Lovells Group boss says Aust is wrong to give up on making things
Lovells Group chief Simon Crane reveals why Australian manufacturing matters after 95 years in business, warning the nation risks losing crucial skills and prosperity.
As a manufacturing family, we’ve backed Australians for 150 years.
The merits of backing Australian manufacturing – and why people might do so – have been questioned by a few commentators lately. It’s not my job to give hot takes on the issues of the day. But I’ve spent my life in the industry, my family has been in manufacturing since 1855, and here’s my perspective.
I own and run Lovells Group, which turns 95 this year. We make suspension, haulage and other products for transport, mining, rail and defence customers worldwide. Our core business is highly-engineered suspension and spring-based systems.
We employ over 120 highly-skilled staff and support around 200 retail and distribution partners globally – conservatively we keep 1,000 Australians employed.
I’m not here to ask for government support or a pat on the back. I just ask that people understand why manufacturing businesses like mine matter to the nation’s economy, people’s livelihoods, the nation’s prosperity and our place in a global market.
This is an industry Australians – and many commentators – misunderstand.
There was a brief period where it was different. In 1942, with the threat of war at our door, the strategic merits of manufacturing became obvious. We got good at it, then largely gave up about 30 years later. Perhaps, as one chief scientist said, it was because we “turned a rusty hill into GDP”, or maybe it was complacency. Regardless, manufacturing’s share of GDP has slid from around 25 per cent in the early 1970s to 5.1 per cent today.
Australians have an agrarian heritage alongside city-dweller tendencies. Manufacturing is something you don’t see often in metropolitan centres – today it’s now a mix of highly-innovative small manufacturers, a few medium-sized businesses like Lovells, and a couple of large ones.
One thing all manufacturers share is that we provide jobs for everyone. From world-class engineers, designers and researchers to production staff, technicians, marketeers and more – manufacturing has a place for all. It’s one of the few industries where talent and opportunity meet at every level. For me, one of the great joys is seeing what it offers Australians who might otherwise have limited prospects.
Engineering talent is crucial for any modern manufacturer, yet Australians are not choosing engineering degrees – our graduation levels are the sixth-lowest in the OECD. Sadly, many bright graduates head overseas for opportunity because we have talked ourselves into believing we can’t be a nation that makes things. Training world-class talent only to see it leave is no different from exporting raw resources to be value-added elsewhere – it’s madness.
We are ceding prosperity elsewhere in the world.
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At Lovells, we have some engineers designing new products and others designing the processes and machinery to make them. We also build nearly all our own equipment – which requires highly-skilled engineers and tradespeople.
My late father once told me manufacturing is good for society in its own right. I didn’t get it at first. The reality is manufacturing offers stable, well-paid jobs, ongoing training, and a social workplace where lasting careers and friendships are built. It provides a job for everyone, prosperity for the surrounding region, and global relevance for our nation.
He was right!
But to stay at the top, we must innovate. This is where old stereotypes hold back perceptions and career interest. At its core, Lovells heats and bends steel – preferably steel made here – but if we fail to innovate, we become obsolete.
That’s why we’re investing $12 million in a new engineering, manufacturing and retail centre in Newcastle, New South Wales, complementing our nearby production facilities and our R & D hub in South Australia. The site will feature advanced testing labs, dynamic-stability analysis and electro-technology development, bringing together engineers and designers under a near century-old legacy. It will also drive our next generation of fast-charger products for electric vehicles, trucks and buses.
The electrification trend is clear. While we use just 0.6 megawatts of power today, we rely on around 8 megawatts of natural gas – an inefficient, costly way to heat metal. Our engineers are developing some of the world’s largest electric induction heaters, offering precise heat, cutting gas use, and creating a new exportable technology.
This is where Australia’s future lies – in high-value, locally-relevant but exportable technologies developed by Australian-owned companies, not outposts of global entities. We will never win on cost, so we should never join the race to the bottom. At Lovells, we compete and succeed on value – it’s why our products are trusted by defence forces, emergency services and customers worldwide. We’re capable and we are good at what we do, and we take pride in delivering quality and it’s why we’ve been able to support the nation through good times and bad.
Meanwhile, Australia remains complacent, relying on a third-world export mix of iron ore, coal, natural gas and gold. We’d be fools to think digging and shipping this forever will secure our future.
It frustrates me to see our natural resources sent overseas to be value-added when we’re capable of doing it here – we just need conviction. I was fortunate to build a business essentially from the ground up, but doing the same today would be far tougher.
This is where the opportunity to build more mid-sized, multi-competency manufacturers resides, and we must back them to grow and stay onshore. That means focusing on global niches where we can truly compete – Lovells is proof, as the largest manufacturer of our kind in the southern hemisphere.
Australia can create world-leading manufacturers. Rode microphones, crafted in Sydney’s Silverwater, capture the voices heard on podcasts globally. Finisar, in Rosebury, makes optical components that carry much of the world’s internet traffic. And ANCA CNC Machines in Victoria produces precision machinery used to make everything from iPhones to jet engines. Together, these companies employ thousands of Australians and export our knowledge and products worldwide.
It’s important to remember that just because you can’t kick your toe on it doesn’t mean it’s not vital.
Some commentators, including economist Saul Eslake, have suggested a larger manufacturing sector would lower living standards. They miss the nuance. Hi-tech powerhouses like Singapore, Japan, Germany and South Korea show prosperity and a high share of manufacturing can coexist. Resource-poor nations like Slovakia and Sweden also prove that wealth can be built on diverse, exportable products.
Australia may be naturally blessed, but we need more people to see the value in manufacturing, its ability to solve problems, provide meaningful careers, and move society forward.
Pundits are entitled to their opinions, but after a life in manufacturing, I’ll offer my experience – and my father’s words – against their theories any day.
Simon Crane is Managing Director of Lovells Group
This article is part of the Back Australia series, which was supported by Australian Made Campaign, Harvey Norman, Westpac, Bunnings, Coles, TechnologyOne, REA Group, Cadbury, R.M.Williams, Qantas, Vodafone and BHP.
Originally published as Lovells Group boss says Aust is wrong to give up on making things
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