This week on the Defence Connect Podcast, we introduce you to BAE Systems Australia’s new chief executive Gabby Costigan.
Costigan, an ex-colonel in the Australian Army, takes us through her illustrious career starting with her time in the Australian Defence Force, her experience working with NATO, her deployment to Afghanistan where she worked in logistics, followed by her posting to the US where she went to Central Command in Tampa, before leaving Defence and finding her way to the role of CEO for Linfox Asia.
Tune in as the logistics and supply chain expert talks us through the bids BAE Systems has put forward for major projects AIR 2025 Phase 6 JORN, LAND 400 and SEA 5000, mobilising the workforce for these projects and the prime’s collaboration with Australia’s SMEs.
Enjoy the podcast,
The Defence Connect team.
Listen to previous episodes of the Defence Connect podcast:
Episode 130: PODCAST: The shift from consulting business to specialised engineering leader, Greg Barsby, QinetiQ
Episode 129: Guiding Defence’s R&D and innovation agenda: On Point with Dr Alex Zelinsky
Episode 128: PODCAST: The process, rigour and role of a chief defence scientist, Professor Alex Zelinsky AO, University of Newcastle
Episode 127: PODCAST: The relationship between air cadets and the RAAF, Wing Commander (AAFC) Paul Martin Hughes JP
Episode 126: PODCAST: How growing expectations within defence industry are providing opportunities for SMEs, Greg Whitehouse, Precision Technic Defence Pty Ltd
Episode 125: PODCAST: How a changing ADF will shape the benchmarks that Air Combat Group strives to achieve, AIRCDRE Mike Kitcher, Air Combat Group – RAAF
Episode 124: PODCAST: Enhancing the future of Australia’s unmanned undersea capabilities, Gavin Henry & Daniel Dent, Thales
Episode 123: PODCAST: How naval shipbuilding is shaping the future of Australian defence, Rear Admiral Jonathan Mead, Royal Australian Navy
Episode 122: PODCAST: The top topics and commentary impacting the defence sector across 2018
Episode 121: PODCAST: Balancing the needs of both the defence and civilian sectors, Angus Hutchinson, Thomas Global Systems
Announcer: Welcome to the Defence Connect podcast, with your host, Phil Tarrant.
Phil Tarrant: G’day everyone, tt's Phil Tarrant here. I'm the host of the Defence Connect podcast. Thanks for joining us today, in the lead-up to a significant announcement over the coming months with the SEA 5000. Three competitors all with very good propositions to equip our Navy with frigates in the years ahead. Joining me today in the studio is the new CEO of BAE Systems Australia, Gabby Costigan. We're going to have a chat about SEA 5000, her view of the world, her role now leading one of Australia's largest defence organisations, and also get to know her a little bit better. Gabby, how are you going? Thanks for joining us.
Gabby Costigan: Thanks, Phil. I'm great.
Phil Tarrant: 1 January was your first official day as CEO. You've obviously been a CEO-elect for a couple of months prior, which we reported in Defenceconnect.com.au. What’s been happening? How's the first month been?
Gabby Costigan: The first month has been really busy-
Phil Tarrant: Yeah, I can imagine.
Gabby Costigan: ... but great. I did join BAE in October, as you know. I spent the first few months getting to see the rest of the global business, which was an amazing opportunity to meet the rest of the team, see some of the amazing things we're doing all over the world. It was fabulous, and then obviously got back here, did my handover with Glynn Phillips, who's headed back to the UK, and started on January 1. Good day to start, and it's been a very busy month.
Phil Tarrant: What was the realisation on the 31st of December, and the clock ticks over 12, and you start a new role? Was it a ‘here we go moment’, or very confident and comfortable with the opportunity you had?
Gabby Costigan: I think there was a real level of excitement. I don't think I slept a lot. I'm comfortable. This is an industry that I know. I'm really glad to be back working with defence. I've been out of Australia for several years, so it's nice to be back in Australia. It's nice for my family to come home. To be honest, I'm joining the business at an incredibly exciting time. Now there's a couple of big announcements coming, and I want things to happen.
Phil Tarrant: It's a good time to be CEO if these announcements fall in your favour.
Gabby Costigan: Yeah, it is.
Phil Tarrant: You've got LAND 400, SEA 5000, obviously the anticipated JORN announcement as well. We're getting to those in a moment, but just for our listeners who aren't too familiar with you, you're ex-Army.
