The Dirty Job America Walked Away From | Mike Cadenazzi #476 | The Way I Heard It

People are looking at Iran right now and going, "Well, listen, you just you can't win it from the air, and you're not going to win it autonomously because that's never happened before. The troops are going to have to go in. And when that happens, all hell's going to break loose."

What is the goal?

We'll want to make sure that we wrap all of our aircraft and ships and ground support bases with as much capability as possible. It's not cheap to go ahead and be the best in the world. We think it's worth it, and we're going to continue to be the best in the world as we transition to leveraging more of these new capabilities.

Your business card reads exactly what?

Assistant Secretary of War for Industrial-based Policy and I am also performing the duties of the Assistant Secretary of War for International Armaments Cooperation.

How big is the card? I mean, is this like a 3x5 or you just go with an 8 by10?

It's a standard card. It fits a lot of stuff on it. So, are are there no acronyms on the card? This is all spelled out. It's all spelled out ASWIBP and ASWAC.

Pretty good.

Okay. It's great to see you again.

Um, the listeners should understand that the first time we met was in the hallowed halls or the labyrinth maze of the of the Pentagon a few months ago.

Yeah.

Uh where you had just begun to occupy uh your new office.

It was about a month in, I think, we got a hold of you finally after trying to get a hold of you last summer. this uh this esteemed individual sitting across from me wanted to reach out to microworks because as a guy who's in charge of the DIB, which is the defense industrial base.

Absolutely.

Uh there's a fair amount of shared real estate on the old ven diagrams and you wanted to talk to me about ways that the Department of War and Microworks could potentially partner around a shared objective. And tell me if I got this wrong. I I think you've got the best job in the Pentagon.

I have the best job in the Pentagon and at the best time. Truly, I am honored to be doing this.

I didn't know that seven months ago and you didn't have the job yet.

I didn't. I was not confirmed then. It was a It was aspirational.

So, you thought you were going to be appointed and if such an occasion would come to pass. You wanted to be able to reach out to me to have a conversation about an objective that was not yet signed off as a prime directive, but currently is.

Yeah. So technically you're avoiding pinning yourself down to a guy that wasn't actually in the job. So I understand very deafly handled them.

Thank you. Well, by the time the request made it to my partner, uh, Mary, and she asked me and she's like, "Oh, you know, it's a he's going to be a bureaucrat. Is a political thing. We've worked so hard to to stay out of that world."

But you know what? We're in a new world now and the stakes seem just incredibly high. And um I Googled you as one does these days and when I saw your curriculum via and what you had done for the Navy cryptography was it

cryptologology

what's the difference?

Uh I mean practically cryptography is sort of the the hardcore um science of actually cracking code. So that's sort of the math that goes into it and all the the engineering to build the systems. Cryptologology is the broader field of all the associated and ancillary systems and support that go into making that uh capability work for the country along with other technical stuff as well.

You probably do puzzles, right, to pass the time like you do the sudoku, you do a crosswork.

Absolutely. Okay. Your job in the Navy was to crack codes uh and now you're doing that on steroids.

Anybody that's an officer would tell you your job to do paperwork, but yes, the the guys underneath us were doing the hard stuff. Yes.

All right. And out of the Navy, you were in the private sector for a spell.

20 years. That's what did you do?

I started a bunch of little companies with people. First few were uh disasters. Lost some lost some money and learned some lessons as one does on the entrepreneurial side and uh and I finally figured it out and I sold a company in 2012 uh which is doing defense stuff. So in the Pentagon just doing paperwork, but I'd also started a little business uh doing uh SAS like software as a service for defense market and budget analysis which is kind of an esoteric spot in like the the 2010 time frame. And then I turned converted that into another company which ended up selling to a large well-known consulting firm and uh it was a great opportunity for me to go ahead and take what I was doing uh locally and sort of have a chance to apply it sort of nationwide and even internationally.

Had you ever aspired prior to that to government service? I mean were you even thinking about that?

No, I think my pursuit of this job came out of a a desire to help honestly. So I have a lot of friends. All my besties are in the Navy or in the Marine Corps or in the service of some kind. Um my wife is in the Navy. I've spent a lot of time working on uh my dad was in the Navy as well for that matter. And for me, it's incredibly important that the country do what we can to go ahead and make sure we're focused on national security. And in consulting, you have an opportunity to help, but you can't really drive the change. You're outside. You're offering advice. At the end of the day, you have to be in the system to help. And um I was lucky enough to go ahead and throw my resume into the Trump administration, have a bunch of people look at it and say, "I think this guy has what it takes." But more importantly, they brought me in and they let me talk about the way I wanted to tackle the problem and it really resonated with them. I don't know why. I was very lucky. They had a lot of choices for a lot of talented people. U but ended up getting the nomination from President Trump and the team and it's been a ride since.

Well, I want to talk more about that obviously. But back to the Navy days, what what ship were you assigned?

My first tour was in Guam. So, I was stationed at a base in Guam, which was a a cold war um naval communications station. Um, and then I went to Monterey, California to go ahead and get a master's degree in electrical engineering. So, I went back to school immediately. And the reason why is because although I was an engineer, my bachelors was in civil engineering. So, all this magical math that they were doing, uh, I really wanted to go ahead and learn about it. And so, I got I had to go ahead and understand exactly what was happening with the the black boxes. After that, I went to the USS Lasal at Six Fleet, which was in uh, GA, Italy at the time. And, uh, I was there during uh, 911. And so, that was a very exciting time. uh for the country and for me. And I remember being there on the ship that day watching CNN and the first plane hit the first tower and then the second plane hit the second tower and somebody said, "Holy we're going to war." And I remember quite clearly being stunned by the situation and I think world changing in my life have not having been through something like that as an adult. Um I had a little girl at the time, my first baby was about a year old. Everything changed after that. And last, my last tour was at uh Naval European Forces Command up in uh what was then uh the the base in London, which was right by the US Embassy. And they've now since moved that down to Naples, Italy.

I forget what Malcolm Gladwell uh called those moments that that galvanize countries and and worlds really. You know, most big moments you don't know are big until you look back at them and go, "Oh boy, you know, I I was there for that." But to your point that certainly in our lifetime that was in an instant most people who were paying attention I think realized on a visceral level that it's all going to be different. Chuck, do you remember? I called you.

Oh yeah, of course I remember.

And I you said turn on the TV and I said why? You said just turn it on. I'm like it was like I don't know six or seven in the morning or something.

You you said uh which channel?

Yeah. And you said every channel.

Yeah. Doesn't matter.

Yeah. So

tipping points is what Malcolm Gladwell calls those.

That's the book. Yeah. But those moments where like like he just remembered with such specificity where he was and that's the point of it. I I was in bed and I had been on Wall Street the day before. I'd been downtown and I'd flown home to LA and just remember thinking it's just it's such a sliding doors moment.

Absolutely. everything different after that. The way we view the world, the way the military operated, the pivot into the the global war on terrorism, and sort of that's kind of what leads us to where we are now, which is the coming out of the Cold War, the shift from our Cold War industrial apparatus into fighting what was essentially a a low-end asymmetric counterterrorism operation at scale really shifted the way we think about buying gear, the kind of beer gear that we buy, the companies that we buy from, and the scale that we bought it from. Um, the thinking was really is the end of history. we weren't going to need big ships, planes, tanks, and bombs anymore. Uh what we needed was little light agile tools, and we needed um counter ID capabilities and small vehicles and troops. And it turns out we hollowed ourselves out in the process, which is not great. The other thing that's happened like in real time it seems, you know, I'm I'm reflecting on our our first meeting, all the things we're going to talk about regarding workforce and minerals and so forth, and now we're in Iran and now we're tearing through stockpiles of of weapons. And I would imagine a big part of your job visav keeping the industrial base reinvigorated and and frosty uh is is to make sure we have the capacity and the redundancy to keep ourselves to keep the arsenal filled. Is there just a whole new tenor and tone right now in your office in those halls of the Pentagon? It's got to be.

Absolutely. And I think the administration started off um strong in this regard, which is talking about moving to a wartime footing for production as a way of driving up urgency into uh an industry that's pretty complacent. They're there every day. They're um working with us. They're working with the war fighters about how we're going to go ahead and affect um change. But at the same time, the way we've been buying our capabilities has been pretty lackadasical because there hasn't been the same urgency. The Trump administration, Secretary Hegsth, Deputy Secretary Fineberg, all the way down to to my boss, Honorable Mike Duffy, have spent a lot of time to sort of drive up the level of urgency going forward. We really capped that off with a series of um changes to the way or aspirationally changes to the way we acquire systems in November with a new strategy um put out by our team and I was honored to be a part of the thinking that went into that and that's led into where we are which is like the beginning part of this year a whole series of new agreements with um companies about changing the way we buy and the scale at which we buy to make sure that we're thinking through structurally how we unlock demand to go ahead and create capac capacity and do that in partnership with the Congress who has to pay the bills and give us the authorities to do this. And the way that ties it into the supply chain, but really gets at the heart of what our gap has been is we just simply don't buy enough over long enough periods of time for anyone to feel comfortable that we can produce enough munitions to meet the needs in a fight. And you're seeing that and hearing about that today.

