Below is a transcript of the interview:

FRANCIS ROSE:  Joining me now, the Chief of Naval Operations, Admiral Michael Gilday.  Admiral, welcome.  It is great to see you.

I want to start where we usually start in Washington, and that is with money.  An ongoing theme, as you testified before the committees of jurisdiction about the budget request, was the discussion regarding readiness versus new procurements.  What’s your takeaway from that discussion?  What was the point that you wanted to make to those committees of jurisdiction?  And where do you see that balance for the Navy today, sir?

ADMIRAL MICHAEL M. GILDAY:  Well, balance is exactly the operative word.  I really wanted to describe for the committees of the Congress and for the public how we were going to – our investment strategy for the top line that’s being proposed by the president. And so, as I discussed that, I really talked about the need to make strategic investments in three key areas.

One of them was the Columbia-class SSBN.  We need to deliver that platform on time, before the end of the decade, in 2028.

The second area was investment in our shipyards.  This is a once-in-a-century investment that we need to make in order to maintain many of the submarines that we’re building today.

And then, lastly, strategic sealift is another area that I felt – that I feel that we’ve underinvested in for a number of years and we had to – we had to focus investments in that area as well.

So those are the three key strategic areas that we were focused on.  And then we also had to balance the budget across three big bins.

The first is readiness and training.  So think the fleet in the near and in the mid-term.

And then in modernization.  So that’s keeping pace with or leading, actually trying to stay ahead of, our adversaries in terms of capabilities on our existing fleet.

And then – and then building capacity.

And so really trying to balance across those three bins.  And it becomes kind of tricky because it’s difficult to keep an absolute balance, or it’s difficult to keep an even balance across all three of those.  But I tended to prioritize current readiness in training over the three.

MR. ROSE:  I want to talk about each of those three in turn and some of the platforms that you mentioned.  In particular, though, a lot of questions about the size of the fleet.  The shipbuilding plan that you released recently calls for anywhere from 320 to 370 manned ships.  That kind of made the target of 355 a little more fuzzy in the minds of a lot of people.  Is that a fair representation, do you think, of the intent of the shipbuilding plan, Admiral?

ADM. GILDAY:  I think the shipbuilding plan wanted to – I think the intent was to present a range; 355 kind of falls smack in the middle, and of course, that’s the law.  And I still think that 355 is a good target.

But you know, the reality is that we can’t really afford to have a Navy bigger than one that we can sustain given the resources that we receive.  And so, based on our current budget, I believe or the analysis shows that we can afford a fleet of about 300 ships.  So that includes the manning, the training, the equipping, the supply parts, the ammunition, the training days, the flying hours, all of that that yields a fleet that’s ready to go to sea today and deter a China, deter a Russia from any malign activity.

I hope I got at your point there, sir.

MR. ROSE:  Yes, sir.

What’s the path, then, in the time that you have remaining as CNO – and I’m not casting aspersions on the amount of time that that may be, but what is the path to move the Navy toward the 355-ship goal at the time that the law calls for it to be?

ADM. GILDAY:  I think it’s going to be a challenge.  If our top line stays the same or if it decreases – if it decreases, I think that we’re likely – we’re going to see a declining fleet in terms of – in terms of capacity.  And so if I – if we take a look at the fact that 60 percent of our budget is for manpower, for operations, and for maintenance, and that those costs are increasing on an annual basis at about almost 2 ½ percent above inflation, that that’s going to eat away at our ability to grow capacity that’ll ever approach above 300 ships based on – based on how we’re funded right now.

MR. ROSE:  The prognosis for inflation, too, moving forward is not very good.  There are many experts that think that that will go up in out years, and I’ll take that up with the budget nerds rather than discussing that with you, Admiral.

But the path to getting to 355 includes in some cases adding different platforms through modernization.  One of the things that came up on a number of occasions in the hearings that we mentioned at the beginning of this conversation was platforms that you want to divest, legacy systems that you want to cut or eliminate.  What’s the state of those?  And what is the case that you made to Congress for getting rid of some of those programs that maybe some of those members wanted to keep?

ADM. GILDAY:  So the most controversial is the cruisers.  And so there are seven proposed decommissionings in FY ’22 budget, and the argument that I made really fell across three areas.

The first for the cruisers was the cost to own – cost to own and operate, which for those seven ships is about $5 billion over the five-year defense plan.

