PODCAST: Making it in the USA, Vince Howie

Phil Tarrant:

G'day everyone, it's Phil Tarrant here. I'm the host of the Defence Connect podcast. Thanks for joining us, live from Avalon. We're into the third day now and plenty of activity. I do apologise in advance, we're in the middle of a flying display and I think there's a F-16 flying overhead.

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Today our guest for this podcast, I've got Vince Howie with us. Vince is an aerospace and defence director with Oklahoma Department of Commerce, so Vince is in town with a lot of his other colleagues from other states in America and they're out here looking at Australian defence business and looking to attract some of the talented SMEs and businesses in Australia over to the US to set up shop. How you finding it Vince?

Vince Howie:

It's been great. Philip, that sound that doesn't bother me. We always call it the sound of freedom. Happy to be here on my first time in Australia. It's been fabulous.

Phil Tarrant:

How you finding doing business with the Aussies? You enjoying it?

Vince Howie:

You know, I went to the Singapore airshow last year and I met some of the Aussies there. We do Paris and Farnborough every year so this year I thought, well I might as well try the Avalon airshow. The Australians have been great. In fact, they remind me of home.

Phil Tarrant:

You're here representing Oklahoma and you're within the US pavilion here. What other states are represented in terms of coming out from America?

Vince Howie:

Yeah, there's four states here. You've got Maryland, Connecticut, Oregon, and Oklahoma.

Phil Tarrant:

So in terms of defence business in those respective states, how does Oklahoma sit?

Vince Howie:

Maryland probably has the most businesses, only because they are the ... Right next to Washington D.C., and so if you work ... I've been to Washington D.C. twice in my career and you either live in Virginia or Maryland, and so every major company is represented there so I know they have more companies.

Now, what Oklahoma has more manufacturing and maintenance repair and overhaul capability there. That's really where our expertise lies.

Phil Tarrant:

So here in Avalon and here in Australia, you're trying to attract Australian businesses into Oklahoma to perhaps set up an arm of an Australian business or to move out there directly to look to get into the US supply chain. Can you just talk me a little bit about the dynamics of Australian businesses moving into somewhere like Oklahoma in defence?

Vince Howie:

Right. We have one of Australia's premier companies, Ferra, has opened their North American showroom in Grove, Oklahoma, and because of that partnership that we have with Ferra, it just made me realise how many companies that Australia has.

Over the course of the last three days I have visited multiple companies and I have a commitment from six of them that are going to come to the US and will come visit Oklahoma. In fact, many of them are changing their plans to visit Oklahoma because they didn't realise how much aerospace we have in the state. We just finished up our aerospace economic impact on the state. To my surprise, we have about 1,275 businesses in aerospace in the state of Oklahoma. We employ around 120,00 people in the aerospace industry. It's big business for us.

If you look at the United States, right down the very centre is a road called Interstate 35 and it's known as the I-35 corridor, that's the fastest growing area in the United States. People are moving their business from the east and west coast to the centre part of the United States because we have such low cost of living. For example, Oklahoma is number two for cost of energy. Crime rate's low. Housing ... Some of the best housing rates. When I lived in Washington D.C. compared to the house I have here in Oklahoma it's about half the price.

Businesses can come to Oklahoma and be much, much more competitive. My whole plan here is to come visit with companies and say, show them the advantages that Oklahoma has, and all I want them to do is just consider us and give us a look when they're considering putting a presence into the United States.

Phil Tarrant:

Do you think it's easy or relatively straightforward for Australian businesses to look to move into the US market and join a US supply chain? Is that often a step a little bit too far for most Aussie businesses or is it quite a reasonably easy process for them to get in there?

Vince Howie:

The process .. There goes that sound of freedom again. The process for them to come to the United States, I think, is really quite easy. Especially for Australian business, because our laws, our court systems, our business practises, our morals, the way that we conduct business, is so similar to one another. Then the Australians do have so many of our platforms already and they're already doing work in those areas.

The US is such a large market. I know it scares a lot of people, but because it is such a big market there's lots and lots of opportunity, even for small machine shots. I have five companies that I brought with me. One of them only has 12 employees, but it's incredible the amount of work that he does for Pratt and ... He does engine blades. RCI is the name of the company. They already have ties here with some of the propulsion folks.

For Australian companies to come to Oklahoma, or to the US, it's a natural fit. I saw that with Ferra again. They came, they brought a very small presence. I think when they first started it was less than 10 employees, and now they have their North American showroom which is a state of the art, beautiful facility there.

Phil Tarrant:

As an Australian business looking to grow outside of Australia into the US supply chain, is there a particular point in time when a business is ready to do that, or do they need to be a particular level of sophistication to actually make it worth their while?