As a rule, I try and stay out of politics, but when it comes to closing America's skills gap, I'm not opposed to the occasional photo op. That's me with the governor of Montana in Great Falls highlighting a local program called Neighbor Works that's teaching high school kids how to build real houses in the real world. It's an amazing program. Wells Fargo was also there with a very generous donation for Neighbor Works. This is not a commercial for Wells Fargo or a political endorsement, but look, if we're serious about closing the skills gap in this country, we need more big companies investing in local initiatives like these. And we need more governors investing in the skilled trades. And we need more scholarships for men and women who want to pursue careers, AI proof six figure jobs that don't require a 4-year degree. At Microworks, we've set aside millions of dollars to help train the next generation of skilled workers. The opportunities are real at microworks.org and the money is there. Go get some.

For a lot of outside observers, you we kind of look at this whole thing and say, who who took their eye off the ball? How did we let it get how do we fall so far behind China, for instance? How did our ship building become so um degraded? Was it a moment in time in your estimation or was it just the frog in a boiling water and a little bit here and a little bit there?

So, I'll go back to something that that happened in my confirmation process, which is you get the chance to speak to a lot of senators and a lot of people on Capitol Hill. And there's two sentiments that came out very strong. One was incredible bipartisan support for the defense industrial base production for the war fighter, which is really um incredible in this time when you sort of think about how tense things can be. You watch the news, you think about the the public statements, really is bipartisan behind the scenes. And that's gratifying for me to have walked in and had so much support. Secondarily, the other question was, "Why are things so messed up?" Um, and I just don't understand. We're give you a trillion dollars. All these authorities, you spend time and the Congress isn't perfect by any means. They know that. We know that. Um, but they're trying. I think their heart's in the right place. And so, I think it's a fair question, which is why are things different? Why are things not working out the way that they want? And I'll go back to the postcold war period of um the end of history and sort of the books that frame that up, which is we made a lot of s seriously rosy assumptions about how globalism would unfold. They've been well studied in books. We thought that working with China would allow them to go ahead and democratize. They would be a place where we could go ahead and buy what we needed and we would shift to a lovely polite service economy and war would be over. Um, instead what we did is the opposite. We actually empowered our number one adversary, our strategic competitor to go ahead and uh actually take over huge chunks of our industrial base. So, we've talked about this on the minerals front. Um, China makes 95% of the world's rare earths. We're completely dependent upon them for rare earth metals. um that's not a place you want to be in where your adversary is. We made an assumption that was going to be okay for us structurally in a world that is historically been, you know, wrought with geopolitical trauma. We never would have taken those risks during the first cold war. And now in whatever way you frame the current competition with China, um I think you see a recognition that we can no longer allow those assumptions about markets to go ahead and dominate the conversation because unfortunately left to its own devices, markets will go ahead and take our 95% dependence and make it 96% tomorrow and 97% the day after that.

That's what I was getting at. It's drip drip drip

and all for reasonable incentives along the way. efficiency, uh, global supply chains cost. Um, and you know, there's an element of people want to make money. I could make more money by taking my factory and closing it down in the States or my supply chain and moving it from Europe and moving it to China. We're seeing that up and down the way. And we're seeing that people have made those choices. Companies have made those choices even when they know that their IP is at risk. Um, they're threatened. Uh, it's stolen. They're developing a workforce which is going to work at the competitive Chinese factory for the future. the recognition in the near term that this can no longer go on and that we have to go ahead and fundamentally bend the curve on what it means to go ahead and manufacture in America. This is a great part of what I'm I'm seeing today, not just from the Department of War, which is fantastic. But you see the whole re-industrialized movement, all the companies and investment that's going into bringing manufacturing back here is truly exciting.

How many jobs are currently open in the industrial base that you oversee?

So we think there's about 400,000 or so um in this current year at this current environment. The challenge is that you know it's hard to go ahead and gauge that because so much of the defense industry is dependent upon uh multi-industrial firms and the supply chain. So as you go further and further down there are fewer companies that make things specifically for the department and more companies that make like ball bearings or gaskets or some piece of material

practical to practical

for Yes. and and they do things for aerospace companies and they'll do things for cars um and auto manufacturing and so it's kind of hard to gauge. Our number is around 400,000. We see that as defense demand continues to grow um given the the number of retirements which has got an aging workforce, a workforce that came in in the 50s and 60s in many cases now and then to the 80s that they're really struggling to backfill that that over the next 10 years we're likely to have as many as four million jobs uh are needed to go ahead and fill the skilled trades within the defense industrial base.

It's a big gap.

I mean that's a lot.

That's why I wrote you last summer, Mike.

No, no pressure, Mr. But uh regarding our national security, we sure would appreciate a moment of your time. Look, I was flattered that you reached out, but it is daunting to think about that gap and and how to close it. Like from my perspective, the conversation changed overnight from, hey, these opportunities are unloved. They're better than you think. And so your kid would behoove him or herself to explore these jobs. And it'd be wise for you, mom, dad, to, you know, maybe let go of some of the stigmas and stereotypes that surround this work because this employer over here is going to roll out the red carpet and these two will live happily ever after. That that's kind of been the paradigm. That's not what this is. This is now our submarines. I talk all the time on this podcast and out in the world about the call I got from Blue Forge Alliance

and these 16,000 individual companies who are collectively charged with delivering three nuclear subs a year to the Navy and they're freaked out, man. They're absolutely I mean

I I don't know if I told you at the Pentagon, but they literally called me to say, "Can you We're having a hell of

Did you answer Mike?

No, it went to info and it's still there. We're still getting back. No, I answered them and uh and I'll never forget the exchange. It started with um we're having a hell of a time finding welders, electricians, CNC operators, you know, you know, do you think you can help? I said, how many do you need? They said, 400,000 in the next eight or nine years, but like a 100,000 yesterday. They said, "We've looked everywhere. Do you know where they are?" I said, "Yeah, man. They're in the eighth grade."

Yes, absolutely.

That sort of I think hit a chord. and then the floodgates open and then it's like not a week goes by where I don't hear from somebody in a significant position in some industry having a similar freakout but you're the granddaddy of all this it all kind of trickles back to the biggest most consequential employer in the world and that back to your job whatever I can't remember what you told me your business card says but maybe I should just ask you why it is the best job in the Pentagon because we do have these gaps and I have been empowered to try and help.

Industrial-based policy really owns nothing. We don't own the actual end item units. I don't buy weapons. We don't sustain weapons. We don't deploy. We don't deploy with the troops. We actually help people solve problems across the industrial base to make the production and the readiness of those platforms more available to everyone. Whether that's do it cheaper, to gohead and solve a production gap, to help find another supplier. So, we truly have the ability to just work with an incredibly talented team to go off and find hard problems. And luckily, the Congress has been kind enough to invest uh a lot of funds in our program to go and actually get in and work and say, "How can I help you overcome this gap?" There's a huge technical challenge there. The idea of actually solving and doing no more manufacturing capabilities and we partner with groups like Oakidge National Laboratories, which famously for, you know, World War II and uranium processing, those kind of things. Absolutely. But they also have an incredible manufacturing capability which is truly a national asset as part of the Department of Energy. We work with them with associations and um 501c3 charities to go ahead and find ways to just improve the way we're manufacturing. We go into the companies, we talk to them about problems they're having and ways that they could unlock capacity and capability. We also, and I have inherited this from an amazing team, we also fund 41 different workforce programs across the country right now. So we do everything from partnering with Honolulu Community College on skilled trains development. So milling machines, CNC machines. We bought machines and re-equipped a facility there in Honolulu.

Is that the forge program?

No, the forge is separate. The forge is actually um an additive and advanced manufacturing capability which we've built at Scoffield Barracks to allow the military services and their personnel to come and actually kind of play around with the gear and build new stuff. The training program is actually at HCC where they can go in and actually learn over the course of uh 16 weeks how to become uh you know journeyman kind of you know um tradesman. We also have a program at ATDM down in Danville um which is a welding academy. It's a sponsorship a scholarship academy where people can come in 16 weeks they come in knowing nothing. They can live there. They get fed the whole deal and at the end of the 16 weeks we go ahead and help them get a job somewhere in the industrial base. These are incredible programs. who do things in the Gulf Coast, in New England, up in Michigan. We're driving a lot of impact because it's been this gap for the industrial base, although there have been lots and lots of state programs and tactical programs that you've talked about in the past. They're not really aligned to what the Department of War needs and what the industrial base needs. And so, a lot of times companies are forced to solve the problem on their own. And in a problem like this, with the scale of the the gap that you need, you really need to bring resources at scale. And that's where I'm really excited that we're talking to people like you about how we can do a better job of tying all of our programs together, leveraging your sort of expertise and contacts and really doing uh a better job of moving the needle on hiring and exciting these folks, which as you mentioned starts with talking to kids in kindergarten and elementary school.

