CNO Gilday Speaks at the McAleese 12th Annual Defense Programs Conference

17 May 2021
Chief of Naval Operations Adm. Mike Gilday spoke at the McAleese 12th Annual FY2022 Defense Programs Conference, May 13.

Below is the transcript of the conversation:

JIM MCALEESE:  (In progress) – referring to this affectionately as the mosh pit.  And the gentleman that coined that phrase, sir, was “Hondo” Geurts when he was here yesterday.  He was quite impressed with the incredibly lavish and hip position. 

Our speaker needs no introduction at all.  I don’t want to get ahead of him.  I do have a sense, though, that probably the number 355 will probably pop up a couple of times during his briefing.  And with that, please welcome Admiral Gilday.  (Applause.)

ADMIRAL MICHAEL M. GILDAY:  Thank you.  It’s great to be here.  Thanks for having me.

JIM MCALEESE:  Yes, sir.

ADM. GILDAY:  This is my first time speaking at this –

JIM MCALEESE:  In the mosh pit.  Yes, sir.  Very affectionate.

ADM. GILDAY:  And certainly in the pit.  But it is one of the silver linings of COVID, to be quite honest with you, in terms of how we can have a thousand of people or so participate in this discussion today.

What I thought I’d do is instead of delivering prepared remarks is talk about three areas briefly and then let’s dive into what I would expect to be a series of difficult questions that we can have a good dialogue about.

The three areas I wanted to talk about briefly, what the Navy’s been doing for the past year, what we’re delivering right now in terms of our operations abroad.  The second thing I’d like to talk about briefly is our collaboration with industry, that relationship over the past year, and from both our operations and our relationship with industry talk about the silver lining that COVID has given us and look at it through the lens of a glass half-full.  And then I’d like to talk about the budget environment without specifically talking about the budget, if I can – my thoughts on the Navy’s investment, where I really think we need to put our money to deliver the most lethal and ready capabilities in the nation.

So, with respect to the Navy and what we’ve been doing over the past year, so we’ve been operating on a pretty good op tempo.  About 30-35 percent of the fleet underway at any given day.  Most of that fleet pushed forward and deployed at the tactical edge, where they must be, I believe strongly.  You know, one of my priorities is readiness, that we need a ready Navy forward for all reasons that COCOMs have talked about in the past four to six weeks in their testimony.  And so most of that – most of that fire power has been forward.  We’ve done some significant – had a few significant events in the past year.  I’ll just touch on a few.  One is the successful standard missile engagement of an ICBM.  The second was a big exercise that we just had, a large-scale exercise, with unmanned and manned off of the California coast. 

And then in terms of what we’re doing right now, of course, the Eisenhower is in the Middle East and providing overwatch during the tenuous withdrawal from Afghanistan to make sure that we’ve got proper air cover for our forces as we steadily withdraw.  We also have an ARG – the Iwo Jima ARG that’s up in the high north, in the Norwegian Sea.  And she’s doing an exercise with NATO partners.  The high north is an area where it’s no longer rare that we’re doing operations up there.  Over the past 12 to 18 months in 20 operations or exercises in the high north or the Arctic.  And most of those have been done joint and multilaterally.  And certainly a number of them with the Coast Guard, the Air Force, and the Marine Corps.

And then we also have – the Theodore Roosevelt was in the South China Sea just a couple of weeks ago.  Now she’s off the – actually in the Gulf of Alaska with the Makin Island ARG.  And they’re actually doing a joint exercise up there with the Air Force, up in the cold.  And then we also have ships that are operating and doing exercises with the French, the Australians, and the Japanese in the Western Pacific right now.  So we’re delivering all of that during the pandemic. 

And we’ve learned a lot in the past year.  We’ve been able to maintain a very low positivity rate across the force.  Right now it’s less than one-tenth of one percent.  So 400 Sailors positive out of almost 350,000.  And we’ve maintained that for months, and months, and months.  But the success of that and what we’ve been able to deliver forward really comes down to what I believe is individual responsibility that the Sailors have taken.  It’s exactly the kind of behavior – responsible behavior that you would expect and that you would want them to aspire to, not only holding themselves to the standards that we expect but also their shipmates to the left and the right of them.

I think there’s been a cultural change at sea in terms of how we operate, whether it’s on ships, submarines, or in our aviation squadrons because of the pandemic.  But by and large it has worked out really, really well.  And I just can’t thank the families – and I know there are some people that are viewing that have active-duty family members.  Some of them may be in the Navy.  And that support that you’ve given our Sailors over the past year has been magnificent.  So thank you for that.

In terms of our relationship with industry, as most out there are probably aware, there is typically an opaque curtain that runs down the 395 corridor between Crystal City and the Pentagon.  And I’d say that one of the silver linings with COVID is we’ve seen that opaque curtain lift, not to a small degree but to a great degree.  Where we’ve been working very closely with industry on a week-to-week basis, particularly with a couple of areas.  One is supply chain.  So not understanding now that – not only understanding how that affects production lines.  And so setting the Navy’s expectation through challenges that we might expect over the past year, but also with respect to supply chains and particularly with overseas suppliers – a much better understanding of where that brittleness is and how we need to work with industry to mitigate that.

Secretary Geurts, who spoke to the audience yesterday, was in a – (laughs) – is in a very rigid, week-to-week drumbeat and phone calls and video teleconferences with CEOs of major defense firms.  And so it’s our hope that that kind of behavior and that relationship continues.  And I aspire to be a trusted customer of industry. 

