On Point: Milskil leading SMEs in supporting Defence capability

John Lonergan last joined the Defence Connect team at the 2017 Avalon Airshow, where we got our first look at the F-35 Lightning II Joint Strike Fighter. 

In his latest conversation with Phil Tarrant and the Defence Connect Podcast, Lonergan discussed the arrival of two F-35s in Australia later this year, and to unpack the company’s recent contract win with Lockheed Martin, which will see Milskil delivering training services across the JSF program in Australia.

Lonergan covered the technological developments within the space and the new facilities of the JSF, discussed Milskil’s working relationship with Lockheed Martin and shares future business development plans in line with the opportunities that the company believes are likely to present themselves.

Phil Tarrant: How have you found working with Lockheed, obviously it's a major prime here [in the F-35 program] in Australia, and globally it's a significant enterprise. Has it been easy to work with? When you look at the SME sector and take Milskil as an example of how to do it well, how do you become an attraction business to a prime? So what's the inherent capabilities or the DNA of a really sound SME that primes find attractive? And imagine sort of financial security assurances is key, process operations. But what else do the primes look at to get comfort with working with an SME?

John Lonergan: So we've worked with a number of companies. Obviously we're working with Lockheed Martin, the global company. So we've worked closely with a team in the US. We also work with the teams out here in Australia. And I'd have to say, it's been one of true teaming and a really good partnership. And it's been a very easy journey so far working with them.

I think to be attractive, you probably need to be doing something that other prime can't do, or they can't do as well as you do. So that might be a matter of style, or it might be a matter of something that's just so niche and difficult to manage across a broad business that it's much easier to get someone that understands the environment. So fighter trainings are a classic example of that. To do that well takes a lot of effort, takes a lot of knowledge. It's just not something that you decide to do and hire some people and move into it.

So I think it's important that you're offering them a value proposition that's gonna make it easier for them to deliver what they want to deliver. And also, mitigate risk in terms of actually them being assured that whatever they've been tasked with, bringing you on board is actually gonna get that delivered. And that's gonna reduce the risk of the program from their perspective.

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Phil Tarrant: I actually went to your facilities up in Williamtown, on the base there. Saw the operation. You've got some very talented pilots up there. Some from the US and Canada and Australia. So it's very multicultural in terms of the assets you have, in terms of the training capabilities.

The JSF facility is there. There's been a huge amount of infrastructure development. And I haven't been up there for a little while. Before we came in here, you mentioned that it's significantly advanced now. So we're just on ready to start getting these plans operational.

But looking at your facilities back then, what needs to happen to them in order for you to satisfy the training requirements for the JSF?

John Lonergan: So the integrated training centre for the F-35 at Williamtown is constructed. It's been fitted out. I think simulators are going in. Most of the maintenance training devices, etc are in. So it's really in the last stages of all of the tools, if you like to enable training to be put in there. So following on from that, it'll be a case of our workforce being trained and up skilled on the JSFs to start training.

We've got several different areas of training that we're being tasked with under the JSF. A new one for us is we'll be conducting the maintenance training of the rough maintainers. So we've assembled a workforce of maintainers from a broad background, from each of the services defence industry. They've all got a great lot of skills, a lot of passion for technology, and certainly a lot of passion for the JSF.

What needs to happen next for those guys is Lockheed Martin has a global mobile training team, which they send round the world to do the initial skills training for local SMEs, such as ourself. So the training for those guys will start very soon. The other major part of our training is the Air Crew training, which is something we're well known for with the Classic Super and Growler. Our Air Crew will have to go over to the states to undertake about five months of training, again, facilitated by Lockheed Martin, before they come back to commence instruction.

Phil Tarrant: When you sort of pin yourself against the other SMEs in this space, you've done exceptionally well. And there's been a great journey for Milskil over there for 16, 17 years. When you speak to your contemporaries across the SME space, and you probably just share how you see the world and what's going on, and challenges and frustrations, what would be your key tip for these SMEs who are entering defence or who are new to defence to stay the course and go from being yourself not having any contracts whatever, to now all the fast jet training stuff. What's it take?