Look, I think it was Dale Carnegie said all all problems are communication problems. Uh you just mentioned four great solutions that are clearly moving the needle and have proof evidence.

Absolutely.

99.9% of the country's never heard of them.

That is part of the problem and why I'm here talking.

I thought we were friends.

Yeah.

You just wanted to hang. Well, it's why I invited you. I'm keen to help and I I think part of what I'm supposed to be doing this year aside from highlighting the individuals that we've been able to assist through microworks is to tap the country on the shoulder right again and again and say hey this thing in Tennessee this thing in Honolulu there this other thing over here it's almost like we need a weekly a short weekly show called how the hell are we going to close the skills gap this episode brought to you by

Did you just come down for that off the cuff?

Pretty much pretty amazing. Right out of the pro just just like that.

But the top part of the funnel has to be awareness.

Yes.

And then I think it has to be genuine because the meter on this generation is keen. They know when they're being marketed.

But I was at the um I was at the Army Navy game and ran in, maybe you know the guy, he's the CTO of the Army. His first name is Alex, right? and and we we just were chatting and I he had his phone out and I said, "Show me something in your phone right now that you're not supposed to show me that that you're just super excited about."

Is this a test?

Yeah. And he was like, "All right." So, like, it's okay for you to see this, but but I really haven't shown a lot of people. And he and he showed me this tank, maybe a F35 or something like that.

No, the M1. It's the Abrams.

No, I know. I think it's

Oh, another tank. This thing had a cockpit that was modeled after the F1. Oh,

this thing like shoots lasers and could take a satellite out of the orbit and and it goes 75 miles an hour. I'm standing there at the game and we're not looking at the game, but the guy's so enthused by it and I thought, you know, that enthusiasm for the tech, that's what has to like come through the camera. That's what has to jump off of the page because it seems like I mean that's what's super cool. That's what's going to make some kids somewhere go you know what I want to learn how to do that or more to the point some other kids say look maybe I don't get to drive that tank but I'd like to build it man.

Absolutely.

That would be amazing.

So making all this cool is job one.

Absolutely. And that's why it's been really exciting to see Secretary Hegsth off in his um Arsenal of Freedom tour where he's been visiting factories talking about the warriors behind the warriors. And so from the factory floor to the foxhole is sort of the framing is which is we've got to get people excited about however about national service as a broad category. And some people will want to serve on active duty as I did as Scott my uh stratcom's lead here um today um did and so many people do and as you talked about today are serving currently over in the Middle East doing really hard dangerous things on behalf of the country um because the country's asked them to. But there's other ways to serve, right? There's other ways to serve in terms of your support to the department, being a government civilian, working in the Pentagon. I work with amazing folks or working in the many factories that actually producing the gear that we need to actually fight and win. And we really want to encourage people to think about service in that way. And serve however you want, but serve. Make that part of your portfolio of your life. You don't have to do it forever. Um, we think part of the opportunity of the now is that there's this ability to think about skilled trades for the future and a way where you can build a real career that's valuable, that's uh that's uh impactful, that is fulfilling, and also will provide a great life for you and your family in whatever way that you set that up. And that that's the opportunity of really exciting people about this moment about getting involved with the defense industrial base, but more broadly with the skilled trades as as a as a national issue where we can sort of draft off it and make sure we're meeting our requirements because lots of those people will want to go ahead and do cool stuff like make ships, planes, tanks, and bombs,

right? Because somewhere between um fulfilling and valuable is this other thing that I feels kind of unique. It's meaningful. It's consequential, right? So, like whatever news channel you watch, when you when you flick around and when you see a, you know, a boat filled with drugs being vaporized, obliterated, when you see some of this footage that right right now, we should again just remind people we're having this conversation on the 6th of March. Who knows what the state of play is going to be a week or two from now when this drops, but I mean just turning on the TV and seeing the handiwork in action is in itself its own kind of I mean not to reduce it to a to a recruiting video, but it sure makes me wonder, man, who who made that happen? Who made that thing? What is that thing? and you know can I be a part of that?

Absolutely. So we've been blessed by incredible engineering technical talent within the department for a long time since the cold war. We have the best scientists and engineers working at an incredible scale on the most amazing weapons platforms. The challenge has always been that they're really hard to build. They're very very slow. And so what we need to go ahead and do is incentivize kind of the next generations of engineers and scientists to help us build really cool stuff that's a little easier to manufacture so we can get more of it. And then we need to concurrently bring in that next generation of skilled tradesmen, the laborers, the welders, the electricians that can help us actually deliver on that promise. And that's going to be uh we think a highly automated future which is going to be people not just manually doing stuff but actually working in partnership with technology with the latest tools. And you can go to all these amazing factories. You can see how people are building a capacity which is really unlocking speed for the skilled tradesmen to actually go ahead and apply their tools and their skills and their handiwork. But to do it at scale where you have one guy controlling 10 10 systems as opposed to some sort of three shift capability where one human being would have to sit with one machine for eight hours straight. The leverage that this provides for the future and the ability to go ahead and provide more impact is truly phenomenal and I think we're at the cusp of that innovation being here and people have talked about some of those capabilities existing over in Asia. We're there. We've got the skills and the talent. Now we just need to unlock it for the country.

Palmer Lucky sat right there a few months.

Flip-flops.

You know what he No, you know what he wore? He wore these uh it it was the it was like a glove for your foot. Like his like his toes each had an individual sleeve.

Yeah.

I mean, he flew his own helicopter here, so he's like Yeah. The flip-flops are kind of hazardous with the pedals. These work better. But yeah, full-on Hawaiian shirt goatee. Hey, I got to circle back with him because he made some really really great points regarding what you're what you're intimating around automation. I mean, I think he just outright said, "Look, our our only hope given the challenges posed by by China and all these other categories is to truly master autonomy in our war fighter or it or some version of it." So he's he's busy, you know, with these subs, these unmanned subs. And of course, everybody knows about the drones now, but what don't we know that you can share about just the sheer lethality and the awesomeness of the machine that is in place. I know it needs to be maintained and I know that's that's your job, but I just feel like a lot of people who don't quite have an accurate understanding of what the US military is capable of doing.

So, I think people's indexing around the Ukraine conflict with regards to autonomy is a useful starting point, but it's not the end starting point because I think everyone who knows how the US fights understands that we would we would not fight the way that anyone on that conflict fights. We would bring much more mass. We'd bring much more technology. We would fly 50 B-52 bombers over top and and lay waste to huge sections of land to go ahead and penetrate lots large numbers of tanks through. We would drive a thousand miles north to go around them and come around behind them. We would do lots of incredible things. But we would also enable that with a lot of incredible sensor technology, space, um, cyber, you name it. And so at the end of the day, I think as autonomy fits in for the future into the way we think about it is that it is a compelling capability that's going to augment the power of the individual to go ahead and achieve more. So much like we talk about on the the factory floor, how that one uh skilled tradesman could go ahead and now operate 10 machines. Think about that in terms of the way that your your near-term fighter pilot's going to not just have his own aircraft's capabilities. that fighter pilot is going to go to have to have three, four, five different capabilities that are in the air with it that are linked, meshed, controlled and operating system synergistically with thousands of other units that are all connected to provide what is hopefully uh a vexing problem for the adversary at every turn and one that provides us demonstrable advantage over time. That is the promise of these capabilities. I think we're at the we're again at the cusp of that, but we're not going to fundamentally replace the human being. As you can see today, there are manned aircraft doing many of these things. There are probably a lot of autonomous systems out there. They've talked about some of the the Lucas drone that is out doing its thing now for the first time. The Lucas drone is one of the first sort of US uh you know lowcost manufactured drone systems which is used for combat operations. So, it's kind of like a one-way attack drone as you've seen in Ukraine. And so we're really excited about these programs RAM FRAM for the future that are going to allow us to go ahead and provide these capabilities at scale in partnership with the man capability. The challenge has always been you can you can sort of use these autonomous systems to achieve effects. You ultimately need people to hold ground and objectives um in a in a conflict. And so we don't think there's a window which the the person becomes or the soldier, the sailor, airman, marine or guardian becomes less valuable in the near term. we're going to make them more important because we're going to make them more powerful through the use of all this tech that we bring to them. And that's the exciting part is actually working with the companies and going to the factories and talking about how they can unlock these capabilities to deliver it at scale, at volume, and on time. And I think that's one of the things that the drone capabilities actually promise is I can build you a lot of these things really fast. I can deliver boatloads of them quickly. And if I order a hundred for next month, I'll probably get a hundred next month. Um whereas if I order a 100 fighter aircraft over the next five years, maybe I get 75, maybe I get 60. Um those have been the real challenges um for how we buy things in the past. And this allows us a level of certainty and the capacity we can bring, which is really exciting, too.