Vince Howie:

You know what, that's an interesting question because businesses go through different cycles and it depends on what their business strategy is on when they're ready to make the move. I've noticed that a couple of the businesses that I've met with are almost startups and they've got some really unique ideas, some great capabilities, and they've shared them with the Australian market and now they're looking to say, "Wow, there's ... We've got a great reception for this in Australia. Let's try the US market." In those cases, you know, it's almost let's go try the US market.

In others, they're established businesses, they have a lot of ... Some of them are doing a lot of trade with the US already. It's well known fact ... I'm not trying to say anything [inaudible 00:06:40], but if you want to do business in the US, you need a presence in the US. Much like here, a lot of this is built on relationships. You want to look someone eye to eye to see, can I trust them? Are they going to do what they tell me they're going to do? Is this contract going to be worth the paper it's written on?

It depends on the stage of the business, it depends on what their business's practise are, and what their goals are and what they're trying to achieve. It's not any one phase of the business, it's kind of what their philosophy is.

Phil Tarrant:

What's the sort of overall reputation of Aussie businesses or Aussie defence professionals over in America? Are we well liked? Do we open up doors okay?

Vince Howie:

Absolutely. I'm a retired former SES with the U.S. Air Force. I spent 29 years in the Air Force. It made me equivalent to a brigadier general. When I was in the Pentagon I had an Aussie officer that worked with me. At Tinker Air Force Base where I spent 19 of my 29 years, it's the largest maintenance repair and overhaul facility in the world for DOD, located in Oklahoma City, we have Australian exchange officers there, always very professional, great personalities, best guy to go have a beer with.

The reputation here, and because of Ferra, knowing what a world class company that is, I think the reputation is very good. Especially in companies that are in the defence industry, in the aerospace industry. Let's face it, if you don't ... If you're not a top notch company in aerospace you don't survive. This is not a something where somebody can slack off or not have the right technology, not do the followup, not do the maintenance. You won't survive in this industry.

Phil Tarrant:

Culturally, is there anything in particular that you think Aussies can do a little bit better or a little bit more mindful of when they're doing business with Americans? Because our styles are sometimes a little bit different.

Vince Howie:

Sure, sure.

Phil Tarrant:

Americans get a little bit more, maybe forward in ... Forward in the way they operate, but do you reckon just let it happen, let it happen organically, or is there anything we can do better do you think?

Vince Howie:

Again, I think our philosophies and mindsets and business practises are very similar. The one thing that has kind of struck me as I've visited a lot of these businesses is that they're afraid that the US is too big, and so they haven't even thought about them, it hasn't been in their business plan to even to look at the US. Then once they ... We have a conversation and we talk to them about how we can open the door, bring them in and let them see what there is, meet the communities, I think they're put at relieve. Their minds are ... They're a lot more willing to take that chance and maybe look at the US market.

I would say if they would be ... Don't try to take on the entire United States, it is way too big. But if you cold go to one singular location and then make contacts, establish relationships, it's a very easy thing to do.

Phil Tarrant:

So the Oklahoma Department of Commerce, so you're state government.

Vince Howie:

Yeah.

Phil Tarrant:

Are very openly and actively pursuing Australian business, but also other businesses globally, to bring them in to the defence community within Oklahoma. Is that like a big focus for the state moving forward?

Vince Howie:

Absolutely. Aerospace is our number two industry in the sate of Oklahoma. Number one is oil and gas. We're only behind Texas only because they're bigger. They're number one, we're number two. But aerospace is ... it's a high tech, high paying jobs. The jobs in Oklahoma average about $25,000 more per year in aerospace than the state average.

Phil Tarrant:

Okay.

Vince Howie:

So it's the kind of jobs that you want there. They're high tech, engineers, but more than that is the economic impact that it has on the state.

Phil Tarrant:

Do you think it's east for Aussie businesses looking to set themselves up in the States or within Oklahoma in particular, the people talent there, they're quite easy to be able to find the people to work within your firms? You have the knowledge and the talent pool there that will be attractive to Australian businesses?

Vince Howie:

Yeah, absolutely. Again, like I was saying, we have 120,000 people in the industry, 1,275 different businesses. We have six military installations in the state. We also have the FAA Mike Monroney Centre, which is the training centre for all air traffic controllers. Because there's so many of those military installations there, you know a young guy goes in, 18, 20 years old, he serves his 20 years, he's 40 years old, he's looking for a career. That's another reason I think that there's so many businesses there and it's easy to place those guys and keep them in the state.

We also have the CareerTech Programme, which will take companies' employees and train them at no cost to the company, so if they want a sheet metal mechanic, a hydraulics guy, or avionics. Another piece that they do is we do free employment testing. They've got a prospective employee, they send him to one of the CareerTech centres. Say he's a sheet metal guy, they'll give him a set of blueprints, a bag of parts, and see what he can do. They can tell real quickly, is this guy at journeyman level or does he need to go back to school? Again, that is at no cost to the companies.

