Center for Strategic and Budgetary Assessments (CSBA) Webinar with Admiral Michael M. Gilday
Admiral Michael M. Gilday,
Chief of Naval Operations
Thomas G. Mahnken,
Center for Strategic and Budgetary Assessments (CSBA)
Time: 2:00 p.m. EDT
Date: Tuesday, April 27, 2021
THOMAS MAHNKEN: All right. Well, it looks like our numbers are stabilized, more or less, so why don’t we – why don’t we get this session underway.
Good afternoon, everybody. At least, good afternoon to those of you who are in this time zone. Maybe good morning to those on the West Coast and farther west. My name is Tom Mahnken, president and CEO of the Center for Strategic and Budgetary Assessments. And today we really are honored and pleased to have Admiral Mike Gilday, the 32nd chief of naval operations, with us for a discussion.
And in just a minute I’m going to turn things over to Admiral Gilday for his opening remarks. And then we’ll spend the remainder of the hour that we have with a discussion. And some of you have already figured it out, I already see the questions starting to populate in the Q&A function. If you do have any questions please do submit them via the Q&A function, and then I’ll moderate the – I’ll moderate that discussion after I, of course, first abuse the chair’s privilege by asking the first couple questions. But to allow maximum time for that discussion I’m going to turn things over to Admiral Gilday for his remarks, and then we’ll throw it open.
So, first off, Admiral, thanks again for joining us. Thanks for taking of your time. And the floor is yours.
ADMIRAL MICHAEL M. GILDAY: Dr. Mahnken, thank you very much. And thanks to everybody who’s tuning in this afternoon. No doubt it’s budget season and we’re coming up on testimony time. And what I thought might be useful today – although I can’t speak specifically to numbers, and that won’t surprise anybody out there – I at least wanted to talk about the framework that we’re taking to approach the ’22 budget, which is a really tight turn here in the building, and likewise, over across the river, and then up on the Hill. And then also, as we – as we then very quickly step into the ’23 budget cycle, which should even be more exciting.
I do go back, if I can for a moment, to the 2018 NDS. And Secretary Austin said during his confirmation hearing that there were two things – two things, really three things, about the NDS. One is that he thought it was a solid strategy, but he wanted to take another look at it and see if it required an update. And then he also wanted to take a look at how that strategy is being resourced. So that’s translated here in the building recently into a Global Posture Review which is ongoing right now. I think his commitment to update the NDS – that it’ll be influenced by that, as well as the China Taskforce that he stood up that’s also – that’s also ongoing.
But I think the NDS problem sets that Secretary Mattis outlined in 2018, the prioritization of those – with China being the strategic threat. Although, we didn’t call them the strategic threat at the time, certainly we had a sense. I think that the fact that we approach those problem sets, particularly China and Russia, transregionally and multi – and through a multidomain kind of approach I think is really important in terms of formulating our priorities and what we put money against, and also in terms of how we operate.
I also think that the missions of the NDS, I hope – I would think remain largely unchanged. And that goes to defend the homeland, be able to deter strategically, deter conventionally, to be able to respond to threats, assure allies and partners, and compete below the level of armed competition – of armed conflict. And so I think that those – that those mission areas should stay – should stay relatively stable. I can’t see any big changes there. But time will tell. But it does influence my thinking when I ask myself what’s expected of the Navy as part of the joint force to deliver against those – across those mission areas and against those five problem sets.
I think a misconception many times – and a misconception in the Pentagon in reading that strategy – is that China always, always, always needs to be number one. And that’s not always the case. So I’d give you an example. I think that the NDS specifically, as the secretary at the time talked about, the ability – the need to be strategically predictable but operationally unpredictable. I think you have to take a look at those mission areas and ask yourself: OK, is China really number on in the hit parade with respect to strategic deterrence?
The answer to that may be no. It may be – it may be Russia. Or the fact that we need to be able to respond to threats. Is China the threat – the most pressing threat that we need to respond to at this time? And the answer to that might be no, in the case of what we’ve seen from Iran over the past 18 months. So while over the long term with respect to how we develop the force and how we design the force should remain relatively constant. I would say in the near term, in that zero-to-two-year time frame, there is – there is – things will shift back and forth, perhaps. And we need to be mindful of that. And we need to be able to adapt to that.
Shifting to the Navy more specifically, every single assessment that’s been done on our force structure since 2015 has called for a larger, more capable Navy in this great – in this hour of great-power competition to not only deter but also to be able to respond if required. And that’s not just in the Indo-Pacific. It’s globally. And again, it’s across those mission areas that I spoke to, and it’s across those five problem sets that are outlined in the NDS. But that has been a constant with respect to the growth in numbers.
Recently I was asked by a member of Congress what my North Star is with respect to numbers. Right now, that’s 355. I still think that’s a really good target. And I would – with respect to that, the integrated force structure assessment that Commandant Berger and I presented to the secretary of defense at the time, Esper, in January of 2020 called for north of 355 with respect to the numbers. And the FNFS that was signed out by – the Future Naval Force Structure Assessment – signed out by Secretary Esper certainly went far above 355.
