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Chief of Naval Operations Adm. Mike Gilday participates in a panel discussion, "Fleet Architecture: Equipping the Future Force," hosted by the Center for Maritime Strategy and Naval War College Foundation. Gilday participated in the panel alongside Adm. (Ret.) Scott Swift and HII President and CEO Mr. Mike Petters.
SAM J. TANGREDI: Talk about getting a swelled head. After hearing all those great things, I’m just a guy who likes to write and has God-given gift to do that. My sad task is to make some introductory remarks about future fleet design and introduce our panelists. In the spirit of Get Real, Get Better, I’ll take the liberty of reversing that order. Now, you know who the panelists are, and what they have accomplished. They really don’t need an introduction. But there’s some things I would like you to consider when assessing the meaning the context of their remarks and what’s behind, what influences their views.
It's one thing to be CNO when the administration recognizes a definite threat and is willing to pour in resources to build towards a 600-ship navy. It’s another thing to be CNO when you have just essentially defeated your opponent, you have to choose assets you’re going to keep of the perceived reduced threat. It’s still another thing to be CNO when your potential opponent is building up their fleet like this. USN resources are like this – well, actually on a downturn. That’s a very different situation. And those trends are bad. We all know that.
And that’s a challenge that other CNOs may not have had. To get real, and look at the situation on the face, it’s a situation that many leaders could not successfully handle. Now, this CNO has had to make some hard choices. And I know some of us, including myself, might question some of those choices. We need recognize that he faces a challenge that would literally break the spirit of other leaders, but it hasn’t broken the spirit of the CNO.
Now, they say that when you admit what you don’t know, that is the source of wisdom, or the start of wisdom. And I’m not sure really sure if Adm. Swift was the very first flag officer who took China seriously. As commander of the Pacific Fleet (PACFLT) he might have been. But let me tell you that he’s one of the few flag officers to recognize that he needed to go beyond his own staff and his own experience and seek out the wisdom of others in rather obscure corners of the Navy.
And I’m thinking primarily about the Halsey Group at the U.S. Naval War College. It's a group of officer students who are part of a voluntary elective to be continuously and iteratively wargaming the tactical moves of the real campaign that we may have to face in the Western Pacific, just like the War College did in the 1920s, 1930s. Quite frankly, their message had not been always very welcome, because they have told a lot of hard truths.
As PACFLT commander, Adm. Swift became their champion. And the reason I think that’s significant is because I’ve worked with a lot of flag officers who really weren’t willing to admit that they did not know everything about what they face. So it takes a great deal of courage, not the courage you have in battle, but courage to admit that there might be wisdom from other sources that you could listen to. And that’s basically because they work in an environment where a lot of people pretend they know it all. And a lot of people who pretend to know it all get rewarded for pretending to know it all. So that’s an interesting thing to keep in mind.
Now, we have Mr. Petters and his counterparts to thank for keeping shipbuilding alive in America. But more than that, we have to thank him and his counterparts in industry for keeping the last bastion of high-paying, high-skilled, blue-collar jobs in America, which is what everybody says we want to bring back to the country. And I think some of the buy back better money should be going to shipyards, because that’s critical infrastructure. But if we want to bring back high-paying, high-skilled, blue-collar jobs, we need to look at the model used by him and his counterparts in defense industry.
And the problem is that that’s not the model being taught in business school. So I went – last night I was in Newport. I saw multigenerational workers from the same family working there. And you don’t do that – they won’t do that if they don’t think the company is reasonably loyal to them. But unfortunately, business schools (and a lot of other business) teach and use the Jack Welch model: company owes nothing to their workers, no loyalty, we squished it out to jack up share price, and the savvy investors can cash in. That model’s never going to bring back high-paying, high-skilled, blue-collar jobs to America. This model might. And so I think that we need to take a look at defense industries for the way that they work with their employees, even in the hard times. And that’s one of the things I think we owe Mr. Petters and his counterparts, keeping that model alive.
OK. I am – at this point, I should talk a little bit about future fleet design, real quickly. And everybody wants me to mention artificial intelligence, that technology. But when you look at future fleet design you really don’t – it has to go back to the basic questions. And it’s basically this: America does not need to build and maintain a fleet. America needs to build and maintain three fleets.
This fleet over here is the geoeconomic instrument that America needs. It is the forward-deployed multipurpose fleet that satisfies – doesn’t fight and win America’s wars, but prevents America’s wars by providing the stability in the various unstable areas in the world, and ensuring that no one could cut us off from the resources and markets that we need for our prosperity. Literally speaking, it’s the fleet that ensures that the U.S. dollar is going to remain the world reserve currency, because if it doesn’t then your grandchildren aren’t going to have as good a life as you have. That’s this fleet. It needs to forward deploy, be self-sustaining and multipurpose.
This fleet here is the fight tonight fleet. High striking power. Resilience. Survivability. Designed to carry out weapon war now. High level of current readiness.
This fleet over here is the future fleet. The fleet that perhaps more than anything needs wisdom. And the wisdom is not only to discern which technologies may be able to enable us to carry out our future tasks, but also which technologies probably won’t make the mark. That takes a lot of wisdom.
Now, I mention those three fleets because the challenge – the real challenge behind fleet design, future fleet design, is to determine where you’re going to put the resources, what you’re going to focus on. That all depends on your view of what the future security environment is going to be like, because here’s what the challenge is: If you think that what Adm. Davidson has said, 2027 may be a critical moment and if you’re focused on the fight tonight, you need to put the money on munitions, corvettes, readiness. That is the focus. And when you have a limited amount of resources, you have to prioritize. So maybe you’ll take risk from these two fleets that we’ve all sought to build and maintain.
If you think that the challenge might not be out till 2049, or something like that, then you probably want to invest in this fleet, the future fleet, because there may be things coming down the pike, technologies that will make – that will enable us to face that challenge. And perhaps you take a risk on the whole fight tonight readiness to be able to do that. Now, if you think it’s really long range, 2060, then it might be this forward deployed fleet, the geoeconomic instrument, that you want to focus on. Because between now 2060, there’s going to be a lot of instability and other crisis that we need to be able to counter, that we need to be able to deter.