In fact, one company just bought a very complex CNC machine from Germany. We took their employees, shipped them to Germany for training and brought them back so they could train the rest of the employees and did that at no cost to the company.

Phil Tarrant:

[inaudible 00:11:57]. If there was one thing that any Aussie business which is looking to connect or enter into the US aerospace or defence supply chain, what's the one thing they could to today to better gear them for success in the future?

Vince Howie:

Call me.

Phil Tarrant:

Call you?

Vince Howie:

No and it's not just military. In Tulsa, which is about 90 miles away from Oklahoma City, is the American Airline and now US Air Maintenance, Repair and Overhaul Facility and they employ around 6,000 people. Between these ... They claim they're the largest commercial MRO in the world, and Tinker is the largest defence. We have both defence and commercial so there's lots of businesses there.

The main thing I would tell Australians is find somebody that they can establish a relationships with, they they can trust, so that they can open doors and let them see what it takes to do business in the United States. That it's really fairly easy.

We also have incentive programmes that we will help pay when you bring jobs to the state. In fact, we've got ... One program's called the Quality Jobs Programme, and depending on the number of jobs, the investment, and the salaries that are paid, it pays back to the company 5% of the income tax that those employees that they bring to the state to them on a quarterly basis in cash.

Then we have an engineering tex credit. The only state in the nation that has an aerospace engineering tax credit. For the engineers that they hire, they get a 5% of their salary tax credit on the corporate taxes for five years. Then it's also good to the employee, so if the employee gets $5,000 for five years off their personal income tax. If the company hires somebody that graduated from Oklahoma University, that 5% goes to 10%, so we want [inaudible 00:13:47] ... We're trying to keep our young folks in state.

Phil Tarrant:

Keep in all in-

Vince Howie:

Yeah, yeah.

Phil Tarrant:

Yeah. Makes a lot of sense.

Vince Howie:

Because we have 12 universities that have aerospace degrees at some great engineering schools.

Phil Tarrant:

Interesting. Look, you know, I think for a lot of our listeners who are considering expansion, considering the US market, I think traditionally it's always been seen as a tough market to crack-

Vince Howie:

It is.

Phil Tarrant:

As an Aussie business. But I guess part of the way of doing it is to actually set up in the States and that's going to give you a big head start to get into the US supply chain.

Do you think that, just to finish off with this, that connecting with the customer, so connecting with military, the relevant services, the appetite between those guys that connect with industry versus what you've seen in Australia so far, would you say it's similar or are they more engaged in dealing with industry?

Vince Howie:

It's quite similar in some respects. In the US, we tend to farm things out all across the US. For political reasons in a lot of cases.

Phil Tarrant:

Yeah.

Vince Howie:

Because you want congressional support on anytime you do anything for the military. In the commercial world it's not quite that way, but they're always looking for the best quality at the best price. I think that for Australian companies, number one is they need to put a presence in the US. Again, that's to develop those relationships. Go out there and meet the companies that do similar things that they do. Maybe they'll be a competitor and maybe they will be a source for them someday. Because things happen. You could have a great source today and something happened in their shop and they're gone and they need help immediately, where an Australian company could fit right in. Sometimes the orders are so big they have to farm them out.

I think there's a lot of ways to do that, but unless you're looking eye to eye, it's tough to do business.

Phil Tarrant:

Very hard.

Vince Howie:

Yeah.

Phil Tarrant:

I completely agree with that. Vince, I've really enjoyed the chat. Thanks for stopping by and saying G'day. Look, I feel a lot more knowledgeable about, not only the great state of Oklahoma, but just the opportunities for Aussie businesses who are looking to enter that US supply chain.

If anyone wants to find out more about you guys, website or anything? Where's a place they can track you guys down?

Vince Howie:

Yeah, okcommerce.gov is one place. If you want to email me personally, it's just This email address is being protected from spambots. You need JavaScript enabled to view it.. You can go google, just Oklahoma commerce, it will pop right up.

Phil Tarrant:

Okay, excellent.

Vince Howie:

So it's easy to do. I just want to say thanks for giving me opportunity to brag a little bit about our state.

Phil Tarrant:

No problem.

Vince Howie:

I'm happy to help anyone and share an opportunity for them to come to the United States, host them. We have the Thunder basketball team. I'll take them buy a beer, we'll go to a basketball game.

Phil Tarrant:

That sounds all right. I think a lot of Aussies will put their hand up for that.

I think for our listeners, look, if you're got any questions for Vince or for me in general, if I can help you out in terms of pointing you in right direction, you can contact our team This email address is being protected from spambots. You need JavaScript enabled to view it.. Anything specifically for Vince, we'll flick it over to you and put [inaudible 00:16:38] into it. Remember to follow us on all the social stuff; Facebook, Twitter, LinkedIn. Go to defenceconnect.com.au for daily breaking news and market intelligence around defence. Thanks for joining us. We'll see you again next time. Bye bye.