But 355 is the law of the land right now. And I think given where we are, just shy of 300, that’s not a bad target. The 30-year shipbuilding plan that Secretary Esper submitted to Congress in late 2020 also had a glide slope that put us at 355 a decade from now, 2031 to 2033 timeframe. But importantly, that trend assumed 4.1 percent growth in our shipbuilding account. Actually, a 4.1 percent growth in our budget I think is what the secretary called for in that – in that shipbuilding plan.
As you’re probably well-aware, the buying power of the Navy has been relatively flat since 2010. Although we have seen an increase in CVN since that time, and some of those bumps are certainly due to aircraft carriers and most recently the Columbia-class SSBN, our buying power has been relatively flat when you take a look at inflation. And I think that, you know, taking a look at the 715 (billion dollars) top line that the department has this year, so we’re going to see us just hovering – lucky to actually keep pace with inflation.
And what that will make most challenging, I think, is that given the rise in personnel costs, and given the rise in operations maintenance costs – which typically rise at a rate higher than inflation – it will put a squeeze – or, potentially put a squeeze on the shipbuilding budget unless money is found elsewhere, outside of Navy’s top line, in order to – in order to fund growth.
So as I take kind of a realistic approach to an investment strategy, given everything that I just said, and based on things that I’ve said previously about maintaining a fleet that’s whole – that is to say – you know, that is to say that I’m not going to sacrifice – I’m not going to sacrifice capability and readiness at the expense of capacity. It’s still – it’s what I said in my first testimony when I was confirmed, and I still believe that today. And in short, that I think that we need a fleet that’s more ready, and more capable, and more lethal more than we need a bigger fleet that’s less ready, and less capable, and less lethal.
So as I take a look at three areas across which these are broadly where we – where we put our money – the first would be readiness. And that’s been my number-one priority since I’ve been in the job. I truly feel that if we do get in a scrap with an adversary that our fleet and its commanders are likely not to meet all of our expectations but will certainly fall to the level to which we have trained them and that we have prepared them for the fight. So that continues to be priority number one. And in that, I would also include many of our manpower investments, investments in personnel. And that includes new training frameworks that we’re – that we’re bringing online.
The second bin would be capabilities. And this really gets to force development and the fact that 70-80 percent of the fleet that we have today is going to be in the water 10 years from now. And so these are development – these are investments in fires – think hypersonics as an example – weapons with range and speed, whether they’re going to be delivered from a submarine, from a ship, or from a jet. Networks is also an important capability. Taskforce Overmatch, we can certainly get into here in the Q&A. It’s the Navy’s piece of JADC2. And we’re not going to be able to field the hybrid fleet in the future, we’re not going to be able to decide that faster than the adversary, unless we get the network piece right.
And then the third bin is really capacity. And as I said a moment ago, I think that we will grow the Navy at an affordable rate. And the composition of that growth is really going to be informed by – right now, it’s informed by the FNFS assessment, which really – is really helping us inside our budget lines to determine what those priorities are with respect to the composition of the fleet that we need to field to both deter and defeat an adversary.
So what are those – what are those three bins? What does the money across those three bins deliver us, let’s say, by the end of the FYDP? And so the path that we’re on right now will deliver – or, will – assuming that the path remains stable and fairly predictable – is that with respect to the undersea, all the Block III Virginias will be delivered by that time. Actually, all the Block IIIs and Block IVs will be delivered by 2025. We’ll be at the cusp of delivering Virginia-class Block Vs. And we will, at that time, be fielding an advanced weapon under the sea.
With respect to the service fleet we will begin to deliver the Constellation-class frigate. We will be delivering Flight III DDGs. We will have mine and ASW modules on LCS. Hopefully by that time we’ll have corrected some of the other issues that have plagued the sustainability and reliability of the littoral combat ship. But I think we’re on the right path there, at least I’m optimistic that we are. We sure are putting plenty of heat on it. In terms of weapons, in terms of maritime strike Tomahawk, in terms of other – in terms of by 2025 fielding hypersonics in the Zumwalt-class destroyers will be an important move forward, to turn that into a strike platform.
And then lastly, if I think about on the aviation side, we’re deploying our first F-35 squadron this summer on Vinson. We’ll have six squadrons in six wings by 2025, and be that much closer to a fourth/fifth-gen mix, again, with weapons with range and speed with respect to LRASM and AARGM. The new increment of P-8s will be online by that time. And then the networks piece that we’re putting so much heat against with Admiral Small out in San Diego in NAVWAR. So with that, Tom, I’d like to – I’d like to pause – I think that’s given people enough to kind of chew on – and open it up to your questions and then the questions of the audience.
MR. MAHNKEN: Thanks, CNO. Yeah, you’ve put a lot on the table. And you know, for us, you know, we are the Center for Strategic and Budgetary Assessments. You talked about budget. You talked about strategy. I wanted to lead off with strategy. And actually, initially not ours, but you talked about China. And what – Admiral, what in your view is – or, how would you characterize China’s strategy? And then how do you think about, you know, the U.S. Navy fostering, acquiring, and operating capabilities to counter – to defeat that strategy?