Well, war gets awfully foggy, as we know, and

we are in the fog.

We must be because I just read a story about, you know, we're we're spending a million dollars on a missile to take down a $20,000 drone. And then I read another story that said, "No, that's not true." And then I read another story that said, "No, actually it is true." And then another one said, "No, let me assure you that's that's not true." Is that true?

I think it's true in the sense that uh if you go back and look at what we did uh over the past couple years with in the Red Sea, sort of uh countering the Houthies and those kind of capabilities, we were forced to fire a lot of very expensive weapons to keep uh US naval aircraft uh and ships uh safe. And so a lot of times there was a cost mismatch. And one of the reasons why we won the Cold War is that we were on the we put the Soviets on the wrong side of a cost incurring strategy. That is they were having to spend more money on their defensive capabilities on an economy that really couldn't sustain it.

We're now probably on the wrong side of that cost occurring strategy to some degree when it comes to that fight. However,

for now

and we're we've recognized that and we're ramping up the capacity to go and do that. We are rapidly creating a series of tools. Directed energy high power microwave um small um attractable drones themselves, interceptor drones, so that little raptor drone that's going to go ahead and take out another drone. Smaller munitions and missiles that'll allow us to go ahead and deal with this at scale at a much more realistic price point. It's never going to be satisfying given the fact that what we don't want to do is take a lot of risk with our service members. So there are other countries that are willing to go ahead and accept a fair amount of risk. So they'll go ahead and um not spend as much. We'll want to make sure that we wrap all of our aircraft and ships and ground support bases with as much capability as possible. Sometimes that's going to be expensive to make sure that they're safe until we can go ahead and find a lowerc cost solution. So um that is the natural in income um instinct of the department is to go ahead and make sure that we're investing heavily to take care of the troops. Um it's not cheap to go ahead and be the best in the world. We think it's worth it and we're going to continue to be the best in the world as we transition to leveraging more of these new capabilities.

There's a fear of a quagmire. There's always a fear of a quagmire and people are looking at Iran right now and going, "Well, listen, you just you can't win it from the air and you're not going to win it autonomously because that's never happened before. The troops are going to have to go in and when that happens, all hell's going to break loose and then you're going to have a political disaster and then it's Vietnam and but you know who's a Santa Ana, right? You don't look you don't learn from history, you're doomed to repeat it. But on the other hand, the past is the past. And what is the goal visav? Is it to keep troops from ever needing to go in to a situation like this? Will the tech get to the point where you can fight a war from that distance and actually, pardon the phrasiology, but get away with it?

I can't speculate on future leaders or this leader's um relationship to that decision. I mean, I I know we've been tasked to do and I know what the situation is now, which is to go ahead and provide as much capacity as problems so that the the president, the commander-in-chief, the leadership of the department have a lot of options. And so, what I think more than anything else, what I'm focused on is how we can unlock capa unlock capacity to provide those options. And sometimes you're you just want to go ahead and stand off from a distance, do whatever you're going to do. And sometimes you're going to want to go ahead and do Venezuela, which is going to go ahead and require you to go ahead and be on the ground tactically for short periods of time. The issues of and the opportunities associated with taking and holding ground will almost assuredly for the for the near term require large numbers of man capabilities, soldiers and marines actually occupying space for a period of time. If that is your objective, I would expect you still need those people. Um, but for the moment, we're really excited about all the mix of capabilities that allows you to provide a solution which is faster, lighter, less expensive, more lethal, able to project power over longer distance and deal with whatever combination of things are necessary. Um, and that's really the job for the department is to provide options in support of the president and all of the strategic commanders like Admiral Paparo out in Indo Pacific Command. Um, to make sure that they know they've got what they need to fight and win however they want to fight and win.

Sidebar, did you uh did you play risk as a kid?

Absolutely. You Australia guy or uh

Well, Europe,

I I read this thing the other day, man, that that basically said one of the hacks in that game was it if you were defending North America or the United States, say, and and you wanted to There's one thing to do to make sure you don't lose when you're in that position. Three things actually. You need to control Alaska. You need to control Venezuela and you need to control Greenland. If you have those areas under control, you can't lose.

Is he playing risk?

That's the literal application of the game to this. Uh, that's pretty good. I never thought about that.

I mean, you you can't lose if that's the thing you're defending.

I knew I always tried to have my sister get Europe so she'd end up losing. Um, I think there's a lot of logic to um territorial aspirations and no one argues that there are incredibly strategic things. I think uh anyone from Alaska will remind you that uh I think it was John Boyd that described Alaska as the most uh strategic place on earth. Was it John Boyd or was it uh Billy Mitchell? I can't remember. Uh one of the big guys

Seward bought it, right?

Seward. Yes, absolutely. Back in the day,

Seward's folly.

But described Alaska as the most strategic place on earth, right? And so you could look at a place like Greenland and say it's incredibly strategic as well. And um but there are a number of strategic challenges associated with uh our role controlling the global commons that we're managing in an effective way. And we do that right now every single day. And I always think back to the Ben & Jerry's commercial like 1% for peace and then the response which is that the Marines do more for peace every day than Ben and Jerry's will do in a 100 years. And although it's a delicious ice cream, I do think I concur with that approach that the investment we make in these capabilities, our ability to to be there every day at great human cost at great cost to the taxpayer, we we generate incredible value for that as citizens. And I think we take it for granted when we don't think about what the bene what is beneficial to us as a country in terms of the things that have um acred from this presence and our ability to respond to challenges. you have to um understand a lot of interdisiplinary things it seems to in to enjoy the best job in the Pentagon or at least

To you know, to occupy that position. Well, I'm thinking of rare earths, which really aren't rare or earth technically.

>> Nope. Like, how much did you know about that, and to what degree have you reacquainted yourself with the periodic table of elements?

>> I have a periodic table of the elements next to my desk in the Pentagon that I refer to all the time. We spend, uh, I actually, uh, spoke to a guy that previously had this job, Eric Tuning. Um, and I said, "How much time did you spend on minerals when you, in this job, in 2017 and 2018?" And he was like, "I don't know, like 5%, maybe something like that." We're spending significantly more time on minerals, and I assure you that was not part of my plan for taking this job. Um, because the last time I touched chemistry seriously was probably in 10th grade learning about it. Talking to experts. We have literally geologist PhDs and, uh, chemical PhDs on staff for us, engineers whose whole life is working in these areas. And I, I truly am thankful they don't leave because they could go make way more money working for some mining company. They're incredible.

>> They're PhDs.

>> Absolutely. Like, you, you're surrounded with with big-brained.

>> Incredibly smart people.

>> Did you bring a few of them in yourself? Did they volunteer?

>> Uh, I, we're hiring some people. We are hiring, by the way. So if you have any friends in that, that big rolodex, um, I have been blessed by the fact that this is an incredible program and office, which has attracted a lot of really talented people for a long time because we are solving problems and we have the resources to solve problems. So, I inherited a team of amazing chemists and geologists that are off doing incredible stuff every single day, and, um, I did not have to hire them. Um, but they're really motivated by national security, and I think it's working on that national security challenge. So, there's no place else you can do what we do in our office, working with the services, working on really demanding challenges, and trying to do it on an operational time frame. That is, I'm not interested in like a five or 10-year sort of like science and technology study. I'm trying to solve a problem for a customer in the Department of War today. That is, how can I put money out the door to a process, to a procedure, or buying a gear, a piece of gear that's going to solve this manufacturing, this workforce problem in the short term. And that's really the exciting part about what it is. And they get to do it touching like the classified stuff, which makes it a little more exciting than than normal work if you're at the bench, uh, sitting at a lab someplace. Last thing I thought I'd get involved in is undersea mining and polymetallic nodules and this whole rare earth thing, but it came to me back in July. I was at an energy, uh, conference in Pittsburgh, and some guy ran up to me and he, and he gave me this charcoal briquette-shaped thing that he described as a as a battery and a rock, you know, filled with copper and cobalt and nickel and manganese. Uh, billions of them lying on the ocean floor, and an executive order the president signed about a year ago this month or in the coming month, uh, to encourage people to go get those things. That's part of what you and I talked about in the Pentagon, but I, I wasn't looking at it as a as a business opportunity. I, I was looking at it as this thing's going to create 100,000 jobs if it's for real. And ever since then, with every passing day, it's for real. We're, we're going to go get those things, and some of them have rare earths, some of them have these other minerals, but if you could just talk generally about the impact that that industry represents, not just for workforce but for the national security that, you know, I imagine is your prime directive.

