Mr Fix-it?

Boeing Defence Australia VP and MD, John Duddy

The past two years have seen mixed fortune for Boeing Australia. One the one hand, successful and one time/on budget sales and service introductions of C-17 transports and F/A-18F Super Hornets have kept the company at the forefront of the ADF’s acquisition trail. But a string of delayed projects ‘of concern’ including the ADF’s Air 5333 Vigilare air defence command and control system, the JP2043 HF Modernisation (HFMOD) program, and the failed JP129 I-View tactical UAV have seen the company take a credibility hit within defence and industry circles, one it is working hard to come back from.

“I have that ‘fix-it’ label – sometimes it works out well, and sometimes it doesn’t.”

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Two major elements in the resurgence of Boeing’s local arm have been the realignment of its defence business units with those of the US parent company, and the appointment of new Vice President and Managing Director of Boeing Defence Australia, John Duddy, to the role late last year. Duddy has developed a reputation as a ‘fix it guy’ within Boeing after getting several troubled US programs back on track in the past few years.

“I was in the missile business for about 15 years at what was Rockwell at the time building the Hellfire missile and the AGM-130 version of the GBU-15,” he told Australian Aviation. “Around 1996 I was asked to move to Rocketdyne as there were some issues there, and I was asked to turn around the organisation. Rocketdyne makes the space shuttle main engines and has a lot of the market for expendable engines such as those used on the Delta rocket.”

In 2003, Duddy moved from rocket engines to the rockets themselves, moving across to Boeing’s Delta program shortly after the company had been forced to write off millions of dollars on that program. “It wasn’t so much performance related, but we had misjudged the market,” he said. “Our business model was to build 400 missiles, but the market dropped to just 100 in a short period of time. So I worked on that for two years, and during that time the United Launch Alliance was formed with Lockheed Martin. I represented the program in the negotiations and that was consummated in 2005.”

From Delta, Duddy was seconded to the GPS-2F (or Navstar-2F) program for which Boeing was contracted to build and launch a constellation of military GPS satellites for the US DoD. “What I found was the GPS program was in trouble – it was a hostile environment and it was coming to the point where the customer was going to terminate the program, so they asked me to come in and see what I could do,” he explained. “So we made some difficult choices which included changing the leadership group out, and we worked on the execution with the customer as a team. They went from being close to terminating the program in January 2006 to ordering three more satellites that July.”

Duddy later led a team that bid for the next tranche of satellites under the GPS-3A program. Because of Boeing’s previously poor performance on -2F and its desire to deliver on that program, the company hesitated on whether to bid for -3A, deciding only very late in the piece to go ahead with a bid. “We stepped into it kind of late,” he said. “We had to go from six people in July 2007 to about 200 people very quickly, so we staffed up and tried to catch Lockheed Martin. We just about caught up but lost in the end, but I was really proud of that team that came from nowhere to almost win it.”

And while the -3F bid process was underway, Duddy was also charged with heading up a program to massively upgrade the ground control segment of the entire US GPS satellite constellation. “The legacy system was a mainframe of old computers from the 1970s, and we were going from the mainframe to distributed architecture,” he related. “But you can’t have the constellation go down, as not just the GPS system but the entire world’s financial institutions which also use GPS to track financial transactions would also go down. We had to change out the control system for that which was quite an undertaking – I relate it to changing out your car’s engine while you’re driving down the freeway at 100 km an hour. But we switched it out and it went flawlessly!”

Boeing Defence Australia

It was towards the end of his time at the -2F program that Duddy was asked to interview for the position in Australia. “I interviewed in October last year, and I got a phone call in November that I had the job,” he said. “I came out to meet the leadership team soon after that and to see where everything was and to understand how we were doing business which gave me a great start, and I’ve pretty much hit the ground at full speed since I got here in February.”