ADM. GILDAY: So I think that China approaches things by bringing them to a slow boil. And when they feel confident that they can make a move with acceptable risk, then I think that’s what they’re going to do. As I watched them operate recently around Taiwan, it makes me think of whether or not they’re beginning to treat Taiwan like Hainan island, and as if it’s already theirs. As we see their ship activity not just on the western side, in the Taiwan Strait, but all around the island, with respect to the combatants. Similarly, their activity in the South China Sea. At what point will they think that they are in a position of advantage to potentially move?
And so that’s why the Navy being deployed in numbers and readiness being a top priority is so important. As we heard Admiral Davidson testify to, we have to have forces forward in order to cause enough doubt in the minds of President Xi that today is not the day, right? That we have sufficient forces there to foil his plans should he decide to act. So I hope I answered your question there, Tom, sufficiently in terms of what I think their approach is.
MR. MAHNKEN: No, thank you for that. Let me give you one more before – straight from me, before going to the questions we have from our participants. And you talked about, you know, multidomain operations, right? And that’s certainly true within the Navy. It’s certainly true within the naval services. And it’s also true with the Joint Warfighting Concept. And realizing that the – you know, the Joint Warfighting Concept itself is classified, I’m interested in your thoughts about how you view the Joint Warfighting Concept as it relates to the various concepts that the Navy and – Navy, Marine Corps, Coast Guard have all been developing with one another. I mean, how do you – how do you think about the Joint Warfighting Concept as CNO moving forward?
ADM. GILDAY: So let me just talk about the Navy for a moment. And I probably should have said this upfront. So I mentioned the Future Naval Force Structure assessment. And so that work that produced – that actually informed the 30-year shipbuilding plan that we submitted – was really grounded on how we think we’re going to fight and how we think we’re going to operate. And so for the Navy and Marine Corps – for the Navy, that was distributed maritime operations, which is stitched together with LOCE and EABO from a – from a Marine Corps standpoint. So with every deploying strike group and ARG we have been doing fleet battle problems that directly test and mature elements of DMO. Ongoing right now is a – is a major integrated battle problem we’re doing with unmanned and manned platforms on the West Coast.
So DMO, EABO, LOCE, that’s a Navy-Marine Corps – that’s the naval contribution to the Joint Warfighting Construct. In terms of bringing all those – all of those operating concepts together, I would tell you that it’s complex. It’s not easy to figure that out, particularly when you – when you think about how we want to fight as a joint force. And that certainly has to inform how we think about executing distributed maritime operations. But when we think about more specifically how do we want to deliver joint fires as an example, in this day in age, it becomes really complicated, particularly when you’re talking about an adversary that’s transregional, right?
So who owns it? Who’s calling the shots? Who is dictating the op tempo and the timing with respect to delivering effects? That’s something that we’re working on really hard. And it’s tied up in the Joint Warfighting Concept. But it is a – it has a lot of focus, I would say, inside the Pentagon and beyond in terms of how we tie those things together – how we tied the services together for the joint commander.
MR. MAHNKEN: Well, thank you for that.
We’ve got a number of questions from retired General Ken – (audio break) – from Captain Bryan Durkee, our federal executive fellow here at CSBA; from Matty Golub at Johns Hopkins, all about kind of unmanned. And both in terms of what we’re learning right now from – you know, from the fleet experimentation that’s going on right now, versus kind of the path ahead. So what would you say about unmanned/robotics both in terms of what you can share, you know, fresh off – you know, hot off the press and then looking into the future?
ADM. GILDAY: So, first of all, we believe it’s an important part of the future, right? That we can’t afford – that we can’t afford to field a Navy like we did in the previous century, right? That we believe that numbers are important, but with respect to affordability, with respect to lethality, that there’s a better way to get at it than we have before. Unmanned is part of that answer. And certainly manned-unmanned teaming, which eventually would lead to, you know, a more autonomous – an element of a more autonomous fleet, is where we’re headed.
When I came into the job we had about 15 different programs across the unmanned spectrum. So it had everything from platforms in the air, to on the sea, to under the sea. Those programs were not necessarily connected. And we certainly weren’t connected to the Marine Corps. And so what I wanted to do was accelerate the timeline to maturity for those programs, to learn from each – to learn – for those programs to learn from each other, to use commonality wherever possible with respect to control stations and the networks that we would use to command – to C2 these elements was another important piece of it. And we weren’t going to get there if we had 15 different programs traveling in stovepipes.
So the framework that we developed is really our first step in bringing everything together in kind of – as kind of an orchestra instead of individual parts, so we can learn from – learn from the experimentation and the rigorous testing that we’re trying to get at right now, and then to make informed decisions about what platforms we sundown and what platforms we double down on, and get to a point in probably five to seven years where we’re much more confident about two real big pieces.
One is reliability in terms of – in terms of operations. We don’t want to have to tow these things in from the middle of the Pacific, right? The second is trust. And that’s all about command and control. And so to give you an example, the MQ-25, which we’re very bullish about and it should IOC around 2025 on our aircraft carriers. I was just out to look at them last week in St. Louis, out at Boeing.