>> Absolutely. So, this is an incredible situation in the country where, if you think about our dependence on, um, overseas resources, primarily China, but there are other dependencies as well for things like cobalt, which come from Africa, and processing can be in different places, a lot of that in China. That last April, when, um, the spigot got turned off for rare earths, everyone in the White House at the time, the NYSE, as I understand it, got really concerned very fast because industry called and said, "This is going to practically tactically limit my operations here very shortly. What are you going to do about it?" And so, all of a sudden, the word went out that we needed to change. And so you saw the executive orders, you saw the urgency from the White House and from the Department of War to start investing. You've seen some of these deals. Um, we're investing substantial into, uh, and in partnership with others in the department, within the Department of Energy, within, uh, Department of Commerce to go ahead and unlock resources that are available domestically, but also with our partners. We partnered in, uh, our Japanese colleagues, Australian, European partners to make these capabilities available for the future. The challenge has been, they're very dirty and they take a long time to come online. And so, what we need is an all-of-the-above approach to this. That is, I need investments in mining today to unlock capacity for the future. I need opportunities to invest in production and refining. I need to go ahead and find every rock I can to bring forward and figure out the quickest, fastest, most, um, viable way for us to make that available to the industry at large. For us, if you think about what I said at the earlier on about our acquisition transformation strategy to drive things from the top down, that is, I want to fix the demand signal so that everyone knows we need way more of these missiles. Right? That's a huge thing.

>> I don't want to gloss over what you just said. Did we abdicate our responsibility to take care of our own rare earths simply because the process of cultivating them was dirty?

>> Yes.

>> Is that why we just sat back and and let watch China do it?

>> So, essentially in the '90s, at the end of the Cold War, we decided there were industries that no longer needed to be done here. The Chinese were happy to go ahead and take these dirty chemical processes and do them in China with far less environmental restriction, and as a result, we were quite happy to go ahead and ship that stuff over. They started delivering that to us, and over time, every individual factory, every individual process here was outsourced to China almost entirely. Um, and so we became incredibly dependent on them. That was a decision we made in light of, again, rosy assumptions about how things would work in a globalized world. Those assumptions were wrong. We're revisiting them now. Hence the need to go ahead and literally take billions of dollars. And I think that's our challenge is trying to make the case to folks that some of the deals we're doing look really big. We're like, "Oh, here's, here's a billion dollars that the government is investing. Oh my god, it's outrageous." When you think about the standpoint that the Department of War, just the DIB, probably uses half a percent, right? 8% of, uh, domestic demand for rare earths. We are a very minor consumer of this. It is the nation at large. All of its industries, your iPhones, your laptops, your cars, um, aircraft, everything else you do, your TVs. That is where the demand signal is in terms of domestic demand. And so for us, we recognize that we have a problem from the national security standpoint of assured access to these capabilities. And we have a stockpile with some stuff on the shelf, which allows us some flexibility. But we need to unlock this for the country because the same spigot could be turned off again. And that's going to affect not just us, it's going to affect everybody working to go ahead and do electronics and software and anything else that you can imagine across the economy.

>> So, you've got billions of dollars, billions of dollars that you can invest.

>> The department does.

>> The department does, not Mike Kenazi personally, but you've got access to a lot of money. And I mean, are are companies just queued up outside your office now? And, and if so, what kind of companies are you looking for? Uniquely American companies, wholly American companies. My friend Tom Albanese, who used to run Rio Tinto, has sent me a thing earlier today that said, "Look, we're half of the existing mining workforce will be gone, retired in by 2029." That, that whole sector needs to be wildly reinvigorated. And he's dealing with that same crazy math. Five, five out, two in, five retire, two come in.

>> I, I think it might even be worse than that in in mining at this point.

>> I believe it.

>> But I mean, I just find it really from the in it's fascinating from the investment side, it's horrifying from the workforce side, it's, it's a challenge. But in the end, I, I do, I understand right, that you're sitting on a pile of money trying to figure out how best to deploy it.

>> So, we, our teams, luckily, these amazing scientists and engineers are building essentially national and global models of, uh, mineral demand across a whole variety of them. Um, so there's probably like 30 or 40 that we're focused on, kind of 20-something that are the key. And our goal is to understand what do we need to, to meet the defense industrial base requirements, which is again, a relatively small ca, um, amount in most cases, and then how do I go ahead and meet that from the mine through to production, refining, all the way to recycling. And then we're trying to go ahead and target our investments in the most opportunistic way. That's everything from preliminary, um, site assessment to sort of say, "What's here? Is it worth it?" into direct investments in mines, to technology unlocks. And so, there is, there's a need for investment at every level, and I think that's why there's so much money flooding this from our side. What we're trying to do is catalyze all the private investment so the folks at Rio Tinto will sort of come along and say, "All right, well, the, the Department of War, the government's done some of the initial testing, they're investing. We think we can help scale this." And that's sort of the, you're talking about the seabed nodules and those sorts of things. That's really the opportunity is for us to partner and figure out what's the economic unlock there that allows that company to sort of do what it needs to do and then bring it back here. We're not overly indexed on US only because I think we recognize that some cases it's going to take a long time to unlock capacity here because there is no mod. So, we're just going to have to go ahead and work with our partners, or our partners already have capacity, and they're willing to share it. Um, and I'll say that for all of our partners, these deals that we've set up, they've been a lot of interest in terms of how we move forward, and I'm really excited about that. We've got investments in three or four countries at this point, just since I've come on board. Um, and that's really exciting to to find that there's so much interest in in solving the Western problem, which is, you know, the West at large being our European partners, Japan, uh, South Korea, Australia, Canada, the US. We're really excited about that broad interest in making sure that there's enough capacity for all of our economies and our militaries to deliver the capabilities required.

>> It just seems in so many cases like the resources that we need, we have, or we have access to, and we just get in our own way so often. Do me a favor, Chuck. Google polymetallic nodules and just put up a couple of these images so people know what we're talking about. And, you know, I think about the incredible petroleum reserves that that we have and the whole conversation around energy independence, and I think about the timber that we have, maybe more than anyone, but we're a leading importer of timber. You know, we, we have these things and and we have access. I say mining just so people understand these aren't, these nodules, they they don't, you don't dig them up.

>> They're just sitting there. They're sitting there at the bottom. Now, granted, they're sitting there at like 20,000 feet, and, and there's a lot of tech to get them. But this is a, what do you reckon? A 16, a 20 trillion dollar industry.

>> Oh, there's a lot. Yeah, there you go.

>> Look at those things. Gorgeous.

>> Little, little boogers at the bottom of the sea.

>> They are sitting there.

>> Waiting to be picked up. And that's that's nickel, cobalt, copper, and manganese.

>> And I think that is a great example of, um, the challenge to your point around, "We have the solution. We know we could do this." And that's the same across the country. There's lithium in Arkansas. There's, um, other, um, uh, there's cobalt in different parts of the country. Um, there's the rare earths that are in California. There are all these rocks are available. What it takes is the will and the leadership to go ahead and actually start the process of thoughtfully working through reasonable environmental considerations, which are reasonable. Making sure that there's enough investment from the country to go ahead and stimulate the private capital to do that, and then to make sure that we're thinking holistically about how we get it to the people that are going to buy it for the end user needs. And I think there's been times when we've started, you know, started and stopped this. And I'll take the, our investments in, uh, MP Materials and what that means for the future. You've tried Molly Corp back in, you know, 2010, went bankrupt, and they went bankrupt.

>> I want people to understand this. So, so MP, what do they do, and what did the feds do to allow them to do more of it?

>> Sure. So, um, MP Materials is the, um, the resurrection of a company that has been trying to go ahead and do domestic rare earths manufacturing since, uh, the 2005, 2008 time frame. They've gone bankrupt twice in various formats, and MP Materials is trying to create a domestic capability for us to go ahead and manufacture these, um, so that we, we get off of, um, entire, you're not going to meet all of our requirements, but to go ahead and provide capabilities that meet a large chunk of US domestic demand. And so, going forward, uh, we made a partnership with MP Materials to sort of invest in them. We catalyzed that investment by bringing in other investors. So, Apple actually invested them on the back of this, and we've started the process of trying to work with them to make sure that they're producing new capabilities at their facility down in Texas, and that we can find other partners that want to come in and bring new capabilities to accelerate what they're doing. It's a really exciting opportunity. One that some people don't like because they're like, "Why is the government getting involved in this?" At the end of the day, I think we're trying to solve these problems in a very different way from the past because we're forced to. I don't think anybody, again, came into this business thinking that we were going to go ahead and start spend so much time on mines. We have to. It's not optional because we don't have access to the materials we need, and therefore we won't be able to build the weapons and systems we need to fight and win. And so that's kind of like a necessary challenge. It's a national security issue for us. We're keen to be talking to the guys like at Rio Tinto and your, your other folks there that, um, are interested in solving these problems.