So the challenge, I think – for the CNO and everyone in designing the future fleet – is that you’re not just looking at what technologies you need. You’re looking at how to maintain three fleets, and where are you going to put the resources into? How you’re going to divide it up, because we don’t need just one fleet. We need three. And I think that’s a big job. So when you think about future fleet design, future fleet architecture, I think that’s one of the things we need to remember, one of the basics of that.
OK. So my other task is, of course, to moderate your questions and to start us off. Now, you are a very sophisticated audience, so we are not going to toss softball questions here. I’m going to start us off by having some questions and trying to set a good example as fare as tossing hardballs. So that’s my task. And also to, when you have your questions, kind of encourage you that it’s a question and not a statement, and all that. But before I actually ask the questions, someone came up to me and said, you know, SecDef talked about this trip to the West Coast. And we know that the CNO went on his trip to Reagan Forum [and then to Silicon Valley]. And they said, we really would want to know what his views are.
So, sir, before we get to the questions, would you like to make some remarks about what your take-ways were from that trip?
ADMIRAL MICHAEL M. GILDAY: Sure. Briefly, the trip out west, really the industry panel that I sat on at the Reagan Forum was really the reason why I went out there. And that industry panel, as you would expect, was really focused on the continuum. If we look at the defense industrial base and consider it as a continuum, [we] really focus on the right side of that continuum, heavy industry, right? The primes, the big shipbuilders, et cetera.
My time in Silicon Valley the previous 48 hours was really spent in the other direction, the other side of that spectrum, with many small companies, so venture capitalists, interested in the work that they’re doing. And primarily, the challenges that they’re having, to see stories that they told me with respect to entering the world of DOD, number one. And, number two, making that transition from, let’s say, prototyping and the burn-in to full-scale production. With respect to – so I went to some big companies in Silicon Valley. I went to DIU. And I also spent time with about 20 to 25 venture capitalists and small, high-tech companies, AI primarily, data analytics, and unmanned platforms.
So one of the things that I took away, in a positive sense, was that it’s much less challenging for small companies to find a path in DOD. Whether it’s DIU or NavalX, there are definitely doors that open much wider now. The experimentation that we’re doing in Fifth Fleet, that I can talk about at some point during the discussion today, is an example of – right now we’re doing an exercise where we essentially whittle down 105 AI and unmanned platforms down to 14 for the burn-in that we’re doing right now.
But the other thing that was clear to me, and did just confirm what – really, what I already knew, is that – is that we still have not made the leap from, you know, prototyping to – we haven’t made it easy for them to go to full-scale production. And so that’s three – you know, in the value deficit, what exists is a three-year gap. The secretary of defense juiced it up last week with Strategic Capital Office, to basically provide some money to allow small companies to survive that chasm. The House Appropriations Committee on the defense side put aside, I think, $100 million in the ’22 budget to do something similar. But what really needs reform is not just the PPBE/PPBS system, but also how our requirements process, our acquisition process. So we’ll leave it there.
MR. TANGREDI: Thank you, sir.
ADM. GILDAY: Yeah.
MR. TANGREDI: Thank you. OK, so we’re – as I said, you’re a sophisticated audience. We’re going to toss some hardballs here.
CNO, when you take a look at – when one takes a look at advantage at sea and the Navigation Plan, and then tries to cost it out, one can’t escape the conclusion that were you to achieve those goals, you’d probably need somewhere around 5% real growth. Where are you going to get it?
ADM. GILDAY: So if we talk about growth, there’s two things that I would talk about. You know, resourcing is a piece of it, but capacity is as well. And so the secretary [of the navy] mentioned the highest shipbuilding budget that we’ve ever had up on the Hill right now that does seem to have a lot of support, at $27.5 billion. That is spread across seven shipyards. You mentioned 54 ships in production. We have 80 ships under contract. I would – in a word – healthy, and trending in the right direction. Sustaining that is a challenge, but in terms of capacity I don’t think that we can throw much more money at seven shipyards right now and wring more out of them in terms of capacity.
There is growth there that they need to – if we give them, and we owe them, the Department of Defense, a steady predictable set of headlights so that they can plan with respect to infrastructure, with respect to workforce. We owe them transition plans between platforms, right, from one ship class to another. Flight III DDGs to DDG(X) would be one. We owe them a – and we’ve recently done this. At the highly classified level we brought in CEOs to a SCIF. And we briefed them on, at a very high classification level, war games that we’ve run up in the Naval War College. Also, [inaudible] informed how-we-fight briefs, so that they understand what we’re really looking for in terms of capabilities. Or, more importantly, what key operational problems are we trying to solve, which is probably more important than giving them a list of requirements.
So I think, with respect to the industrial base, giving them a set of headlights, I think that there are a number of other things that Mr. Petters can speak in much more detail. I think working alongside the Department of Labor and Department of Education, perhaps making vocational training more attractive to people of all ages, in order – in terms of attracting talent. Our apprenticeship programs are very strong and getting stronger. I think that’s another piece. I think competitive wages to retain people are really important. I think applying manufacturing technology in our shipyards to give us 21st century shipyards is another aspect that’ll make us more efficient in terms of shipbuilding.
I think in terms of the Navy, besides a steady demand signal and multiyear procurement contracts, which give a greater sense of confidence to industry, I also think there are a couple of other things that we can do. One is to try to level out that steady-state production load across the shipyards that they have, number one, so that they can basically plan on workforce and infrastructure with a high degree of fidelity. The other is to minimize churn. And what I mean by that – and so the new frigate would be an example of this. We don’t want any more changes to hulls one and two. We want to get them out the door.
I personally want to walk away from PSAs, post shakedown availability periods, after we – I want to deliver them. I want to get them into the fleet and I want to get them out there. And so our partners up in Wisconsin are sighted on the same kinds of goals. So we’re working very closely with them, as now the requirements change on that class of ship, to minimize any of that churn. So in terms of funding, you said it, we need 5% growth. Right now we have plenty of support on the Hill. We actually have good support within the building.
Remember, the United States Navy has not been the priority for the last two decades, because of the ground wars. That’s been the appropriate focus of our nation. This ship – that rudder, when you pull it over, does not turn that big industrial base very quickly to close those gaps that we need to close. Yeah, would I like more ships? Am I concerned about 290? Yeah. But let’s have – you know, when somebody asked a question earlier about, you know, what are your priorities in the ’24 budget, they haven’t changed. Readiness, modernization, and capacity, in that order.
