have not experienced great difficulty. There are a few reasons for that, not least of which is the demise of Ansett and therefore the availability of people, and quite large numbers of them technically qualified, on the market. So I can speak for Australian Aerospace, the prime contractor for Air 87 and Air 9000: they have steadily increased their level of employment as the assembly line for the Tiger helicopter has come to fruition. They have been able to exercise a lot of discretion as to who they actually select for the job - they are very happy with the technical qualifications of the people they have. And of course they are also selecting on the basis of their potential for further technical training, and all of these people have at some point spent a considerable amount of time in France upgrading their technical qualifications for the new materials and the new avionics systems and so on.
On the other hand there is no question that there's a definite shortage in particular areas, especially electronics, and other less well known aspects such as materials handling and manufacturing - what we used to call sheet metal workers on classical aircraft. Well these are now composite aircraft so the skills are different and although we have had quite a history now within this country of manufacturing composite components for aircraft, these are generally established in the component manufacturing businesses, so the number of people available in those more or less technical areas are not so great. So far we haven't had a problem. This doesn't mean this will continue. The short answer to your question is we've not experienced any problems yet. We know there is a looming problem and Australian Aerospace is moving through its sponsorship arrangements and so on to reduce this potential problem.
ADM: To what extent will the mooted Australian industry program be implemented if further MRH90 buys don't eventuate under Air 9000 for some years yet?
Roberts: If no further MRH 90s are ordered, Eurocopter and Australian Aerospace will proceed to fully meet the industry program that was proposed on the basis of 12 aircraft, which was one of the options we were asked to propose. Nevertheless EADS, Eurocopter and Australian Aerospace are committed to the aims of the Australian Government in this area, to try to maximise its inherent capability through local support, so we can guarantee that we will absolutely make our best endeavours to optimise our industry program.
On the other hand there are some aspects which we might be able to contribute. New Zealand is interested in replacing its helicopter fleet - some of which are troop lift helicopters. Depending on timings, and whether we are successful in a proposal for New Zealand it is possible that if - and this is a big if - they select the MRH 90, then the orders could be in some way combined for the mutual benefit of both parties. Accordingly, we'll be using our best efforts to win that business and try to combine both. It is not an easy situation, but we are well aware of the Commonwealth's aims in this area and we would very much like to assist them achieve these aims.
ADM: Will the MRH 90s be built in France if the order stays at 12?
Roberts: In the case of the 12 MRH90s, Australian Aerospace will supplement the normal production functions within Europe with its own light assembly and test activities locally. In this manner, the tight timescales required to meet the in-service delivery date will be achieved, while still ensuring significant local participation. This is if everything else remains equal - no other orders from any quarter. Nevertheless there are other things that can happen. One is further orders from the region - not necessarily just New Zealand but other countries nearby - who might be also interested in this class of helicopter. We will be looking at every avenue, and further orders over a longer timescale will clearly generate a higher level of local industrial activity.
ADM: What is your view on the divergence between the Air 9000 outcome and the Aerospace sector strategic plan?
Roberts: Well I think the divergence is unfortunate. The principal aim of the Aerospace Sector's Strategic Plan is to maximise leverage from our scarce taxpayer dollars spent on Defence orientated major equipment in order to extract maximum efficiencies from our expenditure. Australia is not alone in this kind of aim. We understand, applaud and embrace it, which is why we always have a very comprehensive industry plan associated with the Air 87 project and also with Air 9000. In the case of the Air 9000, because the strategic plan was finalised relatively recently, and we understand received the approval of the Government, the Air 9000 concept was to be the first plank of the implementation of the strategic plan.
The disappointing aspect is that with the decision to proceed at this time with just the additional troop lift squadron, then it is not the first plank that people had envisaged - at least not at this point. That doesn't mean it cannot become the plank. So I'd say the divergence at the moment is temporary.
I think that the next 18 months to two years will shed further light on this. I've got absolutely no doubt as to the soundness of this plan. I think it will definitely generate great benefits for our own self-reliance in this country. I see that there's no other way really, because of the nature of our expenditure and we would of course like to be able to control our own destiny through our own through life support capability in this country and we can very highly specify the areas where that's possible. Rotary wing is one of those areas. In the future larger fixed wing aircraft could well be another. We understand what the Commonwealth is aiming at here and we think it's very sound, we think it's achievable. I think at the moment we're seeing the beginning of a long term industrial cooperation plan, and we are working very hard to ensure our participation in that plan.
ADM: EADS and its subsidiaries are developing quite a footprint in Australia courtesy of the helicopter projects and the new air-to-air tankers, what do you see as further growth areas and opportunities for the company in this market over the next five to ten years?