>> There you go. Nodules.

>> In clever ways. Gives you an idea of the size.

>> Mary, do you have one on your desk by any chance?

>> A nodule? One of those little? I, I might have one in my backpack, too. I'm, I just think these things.

>> It's the coolest thing that it just exists. And no, I mean, again, it's like nobody really knows too much about them, but I'll, I'd wager later this year, metal independence will become a phrase in much the same way energy independence has become. It just takes time, and people are drinking from a fire hose. There's just endless information. The tech is just moving so fast. The headlines change before you have a chance to read them. It's just impossible to keep up to speed on anything. But that stuff is, um, is primary. You know, it's fundamental. You've got to build while you're building top down from the demand side. You've got to stabilize bottom up by making sure that you have enough materials because you could say you want to build new factories and all these new capabilities. You can't if you don't have the rocks, if you don't have the metals and the materials to close it. And so that's a really exciting opportunity is to go ahead and, uh, think about.

>> You want to toss it over there, don't?

>> Yeah. Yeah. Let me.

>> Oh, it's a little one. It's a baby one.

>> Yeah, this is a baby. This little thing.

>> Cute little thing there.

>> It's adorable.

>> This was introduced to me. This, this, this, this whole thing. I, I told you I was at an energy conference, but it was a guy from the old days that, um, had these produced shipwreck stories and treasure hunting, you know, and like after all these years, the idea, you know, bringing up millions of dollars in gold and silver off these old, old galleons, you know, finding them first, and then diving on them, and, and then he said, you know, this whole time, the real treasure was just lying around on the ground all around them.

>> Yes.

>> These things, a battery in a rock.

>> I think the, the leadership here that you've seen from, uh, the White House and from the department, I think, is really the key. We're committed to this. We're spending a lot of time in it. We're talking to industry. We're trying to encourage them to go ahead and take steps to do just that, which is, how can we help you take advantage of this resource which is sitting there and make sure that we go ahead and get it into the the economy in some thoughtful way. So, that's really cool stuff. Th those kind of things are going to unlock capability for us for the future.

>> Specifically, when this thing is processed and when its various component metals are are separated, what's the practical application for them? Where, what industries are most in need of what's in that rock?

>> So, ev, pretty much every industry. Your cameras, your microphone, um, that TV, uh, the sensors that are going ahead and providing, uh, RF capabilities, they all need something, right? They all need cobalt and geranium and gallium and nitrium. Uh, turbine blades, uh, for engines, uh, you name it, they're all requiring an incredible number of very bespoke minerals that are very, very difficult to get. Even just standard lithium for your battery, right, is something that we require tons of. Uh, copper. You talk about data centers for the future. Um, you're going to need boatloads of copper to go ahead and make that work, uh, going forward. Uh, your power lines, etc. The, the demand is relentless, and if you want to grow the economy, you have to grow your access to this. And again, the point is that they're all there, right? There isn't that America lacks us. In fact, we have pretty much everything we want. Maybe not everything, but pretty much everything we need to go ahead and do it. Um, we just need to unlock that in a reasonable way, and we'll find partners that can close the gap on the, uh, minerals needs that we don't have in abundance. Um, we just need the leadership to continue to understand that this is a national security threat.

>> You, what do they say? History doesn't, uh, repeat itself, but it rhymes, right? And I think about, um, you know, Edwin Drake and, and Titusville, and oil discovered really for the first time, and people know, "Good, this is portentous. This is a game-changer." It's like another one of those moments, you know, surely the, the consequences of of finding oil and being able to bring it out of shale, bring it out of rock, is going to change the. They probably didn't think, "You know what else it's going to do? It's going to save the whales." But of course, it did, you know, because lamp light and we needed the oil from the sperm whales. So we hunted them down. I think there were like six of them left.

>> And I'm thinking of the fight that's going to be coming from the NOS's and the conversation that's going to involve getting these things off the ocean floor. And I, I know somebody's going to point to the rainforest and say, "Where do you think we're getting the cobalt now?" What do you think we're doing to the environment now? I mean, we've got to be mindful and we've got to be careful, for sure. But when I look at the child labor, when I look at the biodiversity, when I look at the trees, when I look at this indigenous tribes that have been totally displaced in the Amazon and our in our quest for these, we're going to get them. We need them. And the idea that there's just decades of them just lying there, I mean, it's just, it's mind-boggling.

>> Well, that's one of the things I think that we, again, we made a mistake in the '90s of assuming that we were going to go ahead and continue to do this. Then the processing was dirty at the time, but that we would continue to process dirty forever and it would never get better. And that's not the history of the country. The history of the country is we do some dirty things for a while, and then we find technology unlocks that actually make it cleaner. The challenge with a lot of these technologies is because we've exported a lot of the refining and processing, we're still doing it the old way. We've missed two and three generations of scientists working on these problems at the cutting edge American institutions. We've had unlocks in things like cell phone technology and RF and space and other things and sensors, and that's fantastic. We haven't had our best and brightest at volume working on these issues to say, "How do I process rare earths in a way that's relatively clean?" So we reduce the amount of environmental waste. What we know is that eventually we'll do it much cleaner. We'll actually reduce carbon emissions and whatever your particular, um, concerns are. There are ways to do this. We've always found that. And so there are programs at DARPA and, uh, research and engineering within the Department of War that are investing in now, finally, new and exciting ways to do this stuff, to process it into something useful, but to do it in ways that's much cleaner. And that's a lot of hope for the future, but we've got to go ahead and get scientists engaged, which means we need the capital engaged and the support for that change over time.

>> Tell me again how we lost two generations exactly.

>> Uh, well, we shipped the capabilities over there, and the Chinese just continued to do it the old-fashioned way. So, there's no incentive of us for to go ahead and invest in the science to actually make it better, and there's no demand signal for it. So, why would I go ahead and become a rare earth scientist if there's no demand for rare earth scientists in the United States of America? All that went over there. And even we changed generations of scientists that were Chinese, and then shipped them back, and then they've taken that technology and they now own it. So we have to come up with our own unique Western capabilities to sort of leap ahead what the processes are for the future, or we're going to end up stuck doing it the dirty way, and I don't think that's where the country wants to be, and it's not been our history that we just sit quietly and let, uh, bad processes continue forever.

>> Did the lockdowns really send a message through the Pentagon and through the halls of power when we realized just how reliant we were,

>> You know, from a medical standpoint?

>> Like, is there a corollary to that?

>> 100%. I think everyone sort of recognized in the moment. You've seen the the rhetoric change since then regarding, uh, the critical need for countries to have some level of domestic resilience. That is, I, I may not need to go ahead and disconnect entirely from these globalized supply chains, but I need to know that a certain amount of my capacity is domestic. The challenge is markets don't like that. They're like, "Well, why would you have an onshore capability that is 15 or 20% more costly than just buying it from wherever the, uh, the original source is?" The challenge is in those moments when supply chains break down or when a competitor wants to go ahead and turn off access, you're forced to go ahead and face the fact that you have no capacity that you can scale up. And so, I think we're in an interesting time where, um, business people, consultants, bankers, governments are thinking through how do you go ahead and create resilience at scale on a domestic level? How you do that among like countries? So say, in the West, and how do you go ahead and take the best advantages of a globalized supply chain that is, maybe there's things that I do want for cheap, um, but to not let yourself be at a vulnerability or suffer a vulnerability from, um, adverse situations. We're at the beginning of building that resilience right now. We are nowhere near along, and I don't think we have a playbook yet. We have a lot of people trying a lot of different things, and more than anything else is that we have to continue to go ahead and experiment with how we create that resilience domestically.

>> How much time do you think we have to get this done?

>> We need it now because I think you're in a world geopolitically where there's likely to be more disruptions for the future. We're certainly betting on the fact that disruption will be more significant and faster, and that's why we're taking so much time and effort here. It's hard to say when. Um, I just want it all moved to the left immediately, as fast as possible.

>> What's it like being you? I mean, it's a powerful job. You know what I mean? I mean, it's like, do you, how do you unwind, and how do you think about just the consequences of what you've been tasked to accomplish, and, and what happens if you screw it up?

