The best in building things, and then I also, and then downstream from that, you know, they've all played around with AI.
For the sake of our country, I think we should expose policymakers to like Maven and like.
This stuff is determinative for life and death and it's not a play toy, it's going to change everything.
And just because the All right, well, it was.
Pleasure talking to all of you.
Senator Fisher, Dr. Karp, Morgan Ortegas, Ranking Member Smith, thank you all very much.
And thank you.
Maine Senator Angus King joined a discussion on the challenges of manufacturing in the U .S., the importance of trade, and a secure supply chain.
They also talk about how the Department of Government Efficiency could impact manufacturing in the U .S. and competition with China.
This was held at the Ronald Reagan Presidential Library in California.
It's 50 minutes.
All right.
Hello, everyone.
Thank you for joining us in one of the late sessions.
I know it's been a long day, but I think we're going to keep everyone's attention with some, I think, really exciting conversation here.
Obviously, incredibly esteemed panel here.
So I think we want to just jump right into it a little bit.
And I think, look, the topic of this day is manufacturing.
That's what we're here to talk about.
There's a widespread agreement manufacturing is important.
We actually have the poll.
I think we can put up from Reagan's poll, which talked about some of the numbers that we've seen with the American public that agree with this.
See if we can get that up there.
Well, while they're working out, we keep going.
There's a lot of different topics that go into manufacturing.
What is the challenge of manufacturing?
How do we actually get back to where we need to be for the arsenal of democracy?
Given that we have here an end user, acquisition official, two representatives from industry, A distinguished legislator.
What I want to start with is to go down the line and ask the panel, basically, what do you think is the single biggest challenge or roadblock to getting manufacturing to where it needs to be for American national security?
And Senator, if we can start with you.
Well, I'm going to start with my own visual aid.
That's great.
Professional Senator, he has his own chart here.
This is a chart that Jim Inhofe created when he was at the Armed Services Committee.
And basically what it shows is the time...
From concept to an operating prototype of aircraft and automobiles.
And it goes back into the 60s and 70s and you see the line for commercial aircraft and military aircraft are pretty similar.
They're right around four or five years.
Something happened in the 70s.
This is the trajectory of the time to develop a military aircraft versus a commercial aircraft.
So, the first part of my presentation is on, I have three D's for you today, but the first one is delay.
This is one of the biggest constraints, is why does it take so long?
Is it process?
Is it requirements creep?
Is it, you know, what are the provisions that makes it, and frankly, at this point in the world, we can't afford to be even close to this graph.
We've got to be able to react to things within months.
Let alone decades.
So I think one of the first things, one of the first biggest barriers in terms of production and acquisition is time.
And so I am anxious to hear from some of my colleagues on the panel about whether this line is improving.
Bill Plant at the Pentagon thinks it's improving.
I'm not so sure, but that's what I think one of the most important things we need to talk about.
Dan?
I guess you stole a little bit of my thunder there, but I would echo the fact that things just need to move faster, and I think that part of the reason for that is that not all the incentives are aligned, and sometimes they're counterintuitive.
I've been around a lot of different programs, different industries.
If you want more of something, you should incentivize it.
General?
I would use Senator King's Same display that he had.
I think it's process change is what we got to get after.
I think that's the biggest challenge that we have.
And I'll give you three examples.
I'll really start with, like, back in 1960, DOD had 11 big pots of money.
And, you know, we didn't have all these programs.
We could move money around and we could spend it, you know, year after year.
Now we're up to 1 ,800 or 1 ,900 different program lines.
So, especially when you're talking about, the first thing I think we need is agile funding.
I really do think we need to be more agile in our funding, especially when you're talking about UAS, counter UAS and EW and we know it spins very rapidly and we have to be able to respond to that.
Second thing that I think we have to do as users is change how we also put our requirements out.
We don't need 30 page documents.
One example we've done with our network is put out a characterization of need.
We have a lot of amazing companies that can come in and help us do these things and change for us.
We just need to let them go and tell them what they can do and be more rapid about doing that.
And I think that the hardest thing is going to be with process change.
I also think, and we've been talking about this a lot in the Army, is we're also going to have to stop buying some things that we know are not going to be war winning down the road.
And that means you can find better value for your money.
And spend your money on the things that you know are going to make the biggest difference on the battlefield.
So I would say it's process change.
I think that's a great point.
I'll just pick up on something that the General said.
I think for us, we've got to think about the design.
I'll pick up on what you said, Senator, on your chart there, which is I think we design to the highest level of requirements, to your point, General, and that takes time.
That's a very high bar.
I think we've got to get back to a more modular design philosophy.
Get it out into the field and then continue to iterate and upgrade in the field as we learn more about the threats, about the threatscape, about what our adversaries are doing.
I would say that's sort of number one.