Gabby Costigan: I am.
Phil Tarrant: Ex-colonel in the Australian Army, and you spent quite a lot of time working with our American friends, as well, some time in NATO. Can you just give us a bit of background on your journey from I guess Duntroon through to where you are today?
Gabby Costigan: Yeah, sure. I had probably a fairly unusual military career, in that I joined the Army many, many years ago now. If I give away too much, it'll age me, but I had a fantastic career. I loved the Army, everything about it. It was a really tough decision to leave, actually, but when I did decide to leave the Army, I left going out on a high, because I did do some amazing jobs in the military. I'm an engineer by background. I worked in Army aviation for several years. When Afghanistan and Iraq kicked off, I deployed to Afghanistan and worked in logistics. I was really fortunate to come back and work for two fabulous generals as their advisor, which was Chief of Joint Operations General Hurley and Lieutenant General Mark Evans. That job for me was probably one of the highlights of my career, because it really exposed me to the broader defence world that when you're a young junior officer, you don't really get to see or understand, and to get some exposure to the political side of defence. From there, I had, as I said, a great time there, and I was then very fortunate to be posted to the United States to work with the U.S. military. I went to Central Command in Tampa, which is, as everybody knows, the two major campaigns at the time were run out of that command. That was just the most brilliant job ever for me at that stage of my career. I ran multinational logistics for the U.S. government, which was an incredibly diverse role. I had five major lines of operation, worked on a number of different things, worked with a number of different departments in the U.S., got to understand the huge machine of the United States military. Yeah, it was a wonderful experience. From there, I took the leap, and left the military, and then went into the aviation industry from there.
Phil Tarrant: The catalyst for leaving the military into the corporate world, was there anything in particular that originated that move? It was just the combination of a number of years and a new opportunity?
Gabby Costigan: No, no, there was certainly a catalyst for me. It sounds a little silly to say, maybe, but after having such an enormous job working for the U.S. government, and as much as I love the Australian military, it was one of those things of coming back to doing something that was maybe not going to be as large as challenging, coming back and working with the Australian Army in engineering again. I saw an opportunity for myself to go and experience a new career, so I left on a high. Then I've been very fortunate since.
Phil Tarrant: It's all about timing in life, isn't it?
Gabby Costigan: It is, yeah.
Phil Tarrant: Make a decision and always leave on a high. Prior to joining BAE, you were CEO of Asia for Linfox. You obviously know a few things around logistics and supply chains.
Gabby Costigan: I'd hope so. I think the job that I did with Central Command probably positioned me really well to take on the role with Linfox. Linfox is, as you know, an incredibly iconic Australian company, a very successful business, and it was a fabulous opportunity for me to work for the Fox family. It was a very challenging role. We were running logistic operations across southeast Asia, also China, and India, some very challenging markets, some very challenging political environments as well. When you're trying to run a transport company and provide warehousing solutions in some of those countries, there's a lot of things going on. I don't know if you've ever driven a car in Jakarta or in Thailand. Those roads are quite challenging, but it was a brilliant opportunity. I had a very large team working across Asia. We had some fabulous customers, and we worked across multiple different industries. The business is going incredibly well. In fact, we were fortunate, or in fact my shareholders I'm sure were pleased, that we doubled the business in three years. It just goes to show you that the rapid growth is happening in those ASEAN countries right now with a burgeoning middle class.
Yeah, so very exciting, but three and a half years, and then I got a phone call from BAE, and it was a great opportunity for me to come home.
Phil Tarrant: I mentioned beforehand, this year, I'm sure it'll happen this year, LAND 400, SEA 5000, major program, and my observation is that on both of those programs you're very competitive. The BAE solution is a good one for both frigates and armoured vehicles. You've got some fierce competition out there as well, so we'll watch your space with a lot of interest. But BAE's gone from a period of time of the last couple of years for driving towards big involvement in these programs with a chance to secure these major contracts. If you guys get the green light on these, it's going to transition into a delivery phase. Obviously, the logistics and supply chain is going to be critical for that. What's the brief that you've had from the BAE board? Have they said, "Gabby, we want you to do this"? How would you crystallise that in a couple of sentences?
Gabby Costigan: A couple of sentences?