>> Uh, thanks. Uh, no pressure, honestly. Um, I don't, I don't view it that way. That, uh, I am honored to be doing this job. The country, um, trusted me through the, the president's nomination, through the confirmation process, um, to go ahead and take a stab at doing this at a time that it's incredibly important. So, every day I am there, grateful for the incredible team I have and for the opportunity. And I really am super psyched that I have the ability to actually go out and have, meet people like you, or go to companies and say, "What do you need? How can I help you?" And they're like, "Really?" And I said, "Yeah, we can go ahead and pay for that. We can go ahead and call that guy." And a lot of times, I think my biggest value is just orchestrating discussions between really smart people who have an interest in a problem, and that I can connect them together and help lubricate that discussion with something that is, um, an imperative from the government or connection to a requirement, occasionally to invest in it. But I think that's the most exciting part is actually seeing these things come together and driving real change. So, for me, it is an honor. Um, I do feel the pressure at times because I, I know that when I took this job, I said that I wanted, uh, to be a part of America's future victories. That's why I did this. And so I want to make sure that I'm there contributing every day. I couldn't look at myself in the mirror, my daughter's in the mirror every day, uh, to go ahead and say that I didn't give it all. Um, and so I'm going to leave it all on the tail on the table. We're going to smoke it to the filter. Phrase it however you like. I'm going to go ahead and, uh, do whatever I can to have a difference. Uh, and know that I tried my best.

>> How many daughters you have?

>> I have three daughters. They are, my 25-year-old daughter is married over in London. She's a lawyer. I have a 23-year-old daughter who is, uh, in, uh, New Jersey and works, uh, in the city. And then a daughter who is, uh, 20 years old and is a junior in college.

>> What do they think of what you do?

>> So, they come from radically different political backgrounds. Uh, my, one of my daughters is definitely during the election was like, "America, America, America, America." And the other daughter was a little bit horrified. So, um, we, uh, we definitely span the the the background. Um, they are very supportive of me and have always been incredibly supportive of my work. I think they appreciate the fact that I'm out here trying every day. They know that I care. They know that I, I'm still a sailor at heart. When I think about who I am, it's still a machini, uh, trying to go ahead and prove that he's can do something for the country. I take that really seriously.

>> What was your confirmation hearing like, and did anybody oppose you, and if so, why?

>> So, I did get 23 votes for and four votes against. I don't know who voted against me yet. Um, everyone was pretty supportive. As I said, in the process, I was surprised it was less contentious, I should say. People asked some really smart questions. Um, there was no drama. Um, you know, Senator Warren even asked me some great questions. And I think a lot of people to expect that politically, uh, you'd get some, you know, nonsense, uh, in that in that environment. But really, it was a thoughtful discussion. I learned a lot from it about what the Senate, uh, cared about and the amount of support for change that's there. Change is hard, requires compromise, and there's not a lot of appetite for compromise right now. So, I'm mostly trying to go ahead and use my, uh, opportunity here to be incredibly collaborative with, uh, all of my partners in the defense industrial base, within the Department of War, and across the government to demonstrate that we can get big stuff done. Uh, there's not, there's no way you're going to get a lot done, uh, alone. Uh, you've got to go ahead and work as a team. And I think I made that case to the senators involved. And so there's four of them that didn't vote for me. I did have one that I thought didn't vote for me reached out and actually said, "No, no, I voted for you." And it was very gratifying. So, thank you, senator. You know who you are. So, I appreciate it.

>> The thing that surprised me most of all, I mean, for people who haven't been to the Pentagon, the, it's, it's hard to overstate the,

>> Five-sided, the five-sided puzzle palace.

>> It. Well, you know how interesting that you would use the P word being a cryptologist. It is a puzzle. I mean, it, it's so easy to get lost in the place, but I really expected to kind of feel like I was just wading through, you know, molasses. I went there to meet the bureaucrats. Man, you guys move, move fast. You're, what do you call Scott over there? What's his official title?

>> He's my strategic communications advisor. I mean, he, he, he just ushered us through the, you know, he was a great navigator. Who else did I meet? U Fineberg, who I suppose is the under secretary.

>> He's the deputy secretary of war.

>> He's the number two.

>> He reports straight to.

>> Secretary Hath. Yes.

>> Right. And do you report straight to Fineberg?

>> I report to the under secretary of war for acquisition and sustainment, Mike Duffy.

>> Mike Duffy. Okay.

>> Who reports to Deputy Fineberg. Now, Deputy Fineberg, when he walked in the room, people, people sat up straight and paid attention.

>> Absolutely.

>> That guy did like some amazing things in the private sector.

>> Yes.

>> Like, real, like serious things.

>> He brings a capability set and experience that I don't think we've ever had in that role, uh, at the deputy role within the department. And you're seeing it in how we're approaching, uh, the way we buy, the way we think about investment, the way we approach the defense industrial base. It's an incredible unlock for us to be able to leverage his experience and knowledge and have him talk turkey about the way things are going to run because he understands it in a ve, in a deep, uh, in a deep way.

>> It's really the question I wanted to ask you vis-à-vis him, but, but both you guys were killing it in the private sector. I mean, you did great, and, and you didn't have to do this. And it's impressive to, uh, to meet people who are who are doing the hard thing, uh, for the right reason, you know, and I mean that as a compliment, obviously. Please, please, please pass it on to him. But I, I think the thing I want people to understand is that there, there, there's so many people, you keep talking about your team, but they're voluminous as well. And certainly the ones I met, all all seem to give a profound damn.

>> Yes. We make fun of, we criticize, we're unhappy with government often. Um, I will tell you, and I'm like everybody else, I've criticized the government left and right. The number of people who are incredibly talented that work every day to make the government do what it does is phenomenal. A huge number of them do it through terrible processes. They do it through rotten times, and good, and good times. They do it through news cycles. They do it through, uh, rain, sleet, and snow. And they just are there every day in a building that is, uh, very difficult to get stuff done in. They do it for one reason, a fundamental belief in national security. And they do it not making a lot of money relative to the peers that they could go ahead and work with out in the civilian sector. They do it for not a lot of benefits. They do it in austere conditions oftentimes, but they do it because they think it's important, and we owe them all a debt of gratitude. And so running down government employees is a big mistake. We need them. Um, and I don't mean me. I mean the folks that actually make the engine run. The rest of us here, I am, I am relatively well taken care of, uh, in my role. Um, the folks that actually are out there doing the work every day, keeping them motivated, exciting people to join them, um, making sure that they know they're appreciated, demonstrating and letting them unlock their incredible skills so they can actually have the impact. That is the, I think leadership is about. And I think Admiral Paparo, um, from Indopacom, talked about, um, eating risk so that the middle, the froz, you can, uh, get the frozen middle to unlock and actually do what they're supposed to do so that employees can go.

>> Eating risk. Eating risk. Eating risk.

>> So, um, that is what I think. And I think he, he said it very succinctly, which is the leadership's job is to go ahead and get the employees to go ahead and work and allow them to work. And so, to make sure we're focusing them on the right things so they don't have to worry about the BS every day. That's really the exciting stuff for me is, um, seeing them actually solve problems. I can't solve those problems. I don't have a PhD in chemistry. Um, what I need to do is get them in the right place with the right people and the right resources, and the problems will get unlocked. And I think that's the amazing thing about our government at this time.

>> How many people work for you directly?

>> I don't know. I have about a hund and something government civilians and another couple hundred contractors. So, it's a, it's a big, uh, super talented team.

>> It's not a small thing that you took the time to come here and talk to me. Where did you come from right before this?

>> Today?

>> Yeah.

>> I was, uh, I was in Texas before that for LA.

>> Yeah.

>> Yeah.

>> So, you're Texas, LA. Where are you going now?

>> I'm going to Hawaii next.

>> What are you doing in Hawaii?

>> We actually have a bunch of investments. You talked about the Forge in Hawaii and Honolulu Community College. We're doing an industry day at the Forge to sort of bring in, uh, people to look at what we're building with the services so we can build more demand there. And then I'm speaking at a conference on Tuesday with a lot of other defense people.

>> Is this thing online, the Forge?

>> Uh.

>> Like, like, is there a website?

>> I don't know if there's a website. We're talking about building a website for it. Um, I think we're probably going to get there, but I was really focused on just trying to get the gear into the building first.

>> You're basically on a kind of road show at the same time you're doing all this other stuff.

>> Yes.

>> And every appearance I've seen or read about, you've invited people to bring you their best ideas. Like you're, you're, you're literally knocking on Silicon Valley's door and saying, "What do you got?"

>> Yep.

>> Um, have they responded?

>> I get hundreds of LinkedIn invites a week. I get 50, 60, 80 different messages a week. We have tons and tons of outreach to our office. I think people are responding, and that's why I'm trying to do this as much as possible, which is, we are looking for, and I think I've tucked this in some of the environments you, some of the things you've seen. We're looking for radically different outcomes. Like, we're not going to solve the nation's national security problems doing it the way we did it five, six, eight years ago. We really need to think fundamentally differently about the, the kinds of companies we're working with, the way those companies operate, the way that we invest in and incentivize people to join. And you go back to your, you know, "Why would I go ahead and participate in this stodgy, boring industry, working in a factory that was made, uh, you know, 50, 60, 80 years ago using technology that is 40 or 50 years old?" We need to change that. And so that for me is the exciting part about this job most of all is going out and actually spreading the word at the fact that this is our chance as a, as a nation to go ahead and really fix these problems.