It's got to be a ready fleet, for all the reasons that we spoke about. We got to modernize the fleet that we have, because whether it’s 2027 – 2027, you got the fleet you got right now to fight, okay? So what we can do in terms of game-changing technologies that give us an edge, we’re sighted on that. It’s a priority in terms of where we’re putting our money. And then capacity, I just feel like we’re in a better place than we’ve been in the last three years in terms of getting money towards shipbuilding, with a clear set of headlights.
Our buying power has been up – I’m going to finish up here in 30 seconds – our buying power has been relatively flat since 2010. We’re now seeing a little – a touch of growth, but we’re fighting against 8% inflation, right? So that’s going to be a very difficult hurdle to clear and still be at 5% growth, [inaudible]. The other thing is 60% of our budget – people, operations, maintenance – rises at a rate above inflation. So when we talk about readiness being a priority, that is a challenge, right? You know, we want a ready fleet today, and we want the fleet of the future. We’re trying to balance that and make smart decisions.
Thanks. That was quite a rant. But I hope I answered your question.
MR. TANGREDI: A very clear rant. Thank you, sir.
I’ll go to Adm. Swift, with a question for him. Adm. Swift, for a considerable time critics have denounced aircraft carriers and amphibious ships as irrelevant, vulnerable, too expensive, very unhip legacy systems which the Navy clings to because, I guess, they think we’re stupid and cannot face the realities of future war. How do you respond to that?
ADMIRAL SCOTT SWIFT (RET.): It’s a great question, Sam. So thank you for that. So, as I gather my thoughts here, let me pause for a minute and highlight Jamie – Adm. Foggo’s comments about pulling together to make the War College Foundation and Navy League together. It’s a critical community piece sand it goes to the question Sam just posed. So the provost and I were having a conversation last night and then again this morning. And my view is that too oftentimes we look at institutions as opportunities for trades to be made to balance the budget, as the CNO pointed out.
Well, there’s two critical institutions, in my mind. One is the Naval War College and the work that they’re doing. The CNO mentioned that. But there’s a spectrum of folks up there. One is the Halsey Alpha Group. And there’s other groups up there like that. Well, the work that the Foundation does assures that that work continues in the absence of funding that the CNO can provide, based on the trades that he needs to make, and support the work that the provost does. So coming together in this is important.
I appreciate the shoutout on the book. I hate writing, unlike Sam. I think I’ve written the forward to seven books now since I’ve retired, and every one I write I swear that’s going to be the last one. My wife seconds that. Writing is very painful for me. But I’m a big believer in the art of warfare, but you have to stand on a foundation of science. And so this background is important in response to Sam’s question of me.
I thank you for the introduction, but as an aviator I’ve got to be a little skeptical. Are you saying I’m really stupid? I’ve never been accused of being the smartest tool in the shed. And my father always told me, recognize your limitations before your start criticizing the limitations of others. So I’ve been a student of life for a long time. And for 40 years, I was a man of science. And I think we need to focus on that. There’s been a reference – the secretary made a reference that today is December 6th, the day before December 7th. And we discovered a new understanding of lessons that we understood already on that December 7th, taught to us by the Japanese.
And so as an aviator, I’m not a defender of carriers. I don’t want to be taught the same lessons that the battleship navy was taught. Remember the warfare that was going on within Navy lines between the battleship navy and the carrier ship navy at that time. Japan helped solve that when they sunk all the battleships or made them inoperable for a period of time. And the carriers captured the sea. That’s all Nimitz had when he took over. He had submarines that he could deploy, and he had carriers. And he had to figure out what to do with them. How do I turn them into a warfighting asset?
So, I think it’s important to think about the whole of a carrier strike group and the power that it brings, and what a different world it was, even from the four years that I’ve been retired. A different world, brought about by F-35. We’re just seeing the leading edge of what that capability can provide to the joint force. I’m going to ask the question of the joint force. And it’s more than that. I see many of my foreign attaché friends in the audience as well. You know, F-35 is an international platform. You know, what key partners, Australia and others, are doing with it, European partners. Germany is interested in increasing a buy of F-35s, based on the reality of what they’re seeing just proximate to their borders in Ukraine.
So F-35 is a major game-changer. We don’t understand how big a game-changer that is, because we’re just getting reports back from the tactical edge about the value that it’s providing to the carrier strike group first. And we need to exploit the value that it provides to the joint force. We’re getting insights to that from the F-35A and what the Air Force is doing with it, as well as what the Marines are doing with Bs and other countries that are flying Bs as well. The other is Growler. I mean, we have to dominate the electronic spectrum. And we have that in Growler going forward. And then what we’re doing with Super Hornet as the tried and true platform, that’s part of that airwing that makes up the carrier strike group.
But all of those pale in comparison to the power and command control over the tactical edge which the carrier provides. So my question is, if you’re going to do away with carriers – I have many people approach me and say: We’ve got to – carriers, their sunset has occurred already. Okay. Let me take your premise. What are you going to replace them with? And the fact that we’re spending all this money for a phase two warfight, when I was the PACFLT commander, the president always asked where the carriers were. When we had an HA/DR incident, my question was, where’s the carrier? Let’s start it headed in that direction.
When I was a J-3 at INDOPACOM, I was having dinner at home when Tomodachi hit. And I went into the kitchen – our nephew was visiting. I went into the kitchen and the news was on on the TV there. And I saw that infamous footage of the tidal wave coming to shore. And I went back and sat down at the dinner table and thought to myself, what are my next steps, as the J-3? And within two minutes, my phone range and it as Adm. Willard. Adm. Willard – it’s the only time he ever called me as a J-3, certainly at home. It was always through somebody else.
And I picked up the phone and told him: I’m assuming you saw what happened on TV. I’m headed up the Hill. And that started 35 days of operations. In that phone call, on an unclassified line, he said Reagan is underway in the North Pacific. I suggest you turn it towards Japan as a symbol of solidarity and support. And he authorized that over the phone. And that’s what I did, and that was my first act as the J-3 in that response. Now Bob Girrier, who was the strike group commander, deserves all the credit for what he did with that carrier strike group. It’s the power of what a carrier represents, not just for national defense but for national security.