The second is reliability.  And so these ships on average right now are 32 years old.  We are seeing cracks and we are seeing – we are seeing challenges in the material conditions of these ships that are, to a certain degree, unpredictable.  So they’re unknown unknowns.  When we tried to deploy a ship most recently and had to bring it back twice because of – because of fuel tank cracks is an example of something we just couldn’t predict, but that we have to react to, and it does have an impact on reliability.  And we need to be able to provide the secretary of defense and the president, you know, reliable assets out there that they can count on to do the nation’s business.

And the third is lethality.  And so some of these cruisers have the SPY-1A radar, which is an analog system.  Others are early SPY-1Bs.  They’re approaching obsolescence, number one.  And number two, they have difficulty actually seeing the threat based on the speed – based on the speed and the profiles that we see threat missiles flying at these days.

And so those three factors really came into play from a realistic standpoint in terms of making the argument to divest of those cruisers.  The cost alone with respect to cruiser modernization is running tens of millions of dollars above what we had originally estimated, largely due to the unknowns related – that come into play with hulls that are over three decades old.

MR. ROSE:  Take me behind the scenes, if you will, for a moment.  And this discussion may not even be happening at your level.  Maybe it’s happening lower down on your chain and at the staff level on Capitol Hill.  But how do you go about making that case?  It sounds to me like you’re describing ships that are just worn out, we’ve used them to their greatest capability and it’s time for something else, and I wonder how you go about making that case on the Hill in a – in a fairly parochial environment in some cases.

ADM. GILDAY:  Right.  So what I try to do is try to take a peek over the horizon, let’s say at the 2025 timeframe, and describe based on our investment strategy the fleet that we’re trying to yield at that point and take to sea.  And so if I could talk about it in three dimensions:  under the sea, on the sea, and in the air.

Under the sea, all of our Virginia-class Block IIIs and Block IVs should be delivered by 2025 with an undersea weapon that has – that’s more lethal and has greater range.

On the sea, we’ll be just at the cusp of delivering our first Constellation-class frigate.  We’ll be delivering the DDG Flight IIIs in earnest, and we are investing in a longer-range weapon – the Maritime Strike Tomahawk – which gives us range and speed to reach out and touch an adversary. And then lastly, by 2025 we believe if we stay on path that we’ll be delivering the Zumwalt-class destroyers with a hypersonic missile capability.

In the air, we’ll have half of our – half of our air wings will have a fourth- and fifth-generation mix, which analysis has shown to be quite effective against our adversaries.  Tied in with that is a longer-range air-to-surface missile that gives us greater reach and greater punch.  And along with that are P-8s, our new increment of P-8s that we’re investing in as well to upgrade.

All of that’s coming into play by 2025.  And so we do have an investment strategy that incrementally gets us to a more capable, a more lethal fleet, but not necessarily a bigger fleet unless we saw a rise in the top line.

MR. ROSE:  A number of observers – and I include myself in this cohort, Admiral – talk about the 355 number and maybe don’t spend as much time as we should talking about the capability of the fleet – that the fleet can deliver at that number.  What’s the delta between the capability that the fleet can deliver today and the capability that you envision a 355-ship or somewhere on that landscape of what the shipbuilding plan has proposed – 320-some to 370-some – what’s the capability that that fleet will deliver that maybe we don’t have today, sir?

ADM. GILDAY:  So in terms of numbers, it really gets down to how we intend to fight.  So for about the last six years, the Navy and the Marine Corps have been working on the joint – on the Distributed Maritime Operations Concept, which I would argue is a joint concept and really is the Navy and Marine Corps’ contribution to the Joint Warfighting Concept that essentially synchronizes the joint force together as a – as one large fighting element.

With respect to Distributed Maritime Operations, the way we expect to fight in the future is to come at an adversary across multiple vectors and multiple domains – so not only on, above, and under the sea, but also space and cyber.  If I tie in the Marine Corps from, let’s say, islands in the Pacific with the lethal capability that they could also contribute to sea control and sea denial, it gives you quite a multi-prong approach to an adversary.

But in order to exercise that concept as we have envisioned it, we need – we need numbers.  We need numbers to be able to distribute the fleet across a very big area in the Pacific.  And so that’s part of the challenge.