Roberts: There are possibilities under the various phases of Air 9000 over the fullness of time so an extension of what's either currently existing, as in Air 87 and the Tiger assembly and production, and the beginnings of the extra troop lift squadron - we expect to build on that on the one hand. Regarding large fixed wing aircraft, especially transport aircraft - and of course the tankers - there are a number of options open to the Commonwealth as to what aircraft they decide to purchase over the next several years as part of their proposal, so it's possible that that order will proceed beyond the current five. So we would expect some further growth there which will mainly be associated with the through life support area.
EADS is a very large company with a number of major business divisions, one of which is Defence Electronics, one is Defence Systems, another one is Space and so on, so we don't propose that any growth that might occur here in Australia will be restricted to aeronautics as in aircraft whether they be fixed wing, large, small, jet fighters. We will certainly be looking at possibilities where we could offer the very high level of electronics expertise which exists within the company as a result of amalgamations amongst various well-respected companies within Europe.
ADM: With the JSF firmly nominated as Australia's preference for its air superiority and strike capabilities, do you think precision guided munitions from the EADS stable have a realistic chance against US offerings in the Australian market?
Roberts: The short answer to that question is we would continue to have great difficulty full stop. Two reasons. The first reason is cultural. We are very used to, in this country, operating with the United States Air Force. It is much easier if the two air forces have the same weapons fit because when working together they fit together like hands in a glove. Everybody understands that.
The second point is an equally pragmatic one. Currently our combat aircraft are, without exception, of US origin. With the single exception of the ASRAAM purchase, all the weapons are of US origin. For any future weapons for an aircraft such as JSF, should they not be of US origin, the reality is that the Commonwealth would be up for extra funding necessary to successfully integrate a weapon of non-US, or I should say more specifically a weapon which is not currently then in the US inventory, onto one of its own aircraft. And that integration, as we've seen with the Hornet, would have to be conducted by the Americans. Therefore the correct answer is that it is not impossible, as demonstrated by the ASRAAM purchase but it will continue to be very difficult.
ADM: From an international perspective, how important for EADS was the win here in Australia on the air-to-air tankers, particularly in light of what is shaping as an intense competition between EADS and Boeing for the USAF tanker requirement?
Roberts: It was extremely important that EADS win here and that was why such a huge effort was made on what was, from a global perspective, a fairly modest requirement in terms of numbers. It was a strategic win because this represents the success of a new product for EADS, or a new Airbus product, which is a modification of a highly efficient air transport aircraft to a military application which, until now, has been dominated by the American KC135/KC10 family of tankers. So from the point of view of establishing a new product line of very high strategic importance, as it's turned out Australia is now leading the world in this area.
Regarding the American project, without getting into the obvious aspects associated with attempting to sell a major European product into an American military market - which, by definition you would have great difficulty with - at least EADS can now say that its program is underway. They of course have a very efficient platform but they also have a very highly flexible refuelling capability both probe and drogue and boom and that product is en route to being on the shelf. It is no longer a paper concept. So when EADS bids in the American competition, should they be permitted to bid, they would be bidding from a position of strength courtesy of the Australian decision.
ADM: There is a widely held belief that because of Australia's close alliance with the US there is much greater chance of US equipment being selected over its European competition to fill our military requirements, do you think that remains the case?
Roberts: I'm aware that there's a widely held belief. My own view is that, like most generalities, it's not entirely correct. Because of the degree of familiarity between the two armed services, the fact that they spend a lot of time exercising together and more recently operating together, it can be entirely expected that the first and continued view about possible new equipment is to look at current and prospective US weapons. If the Americans have the latest upgrade which the ADF does not have, or they have gone to the next generation which we do not have, it would be unnatural if this wasn't the first focus.
Nevertheless, we take note of the fact that US sourced material is not of itself automatically going to be sole source for acquisition, and that there continues to be a significant European participation in the ADF arsenal. We will fight very hard indeed to ensure that participation is maintained or enhanced, as we know we have much to offer, which is not necessarily available from other sources. There may well be, and there have been in the past, strategic overriding considerations which have led to sole-sourced US equipment, notably the JSF and submarine combat systems, but these decisions have been limited so far to high level strategic requirements.
Interoperability considerations are now having an increasingly important impact within the US forces themselves, as well as those of their coalition partners, and of course European products will have to meet these requirements, where relevant, or risk being sidelined. We should remember though that the ANZUS alliance is not the only alliance that operates amongst the free world, that NATO is far larger in scope than ANZUS, and aspects of interoperability which receive attention here of course receive the same attention in the NATO context. I therefore fully expect that interoperability issues will continue to be addressed through the usual NATO standards as they apply to this point and which will apply in the future, so it is our expectation that European products will systematically be fully interoperable with those of the US. We understand overriding strategic considerations. We like to think that we can compete very well from an efficiency and capability viewpoint in those avenues which remain open to us, and we will be fighting very hard to ensure that the customer here gets the best possible choice.