And likewise, I would expect the same.  I think Secretary Geurts talked about the speed of trust.  I would foot-stomp that in terms of how we need to – how we shouldn’t be satisfied.  As good as things have been within that silver lining over the past year, I don’t think we should be satisfied with where we are.  But we ought to continue to press, and press, and press.  And you know, I want to open military industry to be able to deliver – to creatively deliver stuff that we can field quickly and reliably and affordably for our Sailors out in the fleet.

Last thing I’ll touch on before we get to Q&A is the budget environment.  And so I really look at my responsibility, our responsibility as leaders in the Navy, is fielding the absolutely best lethal, capable ready force that we can, given the top line that Congress gives us.  And so our budget proposal to Congress really falls around four different areas.  And the first is readiness and training.  That has been a priority for me since I took the job.  And I’ve always believed that if we get a scrap tonight that the fleet is going to perform at the level of – the level that we have trained them, and that we have prepared them.  And so that remains critically important for us. 

As has been our getting after maintenance.  And so not only within the aviation community, we’ve been on a very healthy readiness recovery trajectory, but also the surface and the submarine corps.  So what we’ve seen despite COVID over the past year or so is a reduction in our public shipyards in delay days.  And as most probably know, 18 to 24 months ago we were only delivering ships out of maintenance on time 30-35 percent of the time.  But in our public yards we reduced those delay days by 80 percent.  They’re down from 7,000-plus delay days down to just over 1,000.  And in the private yards we’re over 60 percent.  And we’re not satisfied with either.  We need to continue to drive to get rid of those delay days. 

Certainly, there’s plenty within the lifelines of the Navy that we know we have to get after and have been getting after.  And this is not by lathering it with more money, but rather getting after process, and we’re doing a much more rigorous and disciplined approach.  Moving contracts from 30 days before maintenance availability out to 120.  I think right now we’re in the high 90s, maybe around 97 days.  Our goal’s 120.  To set those expectations with industry.  We moved ships from Mayport, Florida – between Mayport, Florida and Norfolk, Virginia, as an example, to keep like-ships in the same ports so that we can give a high degree of predictability to the private shipyards in terms of getting those – getting like ships through maintenance at a steady drumbeat so that they can keep up, sustain a workforce that’s predictable.

And so – and with respect to training, we have put an awful lot of effort into maturing our distributed maritime operations concept.  And so with every deploying strike group and ARG we are doing fleet battle problems that rigorously test an aspect of those operating concepts.  We’ve been doing that for four or five years now.  I think we have a really good understanding of how we’re going to fight.  And that has – that has really a given in terms of informing what we’re going to fight with, in terms of some of the analysis we’ve done over the past year or so.

The second area is capabilities.  And briefly what I’m really focused on is with the fleet that we have today how do we get as much lethality and operational availability out of the fleet that we have today, making significant investments in hypersonics, as an example.  Making significant investments in directed energy or laser technology.  One of the things that I didn’t mention over the past year that’s been a success story has been the successful engagement of a target aircraft with shipboard directed energy systems.

And so the third capability would be people.  The third piece would be people.  Heavy investment in ready relevant learning, which is really 21st century approach to training and education for our force, as well as live virtual construct.  And so that is collaboration with the gaming industry so that we can do large-scale exercises again and again and again in a virtual environment.  We’re going to do a large-scale exercise this summer.  It’ll be the biggest exercise that we’ve done in a generation with the number of strike groups and ARGs.  And a good portion of that is also going to be virtual.

And then the last area is capacity.  And so based on the budget that we have – and so the different scenarios might be a budget that rises above the rate of inflation, perhaps with additional growth.  Another might be a flat line.  A third might be declining.  And so based on those different scenarios we take a look at how do we make those investments across those four areas that I talked about?  But at the end of the day, you know, what we – the ends that we’re trying to achieve, the objective, is to field that force that is lethal, capable, and ready.

And I just – as I wrap up my comments, Jim, what I’d like to do is just spend a couple of minutes taking about some of the analysis we’ve done with the Marine Corps, with OSD CAPE, and with the Joint Staff in the past year, and how that has set the foundation for the shipbuilding plan that was submitted late in 2020.  And so that analysis, again, in terms of how we fight, was grounded on distributed maritime operations and the Marine Corps littoral operations concepts, as well as their expeditionary advanced basing concept, that I’m sure the commandant will talk about next.

And that’s maturing nicely and has actually been the basis of the how we’re going to fight piece.  As well as I think the National Defense Strategy also played in significantly into that analysis with respect to our responsibilities for posturing a Navy globally that can defend the homeland, that can deter strategically, deter conventionally, that can be able to respond to threats and give natural command authorities and options.  That can assure allies and partners – and I mentioned some of the exercises that I’m doing today.  And then lastly, to be able to compete below the level of armed conflict against a near-peer adversary.

So that has been a – that has been – that analysis that we did was the underpinning of the shipbuilding plan.  And I think what the analysis gave us, besides a number north of 355 – you had mentioned 355 – it actually gave us a better understanding of what the composition of the fleet needs to be based on how we think we’re going to fight – to give us a better understanding of what we need to fight with in terms of capabilities and platforms.  And so that folded into the shipbuilding plan.