Now, with respect to the analysis that we’ve done that’s informed the fleet that we are investing in or the capabilities that we’re investing in, one of the things that the analysis the Future Naval Force Study assessment provided us was much better insights based on how we’re going to fight.  It gave us better indications of what we need to fight with, and so the capabilities and the platforms that we need to both deter and win.

And so when you take a look at the composition of the fleet, it’s heavily reliant, as an example, on submarines.  And right now our shipbuilding budget, 48 percent of it is dedicated to undersea warfare and new submarines in the Virginia and Columbia class.

But also, with respect to aircraft carriers, the world or the U.S.’s most survivable airfields are aircraft carriers.  And so I talked earlier about the fourth- and fifth-gen mix with long-range weapons associated with that.

So the analysis really gave us a sense beyond the numbers what the composition of the fleet needs to be in order to effectively deter and fight.  And that really comes down to capabilities – joint capabilities that the Navy would contribute to a joint fight.

MR. ROSE:  I’d like to move to some of the platforms individually now, if I might, Chief.  You mentioned the frigate program, the destroyer program, and just a moment ago the carrier program.  A successful shock test for the carrier – for the new carrier recently.  What did you learn from that test?  And how do you think that projects to the carriers that will come behind it, sir?

ADM. GILDAY:  So it’s the first in a series of three shock tests that we’re doing with the – with the Ford as the first in the class.  The first one, the ship did not sustain any appreciable damage from that first shock test, which was quite a large explosive charge.  We’ll increase the intensity of the testing here over the course of the next month in two more shock trials.

Having served on a ship that was damaged by two mines – this was years ago, during Desert Storm – I understand the impact – the potential impact and the value of those shock tests in understanding the survivability of our platforms and to give our – also to give our crews, to give our sailors confidence in the ships that we’re putting them – that we’re putting them on as they go to sea and potentially putting them in harm’s way that these are survivable platforms.

No, the Ford did very, very well in this first test, but we still have two more to go.  We’re then going to put her into a maintenance period for a number of months and our aim is to deploy her in 2022.

MR. ROSE:  The Ford program has had a number of challenges, as I think just about everyone watching this knows.  Do you believe that you’re past those now and that you’re headed toward a more placid, shall we say, period for that program, so that the succeeding ships can enter the fleet faster?

ADM. GILDAY:  I do.  So in 2019, we really redesigned the way we approach the deliver of this ship to get through some challenges with the new systems, and in particular the ammunition elevators as well as the catapults and the arresting gear, which all are electromagnetic.  And so these were new systems on this ship, and we knew that they were going to be the critical path in future Ford-class carriers in their delivery timeline.  And we wanted to – we wanted to essentially go as fast as we could as safely as we could on the Ford and use what we learned in the follow-on ships, specifically the Kennedy and the Enterprise.

So with the – with the Ford, we’re now at the point where we’ve delivered seven of 11 elevators.  We’ll deliver two more in early fall and then the remaining two by the end of 2021, so the elevators will be complete.  And that’s going very, very well. Separately, the catapults and the arresting gear, we’ve had over 8,000 catapult shots and arrested landings on that carrier deck.

The Ford’s been at sea 50 percent of the time over the past year and actually been serving as our carrier qual carrier off the East Coast for a number of months in 2020 and 2021.  And so she has more operational time over the past year than nearly any other ship in the fleet, and she’s been performing very, very well.  She’s been out there, you know, looking for high seas to operate in and operate those elevators.  We’ve been – we’ve been providing or trying to put her in an environment where she can rigorously test all those systems, and they’ve gone very, very well.

MR. ROSE:  Admiral Gilday, I know that the requirements and the technology and the capabilities from platform to platform are completely different.  I understand that, but I wonder if there’s something to learn from the design changes that you’ve had to make and the challenges that you’ve had in the Ford program or acquisition strategy or any of that that can apply to the frigate and to the newer programs that are still on the drawing board.

ADM. GILDAY:  So I’ll give you a few lessons learned.

One is that when you lock in the design, you lock in the design.  And so when we start building the frigate, we are not looking at adding any new systems to that ship.  The delivery of the frigate needs to be the Navy’s SpaceX.  It needs to come out right, on time, within its budget, and with everything working right.  So working very, very closely with the shipbuilder so that we can make that program a shining success.