What are you going to replace that with? I’ll have a discussion about survivability in a moment – well, I’ll address that now. What we need to get to is just what CNO was talking about in his comments here today, and also at the Reagan Forum, and Sam’s comments as well. We need to get back to thinking strategically, planning operationally, and acting tactically. So has anybody ever heard of a CVOA in the Pacific? They do not exist. If you’re not mobile or you’re not expeditionary, you’re not relevant. The Air Force Dispersed Basing Plan is acknowledgement of that. The distributed maritime operations and EABO are two concepts locked at the hip that are designed to ensure that the fleet we have is ready to fight tonight against a peer competitor.
This started back when I was at Seventh Fleet and has continued with the various commanders since then. We continued it when I got to PACFLT. I’ll give a shoutout to Sarge Alexander, and what he did at CTF 70 about how to fight a carrier in the threat envelope, underneath the DF-21 and -26 envelope, at acceptable risk posed. You just have to think strategically about the problem. Instead of admiring the tactical challenge that’s being presented by a peer threat, we need to be focused on the strategic solutions and how do we fight differently. Maybe – [inaudible] – is a thing of the past, just like – [inaudible] – is a thing of the past. So this is the discussion I’ve had with those that want to have a meaningful discussion of, hey, we need to get rid of carriers.
So they’re each 13 billion bucks. We’re getting a return on that every time there’s an HA/DR event and we steam a carrier. Doesn’t have to be Tomodachi. It could be a cyclone in the Philippines. That carrier brings makes 200,000 gallons, thank you very much, of fresh water every day. It is the critical logistics asset that every country needs as soon as there’s an HA/DR event that they can’t deal with. And it’s about stabilizing their government. This is what carriers do. You can’t do it with a DDG. Might be able to do it with a big deck amphib. But so there’s carriers.
Amphibs, it’s amazing what we’re doing with light boats as far as at-sea refueling, logistics, transfers. We need to continue that work. But they’re not survivable – they’re not survivable inside that operational layer or in the tactical layer. We need amphibs to go do that. Do we have enough amphibs in the budget? I’m with Gen. Berger on this one. We don’t. We need more. Do we have enough ships in the budget? Listen to the CNO, no. We don’t. We need more. The delta is risk. So the question isn’t “do we need amphibs.” We absolutely have to have amphibs. If you’re – if we talk about the last tactical mile – I’m talking about the last operational leg that you’ve got to drive to from a logistics perspective. I’m going to come back to that in a moment as well. I’m sensitive to time here.
As I mentioned, if you’re not expeditionary or you’re not mobile, you’re not relevant. And that amphibious capability allows us to operate inside that threat layer at acceptable risk layers that we could not otherwise do if we didn’t have those great hull amphibs. I think the world has changed, from an amphibious perspective. We used to call them up-gunned ESGs for the concept of how big-deck amphibs changed. There’s a – I’m sure – much deeper thinking on it and the new nomenclature, which is fine. But the things that revolutionized what we do with amphibs, especially with big-deck amphibs, one was F-35B, the other was B-22s, and the third was 53 kilos. I think the secretary mentioned all those things.
In my biased view, Gen. Berger might disagree with it – and we don’t have enough Marines in the crowd, in my opinion – I’ll work with you on that, Jim. But I think the days of putting Marines through the surf zone, those are behind us. But we do need to put logistics through the surf zone. And we’ve got to get those logistics proximate to the surf zone. You need amphibs to be able to do that.
I think what you’re seeing in a Marine force is an expeditionary force, where they’re using a lift to go to those critical centers of gravity, not through the surf zone – that’s so easy to defend and so hard to transit through. Note to PRC. And get to an expeditionary approach where you go deep and then fight back to open the harbors so that you can flow logistics in to support the bigger joint fight. Thinking strategically, planning operationally, and acting tactically.
Let me close. So I don’t think they’re crown jewels. Because crown jewels are something to be protected and we hold close. These are assets that we need to deploy into the threat. We need to embrace risk as a resource and risk management as a key component of how we fight as a force. So here’s – this is what my key crown jewels are: Readiness. I’m not here – I’ve got no authorities, no responsibilities up here. I’m not sucking up to CNO when I made these comments, but you’re going to see a lot of parallels between things he said and my thinking.
One is readiness. The second is, and I think it goes to the modernization piece. It’s not confidence in the force, it’s confidence of the force. When I was a PACFLT commander, we had two collisions that killed 17 Sailors. There’s some rule sets that we had in place that we weren’t following as a service. And I think the three investigations were fantastic, in what came out of them. They are just the beginning. That work needs to continue. And CNO and the Navy are off doing that work but were constrained by budget limitations that we need to make – that we need to address.
And the third piece is the ethos of command delegation. The PRC can’t do this. Centralized control centralized command. That is – it comes to us naturally as a naval force. And this is why we’re going to be successful with the carriers, with the amphibs. The last comment is on the light amphibious warship (LAW). Big supporter of it. You know, and by the way, I’m a big supporter of LCS. You may think I’m at cross ways with the CNO when I say that, because I support what we’re doing with LCSs, decommissioning those, because we have to – he has to make really hard decisions, like Sam pointed out in his opening comments.
But we have to have mobility of that Marine force that’s operating inside that threat zone in the first island chain. And they need a ship to do it, because they’re operating from islands. You can’t be constrained to just that small geographic land space that they’re operating on. You need to expand that into the maritime space. That’s what LAWs does. Put NSM on LAWs, now you’ve got some real capability. LCS is a critical capability that helps provide that overmatch and overwatch from a war fighting perspective as LAWS pursues is logistics support and movement that’s so critical to that combined arms element of the Marine Corps.
And the last point I’ll make is with respect to cruisers, more hard decisions. Man, that’s a lot of VLS tubes. That’s a lot of TLAMs we’re getting rid of. But it’s eating our lunch as far as deployment. I saw this as the PACFLT commander. I mean, there was so much revenue that was sucked up trying to get those ships to sea. We’ve had to make hard decisions. These are business decisions. Sam, I think that’s what you were talking about with the challenges that CNO that we have today, and SecNav, are facing. I’ll stop at that point. And I look forward to your questions.
