Things have never been more interesting for Geelong’s manufacturing community, with the industry in Victoria’s second city currently going through a start-up revolution, and at the forefront is innovative engineering company Austeng. By Brent Balinski.
Geelong … Ford. Alcoa. Shell.
If you’re a long-time follower of manufacturing in Australia who just read those words, it’s possible your mind just skipped to a difficult period over the last decade.
“But I actually wonder if history will show the departure of these big companies will ultimately provide a better outcome,” offers Ross George.
And who is Ross George? Some Productivity Commission type? An ultra-dry economist looking at Geelong from hundreds of kilometres away, convinced that the jobs that were lost at those companuies were just crummy old jobs anyway, part of some inevitable “transition to a service industry”? An academic who has spent too much time reading textbooks by long-dead economists, and too little time looking up close at the very real unhappiness caused by closures and layoffs?
No, no, and no again. Ross owns and runs Austeng with his wife Lyn. The boutique engineering company goes back to Ross’ grandfather, who started it after finishing up at International Harvester in the 1950s. And the Georges, aside from their deep ties to and love for Geelong, are not just thinkers but doers. They have a long-term view of both manufacturing and their region, and are confident that it’s a little way into an exciting new chapter.
No longer fighting over the same work from the same major players down the road, Ross says the city’s companies are more willing to work together, and towards something that makes much more sense in terms of modern-day manufacturing.
“When I first started my career in Geelong, when those companies existed, there was no collaboration and everyone considered everybody else a competitor,” says Ross. “Because, in fact, that’s what they were. Because there are no longer those big customers everybody is fighting over, there’s been a mindshift, where we really needed this collaboration and a willingness to look at new industry sectors.”
Lyn points to additional factors such as the Federal Government’s Automotive Industry Package and the State Government’s Skilling the Bay initiative, which have provided impetus. She is also of the view that a crucial nudge was provided by nearby Deakin University to turbo-charge academic/industry engagement under the trailblazing approach of then-Vice Chancellor Jane Den Hollander.
“This was combined with a realisation that we couldn’t keep doing what we always did,” she explains. “And the availability of high-quality engineering and trade resources meant that opportunities were being created from a number of sources that previously weren’t even being considered.”
The Georges work with a handful of early-stage Geelong-based manufacturers, each with the potential to transform the categories they operate in, and each based on a high degree of specialisation rather than a focus on undercutting a hometown rival by a couple of bucks on a job.
They make everything from waste-to-power heat engines, to origami-like folded sheet metal, to high-value nutraceuticals from wine waste. Then there’s a consortium whose world-first work in fibre-reinforced geopolymer bridges was featured in The Economist in late-2019. All featured Austeng as their technology enabler, and all serve as an example that things have never been more interesting for Geelong’s manufacturing community.
The Georges believe there’s a lesson for the rest of Australia there too. If manufacturers, research institutes, governments and investors can work together, great things are possible.
Start-up city
Austeng’s role as an enabler and manufacturing partner for high-tech start-ups has its origins in the automotive industry’s demise. When Ford announced in 2013 that it would end car assembly in Australia, it was no small deal for Austeng. The company earned more than half its revenues from automotive work, designing and making production equipment.
“We had to look at what our value proposition was, which was really in that one-off-type specialised equipment,” remembers Lyn. “Probably a sweet spot for us was working with start-up companies and universities and taking the concept or idea and turning it into a prototype or commercial production facility to prove to investors that it actually works.”
A project developing a nanofibre plant earned Austeng a Victorian Engineering Excellence Award in 2014, but no ongoing revenue or stake in the company. They learned they needed to strike a more collaborative model when working with promising start-ups.
“Instead of also simply a fee for service, we offered to provide certain in-kind services, in turn for – depending on how far advanced they were – an equity position in the company and/or an exclusive manufacturing licence,” Lyn explains. “So if it did take off we would share in the benefits and also, in particular of course, keep the jobs in our workshop in Geelong.”
Their first project with this approach was with Imagine Intelligent Materials, which opened the country’s first commercial graphene plant in 2016. It earned Austeng another Victorian Engineering Excellence Award. Today Austeng is also a partner to start-ups including Formflow, Capricorn Power, Viridi Innovations, Polymeric Powders and TCI.
Lyn is a firm advocate for new, high-tech manufacturing businesses, and believes there are giant opportunities in renewable energy technologies.