And the reason why that shipbuilding plan is really important – it’s not just important for industry to give them the set of headlights with some predictability on what we think our requirements are looking out 10 years with an increasing degree of fidelity, but beyond that, to inform their infrastructure and their manning and training plans that they need to sustain.  But I think also it allowed us to – it allowed us to provide Congress with a good, informed view of where we think the Navy of the future has to be.

We’ve done a lot of work on – we’ve done a lot of work on the unmanned piece.  I mentioned the large-scale exercise we did off the West Coast last month.  But also the unmanned framework where we pulled together all the unmanned platform efforts that we have ongoing in order to understand better where we need to double down and where we need to sundown those programs, so that we can get to a place later on in this decade where we can actually – where we’re confident enough to scale.

And the two big areas that we’re trying to get after, quite frankly, are reliability and command and control.  And then there’s a project that I have ongoing called Taskforce Overmatch, that is taking a look at – with a number of spirals this year in terms of tests – on how we can – how we can provide a network – a software-defined network of networks which we can fight off of, with a hybrid fleet of manned and unmanned. 

The last thing I’d mention with respect to the budget environment is we are also making investments in three big strategic areas.

The first, of course, is the Columbia or the next SSBN.  We have to deliver that program on time, which is 2028.  The Ohios are getting old and we need a replacement.

The second strategic area is investment in our public shipyards.  And this, quite frankly, is a once in a century investment.  Not only in – not only across 20-some-odd drydock facilities that haven’t seen major maintenance in almost 100 years, but also the infrastructure on those shipyards as well.  We have digital twins now developed of all those – all those shipyards to give us a better understanding of what workflow optimization ought to look like.  And that’s informing our strategic investment in those yards.

And lastly, strategic sealift.  So it’s an area where we really haven’t made investments in decades.  And we are – Congress fortunately has given us the flexibility to make investments and use sealift.  We’ve taken a look at – we’ve done the market analysis.  We know we want to go after it, at a tenth of the cost of buying new strategic sealift.  And it’s been a little bit of money on modifications in our private yards here in the states in order to close those gaps in sealift we know that exist right now.

So with that, Jim, let me – let me give it back to you – the talking stick back to you.  And I’m happy to take any questions.

JIM MCALEESE:  That was a big talking stick, sir.  I just I want to use your time very wisely.  My assumption is – in a perfect world, you – the shift who we’re trying to fight would require resourcing top line approximately 4.1 percent on a sustained basis.  And if I understand it correctly, it’s about 2.1 percent inflation and then approximately 2 percent real growth.  Yes, sir.  And then within the integrated naval force structure, which drove the December shipbuilding plan, the 355 is the – what I would refer to as battle force ships, as a layman.  Separate from the appropriate 150-200ish unmanned that fall presumably under sea lethality, ISR, logistics, and then the depth of the magazine, the engine, something you could send up with a FFG-62 and help the frigate.

And then the third one, sir, at the risk of giving red meat to the tiger, would be the –Senator Wicker’s bill.  First briefer we had yesterday was, as you know, Ranking Member Wittman.  And he immediately brought it to all the thousand people’s attention, if they hadn’t already seen it, the bill to defense a portion of the – for the Shipyard Infrastructure Optimization Plan, the SIOP, for – to accelerate your four big public yards, and the additional 2 million (dollars) that’s in there for the private yards as well.  Yes, sir.  Am I missing any of those?

ADM. GILDAY:  No.  I think that’s an important point.  The last point on the infrastructure bill, so it really depends upon not the fund by the funding, and so – the source of that funding.  And so if it comes out of the DOD budget, it’s going to continue to pressurize it.  If it comes from – if it’s outside of the DOD budget it gives us some relief, obviously, and allows us to shift those funds elsewhere, to other priorities. 

With respect to the 355, so, I mentioned the force structure analysis that we did in 2020 that was really approved at the end by Secretary Esper.  And that rigorous analysis that included a red team – a China red team that was threat-informed, was played by a very good China red team – as well as he brought in outside experts from the shipbuilding industry principally, as well as some academics and think tankers, navalists, to take a look at the analysis we did and really give him a gut check on the rigor of it. 

But that analysis was the foundation of that shipbuilding plan.  And so as I mentioned earlier, it really gave us a better understanding of what we think the composition of the future fleet ought to be in order – because having an understanding of how we’re going to fight, the next question is what we’re going to fight with, frankly.  And the shipbuilding plan, basically the 4.1 percent growth that you mentioned, that actually gave Congress and industry a set of headlights that say:  Hey, the target here in 2031 to 2033, right, is that we can deliver – we can have a Navy of 355 ships composed of these elements if we stay on this plan.

But of course, it’s all predicated on growth.  If we – if we step off of that, and if the argument is, OK, you need to maintain – you’re still going to be on a path of 355, but to do that you got to do it on the back of the legacy fleet, I think that’s a whole different conversation in terms of what the cost is that going to – what the opportunity cost of that is going to be for the Navy.  And I can certainly talk about that in more detail and give you some thoughts on where I think that kind of strategy might take us.

JIM MCALEESE:  Yes, sir.  And then a silly question, but when I found your (inaudible) to be very, very well-articulated, right?  And as I – would it be inappropriate – would it be – would I be wrong if I, as a layman, characterized it really as building out distributed maritime operations through celebration of your frigates?  And then the logistics capability through your T-AO fleet oilers, right, and then ultimately – not to be inappropriate – (inaudible) – but the rat inside the python, sir, being – (inaudible) – 2025, and then right behind that moving into – (inaudible) – approach of Columbia of 8 billion – (inaudible) – one per year – (inaudible) - 2035.  Am I missing the –

ADM. GILDAY:  I do think the – I do think the through years are a challenge.  I think industry recognizes that through years are a challenge.  I do think that the analysis that was – that was done highlighted the fact that what we’ve – we believe we have an advantage right now under the sea.  We need to maintain that advantage and pull away.  It’s our most valuable strike platform.  It performs at heavy levels across the world right now.  We need – we need to double down on it, if you will.  So it’s really a challenging industry.  Can we get to a place where we can produce three a year?  And I do think that that’s a challenge.