MR. TANGREDI: Thank you, Admiral. You’ve very eloquently made some points I tried to make a little less eloquently.
Now, to Mr. Petters, again, hardball questions. Congresswoman Luria stood up in the House and said that the Navy needs to apologize for past poor choices, but she also said that given a 30-year shipbuilding plan that has three options that having a plan – having three options meant it wasn’t a plan. What do you and industry need from the Navy concerning its shipbuilding plan that allows you to convince your board that it makes sense to invest more into the infrastructure and increased production, rather than just waiting it out or looking for other ways to make money. What do you need from the Navy in terms of a plan?
MIKE PETTERS: Well, thanks, Sam. And I’m honored to be up here with this distinguished group. And, CNO, it’s good to see you again. And, Scott, always good to be with you. I thank the Navy League and the Foundation – and the War College Foundation for putting this together. This is actually, in my time in industry, this is – this feels like the right kind of – the right kind of meeting at the right time. So, Jamie, you guys are doing a great thing here.
Relative to your question, Sam, I want to – you know, we’re talking about how do you create an enterprise that’s going to support – and, really, say how are we creating a national security or a naval enterprise over the next 30 years? And what’s the industry – my part of this is not the war fighting part, right? I might have opinions, but they don’t count. You have war fighters here. I can talk a little bit about what the industry and how the industry might think about that, and how a 30-year plan fits into that.
Look, at this point in the panel discussions it’s usually time for all the right people to say all the same – all the same people to say all the same things, and everybody – to the same audience – and everybody’s heard it before. And this would be a time where you would stand up and say: The 30-year plan is the 30-year plan, and that’s important. It’s either binary or not. Truth is, it’s not. It’s not binary. None of this is a binary yes or no equation.
The fact is, that if you’re going to build an enterprise, I’d suggest that maybe we ought to think about looking at an enterprise, a national security enterprise, a naval enterprise, a naval security enterprise, Navy-Marine Corps enterprise, encompassing both the war fighters and the industry to support it, that you can measure the value of that enterprise on any given day through probably three – there are probably, I’d say, three categories to think about.
And it’s – and the value of that enterprise is going to be a function of the technology that exists within that enterprise, the capital investment that’s going on in that enterprise, and the human capital that are supporting that enterprise. I think you can kind of take just about any enterprise – any small – any small bicycle shop. You could break it down to those three things. Any large corporation will look at it that way. Gross national product or gross domestic product will look at it that way and say, you know, gross national product’s a function of your technology, your capital investment, and your people. So let’s think about those three dimensions here, and how does the 30-year plan, as it exist, fit into that?
On the technology side, well, you’ve heard a lot already about technology here. And if we go and we talk to our customers, as industry, go and talk to our customers about any particularly important technology, more than likely we’re going to be given some kind of technology roadmap that says: This is where we’re going, and this is what we want to do, and this is how we want to go do that. That’s usually pretty clear. It’s – you know, it’s probably not accurate. It’s precise, but not accurate. But it does give us the kind of information that industry needs to say, you know, the secretary mentioned this morning directed energy, you know, energy – the industry has known that that’s a direction that you want to go, and so we’ve been investing against that for quite some time.
Same thing with unmanned platforms. We’ve known that that’s a direction you want to go. The pacing of it may be different than the roadmap, but we know that’s where you want to go. And so we can make pretty effective investments against that, and be very successful with that. And that has actually been something that we all like to talk about, you know, because the technology stuff is really glamorous. You know, it’s the shiny object that we can go talk about, or we talk to our friends about, or we show off, and it’s great stuff.
The second piece of that is capital investment. I’ll give you my experience with capital investment. On the one hand, the 30-year plan is interesting. And it’s helpful. The most significant signal from the government to any part of the industry would be a – would be a contract. You know, and even more significant is a multiyear contract, a multiyear commitment from the government in contract, in writing.
That means that we’re going to go – and, you know, we’ve had a very successful shipbuilding program, like the Virginia-class program, like the DDG program – where we have been able, and the Coast Guard with the national security cutter program, that I’m very familiar with. But being able to go to the industry and say: We’re going to not only buy a ship, or buy a platform, or buy this product, we’re going to buy many and we’re going to buy them over this timeframe, and we’re going to commit to doing that. And we’ve gotten Congress to a place where they will commit to doing that. So multiyear programs are number on the very best signal to the industry of where you want to go. And I would say that’s where you want to go in the near term.
When you start thinking about the longer term, I mean, the 30-year plan, I’d say, is a longer-term contract – or, a longer-term perspective. There were years where we would bring the 30-year plan whenever it came out. We would bring the 30-year plan into our planning process, and we would look at it, and we would draw it out. And we’d say, it will not be higher than this. This is the best it’s going to be. And then later, there were years where we would say, okay, that’s the baseline. Where could it go from a downside and where could it go from an upside?
The reason that’s important to the industry is that it helps us to plan the capital investment that we need to be in a position to support that. So and my own personal experience is we had 30-year plans in the first half of the 2010s that we were – we were observing. And we combined that with the feedback we were getting from our teams at sea at the fleet, that ships were – they were being run hard, they were being run overtime. We came back with a view that the Navy needed to be about 20% bigger.
Now, there was no fleet study that said that yet. There was the 350-ship thing that had been out there, but there was nothing out there that said operationally we need to be bigger. But we went to our board with those two pieces of information, that said this is kind of where the 30-year plan is. We’re going to invest for success here. And we began a $2 billion – we’re not unique here. I mean, this is my story, but I would say that most of my compatriots in industry did some of the same things. We need to be bigger. We know the Navy needs to be bigger. We know that China’s on the horizon. We need to start investing against that. We put $2 billion into our facilities, and we began a five-year plan to put $2 billion into that.
It was about a year and a half later that the Navy came back and said, you know, what? We need to be bigger. Now, I’m going to choose to believe that the Navy was more free to say that because we in the industry had already begun making investments. So there’s a little bit of a self-fulfilling prophecy here part of this. If the Navy stood up and said we need to be bigger, and the industry was not making any investment at all, then it would be – it would be pretty shrill to do that. So the 30-year plan’s really important, but it’s not final.