And so if I would compare the MQ-25 to the MQ-4 in terms of challenges, when the Triton loses connectivity, they’re flying out of Guam right now, the system – the platforms knows where it needs to return back to. It’s going to be a different problem set with the MQ-25, as an example. So those are things we are working on, including integrating the MQ-25 into the wing in a way that – you know, that’s much more integrated and second nature with respect to how we’re going to operate.
With respect to the service fleet, we really want a platform that’s going to run, run, run, run, run, and not break down on us, right? And so this really gets down to a simple but reliable engineering plan. If I can contrast it to LCS and the Freedom-class hull, where there are 7,000 sensors in that engineering plan. We can’t have that kind of complexity on a platform that’s eventually going to be unmanned. It’s got to be very reliable. So I think we’re on a pretty good path right now. We’re certainly on a better path than we were a year ago. We’re not satisfied yet in terms of where we – in terms of where we are. We’re working hard to learn more from the programs that we’re experimenting with.
We have committed – or, I have committed to Congress that I’m going to be transparent with respect to the testing and development plans associated with those platforms, so that we can build trust on the Hill with respect to where we’re going. Not that we’re going to get everything right in the first pass, and not that every experiment’s going to work, but at least that we’re showing that we’re learning from what we’re doing and we’re not continuing to fail, experiment after experiment.
MR. MAHNKEN: Let me just, on that, you know, bring unmanned back into the equation when it comes to the fleet architecture and fleet structure. So how should we be thinking about that, right? So, you know, 355, you know, your North Star, but that can mean a lot of different things depending on how we think about unmanned systems. So how are you thinking about that, the role of unmanned in the overall fleet architecture? And I guess, how should we be thinking about it, more broadly?
ADM. GILDAY: Yeah. So the – so unmanned right now – unmanned surface and under-the-sea vessels have not yet been classified as part of the battle force. And so they’d be separate and distinct from the 355. I think that round about numbers that we’re looking at, in terms of percentages, probably by the mid to late 2030s we think up to a third of the fleet could be unmanned if everything goes right. And for the airwing of the future we think about the same – initially about 40 percent, potentially going to 60 percent unmanned, as we learn a fourth gen – a fourth-fifth gen mix of manned fighters, as an example, to team with a number of unmanned as they operate – as they operate in contested areas. And so I hope I’m getting your question the right way, Tom, in terms of how we’re differentiating there.
MR. MAHNKEN: Yeah, no, you are. I mean, I think – I think – you know, I think each of the services, you know, faces challenges with new capabilities, right? How to – how to weigh them, how to – you know, services are denominated in different ways. How do you acknowledge the value of new capabilities, you know, while also kind of preserving the coin of the realm, I guess?
ADM. GILDAY: Yeah. So risk reduction is – risk reduction gets a lot of attention around here. We start talking about new platforms, right? So if we think about the new frigate, we’re taking a known hull and a known combat system and we’re going to marry them together. Or, when we think about DDG-X, that will be a new hull, kind of like DDG-51 was, but we’re taking the Aegis combat system and – or, a known combat system, and mating it with that hull.
And so we really are trying to take a look at, you know, minimizing any surprises, doing much more land-based testing. And we’re doing land-based testing with unmanned as well. It was directed that we do in the NDAA, but it’s the path that we’ve been on or that we’re now solidly on because we can’t afford to have surprises down the line that are going to cost us – that are going to cost us deployment time or operational availability in the future.
MR. MAHNKEN: No, thank you for that. We have a – we have a few questions – and I want to – I want to capture the questions but also kind of bundle them together, given the time that we have. You talked about – you talked about strike, you talked about long-range strike, and you talked about the challenges, you know, that the Navy is going to face in the future in a – you know, on a battlefield where there are different – and different services doing long-range strike and trying to integrate all these things together.
What are your thoughts on the path forward there? Both in a, if you will, just – maybe let’s just say from a service standpoint – how are you thinking and how is the Navy thinking about how best to take advantage of capabilities brought to the table by others in the maritime domain? So whether it’s long-range precision fires, or whether it’s use of, say, Air Force assets for maritime missions. And then how do you, more specifically, when you’re thinking about long-range precision fires, you know, hypersonics – how do you think about complementing and deconflicting other service efforts.
ADM. GILDAY: So part of that deals with how we’re going to – how we’re going to move data around in a way that’s going to safe, secure, and at the end is going to lead to the right effect that you want. So if I can just talk about – I’m trying to get to your question here by talking about what we’re doing with Project Overmatch. And so what we are trying to do – and I use – I use your smartphone as an example – is we’re trying to create a software defined network of networks that allows us to pass any kind of data on any network in a more resilient way, in a way that – in a way that’s faster, more secure, more productive for the end user – whether that’s a commander or whether that’s a petty officer that’s got to make a decision or press a button on the far end.
