Australia has an “enormous opportunity” to reboot its manufacturing sector by taking advantage of crippled global supply chains and a lower currency, says Nev Power, the man handpicked by the Prime Minister to lead an expert advisory commission.
Former DowDuPont executive Andrew Liveris has been recruited to work with the Power-led National COVID-19 Coordination Commission and devise a long-term strategy to deliver a competitive, best-in-class manufacturing sector as a major pillar in helping rebuild the economy.
"It [manufacturing] will be a big employer," he said. "It will be import replacement and we can take advantage of current market conditions and disrupted supply chains around the world. It reduces our reliance on single point failures in our supply chain."
Mr Power, a former Fortescue Metals Group chief executive and Perth Airport chairman, said the nation's manufacturing sector could emerge stronger from the crisis by taking advantage of the lower currency and disrupted supply chains. But it was important that the sector was competitive for the long term.
"It needs to be modern, efficient, high-tech and focused on the things we need. A lot of the manufacturing in Australia is very old fashioned, it hasn’t had new investment," he said.
"The long-term [manufacturing capability] needs investment strategies. It needs to be appealing and attractive for large-scale investment."
He said government may play a role in providing seed funding but believed things could be structured to make businesses appealing for private funding.
He said our supply chains would be difficult "for quite some time".
All of the countries we source from have been heavily disrupted by the coronavirus.
"If you think of any manufactured good ... predominantly it comes from China or almost entirely from the Asian region. There is some that comes in from the US but those supply chains have been heavily disrupted as well. Some that comes from Europe," Mr Power said.
"All of the countries we source from have been heavily disrupted by the coronavirus."
As he and Mr Liveris craft a path for renewal, his fellow commissioner Greg Combet is working to kick-start short-term manufacturing aimed at producing critical products, including medical safety equipment and ventilators.
"It's everything from vaccine precursors to ventilators to PPE [personal protection equipment] to test kits to test swabs. It's being challenged globally because everyone is trying to buy them at the same time."
Companies such as Walkinshaw Performance, which was making specialist vehicles and car parts for Holden, is now working to make medical equipment. Ford is also in discussions on producing equipment at its Broadmeadows plant in Victoria.
"We are already seeing ingenuity and innovation. We have packaging companies looking to retool to make personal protection equipment. There are some small manufactures we are helping to expand and manufacture more of that equipment that is needed," Mr Power said.
The commission has also worked on boosting medical supplies through usual procurement channels, which will compliment 90 tonnes of supplies secured by Andrew Forrest's Minderoo Foundation on Wednesday.
Mr Power was appointed chairman of the National COVID-19 Coordination Commission a week ago to co-ordinate advice to the government about anticipating and mitigating the economic and social effects of the pandemic.
Mr Power was on his way to a hydrotherapy appointment in Perth when he took a call from Prime Minister Scott Morrison.
"He rang me ... and said your country needs you," he said.
"It would be fair to say that there was probably a long silence. I pulled over and we had a discussion and he explained what he was looking for in relatively brief terms. But of course you can’t say no and I wouldn’t say no."
Mr Power is aware at some eyebrows being raised that the PM would pluck a "mining guy" to lead the effort. He points out he has a breadth of experience spanning manufacturing (as Smorgan Steel) to not-for-profit groups (he is chairman of the Royal Flying Doctor Service).
My point is, I’m not a mining guy per se.
Aside from his deep knowledge of mining, its supply chains and massive infrastructure, Mr Power spent three years at Leighton developing toll roads, hospitals and desalination plants.
"My point is, I’m not a mining guy per se," Mr Power said.
Mr Power said the commission was operating in a decentralised way, with each commissioner working autonomously.
"People go to them with issues and opportunities and those commissioners are dealing with them," he said.
"We are not a centralised process and the reason for that is we want things to happen quickly and decisions to be made with the best people who are capable of making those decisions. We hook up regularly, but it’s not about being managed from the centre."
The commission includes former Telstra chief David Thodey, former head of the health department Jane Halton, former Toll Holdings boss Paul Little and EnergyAustralia managing director Catherine Tanna.
Perth-based Mr Power was raised on a Queensland cattle station and was home schooled until he was 12.
He still operates the cattle station and musters cattle every year.
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