And number two, and it's not something we do terribly well as an industry, which is design for manufacturability.
We design for performance, obviously because of the threats that are out there.
We don't necessarily design with manufacturability.
In mind.
Why do something with five parts when you can do it additively in one?
So the more we can continue to design for manufacturability, the faster you can continue to ramp up the production phase of any program.
Well, I agree with everything that my teammates up here have said.
I kind of come at this problem from a couple of different ones.
So I've been in the department now for about 18 months.
Before that, I spent 13 years at Apple, which is a place that's all about disruption and scale.
I've also been in the military for about part -time, at least, for about 28 years.
And it's been a lot of my career living back and forth throughout Asia.
And the first thing I'd say is, I just want to...
Footstomp underscore, we simply cannot meet the strategic imperative for us that we've been talking about for the last couple of days unless we're able to fully leverage the incredible power of our commercial tech sector.
This is what Ash Carter stood DIU up to get after.
We're now focused on the bridges that have been built.
It's pretty amazing to see the collection of folks from the tech sector who are here now and build on the experiences that we had.
So, I think, as I think back from...
My experience in the tech world, where we do see transformation at scale, massive innovation, often with capabilities that put something from a concept to a hundred million of something under a tree within less than six months,
that there are just a few things that really drive that.
The first one is relentless demand, which from billions of consumers around the world, the enterprises that serve them, which doesn't actually mean that we know exactly what the demand will be shaped like, but we know it will be there.
And then second, massive competition also from around the world that forces innovation, forces investment in that innovation, because if you don't do that, you lose.
And in our more traditional approach, defense procurement, we really have neither of those two things.
And instead we've got something that looks a lot more like the traditional...
Five -year plans from the old Soviet system, which the Chinese have actually spent a whole lot of time themselves trying to get away from because it doesn't work.
And then we make it even worse by not even being able to consistently pass the budgets to do that.
So my recommendation would really be to address directly both demand and competition.
First, we need a much more clear, consistent, and flexible demand signal.
It doesn't have to be exact clarity of demand for the next five years, but in fact, if you give exact definition and just port more money against it, then you actually don't incent the kind of behaviors that you want.
And, uh, and...
And then I think we've got to have also enough budget consistency to be able to deliver against that and give the confidence that we will.
And then second, we need to use that flexibility to open up the aperture so that that competition can force the innovation and investment.
That means bringing the non -traditionals in.
And alongside the more traditional players, wherever possible, hardware as well as software, making it easier for them to participate and compete.
In some case, the best tech's going to come from there, but in every single case, that will drive competition, that will drive innovation and performance.
DIU works everybody from large traditionals all the way to brand new startups, and we work wherever possible helping them collaborate.
So that can come from anywhere, but competition helps to drive it.
And so this is what we're after at DIU.
We're just getting started using the tools that Congress has provided us and working with our partners like General George here.
Hope you get an opportunity to talk a little bit more about some of the specifics of what we're after.
And I'll just close by saying there is a huge opportunity right now for this incoming administration to partner with Congress and do something big on this.
Senator King, you wanted to chime in there?
Well, everybody's been talking about demand.
It would be nice if Congress could pass a damn budget on time.
I was going to say that, sir.
Continuing resolutions are just terrible.
They cost the Defense Department something like $5 billion a month.
It's pitiful that we can't, there's no earthly reason we couldn't have passed a budget on October, on September 30th.
And by the way, in my little state of Maine, we had a two -year budget.
I don't know why we can't have a two -year budget.
Also, the federal government has no capital budget.
We're paying cash for assets that are going to last 50 years.
So I think there's some real significant improvements that could be made, but it would start with just pass the damn budget on time and then you'd have a steady demand signal throughout the whole system and people could understand how they could invest and get involved in these kinds of long -term projects.
So that's a simple solution.
Through some oversight, I'm not in charge over there.
We'll keep going.
We're going to pass another continuing resolution next week.
Until March.
You think that's going to happen after March?
That's the plan?
I absolutely don't know.
But there's no reason that we can't do this.
Have negotiations over the top line.
Have the Appropriations Committee work out the distributions and go from there.
It ought to be pretty straightforward.
By the way, this isn't the fault of the Appropriations Committee.
They work very hard.
They go through all these numbers.
They have meeting after meeting after meeting.
They do all their work and then it never happens.
Pretty frustrating.
One of the themes I think you might have heard coming down here, and I should say you can use the app to send questions in.
Please don't wait to send them in.
I got a little thing here that'll pop it up for me.
We'll try to work them in as we're going through the conversation.
I think one of the themes that you heard, and certainly something we talked about ahead of time, is speed and the need to figure out ways to be able to go not just faster in terms of actually putting things out, but in terms of our processes and how to actually change things.
And General George, I wanted to ask you this, which is, If there isn't, let's call it holistic, full -up budget acquisition reform from where you stand, can you get at the speed that you need as the end user?