So your smartphone – your smartphone’s connected to a Wi-Fi network. It’s connected to a 4 or 5G network from your service provider. The software in the phone determines how it’s going to move – how that device is going to move data. And you really don’t care what network it uses to move that data. Meanwhile, you’re using applications that provide you whatever – you know, that suit your needs, whatever that need might be, on your device itself. What we’re trying to do in the Navy is we’re trying to develop a software-defined network of networks that allows us to move any data over any network. And we’re doing a series of experiments this year of increasing complexity, with four different spirals, if you will, that allow us to take different data packets.
So as an example, I would send a – I send a message to the fleet on extremism on a system called NAVMAX. Taking that data – taking that data and being able to successfully transfer it between two fighters using a fighter-to-fighter network is something that we’ve already perfected. We’re trying to do that at scale so that by late ’22, early ’23 we can do this with respect to a battlegroup. Again, moving data in a way that’s defined by software and not necessarily by a single person in a – at a console somewhere, and allow us to use battle management aids or applications to make decisions faster.
It’s really – it really comes down to how do you put a commander or an end user in a position where he or she can decide and act faster than the adversary? And so this gets right back to John Boyd’s OODA loop, the orient piece being the most difficult, right? And so the system deciding to use a network that’s, let’s say, perhaps has a low probability of detection, a low probability of intercept, in order to move targeting data from Navy sensors or from a Navy node to an Air Force fighter or to an Air Force bomber. And so that’s eventually where we want to get with both the system that – or, the framework that the Navy’s developing, and how we’re going to apply that more broadly to the joint force.
I was just in Aberdeen with the chief of staff of the Army and the chief of staff of the Air Force, where we were bringing all of our frameworks together. And we were experimenting with them. We are all on separate but similar paths. And we are looking at convergence points where we can bring that – bring that – bring those frameworks together, if you will, so that it can operate seamlessly. And we’re doing that right now in Project Convergence exercises that the Army’s running a couple of times a year. It’s not perfect yet, Tom, but I do think that JADC2 has an awful lot of heat behind it. The joint chiefs signed out a memo to the SecDef less than a year ago that said that was among our top priorities.
MR. MAHNKEN: Yeah. Thank you for that. We’ve got a question from – (audio break). It’s – you know, it’s brought on by the geography of the Western Pacific, and in particular, you know, the critical importance of range when thinking about operations in the Western Pacific – a Taiwan contingency, or beyond that. And so what he is asking for is – you know, is your thinking about – well, for – you know, for want of a better characterization – maximizing the range of naval assets, whether it’s strike, aviation, tanking. What are your thoughts on maximizing the range of U.S. Navy capabilities?
ADM. GILDAY: Yeah. So with respect to – with respect to the platforms and the air wing, that’s what we’re trying to do with MQ-25. And that’s what we’re trying to do as we field – as we field weapons with greater range, right? And certainly with greater speed. Our biggest R&D effort is in hypersonics to deliver that capability in 2025, first on surface ships and then – and then on Block V submarines. And so that’s an example, I think – perhaps maybe the best example – of how we’re – how we want to bring that kind of capability forward in a distributed fashion, using distributed maritime operations, to come at an adversary with a much – in a variety of different vectors, right, to make it very difficult for him to target us.
The other thing that naval forces bring to bear, which is not insignificant in a day and age of hypersonics, is the ability to be mobile. Not that we’re going to be able to completely hide in the future, right? One would think that over time there’ll be ubiquitous imagery coverage over the Pacific – whether those are military satellites or whether they’re commercial. And that information will be available to an adversary whether he or she purchases it or whether they steal it. But it’s going to be difficult to hide.
So in terms of fleet survivability, together with mobility, is our emphasis on directed energy or laser technology, right? It will allow us to shoot down missiles because, as we – nothing that we’re doing is not informed – or, everything that we’re doing is informed by what the Chinese are doing. And not that we want to be in a tail chase. The best possible position is to be leading them. And in some areas we are, and other places we’re not. But they’re putting a lot of – a lot – they’re investing a lot of money, yes, in ships, the size of their navy, but specifically in terms of weapons. Missile technology and satellites. And so that’s not lost on us. I think directed energy, with respect to the future survivability of the fleet, is really important.
If you think about the fact that a Ford-class carrier generates three times the electrical power of a Nimitz-class, or that we’ve got excess power generation in Zumwalt-class destroyers. And we could have that same capability on an unmanned vessel, whether it’s medium or large. And that – and that vessel, traveling along with a, whether it’s a strike group or a surface action group, is allowed to provide a high degree of defense and depth coverage against an incoming threat.
So I got a bit off path on that one with respect to directed energy, but I do think in terms of both the weapons that we’re buying and the platforms that we’re investing in on aircraft carriers, we are looking to extend our range wherever we can. And putting advanced capabilities on submarines is also an important aspect of that whole – I think part of that whole question.
MR. MAHNKEN: Well, thank you. And you did raise directed energy, so I’ll take advantage of the opening, right? So directed energy is one of kind of a suite of promising, emerging capabilities, along with some others, right? But I guess then the question becomes how do you have the headroom to be able to afford some of those new capabilities?