That’s – right now the answer to that is we can’t produce three a year.  Let me just say that.  And so we need – we’d hopefully get to a place where we could.  But again, you know, it’s going to come down to – it also is going to come down to affordability with respect to what the top line is, and how much money we have left for affordable growth with respect to capacity.

SPEAKER:  Yes, sir.  I’m hogging your time.

SPEAKER:  No, listen –

SPEAKER:  I got kind of – he riveted me.  He lured me in with the grand order details of the shipbuilding plan.

SPEAKER:  No, this is fascinating.  I will admit, heck of a challenge to think about modernizing and then bringing in the technology at the same time.  I know very well the whole issues around the submarine fleet and the size of the yards, since I was responsible with Hondo to make sure the nuclear force stayed on track.  And it’s a lot of building blocks.  So thanks.  I don’t think you’ve seen the last challenge.

But what I’d like to do is turn this over to questions coming in from folks.  I have about eight people who want to ask you questions.  And –

SPEAKER:  We have 20-25 minutes.

SPEAKER:  Yeah, absolutely.  Yes, sir.  They didn’t come here to hear me talk.  They came here to hear the admiral talk.

ADM. GILDAY:  Yeah, that’s – well, I wanted to make sure that we had adequate time to get to what’s on people’s minds.  I mean, I think you have heard me speak enough about where I think we’re headed and what our priorities are.

SPEAKER:  You’re the sizzle, sir.

SPEAKER:  Absolutely.  So let’s start with Colin Smith from Bell Flight.  And it’s unusual that we actually have him in the room here, sir.  So, Colin?

Q:  Yeah.  Good morning, Admiral.

So you mentioned industry and the partnership that you have with industry and the challenges of COVID over the last year or so.  Bell and our partner Boeing, along with our industry partners, have been working closely with the Navy to ensure preparedness for the scheduled first deployment of the CNB-22.  You also mentioned the distributed maritime operations and the expeditionary advanced base operations concept.  So as CNB-22 gets ready to deploy for the first time, how do you envision the capabilities that it’s going to bring replacing the C-2 with the fleet?

ADM. GILDAY:  So, first let me say I’ve actually flown on one off the Nimitz about six weeks ago.  And it was a smooth ride, I’ll say, number one.  And certainly a better ride than a C-2.  We need to replace the C-2.  We’ve just had them – they’re as old as I am.  And so that replacement was long overdue.

I think what the – what the 22 really gives us – and you kind of hint at it – is a lot of options.  I think we’re going to – we are very optimistic right now about the reliability of that platform from a maintenance perspective, from the performance so far in the fleet.  I think this first deployment’s going to tell us a lot, we’ll learn from it.  And I think that we will continue to experiment – talking about the fleet battle problems.  And that’s where we will experiment with the 22s and push them, I think, to a greater degree, to see what the art of the possible is with respect to the Marine Corps.

Q:  Great.  Thank you, sir.

ADM. GILDAY:  You’re welcome.

SPEAKER:  Thank you, Admiral.  Let’s now go to Megan Eckstein from the U.S. Naval Institute.  Megan, are you back on?

Q:  I am, yes.  Good morning, sir.  Thank you so much for taking the question. 

ADM. GILDAY:  Hello, Megan.  It’s good to see you.

Q:  Yeah, you too.  Thank you.

I wanted to follow up on the how we’re going to operate piece.  The Marine Corps has moved out pretty quickly on the – (inaudible) – side of things.  They have the first marine littoral regiments they’re standing up.  They’ve moved out pretty quickly on the light amphib.  They have a 2023 deadline for kind of, you know, getting to the second iteration of the EABO manual.

So a two-part question.  First is, what does the Navy need to do to support the Marine Corps in their rapid timeline for working that piece of the operational concept?  And then more broadly on distributed maritime operations, you mentioned the fleet battle problems.  I know you’re picking at pieces here and there but I wondered big picture, you know, how well do you understand?  Do you know at this point what work still remains?  You know, what do you need to do to understand any acquisition needs that will come out to support distributed maritime operations?

ADM. GILDAY:  Yeah, thanks.  So I heard the commandant as recently as this morning before I came over here, just to chat with him real briefly.  So we talk nearly every day.  And so it’s not uncommon for us to spend time together to talk about these very things.  In terms of the Navy-Marine Corps integration, conceptually where we’re going with DMO, LOCE, EABO, integrated, nested together – a lot of that – nearly all of it falls on the shoulders of our fleet commanders and unit commanders. 

So most recently when I was in San Diego, I met with the first unit commander as well as Third Fleet.  And so this is more than just ensuring that we have naval officers and Marine officers on the same staff.  This is about our operations on a day-to-day basis and how they’re integrated together, and how we’re experimenting and testing together.  Unmanneds are a really good example of that in terms of the exercises we most recently completed.  I just – the Seventh Fleet commander just gave me a very detailed brief on his concept of where – of how they’re going to operate with the Marine Corps using DMO in a – in an OPLAN-like scenario, in a war fight.  Admiral Davidson has just updated his war plan.  And so very, very bullish on Navy-Marine Corps integration.  The flexibility that EABOs give us with respect to sea control/sea denial, and power projection.