Duddy is the fourth person to be in the job in less than a year, after former head David Withers departed and transitional heads Jeff Worley and Steve Goo held the reigns in lieu of a more permanent appointment. “I think another reason I got picked for this job is through my previous activities throughout my career,” said Duddy. “I know a lot of people back with Integrated Defense Systems (IDS) so there’s reachback; I know who to call if we need help and I’m not afraid to ask for help. At this point in time we are working on our execution which is really doing very well at the moment.”

“I have that ‘Fix it’ label – sometimes it works out well, and sometimes it doesn’t,” he said. “The goal is to get everyone on the same page; we’ve all got to realise that we have a job to do and how do we go do that together, so that’s the most important thing to me. Then secondly we need to have a very clear execution and battle rhythm that makes sure we deliver our products when we say we will.”

Duddy has overseen the final stages of a major restructure of Boeing’s Australian defence business which has seen it realigned more closely with its US counterparts, thus streamlining the support and ‘reachback’ provided to local development and support programs. “We wanted to structure Boeing Defence Australia (BDA) like the rest of IDS, so with that there are the three business units; there’s Global Support Systems (GSS); there’s Network & Space Systems (NSS), and there’s Boeing Military Aircraft (BMA). So now have three local business leaders; Scott March is here representing BMA, there’s Steve Parker representing NSS, and Wayne Needs with GSS. They interact back with the parent organisation in the US, and my role is to be the senior leader here. They also report into me, and my job is to make sure they get all the support they need, to prioritise those needs, to also be the face of BDA, and to make sure they’re successful which makes all of us successful.”

And despite the process starting before Duddy’s arrival, Boeing has had some wins in recent months with confidence growing in both the Vigilare and HFMOD projects. Vigilare in particular appears to have come good to the point where Boeing displayed a simulation of the system at the recent Dubai and Avalon airshows, and hopes to deploy the system at the RAAF’s Northern and Eastern Regional Operations Centres (NORTHROC and EASTROC) from 2010.

“The other thing for me is to see where we go from here,” he added. “I think we’ve turned some corners as you’ve seen with Vigilare and HFMOD, and from my perspective we need to make sure our customer, mainly the DMO’s needs are being met and we are giving them our support, and I’m spending some time in Canberra to help that process. In order to help their confidence with us, we want to make sure that we are very transparent with the DMO and the minister, and tell them what’s going well and what’s not. An old boss told me once, ‘go ugly early’. In other words, if you’ve got an issue, put it on the table and don’t try to just ‘pump sunshine’ until it turns into a big problem.”

But BDA’s problems extend beyond getting the troubled Vigilare and HFMOD back on track. With other programs such as the Wedgetail modification work, F-111 deep support and the F/A-18 Hornet Upgrade (HUG) program all starting to wind down, the company has a large and highly skilled workforce it quickly needs to find new work for. All but one of the Wedgetail AEW&C aircraft have now been delivered to the flight test program with the final aircraft expected to follow in August, F-111 deep maintenance is ramping down as that aircraft nears its withdrawal late next year, and only the HUG Phase 2.3 electronic warfare upgrade production work remains to be completed on that massive project.

“We have identified the fact that we have already lost people, and that we will be smaller as the F-111 in particular is completed,” he told us. “But we have also identified a bunch of things that we’re going to go off and chase. We’ve talked about getting various Boeing supplier work packages here, but with the way things have dropped (due to the global economic crisis), it’s difficult for it to come this way, although there is still some potential. There are some near term things and some longer term things. We’re still waiting to hear about HUG 2.3 – there’s some engineering and production work still to be let there. There’s long term for F/A-18F, and there’s long term for C-17 and Wedgetail, and hopefully the P-8 (manned maritime reconnaissance aircraft) ends up heading this way as well, so we’ll continue to utilise those facilities at Amberley and Williamtown as strategic areas because we’ve got a great workforce out there.

“The F-111 is a great example,” he added. “The guys who have been working on those know the end is next year, but their performance indicators are above one on the aircraft, so I’m really proud of them. I did go out and meet with them, and they’re naturally concerned and have a right to be. I’m not telling them the picture’s rosy – because we’ve got to see what happens with some of the pursuits we have. The F/A-18Fs are not going to need the same amount of support as the F-111s have because of their age, and we’re continuing to let our people know that.