So we have a question from Eric Gomez (sp) talking, you know, first about the Marine Corps and Commandant Berger’s force design, and his willingness to – you know, to offer up some – you know, some elements of force structure to buy the headroom for modernization. And I guess the question there is, well, how about for the Navy? I mean, are there legacy capabilities that the Navy needs to offload to make room for modernization?
ADM. GILDAY: There are. First of all, you know, the White House has essentially directed us to take a look at legacy platforms that we can divest of. But it’s not always as simple – in one’s – in one’s mind’s eye, people when they hear divest/invest, they think that, oh, if I give something up on the other side of the equal sign it’s going to lead to something else. And that’s not always the case in a budget environment that might be flat or even decreasing, right? I mentioned the fact that there are elements of our – there are elements of our – of our budget, specifically operations and maintenance and personnel, that growth at a rate higher than inflation.
So these have to be very deliberate decisions in terms of what you’re going to give up. And I’ll give a couple of examples. So we put – the Navy – the Navy, in our budget proposal to Congress last year, proposed that we – that we would decommission the first four littoral combat ships. And we offered that up from the standpoint of lethality, and actually – and actually in comparison to other investments we could make that would probably pay off – pay off better than those first four ships. Those first four ships are test platforms. We haven’t invested anything in upgrading the hull, mechanical, electrical systems. We haven’t invested anything in terms of upgrading the weapons systems. In order to do that across those four vessels, it would be about two and a half – two and a half billion.
So if you compare the firepower for, let’s say we could buy three or four frigates for that same – for that same price. Or I could put that money against other potential – other potential capabilities. And so Congress allowed us to decom the first two, but not – but not three and four. And so that’s up, perhaps, again for discussion in this upcoming fiscal year. But that would be one divestment example with the trades.
The other – the other might be specific cruisers that we haven’t upgraded their combat systems yet. They’re older cruisers. And as we’re seeing with some of the cruiser – some of the ships that are undergoing modifications right now, the amount of growth work we’re finding in cruisers that are 32-35 years of age is really cost prohibitive. And again, those are opportunity costs that we should consider in putting that money somewhere else. Again, I think these have to be very deliberate decisions.
With respect to cruisers, there have been critics out there who have said, well, you know, if you decom a cruiser you’re going to lose 122 VLS cells. But if I go back to the fleet that we’re going to field in 2025, right, and I talked about across the undersea, on the sea, and in the air, the capabilities that we’re bringing to bear, I would open up the conversation to let’s not just consider service VLS cells as the only metric we’re going to focus on. There are others. And there are areas there with potential growth that we could put more money against, even in a tight budget scenario, that might yield us better effects than that aging cruiser.
You know, we were – the Vella Gulf is a cruiser that we just deployed. But she deployed late because of cracks in her – in her fuel tanks. And so these ships are old. The average – the average maintenance costs on the fleet today is twice of what it was 20 years ago. The fleet’s getting older. A long – a long answer to the divestment question.
MR. MAHNKEN: No, but a great answer. And it actually leads to a related – (audio break) – Brad Peniston from Defense One, which is, you know – his question is: Can you give us an update on the Navy’s maintenance challenges? You’ve done a little bit of that, but maybe you want to say more. Are ships getting parts any faster than when you started? Are availabilities taking less time and getting more done?
ADM. GILDAY: They are. So particularly – so if I could just talk about the path we’re on. We’re not satisfied yet, but we have knocked down delay days in our public shipyards 80 percent of what they were a year and a half ago, and about 67 percent in the private yards. So I think we’re on the right path. We’re not where we need to be yet. Those need to be zero with respect to delay days, whether it’s in a private yard or whether it’s in a – whether it’s in a public shipyard.
There are a bunch of reasons for that. One example, looking at a substantial amount of data, we concluded that for a surface fleet that due to poor planning and forecasting up front, it was costing us about 30 percent of those delays. Contracting – laying out – or, agreeing to a contract with a private yard 30 days before the shipyard also put a crimp on their own planning, their ability to get parts laid out in time in order to keep jobs progressing on time and in the right sequence. And so our goal right now is to contract 120 days before an availability. And right now, our average is about 97 days. So again, not satisfied but moving in the right direction.
Also, with respect to vertical stacking those contracts, so that certain shipyards are working on like ships two, three, four, five in a row so that it’s predictable for their workforce. There’s a degree of muscle memory that they develop. The recent effort that we made to move ships from Mayport to Norfolk, and from Norfolk to Mayport, so we bring DDGs and amphibs together in one place, kind of a center of mass, has everything to do with getting at the maintenance piece.
The greatest force generation challenge that the Navy has, and the Achilles heel of our – of our force generation framework, is the ability to get ships out of maintenance on time. So we know that. We’ve been very transparent about our efforts with Congress in terms of where we think – where we think we are and where we’re going. I think we’re on the right path. We still have a lot of work to do to really get us where we need to be.