So I would tell you that I’m very optimistic.  I think the commandant is as well.  I don’t speak for him.  But our – I think our impressions together are very positive with respect to the tempo and the pace that we’re getting at here operationally.  In terms of our investments, I think that’s an important discussion to have.  A lot of that will be driven by the top line.  And then I would go back to the analysis that we’ve done.  And the analysis, of course, I’d go back to the fact that the main thing that that analysis gives us is a better understanding of what the composition of the fleet ought to be with respect to lethality in particular, in terms of how we’re going to fight high-end competitors. 

And so that’ll help us make – it won’t make tough decisions any easier, but it will help us, I think, to make better-informed decisions on where we’re going to put that next dollar together.  And certainly some of that is going to – is going to involve the amphibious forces, whether it is – whether it’s big decks, whether it’s LPDs, or the dozens of light amphibious warships that we have planned for the future in order to – in order to really bring this – bring this concept to life.  I hope I got at your points OK, Megan.

Q:  Yeah.  Thank you.

SPEAKER:  Thank you.  Thank you, Megan.

Next we’ll go to Vince Stammetti from Serco.  Vince, are you out there?

Q:  Yes, sir.  I am.  CNO, thank you so much for taking some time with us today.

It’s wonderful to see the investment going into the public yards and the private yards.  As we all know, long overdue, but most welcome.  My question is, so, you know, we struggle with – across the industry with labor, with skilled mechanics, electricians, welders, those sort of folks.  As we build up the infrastructure, are we giving any thought – or, have you given any thought to some sort of a people program where we start to bring in the right kind of folks and get them up to speed?

ADM. GILDAY:  So I was just up at Bath Iron Works on Monday, as an example.  But I could say the same thing – I could say – I could speak to this with other aspects of – the aviation aspect of the defense industrial base, as well as other shipyards, Bath being the most recent.  And so we spent half of our time up there talking to young people and middle-aged people that are joining that workforce.  The most important thing that we could give a company like Bath, Maine, is, again, that set of headlights that the shipbuilding plan provides to say:  Look, we want to build X amount of destroyers a year.  They’re putting – they’re putting a high degree of emphasis on people because at the end of the day Bath Iron Works is a people-driven enterprise.

And so we’re giving them a set of headlights so that they are going after those people with numbers.  They’re training them in the right skill sets.  And hopefully with a healthy shipbuilding fund that the Congress helps us with, we can give them that degree of predictability that brings up that new generation of shipbuilder that has – that builds some of the best ships in the world.  I hope I got after that OK, Vince.  But I – everywhere I go I see people as the primary focus of industry in terms of not only having the right workforce with the right skillsets, but also treating them as the national treasure that they are and making those long-term investments in their training and their benefits.

Q:  Yes, sir.  That’s exactly what I was hoping you’d say.  Thank you, sir.

SPEAKER:  And to build on that, sir, not to be inappropriate, should – just generally speaking, should we be having two DDG-51s sustainable, or perhaps three DDG-51 sustainable, depending upon –

ADM. GILDAY:  I would love it.  I think we shouldn’t self-limit.  I don’t think industry should self-limit.  I think we really like those destroyers.  Those Flight III DDGs will be coming off the line around 2025.  And we really need those ships from an air defense commander role to backfill the cruisers, number one.  But then DDG(X), you mentioned those hulls with a deeper magazine.  Where we’re going to take an existing combat system, a weapons system, and put it on a new hull – just like we did with the Aegis cruisers and the DDG-51s back in the day.

So it’s the same type of – it’s the same type of vision that we have, working very closely with industry.  We are working very closely with them now on DDG(X).  And so it is a Navy lead, but we have – we have those prime shipbuilders involved in the discussions now so that we get it right.  And I’ve been to Wisconsin.  FFG-62 is in a really good place.  We’re going to start bending metal at the end of the year on that hull.  And that’s going to be – and that workforce understands how critically important the on-time delivery of that ship is.  And kind of through the lens of success begets success.  That has to be our SpaceX, FFG-62.  We have to – we have to get that right.

And, you know, industry – we win when industry wins, right?  And so we’re in this together.  I go back to that relationship with industry, how critical it is.  And we don’t always agree on everything, certainly.  But we’re dependent upon each other so much, particularly in this high-end business with shipbuilding and aircraft production.

SPEAKER:  Yes, sir.  And if I understand you correctly, not to be inappropriate, I took away kind of a telegraphing of a 2023-2027 DDG-51 Flight III multiyear followed by a transition into our surface combatant –

ADM. GILDAY:  I’m a big fan of multiyear contracts.  I think – I think it’s great for the Navy.  I think it’s great for the Navy.  It’s great for the Navy from an affordability standpoint.  But obviously it’s great for industry for all the reasons that I already touched on with respect to predictability.  It gives them that set of headlights.  And, you know, so this goes back to Vince’s question about people and how that’s all tied together.  It’s critically important.  And I think that, you know, we’re not just making these numbers up.  We’ve done our homework.  The analysis is really solid.  But we’re not going to keep that 2028 analysis on the shelf because what we want to do is we want to update that periodically, right? 