“We have identified the fact that we have already lost people, and that we will be smaller as the F-111 in particular is completed.”

That said, Boeing had to start laying off some of its Amberley workforce recently. “We had to give out some notices in early March which was very difficult. But we’re not going to say ‘there’s a million jobs coming next month, trust us,’ because that’s not going to happen – we’ve got to be honest. The best things we can do for our employees is to give them what we know, tell what we don’t know, and tell them what we can’t tell them, but we want to give them all the information they need to get on with their lives. Right now our critical mass number is fluctuating, we’re hanging onto everything we can while we knock on every door we can to get work at AMB. We want to make sure we get work and we keep it.”

And in an effort to get that new work from overseas programs or to assist in selling some of its products internationally, BDA has engaged with the recently formed Defence Export Unit to assist in its sales campaigns. “We’ve been working with Terry Whelan and Major General Fairweather from the Defence Export Unit to help us, and they’ve been very helpful in promoting Australian business around the world,” Duddy explained. “Examples include India and the UAE looking at Vigilare and HFMOD, but at the same time we’re making sure we don’t disrupt the execution of the Australian programs. Those are great systems and so to be able to utilise that would be a very big deal. We’re also looking at regional capabilities to try to bring work in from other countries.”

Closer to home, Boeing remain engaged with the DMO on the question of ongoing deeper level support for the RAAF’s 71 ‘classic’ Hornets based at Williamtown and Tindal. The company lost the support contract to BAE Systems last year, but has been granted a six month extension to the former contract because of Boeing’s intellectual property (IP) rights which Duddy is reluctant to relinquish. “From the customer point of view, we’ve told them where we stand so it’s between them and BAE I think at this point,” Duddy offered. “The key is, we need to make some decisions by the June timeframe as that’s when the six month extension runs out. The IP is really the key thing at this point – we built and designed the plane, and there are more of them in service around the world. It’s really a standard thing, so we were a bit surprised when somebody would sign up to a contract with someone else who didn’t have the IP. But when they realised it and the customer came back to us about giving IP, we said, ‘well, we didn’t sign up for it, they did!’ So that’s really important to us – with F/A-18s, we have a lot of current and potential customers around the world and we want to make sure we protect that.”

Longer Term

Moving forward, Duddy recognises that running separate in-country support programs for small fleets of Wedgetails, C-17s and Super Hornets may prove to be cost prohibitive, and so he is looking for innovative solutions. “We’re still negotiating with DMO on F/A-18F in-service support,” he explained. “But the grand vision for me is that we’ll have F/A-18F and C-17 and all those things which, standing on their own, can be kind of expensive, but if you bundle up some of them it provides a more stable workforce and it also saves the customer cost because you’re not running separate activities going on. I also sat with (Wedgetail project head) AVM Chris Deeble at Avalon to pull together plans for the Wedgetail support contract. It’s been a great relationship – we had a great planning session at Williamtown in February where we set where we go from here in terms of support, so that’s off and running and we want to finalise the plan by June.”

“I didn’t fly here to shut the place down, I came here to make this place fly! I applied for a four year posting, and I hope I stay that long.”

And further out, Boeing has identified a large market for its products in Australia, and for products it has developed for Australia to be sold internationally. “We saw potential for US$37bn (A$51bn) over 10 years, and based on that, we’ve formed our long range business plans that will make sense for us, while in the near term we’re looking at what we can do to get our workforce stabilised,” said Duddy. “We looked at what was in the DMO, and we saw a sizable market out there. The reason we did that was because we wanted Boeing (US) to understand that these are the things we’re capable of doing in Australia. We can really be a global company from here. That would be a first for Boeing, and I think this is the best place in the world to do it! There were questions about whether Boeing was going to be here in the future or not. I didn’t fly here to shut the place down; I came here to make this place fly! I applied for a four year posting, and I hope I stay that long.”