I also would tell you that adding to the pressures in the budget are really three strategic areas that we’re investing in. And so one would be Columbia-class SSBN, right? And I’ll get to the – I’ll get to Defense One’s – tying this into Defense One’s question. But Columbia SSBN certainly is a strategic investment for us that has to deliver on time.
Strategic sea lift is another area that we haven’t put enough money against in a long time. And so hence, our – hence, Congress has been excellent with allowing us to buy used sea lift, right? Ships that, you know, we’ve done the market analysis. We know that they still have a couple of decades of service – solid service left in them. And so we’re buying them at a tenth of the cost of new.
The third area, to Defense One’s question, has to do with the strategic investment that we’re making in our public shipyards. So across those four yards we’ve got 21 drydocks. The average age of those things is 100 years. This is – this is a once in a century – once in a century investment in these – in these drydocks. In order to – in order to sustain the fleet going forward – that’s 70 percent that we’re going to have 10 years from now – we have to make these – sustain the investments in these shipyards.
Right now we have nine ongoing military construction projects, ongoing in our four shipyards. There are more to follow. It’s a priority for me. It’s a priority for the Navy. I hope we get a little help in the infrastructure bill that’s currently on the table up on the Hill that might actually help us accelerate some of that work. But also we’ve done digital twins for all of our public yards that are to inform the area development plans that actually will allow us to update infrastructure in an informed fashion. And this is infrastructure that, on average, is over six decades old.
So think, as an example, to do work to refurbish a pump that likely now at, perhaps, Portsmouth Naval Shipyard or Hawaii – the shipyard in Hawaii – you have to bring, you know, from one area of the shipyard to the other. Over time, we have not kept sighted on any kind of efficiencies with respect to workflow in these shipyards. The digital twins will help us understand how to – how to get more efficiency out of the – out of the shops, the placement of those shops, and the work that we have to do to recapitalize that infrastructure over the next several years.
MR. MAHNKEN: Thank you. We have a couple questions about space. So Navy was obviously a player in space from the very beginning. So kind of two – kind of two aspects to it. Now that we have Space Force, you know, how are things going in transferring, you know, naval space capabilities, assets to Space Force? And then anything you would care to say about your conversations with General Raymond about, you know, ongoing space support to Navy as things move forward?
ADM. GILDAY: So it’s been really easy, as a matter of fact. So the Navy operates 13 satellites. And we’re going to transfer those operations to Space Command, where they belong. Right now the Navy is a – is a component of Space Command. So that’s been very seamless in terms of those – in terms of those operations. In terms of – in terms of other elements, we do a lot of – we do some work in our labs that’s related to space.
And right now the decision has been made to maintain those – to maintain our Navy capability within those labs and keep it in the Navy, for the sole reason that, as you can imagine, in a Navy lab – in a Navy research lab there’s a lot of cross-cutting work that goes on across a number of different disciplines. And so in many cases we are developing memorandums of agreement with the Air Force that gives them a lot more say in terms of what work that we’re doing, but we’re not upsetting the workforce or we’re not upsetting the – you know, the command and control, if you will. But we’re still focused on mission, and not on – not on egos with respect to who owns what.
General Raymond and I, on a handshake, agreed to begin to move our first officers from the Navy to the Space Force. That’ll follow a more rigorous process over time. We don’t have a space community inside the Navy – a formal space community. We do have what we call a cadre. And those people are identified based on education or experience in commands like STRATCOM, or both. In fact, a woman that works in my front office is both degreed in space and she’s also worked in space jobs in STRATCOM. So her future is likely in the space community. And we need – all of the services need to help grow the Space Force. So it’s a good-news story right now. There’s always a little bit of friction, but I just haven’t experienced much, as a service chief, with respect to that transformation.
MR. MAHNKEN: We – as we’re drawing towards the end – and I am going to reserve some time for any final remarks you may have – but we’ve got a number of questions about speed and about urgency. In other words, are we moving fast enough? Is the Navy moving fast enough to develop the types of capabilities that we need to deter, defeat, if necessary, peer adversaries? And particularly when it comes to innovative technologies, are we moving fast enough to get those into service and to the fleet?
ADM. GILDAY: So the short answer is no. But the caveat is we’ve got to get it right. So I could point to a number of programs that the Navy – any service chief can point to a number of programs where perhaps our eyes were bigger than our stomach, we moved too quickly, and we scaled too fast, right? And so unmanned is a really good – really good example, where we have pumped the brakes a little bit. We’re trying to be more disciplined so that we reach a position – let’s say, as I said, in five to seven years where we’re really confident in our ability to command and control reliable platforms out there with a high degree of reliability, so we’re making an informed decision at scale.
Yeah, we are giving up a little time, but, boy, as I’m chasing problems on some programs that we have, you know, LCS is front and center with the combining gear on the Freedom-variant hulls, where I can’t rely on those ships deployed right now, not with a high degree of confidence. And so we’ve stopped delivery of those ships from the primary vendor. And we need to get that combining gear redesigned, tested, and then backfitted on those hulls in order to get them out there. I don’t want to be in that position with other programs. And so I’m willing – based on a whole lot of scar tissue with other programs – to take a deliberate approach here, take a focused approach.