I think that OSD will determine what that drumbeat is.  Maybe it’s every other year, where we fold in the analysis of our fleet, the war games, the results of the war games, the insights we gain, the insights of experimentation and fleet battle problems that give you a better understanding.  With respect to Megan’s question on the maturation of DMO, EABO.

SPEAKER:  Yes, sir.  And I’m sure in no way – (inaudible) – you mentioned their availability to put the Conventional Prompt Strike into the DDG-1000 hulls by 2028.

ADM. GILDAY:  So it’s our goal to get hypersonics on the Zumwalts by 2025.

JIM MCALEESE:  Oh, I was off by three years.  Oh, I’m sorry, sir.  Terrible.

ADM. GILDAY:  2025.

SPEAKER:  2025, Jim.  2025.

JIM MCALEESE:  Yes, sir.  I’m sorry.

ADM. GILDAY:  So we believe that that’s a platform that we can field hypersonics on.  I just talked to General McConville, the Army chief, about their – likewise their effort.  They’re sighted on 2023.  They’re fielding hypersonics.  And so that’s an area where the services are working really closely together.  And I think industry’s been a huge help as well.  I think that’s going to be a good news story for the country.

SPEAKER:  (Inaudible) – sir, is that over a year or is that actually fielding today?

ADM. GILDAY:  So that would be IOC.

SPEAKER:  IOC?  Yeah.  Well, done.  Yes, sir.

Yes, I’m sorry.

SPEAKER:  No, it’s OK.  Admiral, I would only add one thing to the multiyear.  Not only is it good for the Navy and good for industry, it’s good for the taxpayer.

ADM. GILDAY:  Absolutely, yeah.

SPEAKER:  And that’s a story we don’t always tell.

ADM. GILDAY:  It’s a smart way to do business.

SPEAKER:  Absolutely a smart way to do business.

John Lehman from Finnick and Perry (ph).  Are you out there?

Q:  I am.  Good morning, Admiral, and thanks for taking the time this morning.

My question concerns the language between strategy and force structure.  In my humble opinion, far too much of the discussion about the Navy has been focused on force structure, the number of ships, and not nearly enough about the critical importance of American sea power to our security and economy, and the naval strategy from which that force structure should derive.  With that as a preface, what is your view on your role as an advocate for American sea power, the role of the Navy in developing strategy, and the current state of the strategy enterprise within it?

ADM. GILDAY:  So, John, we came up with the Tri-Service Maritime Strategy in the fall.  And then nested below that is the commandant’s planning guidance as well as my Nav Plan.  Both the planning guidance from the commandant and the Nav Plan for me focus on things that we think we’ve got to get done this decade.  There are 16 areas that I have implementation plans for, in which Conventional Prompt Strike off the Zumwalts is one of them.  I want to field this capability this decade.  So the short – the bumper sticker for that, John, is I’m focused on less say and more do.

That said, we’ve got an international security guidance.  We will have a national security guidance as well – a national security strategy as well as an upcoming National Defense Strategy.  And so we want to make sure that – we don’t want to get ahead of the administration.  We want to make sure that the next Navy strategy folds in neatly below that.  I think we have the pieces in place right now with the – with the Tri-Service Strategy, the Nav Plan, and the commandant’s guidance, that get us in a good place this year, this budget cycle, and also going into ’23.  But I don’t argue that we couldn’t do a better job of giving a better umbrella with respect to a naval strategy that could be more helpful for the public to understand what we’re doing and why we’re doing it.

I would, though, point to what happened in the Suez.  You know, is the Navy as appreciated as it should be?  I think it could be appreciated a lot more.  It’s incidents like a ship going sideways in the Suez at the cost of $10 billion a day, and what that – when people – if people are feeling the results of that in their pocketbooks, they would value – they would value the Navy so that – they would value the Navy more, right?  And so it’s not until – it’s not until they’re – it’s not until that stuff is threatened that you actually get the kind of – get the kind of attention that you would hope the Navy would get on a day-to-day basis. 

But I appreciate the question, John.  It’s not lost on me the value of a vision going forward.  I think we’re in a pretty good place right now.  But it could always be better.  And I will leverage that next security strategy to take the next round-turn on the Navy’s strategy.

Q:  Thank you, Admiral.

SPEAKER:  Thank you, John. 

Aidan Quigley from Inside Defense.  Are you out there?

Q:  Yep, I’m here.  Thanks again for doing this.

I have a question on the light aircraft carrier concept.  I know the – (inaudible) – in 2022.  I’m curious if you think that light carriers have a role in the fleet of the future.

ADM. GILDAY:  I won’t say they don’t have a role.  I think they deserve more study.  And so when we had these discussions with Secretary Esper as we were putting the final touches on the analysis that we did, I advocated for separating light carriers from super carriers in that analysis.  The reason I did that is because any – our conceptual understanding of what a light carrier would bring to the fight was rather thin.  Super carriers, much more well-established, of course.  But I also think that you’re potentially comparing apples and oranges if you put them on the same line.  That is to say that I don’t believe that they ought to necessarily compete against each other, right? 

And so I think that potentially, Aiden, I think that we could take a look at a light carrier – or, we might call it instead of a light carrier the aviation combatant of the future – that could fill roles with – certainly with unmanned, possibly with DCA functions, possibly ISR and targeting functions, right, where you could relieve the super carrier or the platforms in the super carrier for those roles.  I’ll just give you a for-instance.  This is – there’s no analysis that underpins what I’m saying.  But I’m just saying that conceptually, I think, there could be a role, right?  And I think that we shouldn’t dismiss that.  And we are taking that seriously.  And the discussions in the Pentagon about potentially what an aviation combatant in the future could bring to the fight in a distributed environment is potentially powerful.  So it’s not off the table.  It’s just really early here in the discussions.