Phil Tarrant: Yeah.
Gabby Costigan: Obviously, the board would love us to be successful on all of those campaigns, and they've certainly made that clear to me in my personal objectives. For BAE, the opportunity to win all of these campaigns is very real. I think we can deliver all of those campaigns very successfully. They're different domains, and I think we've got very capable solutions for both of those domains. You talked about competition. To be honest, we love competition. It keeps us on our toes, and it is what challenges organisations like ours to be more innovative moving forward. I think, if I go back to your question, the board obviously would like us to ensure that we mobilise these campaigns properly, if we are successful, and then ensure that we deliver them in a sound, cost-effective way for the customer.
Phil Tarrant: And operating in Australia, whether it's armoured vehicles in Victoria or frigates, is there any nuances about the Australian market, the Australian supply chain which makes it a more challenging market or a more easy market to actually go through the process of major construction projects?
Gabby Costigan: No, I don't think there's anything particularly challenging about Australia. I've worked all over the world, and we've got very capable SMEs in Australia, and highly skilled workers in Australia. The challenge will be around mobilising the highly skilled workforce, and then being able to deliver on that, but I think the work that BAE has done to date on mobilising both of those campaigns, I'm very comfortable that if we are successful, on day one we'll be able to move into delivery very quickly.
Phil Tarrant: A lot of work's been going in the background. We've been reporting on Defence Connect for many months now the partnerships that you've been establishing both within major defence businesses, the primes, and also SMEs to prepare yourself for large, rapid mobilisation of a workforce, whether it's vehicles or frigates. Working in the States, working within the Army, any particular skill you think is going to really carry good favour for you in you delivering what the board wants you to deliver? What can you apply best from your experience in Army and outside of it, and I guess Linfox, into delivery of these major projects?
Gabby Costigan: I think one of the things that the Army certainly teaches you is how to work in a team. In my experience of working across multiple countries now, collaboration is incredibly important to success. I think right now in Australia, within the defence industry right now, it's really at a very unique moment in that it's nice to see, although we're competitors, we work together, and we can work together well. Those partnerships and those teaming arrangements to deliver the best capability to the customer is what we're all focused on. It's not about us doing it on our own. Whether it's with SMEs or whether it's some of our bigger partners such as Raytheon, and Thales, or Lockheed Martin as an example with F-35, those alliances and relationships are really important, because at the end of the day, we're here to deliver the best capability that we can to the Australian Defence Force.
Phil Tarrant: I guess you've seen that capability firsthand in assignment in Afghanistan and working with our counterparts in the U.S., so the actual utility of whether it's vehicles or frigates, on the ground, or in the air, on the sea, it actually makes a big difference.
Gabby Costigan: Yeah, it does. In fact, when I joined BAE and I put out my first speech, if you like, to the organisation, one of the things that I did talk about was how important it is for us to deliver the best quality equipment we can to the defence customer, because I have seen firsthand how important it is for the Australian Defence Force to have capable, sustainable, cost-effective equipment moving forward. Our job is to protect those people who protect us, and we need to make sure that they've got the most sophisticated, advanced technologies, because it is critical.
Phil Tarrant: Speaking of these technologies, the specifics of the SEA 5000 bid, I was fortunate to see the cutting of the steel for the Type 26 over in Glasgow last year. Now that's turning into a ship for the Royal Navy. I've spent some time with some of your colleagues from BAE in the UK, and also the Royal Navy, and they rate its antisubmarine warfare capabilities, but you have two big competitors out there with Fincantieri and Navantia, who also have really good proposed solutions. What's your view on the BAE proposition and why you feel as though it's going to be a better solution for the Australian Navy?
Gabby Costigan: I would have to say that I think we have by far the most capable antisubmarine warfare capability. I've been, like you have been, to Glasgow, and I've seen Type 26 under construction. It is a fully digitised ship, which is incredible to think nowadays that the technologies we have to be able to design and build are there. My personal view is I don't think we have anybody who can compete with us in terms of the exceptional capability that we have with Type 26, which will of course become the Global Combat Ship in Australia. From my perspective, we do have the most capable ship. The technologies are incredibly advanced, and I think we're very well positioned to win.
Phil Tarrant: In terms of mobilising Australian workers to get behind it, it is manufacturing, there's welding of steel, and it's a lot of manual work. There's also a lot of sophisticated work from a delivery and logistics end. How's BAE going to go about getting the best workers possible to actually help fulfil the bid should you be successful?