Or do you think there needs to be fundamental shifts in how this process works?
So what we've proposed is, and I know there's been PPBE reform and all of this, is that we've proposed in the Army that we actually focus on the things that we know change very rapidly, which is UAS, anything uncrewed, counter.
countering uncrued systems and EW.
I mean, we're seeing that, and Ukraine is seeing that.
We're seeing that everywhere on how fast things are changing.
And so I think that that's one area.
And when we didn't, if you had flexible funding and you had the ability, the other part of, you know, besides putting us behind on a continuing resolution...
If you have to make rapid changes and you don't have a budget and you need to increase quantities or you need to make changes, you can't do that either.
So there's real operational impacts.
So I think that we just should take this at that level and try to do that first.
I'd be all for, you know...
We are going to portfolio -based management in all of those systems.
We're buying capabilities.
Our very first transforming and contact brigades got certain, they got infused with a certain amount of tech from one company.
And the one we're doing, getting ready to do in January, all the UAS and the counter UAS and the EW systems are different.
Because they're better.
On the UAS side, they're longer range, they're cheaper.
you know they're just better systems and I think you know cost curve is an important thing for us as well and when we can start buying those things at that level and then I would go back to something that Chris talked about you know we also have to look for our bigger systems of buying modular so rather than building a system that has everything built in active protection counter UAS all of that you know you can build the big system
Senator King, is there going to be appetite on the Hill for that kind of reform?
We've talked for years about doing pools of money so that the services have more flexibility.
Agile.
My high school football coach said he wanted us to be mobile, agile, and hostile.
And that's probably not a bad description for the Army either.
But I think there's an increasing realization that time is absolutely essential.
I mean, we've learned that in Ukraine.
They're doing generations of drones in a matter of weeks.
And we have to do that.
And by the way, one of the places we've really been slow is on directed energy.
And directed energy budget in the defense budget over the past three years has fallen in half.
To me, that's absolutely crazy.
We're shooting down Houthi $20 ,000 drones with $2 million missiles.
Directed energy, that's a perfect use of directed energy.
We're now starting to deploy these directed energy weapons, but it ought to be happening a lot faster.
So I think the idea of allocating money for a purpose rather than for A particular item is a much better way to proceed,
and then that will give you more flexibility in order to acquire the weapons that are necessary for today's conflict, not last month's or last year's.
Can I mention one other thing on that, Aaron, just because Senator brought up directed energy?
The other thing that we're really focused on is actually, you know, typically we built something, we took it to the test range.
You know, then we said, okay, we'll take it back to the lab.
So we're actually doing that.
As you know, we've sent over, we send directed energy and we're sending it out to the Middle East.
We're sending prototypes out there.
you know somebody will say eventually they're going to be 5x better right now they're 3x better that's better capability that we're getting with our you know with our soldiers that are out there we're also finding out what does the heat do what does the humidity do when we take it out in the pacific what does the cold weather do if you're in the eastern plains in europe
Can I maybe build on that for a second?
So first of all, Congress entrusted DIU this past year with a pretty significant uptick in our budget to just shy of a billion dollars.
And there's been a lot of talk about that, a lot of focus on it.
What's been a little bit lost in that discussion of the budget, it's probably the most talked about, 0 .1 % of the defense budget out there.
But what's been a little bit lost in the discussion is what I think is actually the most important thing about it, which is the flexibility that's within that budget.
So for the first time ever, and actually the first time anywhere in the department, we have the ability with the majority of that funding to go all the way from that initial prototyping all the way through to initial fielding to operational units.
Now, we don't scale anything, because that's what the service does.
But that puts me in a position to be a completely different kind of partner for General George so that we're able to help to facilitate those initial deployments.
And so what that means, I'll give you maybe a concrete example.
I think I saw General Jim Rainey here from AFC a second ago, and I'll rewind.
Oh, there he is.
So, for example, company -level UAS.
They see a need based on what's happening in Ukraine, what's happening in Gaza.
He writes a directed requirement.
We need to go do this.
And now we can work together on fielding a prototype really quickly in the same way that we always would have with maybe a few million dollars to help make that happen.
But then we're in a position now to help with the initial fielding at maybe the tens of millions, but also now moving forward to initial fielding out to operational units.
We're good to go.
I think?
It's a brand new thing that Congress has given us to be able to help get after this.
And my perspective is that we need to be doing a lot more of that in places like DIU, but that General George should have that flexibility too.
Dan, let me ask you.
So let's say that there's more flexibility that goes into the budget.
The Army is able to go out and test these things in the field.
DIU is helping to test in the field.
And they say, hey, this thing that you guys made for us, it works pretty well, but we think we want to do this, this, this.
