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How opportunities arose after the auto industry left town

Ford closing its car assembly plant in Geelong was the death knell for many small businesses in the tight community south-west of Melbourne. Despite both state and federal government promises, unions getting militant and locals crossing their fingers, toes – just about everything – hoping that the Australian car industry could survive, the doors closed on the plant in October 2016. A high Australian dollar, less government regulation in overseas markets, plus cheap labour in those same markets all contributed to the plant’s demise.

However, not everybody that relied on the automotive industry to make a living banged their heads against the cinder wall of abandoned warehouses and deserted assembly lines.
Many had been in the industry for years, if not decades. They had a lot invested in Geelong. Not just in nuts and bolts, lathes, sensors, conveyors and production lines but more prominant things – family, the community, the local footie team.

Small engineering enterprise, Austeng, was a typical example of a company that relied heavily on the big players in the market. A family concern that had been run for 25 years by husband and wife team Lyn and Ross George – he the engineer, she a commercial litigator – they knew that adjustments were essential. But what changes? And how? Closing up wasn’t an option, but both Lyn and Ross knew a business plan was needed if they were going to survive. For a company that was inducted into the Tool Manufacturing Hall of Fame in 2009 it seemed there might be some tough times ahead.

Speaking at the recent Women in Industry Conference held in Melbourne in June, Lyn George admitted that initially things were not looking great for their little engineering enterprise.

“We were very much involved in the automotive industry,” said George. “Our biggest client was Ford. Geelong has been badly hit by the closure of a number of automotive clients and their spin-off suppliers’ chain clients and we’d had other challenges. But with disruption comes opportunities. So the question was ‘how do we transition our company?’”

George was uncomfortable talking about sea change buzz words like Unique Value Proposition (UVP), but soon got on board when Austeng connected with business analysts who said that the best way forward was to try and create a niche for themselves.

Then there were the little factors they needed to initiate. Things that a process engineering company wouldn’t usually think of doing — including publicising its wins such as awards via press releases and presentations.

Austeng also had to think differently when it came to redefining its core business and had to get its staff on-board and get them outside of their comfort zone. This was especially true of her husband, Ross, who baulked at the thought of having to start networking.

“I made the suggestion to my husband that we had to [network] and he was horrified,” she said. “He always had the thought that if you had a good product, then customers would come to you. It had worked like that up until now. He also did not like the idea of networking – getting out there. He thought he had to stay at work and work hard. That was the way to success. I really had to show the way and start networking in a very male-dominated industry.”

George believes most people think that networking is another word for trying to schmooze clients. She sees it differently. To her, it’s more about engaging with people and being curious about what they are doing. Where those conversations can lead is surprising, she said. Also, it is advisable to join local industry associations.

“I really would strongly suggest you do that,” she said. “In our case it was the Geelong Manufacturing Council and Engineering Network. And also be aware of what is going on with other companies. Make contact with various government bodies. Let them know what you are doing. Also be aware of what grant options were available.”

George also found that universities were great partners – not just due to the financial incentives that can be extricated through government and private grants, but also due to the ideas that can be thrashed around by both parties.

Once this was all taken into account, Austeng got to work. One of the first projects was helping deliver a nano-fibre production machine. At the time there was grant money floating around left over from the automotive sector’s skills and development program. In order to benefit from the $500,000, local businesses, universities and technologies had to be involved.

“Three companies, including us and Cytomatrix, put in a joint application that we would produce commercial production equipment that we could produce nano-fibres on a commercial scale,” said George. “It was tested at Deakin University for about six months. That really involved our engineers talking to the scientists and getting the background on how it all worked out of their heads and converting that into engineering scale of equipment. Before we’d even finished the machine, a Swiss company found out about it and came in and invested in our partner Cytomatrix.”

It was exciting times, yet once it was all over there was an important lesson to be learned. While they were pleased to be involved in the project, and it expanded their horizons, they missed out when it came to investment opportunities in the new business. Maybe it was because they got too caught up in an exhilarating new field, or just didn’t think beyond getting a working model up and running. They wouldn’t be so naïve next time around. But there were positives, too.

“We received an excellence award for R and D innovation,” said George. “So we sat back on that and looked at it and said ‘that was great’. We had $250,000 worth of equipment that we provided. We were hoping for manufacturing rights and maybe investing in the company but it happened all so fast that we were left high and dry. That did influence us as to what our business model would be in the future.”

With her legal background in tow, George realised that some companies that might have a patent don’t have a lot of money. So they thought they could help those companies to the next stage by providing them with free legal and engineering advice. In return, Austeng would ask for manufacturing rights and/or equity depending on how it worked out. She saw it is a key ingredient to securing a long-term future for Austeng.

That future involved graphene, a substance that is one atom thick and is put together in a lattice-type arrangement. It is incredibly light, and strong and it is electrically and thermally conductive. Austeng was approached by a Sydney-based company called Imagine Intelligent Materials (Imagine IM). While Austeng had missed investment opportunities with the nano-fibre venture, it was the company’s work on that project that encouraged Deakin University to recommend them to Imagine IM.

Imagine IM was creating graphene in a particular way and they needed to scale it up for commercial applications. They already had a client in the geo textiles field, Geofrabrics Australasia, which had various applications for its products. This included putting a layer of geo textiles on the bottom of dams to stop toxic leeching into the substrate.

“We managed to build a pilot plant facility which produces 10 tonnes of graphene a year,” said George.

As with the nano-fibre project, once the momentum began, things started to happen quickly. A second plant was built in North Geelong and the orders from America started coming in. And unlike the first project, they invested in the company pretty quickly.
All these innovations came about because Austeng was willing to sit down, work out a plan, play to its strengths and get help from different sectors – not just industrial, but universities and government bodies.

“Our niche is a one-stop shop and three words encapsulated our UVP –  visualise, engineer deliver,” said George. “We’re also vertically integrated so we have engineers, draughtsmen and tradespeople. So if we are given a concept, we can come up with a concept to engineer it, design it, draught it and then build it.”

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