Gabby Costigan: Should we be successful, I think everybody knows that this will be a ship built in Australia by Australians, and hopefully led by a Australian CEO. As I said earlier, the mobilisation work that we've done to date, I'm very comfortable with where we are right now. Should we be successful, we're very well positioned with a Australian workforce that will be able to deliver this capability.
Phil Tarrant: I'm going to shift on the LAND 400, but a couple of months prior to your formal appointment as CEO, so getting ready for the job, and from 1 January, there is so much that you really need to pick up really quickly, isn't there? BAE's such a large, diverse business, which is already has operations and delivering sustainment across Australia, F-35, for example. There's all these new programs and projects as well. How have you gone about that apprenticeship of gathering as much information as possible so you can come and chat to a guy like myself or the industry authoritatively on stuff like this? Just as I was talking, I was going, "It's actually a big job."
Gabby Costigan: Yeah, it's huge. It really is huge. Without even considering the global business of BAE and just focusing on BAE Australia, we have several hundred contracts across multiple domains. Being able to understand what each of those technologies are and what it is we're delivering is certainly a challenge. I've done a lot of reading. It was also really important for me, as part of that induction phase, to go and visit our partners like Patria in Finland, BAE's Hägglunds in Sweden, just also to see some of our production lines in terms of where we're making parts for F-35 in both Australia and in the UK. I was fortunate enough to go and have a look at the latest carrier that was recently commissioned, get a tour through there to see firsthand how we do build ships. I got to see the OPVs in Scotland. For me, it's being able to see those things, and talk to the people that are on the production lines and in the manufacturing lines that helps cement the knowledge transfer, if you like. Of course, there is a lot of reading to be done.
Phil Tarrant: I've met a number of your executives that work across different programs that
you're delivering right now, and very capable and talented people. As part of your role, how many direct reports do you have? Because I can imagine these guys and girls report directly to you, so it's your job to make sure that they've got what they need in order to deliver what they need to deliver. How many people do you have reporting to you?
Gabby Costigan: Yeah, I have 11 direct reports. That's quite a number.
Phil Tarrant: It's quite a number.
Gabby Costigan: As you said, they're all very experienced, capable executives. Their job is to run for me those specific departments that they run in our business. To be honest, one of the things that was really exciting for me is to meet my team, because many of them have been working for BAE for several years, and their own experience and knowledge was really important. When I came in, they're all briefing me, so that helps me to get my head around and be comfortable with the fact that my executive team know what they're doing.
Phil Tarrant: Yeah. Often, eleven reports, sometimes, it's firefighting, sometimes it's motivation, sometimes it's celebrating wins. How are you prioritising your time right now? Is any particular program getting most of your love, or is it just expanding across all that's possible?
Gabby Costigan: There's still a lot for me to learn. I think the first few months for me, there will be constant learning going on. I try very much, the communication with my management team and the broader BAE is really important for me. I have regular meetings collectively with my management team, and then I'm trying at the moment to get out to as many sites as I can to meet more of the broader BAE team. I have a blog. I've done a few different live videos to the organisation. I'm a very ... What you see is what you get with me. I love to meet people. I love to go out and see what we're doing. The more exposure I can have to the business, the better.
Phil Tarrant: BAE, it's a big brand. It's got a long pedigree in the UK and in Australia. It's been here for quite some time. Your perception towards BAE from being external to BAE versus now leading BAE, is it pretty much what you thought? Is there any subtle changes in terms of the culture or the attitude to the business?
Gabby Costigan: Actually, that's a good question, because I thought I knew BAE. I thought I had a good understanding of the business coming in. To be honest, I've been blown away by, as you said, the pedigree of this business. There's so much that we are doing across the globe, and for not just the Australian Defence Force but for many other allies. I was pleasantly surprised. If anything, I was blown away by some of the things we're doing in advanced technologies and some of the research and development work that we're doing, not just in Australia but around the world. Really exciting stuff. When I think back to when I joined the Army, where we used bloody carbon paper, through to now, what a change it's been in the last three decades. That was really exciting for me coming in, because if anything, it just made it even better.
Phil Tarrant: Is there anything in particular that when you're lying in bed at night now, thinking about what needs to be done, that is pressing on your mind?