From where you stand, how do you take that feedback and then be able to quickly actually get that around instead of taking four years for the feedback to get fed in, run through the process you guys have, get it approved up the chain, etc., etc.?
One of the good and bad things about two hot wars going on is people are innovating very quickly, and we're learning things in the field that we would otherwise take years to go through a requirements process on.
So the crucible of the wars are, you know...
So, as an example...
We do an awful lot of additive manufacturing.
If we do solid rocket motors or our liquid rocket engines, about 80 % of the content that is entailed in those is additively manufactured.
Now the advantage of that is you can iterate very quickly on a design and complexity is nearly free.
So on a combustion chamber that's designed to handle up to 6 ,000 degrees Fahrenheit, if you want to change how the cooling channels happen in that article, You can 3D print something else pretty rapidly, put it now through another qualifications process,
and in a matter of weeks have a different configuration that you would be able to use.
An example of innovation on the solid rocket motor side, and solid rocket motors are a real issue for industry right now, is that we've been working with our partners Raytheon on different types of designs for solid rocket motors.
And they've come in to us and they've said, hey, we've got something.
We've got a drone application out there.
We need to figure out how to shoot these things down.
We've got an idea for an engine.
And our teams have gone and over the weekend designed that in the 3D coding software that we use.
We've sent it off to our plants in Youngstown, Ohio.
They've printed those articles, which means they've welded up the metal to send that back to us.
We've done post -processing on it.
And we've had that back out on the stand in 29 days.
Which is, and we've done that on a couple different programs with Raytheon now, and that's really exciting to see that level of innovation happening to be able to meet and respond to something that's happening in the field.
And then if they say, hey, that's not quite it, you know, we got the feedback from the Army that it wasn't exactly what we wanted.
We wanted some more range.
We wanted a different flight profile.
We wanted something else.
It doesn't cost you years of development or acres and acres of tooling or anything else.
You can just jump right back into the 3D printers, change that design, see if it works or not, get it on the stand, and then feel that capability.
By the way, on 3D printing, I think every Army Depot and every ship should have a 3D printer.
And when we're buying platforms, we should be buying the IP.
So that we can print the parts.
We don't have to send anybody to get a part, and if something goes wrong...
So we're actually doing that, Senator.
We just had a big conference.
We're actually down to the tactical units, and they're in 20 -foot containers, and figuring out where we're going to put these.
Obviously, the other thing that helps is on the battlefield, you want to have very low signatures.
So whatever you're doing, obviously moving things is very costly.
So we're trying to push all of that forward.
And, you know, long lead time parts has been a challenge for us as well.
And so, you know, we have cases where we've taken parts that cost us $20 previously and we're printing them for pennies, you know, 12 cents.
And we do it very rapidly.
And so I think it's also going to be a lot for our operational readiness.
Can I maybe build on that advanced manufacturing point a little bit on what Dan was talking about?
Is this actually an area that we see enormous opportunity?
And actually I've got something that I'll kind of announce that we're going to be doing here.
So I have an opportunity to work with a whole lot of super, super, super innovative companies these days who are incredibly advanced in their hardware and software.
or hardware or software hardware and software integration when I talk to those guys it feels a lot like the same kind of level of of capability energy and talent that I would have had kind of at the best of Apple but focused and maybe kind of defense kind of space reduce kind of space when we have the conversation with some of those companies particularly the ones that are kind of still in the earlier mid ramp of their of their growth curve about the operational side of their business it's it's not kind of the same thing right because they're just not there yet at the At the same time,
there are these incredible, incredible companies in everything in advanced manufacturing from kind of digital engineering all the way through to 3D printing and everything in between.
A lot of them actually having come out of the space arena, but in other areas as well, and some incredibly, incredibly capable companies.
And they are looking for a lot more places to deploy that capability so that they can grow.
And what we are now going to be doing is through something called Blue Manufacturing, which I've sort of talked about a little bit before, we're going to be helping to bring those two groups together so that they can both scale on our stuff, and that'll be helping smaller companies,
but I think it'll also be useful for some larger companies as well in some places, plus some of those larger companies will be able to participate in providing that as a service to others, is something Dan and I have talked about.
And so, in January, we'll be putting out the requirements effectively, or the solicitation to be included in relevant categories.
We're good to go.
Chris, how would that help you?
Would that help you, what we just discussed?
Or is it simply RTX is, you guys are the big coonas and you're all set?
No.
Of course it would help.
Doug and I have talked about this.
We're out looking all the time for new suppliers, innovative suppliers to help us ramp.
We're not coming to this with a not invented here type of attitude.
That's not going to work.
Let's go back to the title of the panel here.
Can we build again?
Hell yeah.
We can build again and we are.
And there are certain areas where we're not ramping as fast, but we're bringing in automation, connected machines, anything that we can to continue to ramp to meet the needs.