And so having three plans is actually pretty interesting to us, because that gives us a chance to kind of bound the problem a little bit, you know, and say: This is the kind of things that they’re thinking about. These are the kind of concepts they’re thinking about. You know, if this technology investment accelerates, then maybe we need to make more capital investment over in this area to help support that. So what we want to do – I mean, we all – I’m not an engineer, but we’re all engineers at heart because we’re in the Navy and Marine Corps team.
And we like to break things down to be very precise. And we want to think of all of this as being a big symphony, where everybody has their piece of music. And if they play their note at the right time, it’ll fill the concert hall with exactly the right music we’re looking for. But the truth is, CNO, you’re running a jazz band here. You know? And we’ve got a lot of folks in this – in this jazz band that are very creative and very innovative, and they’re very talented. What matters is you got to set the rhythm. You got to get the rhythm section right. And if you get the rhythm section right, then all of that creativity and innovation can come to bear and you’ll put together a piece of music that you didn’t anticipate, but it’s going to be better than anything you would have written on a piece of paper.
The third lens that I would say that we look at through in industry – and this is one that, I have to say, after 35 years of being in the industry I had a very rude awakening this past summer. And this is the human capital issue. Some of you may know, I’ve been appointed to the Board of Visitors at the College of William and Mary. And we had our first strategic offsite. And that was my first meeting. So I’m going to here, and I’m going to go hear the strategy. And this is a public institution. And without going into all of the issues that they talk about, given the responsibilities there, I would tell you that one of the things that they’re very focused on is that after 2025 the number of college applicants is going to go down a cliff. A cliff.
Well, I never heard that. Where did that come from? We don’t ever talk about that in this circle. We don’t. You know, we assume that people are going to be there. We’ve always assumed that. So, being a good move, I went back and started pulling threads on it. The birthrate in this country in – in the year 2000 was over 14 per thousand. The birthrate in 2020 was under 12 per thousand. It’s a 15% decline. The biggest step in that decline occurred when the recession happened in 2009-2010.
But why is this an issue for a public institution like William and Mary? Well, because when that decline happened in 2009, 2010, 2011, those kids are going to be applying to college here in ’28 and ’29, right? They’ll be 17-18 years old. They’re worried that the applicant pool is going to go down. Hmm. So they are absolutely focused on going and getting more of the applicants to pay attention to the College of William and Mary. That’s a priority for them because they need the applications. If you go and you actually pull the thread on some of this, what you see is high school diplomas are actually going up still right now, but they’re going to peak around ’24-’25, and then we’re going to begin a very long-term decline. There’s going to be downward pressure on high school diplomas.
Well, high school diplomas is exactly what you’re looking for, and it’s exactly what I’m looking for, among other things. But there’s going to be downward pressure there. Now you throw in that institutions – and I use the College of William and Mary as my personal example – but I want you to think about all of the public institutions that rely on those kids. They are all going to be aggressively trying to capture their share, because for them it will become an existential crisis, especially if you’re an institution in the northeast, where your attraction is local and your population migrated during the pandemic because they don’t have to be local to work anymore.
And so there is – in the academic community writ large – there is a grand concern that institutions in the northeast part of this country are going to be facing an existential crisis in the next five to six years, which means it’s going to be the bear in the corner. They’re going to be a lot more aggressive about trying to get people. They’re going to be a lot more expansive in how do we bring people in. They’re going to create environments where you can teach people without them actually in Connecticut, you know? And they are going to go in after all of the same people that we’re going after, all of them.
Now, I used to say – before the pandemic, I would say to anybody who would ask – I’m sure, CNO, you and I talked about this – is I can build capacity faster than you can appropriate it. I said that all the time. From the secretaries of defense to the admirals of the fleet, because if I knew where you were going, and you started the process of trying to get it into your budget and get it appropriated, I could go hire that workforce and have them trained and ready to go, you know, before you could get the contract signed. Since the pandemic that’s not true. That is not true. Things have changed. Things have changed because we’ve had this great resignation, that it’s been called.
Things have changed because the opportunities for folks to work and engage constructively in our economy are different than they were 10 years ago and 20 years ago. And just an example, when I was a construction supervisor down on the Charlotte – you know, the submarine and the submarine program in Newport News a long time ago, Monday morning I’d come to work and all my foremen would come in with all their people and they’d want to know what the overtime for the weekend looked like, right? How much overtime we got this weekend. Sign me up for overtime, boss.
And I would tell them that if you don’t get to this point by Thursday, you can’t have overtime. If you get to this point by Thursday, then I can afford to give you overtime, right? And we’ll get ahead of next week. We go to Wednesday or Thursday now in our shipyards looking for people to volunteer for overtime. And what’s changed? Well, they can come work for us and they can have their 40 hours a week, and they can get their benefits, and then they can go be an Uber driver for the weekend, or they can do TikTok, or they can do YouTube influencer, or any of that other stuff that I don’t understand.
My point here is to make sure that we don’t have all of the same people saying all of the same things at these kinds of panels. I want to throw this out as – and I’m going to foot-stomp on what the secretary said this morning. He was talking about recruiting. His point to the Navy League about go and recruit somebody is that’s that’s like the pointy end of what’s going on strategically behind that. We’ve got a workforce challenge in this country that every company is dealing with. And it’s not going to get better, because all of the pressures are going the wrong way. And I think it’s showing up in Navy recruiting. I think it’s showing up in surface recruiting. It’s definitely showing up in corporate recruiting.
And in the end, if you don’t have the talent you’re not going to have the technology and you’re not going to have the wherewithal to attract the capital to your industry to make the capital investments that you need so that you’ll have that successful enterprise 10, 15, 20, or 30 years from now. So I think we’re done.
ADM. SWIFT: Hey, Sam, can I respond?
MR. TANGREDI: Sure.
ADM. SWIFT: Let me – I just wanted to foot-stomp this, because I think the point that Mike made is extremely important. Several points. One is, we don’t live in a binary world. So stop making binary criticisms. So it’s the carrier discussion, it’s amphib discussions, it’s being critical of the Navy and what we’re doing, like divesting ourselves of LCSs as we’re building them. That’s where we are with cruisers. How can we afford to give them up? Those are binary discussions. The world is much more complicated than we want it to be, but we have to accept it for what it is. So I think that point that Mike brought up is critically important.