SPEAKER:  And to be fair, sir, my recollection is you have plenty of time because you’re –

ADM. GILDAY:  We do.  We do.

SPEAKER:  – next door to your – (inaudible).

ADM. GILDAY:  We do.  We do.  We do.

And I would tell you, with respect to Ford – if I could just give a shameless plug to the Ford – Ford has spent half of the past year at sea.  She has been our carrier qual CVN off the East Coast for the past several months.  That is not insignificant.  For a carrier that hasn’t yet even deployed, right?  We’ve done over 8,000 cats and traps off the deck of that aircraft carrier with a very, very high degree of reliability with her arresting gear as well as her chemical system.  If you talk to the crew on that ship – particularly those that work in the catapults and those that work in the arresting gear, these are the same Sailors that left the Nimitz-class.  And they’re not looking back.  They really love the Ford. 

We’re ahead of schedule with respect to her work.  We’re entering the phase now where she’s going to do shock trials this summer.  We’re going to take her into another short maintenance availability.  And my goal is to get her out to sea in ’22 doing something substantive.  And so I’m very, very happy with the path we’re on with Ford.  The embarked air wing has been very, very satisfied with the performance of the ship, as has been the strike group commander.  The last thing I’ll say with Ford and Ford-class has to do with directed energy.  In fact, that class of ship produces power at three-times the rate – or, three-times the capacity that the Nimitz-class did.  And so there is room there in terms of space, in terms of cooling, in terms of – in terms of electrical power for directed energy capability.  And so that is the future for me with respect to fleet survivability as an important part of layered defense.

SPEAKER:  You know, I just think – I’ll just make an editorial comment.  Fascinatingly, the last two questions, and the Tri-Services Plan came together.  So the concept formerly known as the light aircraft carrier will be informed by what the Brits do with some of their smaller ships, will be informed by what we have to do in a China fight.  And it will be different.  And I commend the Admiral and the Navy for not jumping to a solution based upon a platform that was there.  We have to think our way through it, because a fight with the lines of communication into the West Pac are so different that will take a whole different concept.  And you know, think like distributed maritime operations, or it could be the light air platforms embedded in that?  But I applaud the fact that they’re taking time to think their way through it, rather than depending upon –

ADM. GILDAY:  And we are trying to move very deliberately, right?  Particularly you could take a look at unmanned as an example.  To put us in a place where we’re confident enough to then pull the sting and say:  OK, now we’re ready to scale this.  Now we’re ready to scale large unmanned surface, medium unmanned surface, and bring those capabilities to bear, and to sail those with frigates, let’s say, or Flight III DDGs.  But we’re not – we’re taking that deliberative approach.  It’s the same thing with the design of the DDG(X).  And so I’m trying to make sure that although it’s important to move with a sense of urgency in this decade, that we’re also doing it in as deliberate and in a manner that we’re not going to regret those decisions in a decade.

SPEAKER:  Yes, sir.

SPEAKER:  We have time for a couple more questions.  So Richard Abott from Defense Daily, are you out there, Richard?  Well, Richard, I think if you are on mute we’re going to go onto Reginald Robinson from BAE.  Reginald, are you on?

Q:  I am on.  Thank you very much.

Good morning, Admiral, and thank you for taking time to speak with us today.  In your opening remarks you talk about the relationship with industry.  And I could not agree more.  We can’t overstate the importance of having robust and ongoing dialogue between the department and industry.  So my question is, along that line – and it really dovetails with what Vince asked earlier about the workforce. 

So what we’re seeing are some indications of early decommissioning of ships – primarily cruisers and LSDs that are driving severe workload reductions, primarily in Norfolk.  If the Navy moves forward with these early decom plans is there a plan to backfill the workflow to stabilize the workforce and the workload in places like Norfolk?  It’s primarily looking at preservation of the ship repair industrial base.  Could you comment to what the Navy is looking to do in terms of increased ships in the fleet?

ADM. GILDAY:  So let me talk about predictability, if we can.  It has to be a fiscally informed plan.  So based on the budget that the Navy has – based on our top line over the past few years, the Navy – we think an affordable size is about 300 to 305 ships.  So if you take a look at where we’ve been putting our money in order to sustain those numbers, if I go back to kind of our priorities in our three bins, people.  So we have funded an additional almost 25,000 billets over the past few years.  We’re filling magazines with munitions where we haven’t before, as an example.  And other high-tech equipment.  We are – we are accelerating our migration to the cloud with respect to – with respect to our networks.

And so – and so from a wholeness perspective, 300 to 305 is my sight picture right now in order to have a Navy that’s sustainable.  What I don’t want to do is get to a place where if – for example, if somebody’s strategy is keep everything that you got, buy as much new as you can.  You know, and it’s easy to – it’s easy to make those assertions, but they have to be fiscally informed or, if we’re forced to keep everything that we have, if we’re forced to buy as much new as we can, the money’s going to have to come from somewhere inside that budget.  And even though the Navy has got $40 billion across the FYDP in some of our reform efforts last year, and we’re putting 7 billion (dollars) towards shipbuilding as an example this year, that’s not a recipe for success in the long term in terms of maintaining a healthy fleet.