“It really is important that Australia be at the forefront of this push, by collaborating with our world-class researchers and leveraging existing capabilities we can be at the forefront,” she says. “As I see with our own start-ups that we work with, the more they collaborate and share their successes, the more opportunities become available and the more synergies are created. I think it’s also true that more government support and a change in attitudes can bring a real impetus.
“You just look at the change in the discussion around hydrogen that’s happened in the last year and how many people are now working on hydrogen projects. We’re a small company, and we’ve got two projects [already]. It just shows the importance of exploring new areas and how important, I believe, they will be to creating jobs and prosperity in the future. We really can’t continue to rely on selling iron ore to the Chinese.”
Lyn’s role helping transform manufacturing in her region earned her an OAM last year. She currently heads the Geelong Manufacturing Council (its first female chair) and is founding board member at the Advanced Fibre Cluster and convenor of the Women In Manufacturing Network. She is a self-confessed mounter of soapboxes when it comes to Australia’s weak appetite for investment in early-stage companies.
“We’ll gamble on horse races, but we won’t back our best and brightest innovators, unlike in the US and Europe where there’s a culture of investing in start-ups,” she says. “And of course you’ve got scale-up manufacturing.
“This is particularly problematic because the scale-up costs are much more significant than investing in fintech or that sort of thing. But there are obviously huge opportunities, if we do make that investment and change our attitudes. If we did this on a national scale …”
Austeng is a company of only $6m turnover a year and 22 employees, yet it covers a wide scope of work. Every now and then there will be a technically demanding new facility, such as Monash University’s new National Drop Weight Impact Testing Facility, and Austeng’s name will be attached as a key project partner.
Ross estimates that among its revenues, about a quarter are from start-ups, another quarter from an enduring line of crematorium and cemetery work, and maybe 15% from walk-ins.
The crematorium work dates back to 1989, when the low Australian dollar made a UK provider uncompetitive and Industry Capability Network’s precursor lined Austeng up with servicing subcontracts. From there, Austeng has supplied somewhere between 15 and 20 of their own new products to that industry, including coffin trolleys, automatic charge biers, hydraulic transfer vans and a compact burial system.
Ross says this work has been helped by recent efforts to improve “soft skills” such as communication with clients, and by responding rapidly.
“Back in the good old days, we were a bunch of engineers talking with a bunch of engineers,” he explains. “Now we’re a bunch of engineers talking with people who aren’t engineers, who can’t necessarily read drawings, and don’t necessarily understand the language we’re talking. That’s not necessarily easy for engineers to do, because we found as engineers that customers aren’t always interested in the things that we’re interested in.”
He adds that the shift lends itself nicely to the solutions side of the business – for example a random customer showing up with a truck having maintenance problems.
“It’s not a long consulting process with 50 reports and all this sort of thing, and that’s got a lot of value to the customers across a whole spectrum,” says Ross. “It might not even need an engineer, it might be just a tradesman to take it on and say ‘This is why it’s cracking, this is the problem, and this is what we’ve got to do.’ It’s the ability to act across a broad spectrum, but act quickly and get customers back up and running again.”
Ross says lazy answers are sadly the only ones being given on the issue of manufacturing skills – recently described by the ACCI as in the biggest shortage in 14 years.
“One thing I really, really hope for is that we try to train our own tradesmen,” he remarks. “We’ve got a youth unemployment problem, we’ve got a skills shortage problem, and we go and rob some third-world country, so we’re brain-draining a third-world country and not training our own kids. It just seems the most crazy situation.”
It is another area where the Georges encourage longer-term thinking rather than quick fixes. For the moment, they see innovation breeding innovation in their city, which Lyn says has an impressive diversity of manufacturers but is small enough to encourage serious networking and collaboration.
Their role in it as a manufacturing hub and facilitator shows what’s possible if everyone works together, says Ross. He muses about biochar from Capricorn Power being turned into graphene products and used by Imagine, whose industrial-scale sensors – as with hemp hurd separated by TCI’s decorticators – could be used in FormFlow’s prefabricated houses.
“Even in our small-scale situation at Austeng we have all these early-stage start-ups and all of them can be interconnected and all of them are better, potentially, for that,” he says. “Someone’s waste product can turn into someone else’s raw material, somebody’s technology enhances somebody else’s product and service.
“And we’re a small company in Geelong. If you look at that mini ecosystem that we’re creating and say, ‘Well, look, if we did this on a national scale’, and you connect a whole lot more bits, that potentially makes a really, really good story, and a really strong economy.”