Gabby Costigan: There's quite a few things that keep me up at night at the moment. Waiting on these two campaigns, it's like a kid waiting for Christmas Day, I think. I'm a pretty impatient person at the best of times, I think, so I'm just waiting for these two announcements, or three announcements actually, to come out, with JORN as well. There, probably things I'm thinking, "Have we done enough? What else do we need?" To be honest, I think we have done enough. I think we've put forward the best solutions for all of those campaigns. One thing I think that BAE have done better is I think we're marketing ourselves now much better than we had done probably in the past. It is important for Australia to understand the pedigree behind BAE, and so that will be one of my focus points this year, is to really start to ensure that our customer really understands the capabilities of BAE Systems, not just Australia but globally, because there's a lot that we can offer, and not just to the Australian Defence Force but also to our neighbours in the region.
Phil Tarrant: One of the other programs, which is up for announcement is LAND 400 phase two, again, a very good proposition you've put forward.
Gabby Costigan: We like to think so.
Phil Tarrant: Yeah. Again, a very good competitor in Rheinmetall. You guys have chosen Victoria over SA to put a stake in the ground and say that's where you'll be building these vehicles from, and we've had Greg Combet on the podcast a number of times talking about the partnership he has with BAE. They're very optimistic about the potential of securing this program for Victoria with BAE and delivering lots of jobs into Victoria, particularly in the automotive transition. How do you feel about that bid? Again, who knows? What's your thoughts on it?
Gabby Costigan: It's 50-50 right now.
Phil Tarrant: It's 50-50.
Gabby Costigan: I do. I feel very really confident with what we have submitted to the Defence Force. The AMV is an exceptional piece of equipment. It's a battle-proven capability. It's used by I think seven different defence forces around the world, so from my perspective, and including the BAE 35 turret, I think it's an exceptional capability. I'm really pleased to be working with the Victorian government. The opportunity for us to build not just a hub for manufacturing these vehicles in Victoria but also a technology hub for BAE Systems, where we have more than 1,000 engineers working at Fishermans Bend across not just the land domain but maritime, excuse me, and air as well. From BAE Systems' perspective, the relationship with the Victorian government is really important for us, because I think we can bring ... We're going to bring innovation. We're going to bring opportunities for further employment. We already know that there are several other companies and smaller SMEs that are now looking to position themselves around Fishermans Bend, which is also important. Lots of opportunities there. Obviously, with the recent change in manufacturing vehicles in Australia, this is a really good opportunity for us to continue the legacy of building vehicles in Victoria.
Phil Tarrant: A natural home for BAE is in South Australia. It's where you're headquartered. It must have been quite a difficult decision to choose Victoria over SA as a location for building vehicles. What's the logic behind that?
Gabby Costigan: I don't know that it's a difficult decision. Sometimes, you've got to think strategically. Yes, South Australia is an important hub for BAE Systems, and it will continue to be an important hub for BAE Systems, and obviously we hope in the coming months that we will be building ships in South Australia, but at the end of the day, we've got to be able to spread our workforce across Australia. Each state offers incredible opportunities for companies like BAE Systems to be able to further develop their technologies and put some of our hubs and expertise in those locations.
Phil Tarrant: You've got a great story of joining the Army and a stellar career, which had many different facets, before you moved into the defence industry. A lot of our listeners are currently serving, men and women who are thinking about life after uniform. What do you think you need to be doing if you're currently serving to best prepare yourself for a career in the defence industry? Is there any particular skills you should be trying to hone to transition comfortably into a job with BAE or a prime or an SME?
Gabby Costigan: Yeah, that's a good question. It is a real challenge when you do leave the military and go into the business world or the corporate sector. I'll tell you one thing that I think that the military really does for you, is it does prepare you to handle multiple different types of situations. The leadership skills that you learn in the Defence Force will carry through into the civilian world regardless of the role that you will go in. The management skills that you will learn will you carry you through. The hard part is probably ... Some of the challenges for me was probably around there's a definite change in discipline between the military and the civilian world. Adjusting to that can be quite challenging at first. Your commercial skills, obviously, that would be an area that if anybody was looking to go into business, I would say that's an area that you really need to work on and make sure that you are commercially savvy, and have some good understanding of finance. Obviously, when you're working for finance, you're spending government money, and you're not there to make a profit. It's a very different approach in the business world. To be honest, the hardest part is just moving into a different organisation and understanding what it is that that organisation does. For me, I've been really fortunate for the companies that I've worked for, and BAE in particular, because they have really strong company values. That was really important for me, and particularly coming from defence, where those values of integrity, and loyalty, and courage, those sorts of things are important to you, and they carry through. That's where I've been fortunate with BAE, to join an organisation that does have really strong company values. That was I guess for me an important thing, was finding a company that I could fit in and be happy working for.