John Lonergan: We spoke about this at Avalon. And I don't think it's really changed. I think, first of all, you need to know what you stand for and what your product is, and what your value proposition is to the customer. Ultimately the end user being defence, but also the other point I made, and I'd reinforce, is the ability to develop effective and meaningful relationships with defence primes. By virtue, generally, have a shepherding over the top of a lot of the work opportunities. And making sure that they understand what you do. And that you can give them confidence that not only do you have a good product, but you know how to manage the delivery of it.

So that's what I get up each day and try and do. And if that works, then I'd say that works.

It's very operationally-focused. I would say it's very war fighter focused. We understand the mission for defence. We understand the capability that they need to generate. And we're passionate about coming up with solutions to generate the capability to meet their mission. So if you walk around Milskil, it has a real vibe. And when we get people that don't come from our environment, even when they're in our corporate building, they're kinda going, there's a bit of a vibe going on here. People talk to each other differently. And that's because it's all been borne up out of operations. So very outcome-focused, and quality at the same time.

Phil Tarrant: Take me through Williamtown. We're at Newcastle at the moment. What's it like to be an SME out there? Has everybody got a bit of swing to their step? Is everyone upbeat, confident about the future? What's the collaboration between SMEs up in Hunter? I know there's a Hunter unit. Are you involved in that dialogue? Do you get together with your contemporaries across other SMEs very often?

John Lonergan: If we look at certainly Williamtown is now building into a major hub for defence. Our sole swing person moved into a new corporate headquarters and also operations hub for us in Williamtown Aerospace Center. There's more and more companies moving in there. So there's certainly ... and they're not all the big companies. A lot of the SME's in there are finding places in and amongst the major primes in that facility. So Williamtown itself, from a defence industry perspective, is turning into a hub.

If we look at what's going on on the base, the traditional things have been there for years. Obviously, Air Combat Group with its Classics. The E-7 is going through upgrades. And of course, it seems like they've been digging at Williamtown for the last ten years. And building to bring the JSF infrastructure in. And that is completely changed what the base of Williamtown looks like. The amount of infrastructure that's gone in to support JSF. And most of that is near completion.

So there is a really big vibe. And I think everyone here is now seeing that actually the JSF is about to turn up on current estimates. We'll see the first of those the end of the year. So I think there's a lot of excitement that goes with that.

Collaboration is not as much as probably we should. One of the reasons of that is we're very focused into a very unique area. We deliver operational training. Most people deliver more focused in engineering, IT and those things. So we're kind of a unique entity. We don't really have a peer group in the sense of the products that we deliver. So we tend to be quite focused towards that area the customer buys.

The full Defence Connect Podcast with John Lonergan is available here. 

Listen to previous episodes of the Defence Connect podcast:

Episode 489: SPOTLIGHT: Scaling advanced manufacturing, with Anduril’s Brian Schimpf and David Goodrich
Episode 488: SPOTLIGHT: How quantum will revolutionise PNT and RF sensing, with DSTG’s Andrew Seedhouse and QuantX’s Andre Luiten
Episode 487: DEFENCE PROPERTY PODCAST: Investing in property from post to post
Episode 486: SPOTLIGHT: Quantum – revolutionising Defence, health and energy – with Dr Cathy Foley, Australia’s chief scientist
Episode 485: CONTESTED GROUND: Unpacking resource and food security, with Senator Matt Canavan
Episode 484: SPOTLIGHT: Commercialising academic and industry research, with Defence Trailblazer’s Dr Sanjay Mazumdar
Episode 483: SPOTLIGHT: Pitching to Defence, with Professor Emily Hilder and Dan Bennett
Episode 482: PODCAST: Contested battlespace, with former prime minister Scott Morrison
Episode 481: CONTESTED GROUND: Into the space frontier with former prime minister Scott Morrison
Episode 480: SPOTLIGHT: The Innovation, Science and Technology Strategy, with Professor Tanya Monro