I’d also say that the – one of the things you learned from the Ford program was the importance of land-based testing on new systems before you introduce them to the fleet.  The ammunition elevators are an exceptional example of a painful process over the past four or five years.  And so we are in the – in the ’21 budget we already have money dedicated to land-based test sites for the frigate so that we can perfect that technology before we – before we deliver it to the ship.

And then, lastly, taking a much more deliberate approach with respect to introducing new technologies to any platform.  And so on the – on the Gerald R. Ford we had 23 new technologies on that ship, which quite frankly increased the risk of delivery and cost – delivery on time and cost right from the get-go.  And I think industry’s in full agreement within this:  We really shouldn’t introduce more than maybe one or two new technologies on any complex platform like that in order to make sure that we keep risk at a manageable level.

MR. ROSE:  I want to move to actually using the equipment that you have, sir.  You are reviewing the results of Unmanned Integrated Battle Problem 21.  What did you learn from that?  And how do you apply that to any of the topics we’ve discussed so far today as far as the fleet structure goes or to any of the other warfighting problems that lay ahead for the Navy?

ADM. GILDAY:  So conceptually what we’re trying to do in that particular battle problem is to understand how we can leverage unmanned in a way that – in a way that would be most beneficial or complementary to our manned platforms.  So, in other words, what missions might those unmanned platforms perform at a highly reliable and effective level that we can take away from the manned platform and have the manned platform focused on missions that are really more manpower-intensive?

So one of those examples would be ISR, right – intel, surveillance, and reconnaissance – whether it’s unmanned surface, unmanned under the sea, or unmanned in the air, leveraging those capabilities, those sensors as an example and providing that data to the manned platforms, including targeting solutions that we’re able to pass from unmanned systems to manned systems to deliver a weapon on target. And there’s a reliability aspect there that I maybe have talked about earlier with unmanned in other interviews where the reliability and the command and control of those unmanned platforms are really the two key challenges that we’re trying to get after.

And so this exercise gave us more insights with respect to the design of the engineering systems, particularly on the unmanned surface vehicles, to ensure that they’re more reliable for a longer period of time at sea, as well as our ability to command and control. And if you like, I can speak in a little bit more detail about the Navy’s Task Force Overmatch and our focus on – that’s the Navy’s contribution to JADC2 – and our focus on trying to resolve those command-and-control challenges for manned and unmanned into the future.

MR. ROSE:  The confluence of Project Overmatch with the unmanned vessels, both undersea and surface, and how you’re bringing those things together, sir.

ADM. GILDAY:  One of the key challenges for a hybrid fleet is going to be the ability to command and control it.

And so what this really comes down to is information dominance, and to put us – to put the United States Navy and actually the joint force in a position where we can decide and act faster than an adversary.  The Navy’s approach to JADC2 is to really build a communication-as-a-service framework.  And so what we’re trying to do is create a network-agnostic system of systems that allows us to transfer any data over any system to an endpoint where an end user is assisted by microprocessing – think applications – that allow him or her to decide and act very quickly based on whatever function they’re doing in the battle force.

And so if I – if I draw a parallel to how your smartphone works, your smartphone would be connected to, let’s say, a wi-fi – a wi-fi network as well as a 4G or 5G network, and the software in the phone determines which path the data travels on.  As an end user, you really don’t care as long as it’s being – that data’s being transferred on the most efficient and secure – by the most efficient and secure means possible.  And at the same time, the smartphone is leveraging microprocessing in the form of applications that allow you as an end user to make very quick decisions on whatever – you know, whatever the – whatever the problem of the – whatever the problem of the moment is that you’re trying to solve.

And so it’s the same kind of approach that we’re taking with this multitude of networks that we have in the fleet, and being able to take a piece of data – anything from routine message traffic to a fire-control solution for a surface-to-surface missile – and be able to – be able to package that data in a way where it could be transferred on any network so that it gets to – it gets to the right place at the right time to have the right effect.

And so we stood up Task Force Overmatch in late 2020, November of 2020 actually.  And this year, in 2021, we are into our fourth spiral or fourth set of experiments that are refining our approach to a final solution set that we’re going to deploy with a carrier strike group in late ’22 or early 2023, and then see if we can scale it fleetwide – all at the same time, walking in lockstep with the Army and the – and the Air Force as they develop their own similar solution sets under JADC2.

MR. ROSE:  Admiral, I have many more questions I would love to pose, but my time has expired.  I’m grateful for you spending this time with me today, sir.  Thank you very much.