Phil Tarrant: Yeah. I think hats off to BAE. You've joined quite an exclusive club of being a female CEO of a major defence business. It's good to see. I think at Defence Connect, we try to champion the role of women within defence. I know that's something that's important to BAE as well. For junior women, whether it's in the military or within the defence industry right now, any particular approach to best cultivate a career that can lead to some of the top jobs in Australia? Any tips for those people?
Gabby Costigan: I've got lots of tips. First of all, I do want to say you're right. Hats off to BAE, because they have done an amazing job with promoting roles for women across the whole organisation. I think I'm really proud of how many women there are working across BAE, and in multiple disciplines of engineering through to management, etc. That was another really good learning point for me when I joined BAE. Yeah, I'm super excited as well to be the first Australian CEO and also the first female for BAE.
With that, I think, comes a bit of an obligation for me as a woman in not just the defence industry but as a woman in business to be, where I can, a good role model for younger women who have aspiring careers. In terms of what would I say to them, I was really lucky, I think, in my career that I had a lot of opportunities. Opportunities come to everybody at different times in their career. You've just got to make the most of them. I think some of the success that I've had is because I worked really hard and I did make the most of those opportunities. I would encourage them to lean forward as much as they can, to try different things, even if you think it's something maybe I don't necessarily have the right experience or background. Give it a shot. If you don't try, you'll never know and you won't learn. I would encourage all women to do what they want to do, and just don't give up.
Phil Tarrant: That's wise counsel. We're running out of time, Gabby. I've got another couple questions here. In particular, obviously, the defence export strategy, Defence Connect we've been writing a lot about it recently. Recently released, obviously, and a lot of different organisations have chimed in on their view of it, what it means for them, and how they're going to capitalise on it. What's the view for BAE on the defence export strategy? What are you guys going to do?
Gabby Costigan: We've been doing. We've been exporting for a long time.
Phil Tarrant: Been doing, yeah. Some time.
Gabby Costigan: It's been a big week, obviously, with the release of that export strategy. BAE Systems is certainly a supporter of that strategy. There's a lot of huge positives that will come out of that, not just for advances in technology, further opportunities for employment, great opportunities for SMEs in the country to be able to export some of their technologies around the globe with the support of the government, but for BAE Systems, we have been exporting out of Australia for a long, long time. We've got one of our great systems, and I think an important one for people to know about, just how long we have been exporting is the decoy system Nulka. I think it's something like $50 million a year in export business, and over 200 jobs that have been generated from that. From BAE Systems' perspective, we're a big supporter of this strategy.
Phil Tarrant: That's good. You've put your feet under the desk now, you're moving ahead, and you've got obviously an interesting year ahead of you. We'll catch up in six months or a year's time, have you on the podcast again, and have a chat. What do you think we'll be discussing then, if you're going to look forward to, say, six months ahead? Where do you think you'll be concentrating your efforts and the focus of the business?
Gabby Costigan: I'll be very busy mobilising SEA 5000, and LAND 400, and JORN.
Phil Tarrant: A very confident response. It's interesting. These programs, there is obviously ... It influences the whole industry, whether it's primes or SMEs looking to be part of the supply chain. I guess your pedigree working with Linfox and your time within the Army supply chain is running through your veins. I'll be interested to see how you look to mobilise the forces of BAE moving forward to capitalise on the clout we have within SME land in Australia, and potentially deliver these projects to the Australian military. We'll watch this space.
Gabby Costigan: Great.
Phil Tarrant: Thanks for coming in, Gabby. I do appreciate your time. I know you're relatively new to the role and you've got a lot of ground to cover, but to me, it feels as though you're well geared to lead what is a very capable organisation into the years ahead. Thanks for coming in.
Gabby Costigan: Thank you very much.