>> Do you think on a, like, education has to fundamentally transform as well?

>> Um, I'm not an educ, education expert. I will know, I will say that, um, I did pretty good with my daughters. Uh, they're all smart, talented folks who went to college. Um, they, uh, achieved, are achieving a lot, and I'm really excited about to see what they're going to do for the future. I struggle with the whole educational framework in America in a way that has created all these incentives to not have people that have skilled trades careers. So, I presume that there's some fundamental mismatch there relative to the economy. And I don't understand what that is. It's guys like you talking to other people that'll unlock it. But I, but I'm really excited about what I'm seeing as a recognition of the problem as much as anything, because you got to start with recognition before you can start thinking about the solution.

>> Anecdotally, I, I've heard from, um, Carnegie Mellon and MIT, both of whom are kind of, I think maybe saying, "Hey, we're, we're certainly trades adjacent." I think Carnegie Mellon was really the country's first actual trade school.

>> Oh, really?

>> Yeah. And there's a real desire to kind of reconnect to that. So I, I think there's a role that the Ivy League could play as trade schools morph and evolve. But I, I also wanted to ask you about what, what individual companies are doing in your estimation that's moving the needle. I was looking at, uh, Palantir. You know, Alex Karp,

>> Who just looks like a mad scientist and is easy to kind of dismiss at a glance, is actually.

>> More so than Palmer Lucky.

>> You know what? I, I would love to get them in the same room, 'cause both of them seem obsessed. I mean, they each name their their company after a Tolkien creation, right? And the sword of power,

>> Palantir, the Seeing Stone.

>> Um, but he is going straight into high schools and taking out like 30 kids at a time, you know, gifted kids, and putting them in, I think he called it a meritocracy program. And, um, he's teaching them like liberal arts, Western civilization, at the same time exposing them to these big engineering projects with real consequence. And they're going to go through this program in a couple of years. They'll have no debt. They'll be making a few hundred grand a year working through a for a premier company. That's what I meant earlier when I'm like, I, I'm not exactly sure what I'm supposed to be doing with what's left of the useful part of my career, but I think I think it has something to do with letting people know when a company gets it right, or when a government office gets it right. And I just can't imagine the skills gap is going to close unless it closes on a thousand fronts contemporaneously. So, letting a thousand flowers bloom, trying lots of different things, and that's, that's kind of what our approach is, which is lots of different models for how we do this. We know that we need to go ahead and talk to kids in elementary school to get them excited about manufacturing. If you don't, by the time they get to kind of high school, you've probably missed the boat for a huge number of them. We need to reinforce it with their parents, with their grandparents. We need to get them excited about what the opportunities are, and it needs to be repetitive. And so for us, I think that's one of the major opportunities is to continue to fund new and interesting programs that are all different in their own way, but, you know, sort of a common backbone to them, which is, we want it to be meaningful. We wanted to be, um, focused on the kids, focused on what the outcomes are for them, making sure that we're tying it together so there's a pipeline of excitement that is, it doesn't just, like, it's cool to go ahead and excite a kid who's in sixth or seventh grade, but if you don't touch them in eighth grade and ninth grade and tenth grade, they lose the fire, and they'll get fired up about something else. And so programs like the program at Palantir, which I've heard about, um, every company is sort of dealing with in their own way, and that's great. We need to start investing resources in pulling the best of those models forward and sort of hyperscaling them across the country, and that'll allow us to sort of think about some some positive outlook for for closing that gap.

>> You know, I'm, I'm talking to Google in a week or two. I'm talking to Nvidia. I'm going to talk to to BlackRock, who looks like they've got a big giant investment they're contemplating in this space, and I'm talking to you, and I figure we're all like throwing a lot of mud against the wall.

>> Well, you've been talking about this problem for a long time. Years.

>> I've been, uh, I remember watching, uh, Dirty Jobs and talking about and being impressed by your ability to highlight, uh, the dignity, the honor, the challenge, the value of these roles. The first one I remember watching is you crawling around in some underneath some house with a guy who was replacing, I don't know, the under part of a house, and it was super claustrophobic, and I was just glad I wasn't there and there with you. Um, and so you've done a great job for this, and I think you having these conversations will be incredibly important, uh, for the future. The lesson from that show was that nobody wants a lecture. Nobody wants a sermon, right? I mean, there were, there was a mission, and I had my opinions about what I hoped would happen as a result of it, but until you get somebody's attention, until you, whether you entertain.

Or satisfy curiosity, you just have to do something else. And that's why we went under the house, 'cause optically it was a show and people, people couldn't turn away. And then they watched, and then maybe they listen, and then maybe later you get permission to go, "Hey, it's me again."

Yeah.

Right.

Anyway, that's what I, that's what I hope to do with you guys. Um, make a more persuasive case for some of these 400,000 open jobs. And as we land the plane here, because I know you got to go and save the world and whatnot, um, what do you think are the, are the most enticing opportunities that exist in your portfolio for people who are willing to learn a skill that's truly in demand and go to work in earnest?

There are a raft of new companies that are kicking off their work with that fusion of new tech capabilities and uh, skilled trades. That is CNC machines, milling machines, automated processes, orchestration software, tying those together at the latest factories and building parts for the latest weapon systems. Incredible demand, and a lot of them are designed to not require a lot of skills. So you don't need to be, you know, a tradesman certified, 10 years experience to go in and do this. You can walk in the door, they will train you to run their software. You will learn how to go ahead and deliver these capabilities for the future. That is an incredible opportunity to sort of be at the cutting edge of what the next generation of trades is.

There's also, if you want to work outside, if you want to work with your hands directly, there's still boatloads of programs. I would encourage you to check out our office, uh, anywhere, um, you want. The industrial-based policy office, our workforce teams, again, manages 41 different programs across the country. We've got a trade and a training program that's available for you. Most of the time, there's some sort of scholarship or paid stipend that goes along with it. So, you don't have to do this for free. You don't have to do this at your own expense. We just want you to go ahead and give us the chance to convince you why this might be the right thing for you, why this would be the right thing for you to offer a service to the country, and ultimately what it means for your future and for your family. These are great jobs. There's honor in it. You can make good money. You can be happy, and you can feel the dignity of actually working with all of us as we're trying to go ahead and serve the nation.

I'm so grateful for your time. I mean it. I know you got a lot of plates that are spinning and, um, look, I'm micro. You're macro. Your macro works. You're the government, man. I, I, I would love to find a way, um, to thread that needle and work with you.

Me, too.

I mean, I, I literally, I first offered in 2009. I wrote Barack Obama an open letter, and I told, I just started the foundation, and you're old enough to remember. Remember the three million shovel-ready jobs?

Absolutely.

Well, I said, "Look, man. I'm rooting for you, and I love investing in the infrastructure, and I love the idea that you're creating these three million jobs, but you're going to have an easier time selling them to a country who's enthused about picking up a shovel."

Yeah.

Right. And I meant it. You know, you have to make a case for the work. You can't just go, "Oh, look, there, there's a job open. Go get it." And, uh, at this, at this, uh, conference where I learned about these polymetallic nodules, um, you know, the president was there, and Alex, I sat next to Alex Karp, that's when I learned about his project, and there were 35 other CEOs in the room, and these guys collectively, Mike, pledged $93 billion to, uh, data center construction in Pennsylvania, right? And it's just a deja vu all over again. I said to the president, "Look, man, I, I'm rooting for you. These two million new jobs that you're talking about, uh, appearing as a result of reshoring and reinvigorating manufacturing, I, I think it's great, but what about the 450,000 open positions right now in manufacturing? Like, what do we do with that?" And I was like the turd in the punch bowl, you know, just raising my hand going, "Look, I like it's $93 billion. Give me just a little, little piece of a tiny, little sliver to make a more persuasive case for the very jobs that you're talking about creating." So, I've been, um, singing out of this hymnal for a while, and it's, uh, it's awesome that you have a partner in our team, in our office, because we're really excited about the opportunity to actually, uh, make a difference in this front and thrilled to have you talking about, and talking about not just the skilled labor thing, which is always been your jam, and we understand and appreciate that, but also the national security implications of this is incredibly important. Um, that there's a unique angle in this, which at this time, and I think is going to be more important going forward.

Well, just so you understand, um, you're on camera right now. This has all been recorded. I will take you up on that. And Mary Sullivan is sitting here taking notes, bearing witness. So, we will darken your doorstep again, and, uh, Scott the Marine will hopefully, um, lead us to your office.

Absolutely.

Once again, for, for more enlightenment. What a pleasure to meet you, uh, again, to see you again, and thank you for doing what you're doing. Um, I feel better knowing you're on the case.

Thank you, Mike. It's my pleasure. Appreciate it.

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