If you walk around here like I have today in your meeting with service chiefs, combatant commanders, they need our stuff.
So we can talk about the five -year plan, the ten -year plan.
They need our stuff today.
They need Patriot batteries.
They need Standard Missile 3, Standard Missile 6.
All things that are in the pipeline today that we're continuing to invest.
Counter UAS.
We heard the general talk about this.
Doug and I were part of a group at DIU this week talking about Counter UAS.
We've ramped up our Coyote platform from a monthly rate by 5x this year.
We're going to double between the end of this year and the year after.
And that's an Army program of record.
We then went and developed and fielded a naval variant in nine months, taking into account all the things you would need to do to account for instability on the sea and whatnot.
We are continually iterating and looking for ways to increase the speed and velocity at which we design.
Just to go back to the sentiment on the panel here, there is a palpable urgency in industry to continue to ramp to meet the needs of our customer.
So somebody asked this in the audience questions, which is, I'm sorry, can you actually add something?
The word constraints is in the title.
What are the constraints?
And something I'm surprised hasn't come up yet is manpower, workforce.
Every business in Maine is looking for workers, and that includes the shipyards.
And we need to really be thinking about that.
The government needs to be thinking about that.
We not only need to be funding facilities at a major defense production, but we need to be talking about parking and daycare and housing.
Talk about constraints.
At Bath Ironworks, which is a major employer in Maine, they have people come from out of state, and then they can't find a place to live that they can afford.
So all of those things are interrelated, and I think if we're talking about constraints, the workforce constraint is a national problem.
I assume it's a problem in other states.
Every business that comes to my office is short of people, whether it's truck drivers, professionals, nurses.
Our principal hospital is down 500 nurses.
So this is something that we really need to address as a country in terms of training and bringing people along.
Senator, couldn't agree more.
Obviously, we've got the plant in North Warwick at Pratt, and we've had to continue to train, develop curriculum.
To your point, to make sure that we've got folks with the right skills.
But it's the reason I mentioned automation.
We've added two million hours of automation within just our Raytheon business unit over the last several years.
So we've got to continue to find ways to automate, to have people be able to operate two and three and four machines as opposed to one person for each machine.
We've got to work around those constraints and automation is a key enabler in making that happen.
I think we have some examples of that.
We're doing that for the organic industrial base, and we're talking about round production.
You basically have the same workforce, but if you've automated it, and you also, some of this is stockpiles and having the right things that are ready to go, you really can scale your production.
There's a lot of companies that are out there doing that.
When you automate this economy, you're not putting people out of work.
That helps.
Same number of people, for example, at some of our organic industrial bases, but you have them.
Radford, we're doing the same thing down there at one of those plants.
So it's the same number of people, you just have a lot more production capacity because it's...
Exactly.
But I'm kind of on that point, and I've seen this happen in other industries as well, and yes, we need to crank out more engineers, we need to crank out more qualified techs and machinists and everything else.
Through our systems.
But a lot of that comes by incentivizing those people to want to come work at your company as well.
That means good benefits, well -paying jobs, good career opportunities, people they like to work with on hard problems.
And good Americans want to come into those jobs.
We want to keep creating those for them.
You all read my mind because that was actually the question that we had from the audience.
That was perfect, sir.
Thanks for setting that up.
One question on the man force, though, is even if, let's say, the force that we have right now, the man, the workforce, can do three times the work that they're able to do through automation, through different processes, etc.
Is that actually still enough to get where we need to be?
Or does there need to be, aside from the changes in processes and additive manufacturing, etc., which helps speed that along, Does there still need to be an influx of manpower to be able to meet the requirements that we have coming?
I'll take a swing at that first.
I mean, I think some of the...
I can give examples.
Some of the things that we're doing now, you know, again, way many decades ago, we had a lot of companies that were a part of, you know, our industrial base.
We had dual -use technology.
They made different things.
I mean, our infantry squad vehicle is a good example.
Right now it's on the Chevy Colorado chassis and it also does very well for us.
I think moving to those kinds of things helps for all of us to be able to do things at scale.
Part of it is the requirements.
My friend Tom Tillis, Senator from North Carolina, used to come to Armed Services Committee meetings with a stack of papers this high that was the spec for a new handgun.
It was literally...
18 inches high.
So part of it is...
I agree with you.
That's characterization of needs.
We've got to be very simple and straightforward.
And if off -the -shelf will work, that's where we are.
Then we should buy it.
I mean, we're doing that for UAS.
The UAS that we bought, again, for the first unit and the second and third are different.
People understand what we need.
They're out with us, and they're producing it.
Actually, maybe two different things.
First, just on this needs versus requirements point.
This is actually really at the heart of the way that DIU tries to approach the problem, starting with the need rather than the requirement.
If you started by asking the consumer what they wanted in a new smartphone in 2006 or 2007, you would have gotten a flip phone that you could play Snake on faster with a toothbrush out the side or something.