So I’m on the USNI board, thanks to the shoutout, again, to the USNI press. But Gen. Berger wrote an article in the November edition of Proceedings. The title of the article is, “Recruiting Requires Bold Changes.” It’s not about recruiting. If you read that article and thought it was about recruiting, you need to read it again I the context that Mike just shared. So I look at this – we have to look for the opportunities instead of the binary approach.
I see, as I’ve thought through this, as I was reading Gen. Berger’s article, that we don’t live in a binary world, that things are changing, that we’ve got public shipyards, we’ve got private shipyards, NNSY and then your consortium of competitors out there, that are facing the same challenge. And we’ve got the OPNAV staff that’s facing the same problem from recruiting. There’s an opportunity to come together and say: How are we going to compete as a consortium with common interests that transcend national defense? This is a national security issue, whether it’s our educational institutions, whether it’s our core infrastructure capability that ensure a defense force that’s relevant, how do we come together and recognize the challenges that we have today are only going to get worse as we go forward?
So whether it’s a board approach to come together and have a discussion. There might not be any solutions that come out of it, but the discussions themselves would have value from the message they would send.
MR. PETTERS: Yeah, I’d second that. I don’t think we talk about the human capital business enough. And I think we talk about recruiting, but I don’t think we talk about the strategic things that are going on in the human capital world that actually can play to our advantage. We have a great product. We really have a great product. And we have so much untapped potential in our country from a human capital standpoint.
I heard – a decade ago, I heard the secretary of the Navy stand up at the War College, actually, and say: If you take a population of the folks that are between the ages of 18 and 24, and you say you have to have a high school diploma, so you eliminate the folks who don’t have a high school diploma. You say you can’t have a criminal record, so you take out all the folks with a criminal record. And then you take out the folks that are not physically qualified for some reason – obesity is probably the number-one reason you take that out, you’re left with about 25% of that population. That’s a staggeringly low number, right? So 25% of that population.
And his point was, that’s the 25% I have to recruit from. Which – and I’m sitting in the room as a pretty young, new CEO. And I’m thinking, those are the same people that I want. And about three months later, I went into my daughter’s classroom in southwest Atlantic, very tough – a very tough environment. And it’s a fifth-grade classroom. And I couldn’t get – I was sitting in the back watching her teach this class – and I couldn’t get it out of my head that there’s six kids in this class of 25 that are going to carry the other 18.
So if we could change that six to eight or nine – I mean, think of what America did when the number was only six. But if we could change that number from six to eight and nine, we can –we can change the trajectory of all of our enterprises with a lot of success. So I’m foot-stomping on what you said, Scott. That’s important.
MR. TANGREDI: I think it’s actually amazing that we’re talking future fleet, and it’s – the focus has been on personnel. That’s very, very telling about how the questions embrace all of the issues that the Navy and industry has to face. And personnel being one of the outstanding.
Now, let’s quickly get to your questions. And so, please, if you have a question. And make it short, so that everyone has a chance. We’ve got a microphone there.
Q: Thanks. Dave Cooper. U.S. Marines, so thanks for that.
My question for the admirals, again, our topic is U.S. Marine Corps Force Design. When you look at what the Marine Corps is doing on force design, there’s been a lot of discussion –
MR. TANGREDI: Can you speak more to the microphone? Because –
Q: There’s still a lot of discussion inside the Marine Corps about where force design is going. No decisions have been made. So from the Navy’s perspective, what are the two or three things that you say, I really hope the Marine Corps gets that piece of force design – kind of the equities from the Navy’s perspective on what the Marines are discussing. Thank you, gentlemen.
ADM. GILDAY: Yeah, it’s the effects that they can – it’s the actions that they can take from forward expeditionary bases that can actually contribute to sea control and sea denial. And the things that they need in their hands in order to do that, empowered by swift, rapid logistics. And so, you know, the actions they take have to do with both kinetic and non-kinetic actions that they’ll take to deliver effects that will contribute to sea control and sea denial.
I think, with respect to logistics or the ability to truly make them maneuverable and expeditionary, I think there’s a big opportunity there in the shipbuilding sector, particularly when we think about how we build ships. They don’t have to be very big. They may not have to be very fancy. They need to move people around quickly and effectively. Very bullish of the commandant’s plan, and we’re in lockstep in terms of the direction that we’re going together.
MR. TANGREDI: Thank you, sir. Sir.
Q: Michael Brown. Until September I was leading the Defense Innovation Unit. So thank you so much for visiting DIU and coming out to the west coast.
A question about the Unmanned Task Force and Task Force 59, which you referred to. I think it’s one of the most innovative things going on across all the services today. Where do you think we are in kind of reaching some preliminary conclusions about what we would want from that? And how do you see that going from concept to kind of fielding whatever the conclusions are across the force? Thank you.
ADM. GILDAY: Yeah. So we’re going to actually deliver the force next summer. Our goal is to have 100 unmanned platforms both on the sea and in the air. They’re not all owned by the United States Navy. Actually, 80% of them are divided among five other partner nations in the Middle East. When we stood up this effort, it wasn’t based on – the key operational problem to solve was, given the fact that the National Defense Strategy was prioritizing the Middle East at a lower priority, given the fact that it’s still a maritime theater with three very important chokepoints – when that ship went cattywampus in the Suez, the effect of that is billions [of dollars] a day if that waterway closed.
So to have better domain awareness of what is transiting in that theater, given the fact we’re going to be constrained by the number of platforms and the number of sensors that we could have in that battlespace. And so going unmanned was an obvious potential solution to the problem. But the real key is not the unmanned platforms. And I’ve talked about this publicly before with, you know, making it parallel with Tesla as the digital native in the automobile industry. There are plenty of companies that build a platform. It’s the AI software plug that’s the real magic.
And that’s what allows us to take the data that those sensors pull in, and to then, of course, using data analytics and AI capabilities, to fuse that in a way that we probably wouldn’t be able to do manually, and to actually give us a much better understanding of what’s growing in that theater. Think, illicit weapons trafficking from Iran. Think other contraband that’s moving in that theater. The trafficking of people as well. And so here are other nations that are very interested in this effort.