I will tell you that I’m much more focused on saying than doing right now. My Nav Plan focuses on 16 different areas that I’m making the argument: Look, Navy, we’ve got to deliver this stuff this decade. We can’t afford to fall behind the adversary. And so that’s where I am. I’m not trying to be too half too cute in anything that we’re doing. I’m trying to get it right. I also know that, you know, perfect can be the enemy of good enough. But with respect to weapons systems and platforms, we just don’t have a great track record of getting it right the first time.
And so, as an example, the Constellation-class frigate, when I was up in Marinette to meet with the workforce who were – those patriots are excited about what they’re doing. They know that this has to be our SpaceX. That we have to get – we have to get this ship off center and delivered, and it’s got to go right the first time. I’m taking a look at how we man those frigates. And so I want to think through every aspect of delivering a platform like that so that I’m not going to waste any time once it hits the water and we deliver it to the fleet.
MR. MAHNKEN: Well, that I think leads to what I think will have to be our last question. And it is about this issue of payloads versus platforms, and specifically, you know, how do you consider payloads versus platforms in the overall resource tradeoffs for – (audio break). Specifically, should we be investing more in weapons versus platforms, which dominate, you know, most of the discussions?
ADM. GILDAY: So I think there’s a balance there. I think what you really have to do is you have to talk about capabilities. And if you want to take a step back, particularly in the budget environment that we think we’re going to be in, how do – we need to talk about joint capabilities. And that’s informed by things like not only the Joint Warfighting Concept, but also the Joint Military Net Assessment. We haven’t done a true assessment in DOD in 25 years. Why? Because nobody’s been breathing down the back of our neck. Now they are.
Now we need to understand, with respect to Russia and China, truly how vulnerable are we across a bunch of different areas? And then what do we have to do to close those gaps? And what element is – in the joint force – can deliver that capability in a way that makes the – that gives you the biggest bang for the buck? And that’s where you begin to double down. Those informed decisions have to be made in a joint – kind of with a joint perspective in this building. And so I come down to – I really come down to capabilities.
With respect to fires, you know, are we making – how much money do you want to put against mobile systems versus systems that are going to be stationary and fixed, right? Those should be – when we talk about hypersonics – those should be decisions that we – that we need to make in the building. They won’t be popular, but that’s the kind of lens we have to apply. I think joint capabilities is the right approach, particularly when we know that we are behind in some areas and we have to close those gaps quickly.
MR. MAHNKEN: Well, thank you for that. And, look, we’ve covered a lot of territory. There’s a lot more territory that we could cover. I think we’ve got still, like – (audio break). Before we close, I just wanted to turn it back over to you, CNO, for any final comments, final thoughts you may have.
ADM. GILDAY: Tom, so I think I’ve had ample time to – you know, to get my points across. Why don’t you take another question, and we can use up the last few minutes with another question or two?
MR. MAHNKEN: Will do. OK, you asked for it so I’ll give you one.
ADM. GILDAY: Go ahead.
MR. MAHNKEN: And it’s from an anonymous attendee. What do you think is the most misunderstood aspect or misperception about China and the Chinese Communist Party, both within the Department of Defense and across American society overall?
ADM. GILDAY: Yeah. So I think that this president has given – certainly, the last president did as well – but I think right now President Biden has made it clear that we are at a strategic inflection point. And he has called out China for their – for their activities. And he’s called out Russia for their activities. And until Americans actually feel a pinch in their – in their pocketbooks and their wallets, we typically don’t pay attention to the – you know, don’t pay as close of attention to the problem.
A good example I think was the piracy problem in the Gulf of Aden and around the Horn of Africa, right? That was having – you know, this is six, seven years ago. That had a cost to it, right? And so people were likely paying more for stuff, they just didn’t – they just didn’t realize. Or the issue that we just had the Suez Canal with the ship going sideways, and the cost was tens of billions a day. We didn’t feel that yet. But overtime, we likely would have, right? You could say the same thing about COVID. That was a slow boil early on until people really began to get it, right?
And so I think that – I think that the Chinese are always going to say one thing and they’re going to do another. What they – there’s a – there’s a – (laughs) – vast difference between what they say publicly or the deals they cut with debtors now that regret that they did the handshake with the Chinese. And there’s stuff that they’re really doing. They are masking their intentions pretty well. And I think it’s becoming more evident now.
MR. MAHNKEN: Well, thank you for that. And thank you. Thank you for your time.
ADM. GILDAY: Thanks, Tom.
MR. MAHNKEN: (Audio break) – resource you have. So thanks for giving it to us. And thanks to all of you for joining in, for giving of your time. And for your friends who didn’t tune in live, we’ll have this up on the website. It’ll be up on YouTube. But for now, CNO, thanks, again, for your time. It’s a real pleasure to spend part of this afternoon with you. And have a wonderful day.
ADM. GILDAY: Thanks, Tom. Likewise. You take care. And thank you, everyone.
MR. MAHNKEN: Take care. Bye-bye.
ADM. GILDAY: Bye-bye.
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