You would not have gotten an iPhone.
What's the human problem we're trying to solve?
How does technology help to solve it?
Which is why we're embedding deeply with Warfare, with the combatant commands as well as with the service to say, what's the need?
How do we bring the technologists in to help solve that problem with tech rather than telling them, hey, go build me this widget with a thousand page thing.
It's like a ten page PowerPoint of how you think you can help to solve the problem and now let's get something real and start talking about it.
So that's one thing.
Second thing is I want to come back to your workforce point and whether we, even after we do all the amazing things we'll do from a process standpoint.
I don't know.
That are way more involved, skilled, and earlier, and start earlier in the education system to help develop that.
So that's a huge need.
I think that the government's going to need to help play a role in helping to stimulate that in the right ways.
And we have done that at other times in our industry.
And I think the private sector needs to get much more active in helping to stimulate that.
And one other thing I'll just throw out there, because I just can't help it, is I actually think one of the places is an enormous source of the kind of talent that we're talking about here.
That is incredibly operationally capable, technically savvy, high integrity, hardworking, and willing to get after it, is all my fellow veterans that are coming out of the force in various places.
And we'd love to keep them in, but the ones who get out, a lot of them should be going to these spaces, and we should be making it easier and easier and easier for them to go do this, because they're great jobs and we need them.
Except for we want to keep them.
We want them to fare.
I would say, Aaron, just to build on a couple things that Doug said.
One, we've got to open the aperture as an industry about who we want to bring into the supply base.
I think you had mentioned that before.
There are people in other industries that we have to, again, be more flexible about adding to the defense supply base.
And then two, I would talk about co -production as another outlet to add capacity, manpower, and enable the ramp.
So, again, partnering with our allies.
If you just think about some of our large programs, I was in Poland a month ago.
We've got nine polar suppliers on Patriot.
We've got co -production on GemT in Germany.
We've got a number of programs where we've...
Kongsberg on NASAMS out of Norway.
And they're on DIU contract.
They're on DIU contract.
So, again, capable...
Partners, internationally, with our allies, again, continues to add capacity and enable us to come up the ramp.
I just want to maybe build on, because I'm super passionate about this one.
I think that that adds capacity that we need.
Partnering with our allies, a partner's way in working.
So first of all, all this technology, right, what's inside of here, we talk a lot about kind of the assembly pieces that happen in China, but what people don't talk about nearly as much is all the guts that are inside of these, the components for all these kinds of...
We're good to go.
The only thing I'd say there though is I'd be sensitive to some of these places in the US that have been left behind a little bit on that kind of thing.
We've got a 3D center of excellence in Youngstown, Ohio now.
And that was help funded by the federal government as well as the state of Ohio to create what are essentially some of the most technologically advanced world -class 3D printing centers for complex...
It's a bit of an and,
not an or.
You're starting to see, again, to the Senator's point, labor continues to be an issue.
And again, I think this just adds, you know, we're talking about adding additional sources to what is a very stretched supply chain, which is what I think co -production can help unlock.
But I think your point's a good one.
I agree with both of you, but I kind of take a more offense view of that, which is I think the opportunity for those capabilities and the kinds of companies that you're talking about, Dan, is I think there's opportunity there because part of what we can do through these kinds of arrangements is help to introduce them to markets where they can get more scale of what they're doing in places like Ohio.
The incoming administration has talked a lot about immigration reform and talked about deportation of individuals as well.
Is there any concern that that kind of movement of people, whether it's restricting them coming into the country or having someone exit, is going to impact the workforce?
We need to control the southern border, and we need to rationalize the immigration process and enable legal immigration.
These are people that we need.
These are people from all over the world with talent.
We're one of the only countries in the world that people want to break into.
Did you ever think of that?
So we have to get control of the southern border first.
And then, you know, the first year I came to the Senate, we passed the comprehensive immigration bill by 67 votes in the Senate, led by John McCain and others.
And it never came up in the House, so it never happened.
But this has to be part of the package.
I mean, we need to enable legal immigration for all this talent that wants to come here.
I mean, I think President Trump said at some point, Chris,
I want to throw one out at you.
You're smirking, so it's a good sign.
It's a good smirk.
So we're in California.
You can look at...
I noticed none of you guys wanted to chip in on immigration.
I thought you handled it beautifully.
So we're here.
You can look at the advertisers who are supporting the Reagan Foundation, and it's a lot of tech companies.
It's all the new entrants, as they're called.
And some of those new entrants...
How do you respond to the idea from some sectors that a prime doesn't necessarily know how to provide what the Department of Defense needs in 2024?
A couple thoughts.
I'll reiterate what I said before.
If you look at the systems we have at play today, Ukraine, Red Sea, Israel, and the like, again, I think the demand is incredibly strong for our products.