What I get concerned about when people talk about, you know, just keeping everything that you got and buying as much as you can, is that the risk is going to be driven down, and we’ve seen before on our O-5 level COs, on our commanders of those ships and their crews.  And so every decommission for me, sir, is a very, very deliberate decision in terms of warfighting capacity, what we’re giving up, what we could potentially gain from that.  A real – a real-life example here with the cruisers, which are now over 30 years old.  We were deploying a cruiser last month out of Norfolk.  We had to bring that cruiser back twice to repair cracked fuel tanks.  There are unknown unknowns with these vessels now that we can’t predict.

To your point about the workforce, I think if – what I want to be able to do is say – I don’t want to kid anybody.  I want to say, look, this is the size of the fleet that I think the Navy can sustain.  If I go back to thing one that I said in my original remarks is that my responsibility is to find and field the most lethal, capable, ready Navy every single day and into the future.  That’s what I’m focused on.  And I’ll be honest with the Congress based on the analysis that we’re doing.  This is the composition of the fleet that I think we ought to have to fight.  And based on the budget that we have, this is what I think we can afford.

I’m trying to – I’ll give you a roundabout answer.  I’m not trying to be evasive at all.  I’m just trying to talk about the different factors that are involved that influence our decision making in making those very deliberate decisions about ships.  And I’m trying to give shipbuilders and ship repair facilities the best set of headlights so that they can plan into the future.  And predictable, stable budget lines from Congress is the best way to do that.

SPEAKER:  Just to be clear, sir, you had mentioned the – how many ships are you thinking?  There’s four LCS – (inaudible) – the first Ford you want to bring out.

ADM. GILDAY:  Right.  Right.

SPEAKER:  And then how many should we be thinking for CG-47s and LSDs?

ADM. GILDAY:  So I don’t want to get – I don’t want to get in front of the budget on those numbers, with respect to those.  But, you know, with respect to LSDs, that is a deep conversation with the commandant of the Marine Corps and his staff and a very deliberate – those are very deliberate decisions to make before you take a combat capability off the field.  But I go back to everything that I just kind of laid out for Reginald in terms of what has to – you have to – you have to keep it real.  You can’t just – you can’t just make stuff up with respect to saying we’re going to keep these ships, and we’re going to keep the magazines full, and we’re going to keep them fully manned, and we’re going to keep them fully trained.  And, you know, and on and on and on.

With respect to the LCS, so those first four LCSs were designated test platforms back in 2016.  We’ve invested nothing in those first four with respect to any of the upgrades to their engineering plans or their whole mechanical systems or their combat systems.  So that’s $2 ½ billion if we want to make those investments in those four ships.  That’s money that we could put again four frigates, as an example.  So those are the kinds of conversations that we need to have inside the Pentagon, with Congress, and with industry.  But we need to keep it real in terms of – you know, and I’m trying to make these decisions as unemotional and as factually based as I can.

SPEAKER:  Jim, I will give you the bumper sticker, if I can, Admiral.  I came on active duty in the late ’70s.  We had a hollow force.  What I just heard was the Admiral saying we’re going to do everything we can to prevent having a hollow force in the future.  And, sir, for that you should be applauded.  Thank you.

SPEAKER:  Thank you.

SPEAKER:  Well done, sir.  (Applause.)

SPEAKER:  Oh wait, back to you.

Q:  Thank you very much for the candor and, as you said, keeping it real.  We definitely appreciate your comments.

ADM. GILDAY:  Thanks, Mr. Robinson.

SPEAKER:  You were just about to leave us with the – I know – (inaudible) – the Suez Canal issue – with the message to the wheat farmer in Oklahoma about what you bring to the China fight.

ADM. GILDAY:  American prosperity floats on seawater.  And so 90 percent of our global trade.  We are a maritime nation.  If you – if we take a look at what’s going on with the Colonial Pipeline, and if we – let’s say – let’s say there is some type of physical obstruction in the Strait of Hormuz that interrupts oil flow.  Even though the United States receives very little if any oil from the Middle East these days, it’s a global commodity.  So we are going to – the perturbations of that for the American taxpayers at the gas pump are going to be felt. 

You need a – you need a Navy forward to prevent conflict.  You need a Navy forward – that’s where you want a Navy.  If you do get in a scrap, you want it far, far away from the United States of America, number one.  And we want to be able to deter, right?  To make Russia and China wake up every day and say to themselves:  Today is not the day.  I’m looking at the Theodore Roosevelt off my coast with the Makin Island ARG.  Today is not the day.

And then with respect to – with respect to sea lanes – and the stuff that we do day-in and day-out with our allies and partners is just fantastic.  The first sea lord from the Royal Navy was here last week.  We had long discussions about not only what we’re doing with the Queen Elizabeth – and we have a U.S. ship deployed with her, the USS The Sullivans.  We also have a Marine Corps F-35 squadron on board.  Powerful, powerful collaboration there.  So.

SPEAKER:  Well spoken.  This is terrible.  We used every minute sir.  I feel like I have been throwing red meat to the tiger. 

ADM. GILDAY:  Well, thanks.

SPEAKER:  It keeps getting bigger, bigger and tougher, sir.

ADM. GILDAY:  I appreciate it.  I appreciate the opportunity.  Thanks for everybody for tuning in.  I appreciate the questions.  And I always – we always appreciate your support.

SPEAKER:  Yes, sir.  Well-spoken, sir.  (Applause.)

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