As the secretary mentioned this morning, we’re looking at using that same model in other areas that I don’t want to speak about publicly yet. But we’re moving in that direction. Again, the challenge – we have some of these platforms on contract now. We’re trying to close that gap where we can get more on contract and close that three-year divide much more quickly. So that’s the real constraint for us to scale.
But let me just add this: So the current requirements and acquisition framework that we operated with, we operate within, was created by Secretary McNamara back in the mid-’60s. And it served us well for a long time. But now, if you go back to that industrial base and the continuum that I described, it doesn’t work for that part of the continuum that lives in places like Silicon Valley, and Austin, and Boston. And so I think that’s where we really need to – that’s where we really need reform.
And I would use exemplars like how did we get MRAPs into the field so quickly in Afghanistan and Iraq? How did Warp Speed get the COVID vaccine out so quickly? It’s not reinventing the wheel. It’s taking a look at those things that we’ve done and learn from them in terms of busting down barriers and getting – actually putting capability in the hands of warfighters inside the FYDP.
The last thing I’ll say is that those companies on that end of the spectrum, most of the technology, nearly all of it, is dual use. And so the technical risk has already been driven down. And that, of course, is a big constraint for us with complex platforms. And so I think we can go to our leadership at OSD, we can go to Capitol Hill and can say, look, these platforms yield X, Y, and Z. We can field them with a very high degree of confidence that they would achieve this mission effectively, with low technical risk, be reliable, and be effective, and then we can update them much more quickly.
The other thing is, that we’ve seen with Task Force 59, is it really makes the Navy the integrator. It brings together both the operator and the developer. Typically, when we buy ships the operator – who operates and who buys them are two completely different groups of people. But with these kinds of technologies, you’re bringing together Sailors and you bring developers side-by-side. And that’s really, really important in terms of delivering a – you know, understanding what you’re getting. So thanks for the question.
MR. TANGREDI: Questions? Sir. –
Q: Hey, good morning. Commander Alan Harcroft, New Zealand naval attaché.
The secretary talked this morning about, you know, a 1,000-ship navy, using allies and partners. With, you know, you were talking here a budget of tens of billions of dollars, you know, the current shipbuilding program has more ships in it than my navy’s had in the last 100 years. And you’re operationalizing some pretty amazing technology. My question for the panel is how can more resource-constrained nations remain relevant to the future fleet?
ADM. GILDAY: Obviously, you know, I want – let me just say that I would take AUKUS as an example. The submarine pillar of AUKUS is one big effort. But the second pillar is advanced capabilities development. More than ever, we’re sharing technology with key allies and partners. We are taking a look in ways we haven’t before how we quantify risk and how we drive down risk so that, again, as the secretary said much more eloquently than I, how we’re harnessing the power of allies and partners around the world every single day. There’s virtually nothing that we do that we’re not doing side-by-side with others.
And so somebody brought up Overmatch in a question earlier. We are working with key allies and partners with that technology to bring allies and partners on board. We are not trying to distance ourselves. We are trying to make sure that whenever possible we’re working in lockstep. The French are not investing in fifth-generation fighters. We, in the United States Navy, for some time are going to operate with fourth and fifth gen integrated. We’re learning how to do that more effectively. We want the French to be working with us in an integration problem now, so that we’re not learning in a fight together.
There’s a lot going on that I would be very optimistic about in terms of the direction we’re going. Adm. Swift dealt with this, you know, at the tactical edge. And he can probably speak to it as well.
ADM. SWIFT: I didn’t pick up my pen. Let me set that. This is my response, start at the tactical edge. You’re there now. So Jack Steer, when he was chief of your navy, all the chiefs since then, I make regular trips to New Zealand to have conversations, especially from a Five Eyes perspective, how do we integrate ourselves? So quickly, here is my response. First of all, a focus on what not to do. So the United – as I say, I have no authorities or responsibilities, so I’m pretty open-minded and free-spoken now. I was open-minded before.
We put a lot of pressure on New Zealand and others about participating in FONOPs. A nonstarter with New Zealand for all kinds of reasons. You might do them in a different context, but not in the context that the U.S. did. So let’s talk about what we can do together, instead of bumping heads in those few areas where we have differences from a government-to-government perspective. And respect those differences. That’s who we are as democracies.
And then the “what to do” piece goes back to my premise of what I think numbered fleets and broad fleets should be focused on, completely aligned with the CNO’s focus as he looks across the global perspective. That’s readiness and that’s confidence of the force. There are no more confident sailors than New Zealand sailors. I mean, it’s extraordinary what you do with the ships you have, the authorities that you delegate to those young commanders in very difficult sea states, executing national missions. There’s a commonality of focus that occurs there between U.S. Sailors and New Zealand sailors. And I’m picking on New Zealand because you spoke up. I know a lot of your compatriots are out there as well. The same goes for them. The CNO talked about the French.
And the last thing – we talked about this already – the readiness, the confidence of the force, and the ethos of command delegation, which is unique to liberal democracies. We are able to fight with a velocity that centralized control and centralized governments can never achieve, regardless of the hardware or software that they have, because they don’t have their critical people there. That’s where I would focus. Instead of focusing on where our differences are, focus on where our commonality is. And when you look at the commonality between the U.S. Navy and the New Zealand Navy, the overlap is huge. And from that position, then we can look at where we can grow together.
MR. PETTERS: I would just – not a war fighter – I would just say it’s a jazz band not a symphony. So what you bring to the band is really important in the band. It’s important that we have this common rhythm section, but your innovation and creativity will be part of the conversation’s success.
ADM. SWIFT: So I had a conversation with one of your partners that they have a force of about 35,000 sailors. And I came in as the PACFLT commander, 145,000 sailors, a $13 billion budget every year, 60 ships, 1,200 aircraft, whatever the numbers were back then. And they said, it’s intimidating to talk to you when I’m talking to you as the chief of my navy. We need to stop this binary approach of a numbers approach. What is the game that we’re playing together as liberal democracies? And what role can we play on that field? It is significant. That’s where we need to come together. That’s what CNO is driving at. And I think what the secretary is talking about, a 1,000-ship navy. It’s about a combined perspective.
MR. TANGREDI: Well, it’s been a fascinating conversation. Time really flies. I think we are at the point where we need to bring this to a conclusion. But I’ve heard some amazing ideas and can’t wait to write something about these things. So let’s thank our panelists.
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