People want more of them, and they want them faster.
That's sort of point one.
I'd say point two would be...
Maybe I'll quibble with your characterization a little bit as a strict defense prime.
Half, almost half of our business, if you think of Pratt, Whitney, and Collins Aerospace, is commercial aerospace based.
And in commercial aerospace, you're constantly investing at risk.
You've got to get products out fast.
You've got to design with upgrades in mind.
You've got to constantly be innovating.
I can give you a number of examples where we've taken a commercial innovation and ported that over into defense and done it very successfully.
So those types of commercial principles and mindset exist within the company today.
I gave you the example before on the defense side about ramping on Coyote.
To the general's point before, we're seeing things out in the field and we're iterating on upgrades, both hardware and software, to react.
To the countermeasures that we're seeing, operating in denied environments, as an example.
I think the folks that you mentioned, the new entrants, the disruptive folks, look, I think competition's a great thing.
I think at times they're competitors, at times they're our partnership opportunities.
So I agree with the need for speed, and I think...
I can give you a number of examples where we're doing just that.
Again, I think the characterization and composition of our business is just different than a traditional defense prime, which gives us a bit of an advantage.
But we're always looking to find ways to partner with folks to provide the absolute best solutions to the general and our customers.
Doug, how do you help get some of those newer entrants up to the ability to produce at scale?
Because that is the big hump that we're all talking about, is we need more of everything right now.
Yeah, so I think the thing that they need most of all is a consistent demand signal that allows them to make the investments and their investors to make the investments that they need to get after it.
So, first they need a chance, and we've already talked about that.
And then we need reference cases of successes that people can point to and see where that success goes.
It's interesting, you know, there's a lot of talk about capital out there, and the reality is that capital is not the scarce resource here.
There's actually a ton of capital.
And every dollar that DIU points at putting into something, there's anywhere from 5 to 10 to sometimes 50 or 100x of that investment that comes in, which we need to come in so that those companies can expand their capacity and go scale.
We also need them to be able to talk about it.
Short answer is the most important thing that we can do is get reps and sets of successes out there and be the kind of counterparty that allows investment to consistently go in there.
Now that doesn't mean that every single company is going to succeed or that every one of these things is going to wind up playing out because that's not how it works in Silicon Valley.
These are companies and investors who are used to taking risks but what they need is they need to have enough clarity of That scale demand that's going in these critical areas of investment with enough of a chance that it's worth taking that risk so that they can take the risk on our stuff.
One thing we haven't really talked about and we're somehow coming up at the end of this is the supply chain security specifically.
We see what happened with Skydio a couple of weeks ago where China cut them off and then earlier this week or last week China threatened to cut off some key minerals.
I guess...
Maybe the way to do this is just say, you know, how do we actually get to getting that, balancing the cost of trying to bring it all on shore?
I was just trying to figure out how to get to that, and you asked the question.
This is good.
We've got a good thing going.
Brad Smith talked about this earlier today.
We're in a hot war right now with China, Russia, and Iran.
It's in cyber.
The attack on the telecommunications assault typhoon, most serious attack on a telecommunications system in this country in our history.
You know what?
We have no deterrence.
Nobody's afraid of us in cyber.
Our whole defense strategy is based upon the concept of deterrence.
If you attack us, we're going to make you pay.
Except in cyber, we're still waiting for a response to the Sony hack.
We have no response.
There has to be, and this is something the president could do, it wouldn't cost a dime, a declarative statement that if we're attacked in cyberspace, there will be a concrete and costly response.
That's something that could be done next week.
It should have been done a long time ago, and it just drives me crazy that we take these attacks.
If you're sitting in with Xi Jinping and he said, should we interfere with the American elections?
You say, yeah, why not?
If we get caught, nothing's going to happen.
It's cheap.
Or should we attack their telephone system?
And we don't know the extent to which they have embedded malware into our telephone system or our financial system or our transportation system.
So boy, to the extent that you all have any role to play, we've got to--
We cannot patch our way out of this problem.
Amen to that, for sure.
On the question of the supply chain, absolutely we should be thinking about that and we should be designing to account for it.
If you have a rare earth mineral and the only place you can get that is out of a very remote region of China and you want to build an entire piece of your infrastructure on that, that's crazy.
You shouldn't do it until you develop that supply base that has that or you design around it with something else.
I don't think we do that all the time.
In the consumer world, we've been able to get away without doing it because we've been able to go to the marketplace.
But in the defense world, you have to anticipate a scenario at some point in the future where you do not have access to that region or to those supplies or somebody will shut them off.
We do that proactively ourselves.
Iranians can't fly jets that we provided for them because we won't give them the replacement parts.
We should think about how that might get flipped on us and we need to account for that in the industrial base.
This is something I think is also important for us to think about.
What critical Which critical areas of capability and which critical parts of those value chain do we need to have either here or for insurance somewhere in order to get after it?
And so one, for example, that I think is an enormous area of opportunity where we're spending a lot of time is batteries.
So historically, in the Department of Defense, our approach to batteries has been incredibly bespoke.
We end up spending a huge amount of money on incredibly complicated bespoke batteries that only go in the one thing.
Well, batteries go in everything.
And meanwhile, there's this $100 billion battery industry out there that includes some very, very, very capable...
Batteries are the real Green New Deal.
I think to Dan's point, it's caused all of us to go deep into the supply chain, tier one, tier two, tier three, and figure out where are you getting your raw materials, where are your suppliers getting their raw materials.
I mean, we saw this with what happened with titanium coming out of Russia, huge impact in aerospace.
So I think it's caused all of us to proactively go and make sure, and in some cases...
It drives higher cost as you're going and standing up second and third sources in other less volatile areas where you can.
But it's something I think we've all got some religion on this and have had to go really, really deep to understand where all the risks are deep, deep, deep in the supply chain.
We have about a minute and a half left, so I'm going to just ask if we can close with kind of a lightning round.
We're going to start with Doug and then just kind of run our way back here.
One of the topics that's been running throughout this conference is the question of the Doge office and efficiency reforms that might be coming.
At the risk of sounding too pithy, in each of your worlds, where do you see an opportunity to maybe talk to that office, the new administration, and say, hey, we understand you're looking for efficiencies, reforms.
Here's an area that you could sick the Doge on if you want to go down that path.
Doug?
I guess what I would say is, you know, you've been hearing from both the guys who work for the Defense Department up here about the opportunity for rapid reform, and there are a few of those things that have to do with the intersection with Congress, between the administration and Congress,
where I think we get to a much more symbiotic speed relationship, for example, of these portfolios of record.
I'd love to go after something like that.
And then there are a whole set of places where there are silly, stupid, bureaucratic, don't -have -to -be -there things that slow down a lot of work.
We're good to go.
I think?
Quite a while ago, I realized that most of what I'd spent my entire career thinking of as risk wasn't.
It was uncertainty in the private sector.
We are dangerously close to protecting ourselves against the wrong kind of risks and translating that into real risk, which is risk to mission, risk to force, risk to the nation.
So we've got to change our approach to risk the way we talk about it.
Chris?
Efficiency is a good thing.
I think we're all looking for opportunities, and I think that's got to be our general posture.
I would balance it with capability, the capabilities that we're all bringing to bear as well, given the threat environment that we're in.
General George?
I'm all in favor of it.
We don't have a nickname for it or anything, but we've been on talking about process innovation in the Army for the last year, and if it doesn't make us more lethal, Our team's more cohesive.
We have to be looking at, should we be doing it?
So I think we have to review everything that we're doing in that light.
And again, I think that the tough thing is going to be, we also need to be flexible with our...
Dan?
So having gone through this once when I was inside the government, I was a lawyer at the Securities and Exchange Commission, and they did a reform initiative, and one of those was to take out a layer and a half, almost two layers of sort of bureaucracy in the middle layer,
and it turned out we actually ended up bringing more cases faster.
So I'm welcoming any targeted efforts to help make the U .S. government more efficient.
I know it's going to be hard.
Senator King, last word.
I think a program looking for efficiency is good.
I think we should be doing that periodically on a regular basis.
My only concern is when you use the term efficiency to talk about programmatic programs that may have a policy.
In other words, efficiency is one thing.
Policy is something else.
For example, what if they say, well, the Sentinel program is too expensive?
There's a lot of thought and policy that goes into maintaining the three legs of the nuclear triad, and I'm not sure the cost should be necessarily the driving factor.
Do you see what I mean?
I don't mind Mr. Musk or others who are looking at efficiency and saying, why do you have all those layers, those kinds of things?
That's fine.
But I think there's a danger that they're implicitly or maybe explicitly going to be making policy decisions.
We don't need to be doing this anymore.
I think that's a decision for Congress to make.
Well, I feel like I learned a lot.
I appreciate everyone chiming in here and this absolutely fantastic panel.
Please join me in giving them a hand.
This morning starting at 7 Eastern on C -SPAN, C -SPAN Now, our free mobile app, or online at c -span .org.
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In his latest book, LBJ and McNamara, Peter Osnos' dedication reads this way.
To those on the Vietnam wall, on the mall, and their countless Vietnamese counterparts, it did not have to happen.
Unquote.
In his role as publisher at Public Affairs Books, Osnos spent numerous hours working with former Defense Secretary Robert McNamara for his 1995 book, In Retrospect, The Tragedy and Lessons of Vietnam.
Osnos writes, this book describes what happened in the years between 1963 and McNamara's last day as Secretary of Defense in February of 1968.