Meeting

Is the U.S. Military Industrial Base Prepared?

Wednesday, May 3, 2023
Speakers

Undersecretary of Defense for Acquisition and Sustainment, U.S. Department of Defense

Vice President, Defense Systems Operations, and Executive Director, Center for Space Policy and Strategy, Aerospace Corporation; Former Director, Cost Assessment and Program Evaluation, U.S. Department of Defense; CFR Member

Executive Vice President for Strategy and Policy, National Defense Industrial Association; Counselor, WestExec Advisors; Former Chief of Staff to the Secretary of Defense, U.S. Department of Defense; CFR Member

Presider
Mary Beth Long

Cofounder and Principal, Global Alliance Advisors, LLC; Former Assistant Secretary of Defense, International Security Affairs, Office of the Secretary of Defense, U.S. Department of Defense; CFR Member

Experts discuss the U.S. military's industrial capacity and readiness, if the stress test of the war in Ukraine has illuminated potential areas of weakness,  and whether or not the U.S. industrial base is prepared for future engagements.

LONG: Hi. Welcome, all of you, to CFR today. As you know, we’re here to discuss the U.S. military industrial base, and whether or not we are prepared.

Let me introduce myself. My name is Mary Beth Long. I am former DOD, former CIA, and I guess I’m here today representing my company Global Alliance Advisors but, more importantly, myself, and representing you all to get your questions and hopefully some useful information out there.

Let me go ahead and convene the meeting by announcing that: Welcome to today’s Council on Foreign Relations meeting. For those of you who think you might be on another YouTube or Zoom channel, today is, “Is the U.S. Military Base Prepared?” We’re going to start the discussion now. We’re going to start out with a quick question and answer period. At this time, I’d like to invite members to join our conversation with questions—no. That’s later. OK, great. So send your questions in, yes? OK, great. Let me introduce our panelists here.

We’re really honored today to have Dr. William LaPlante. And Dr. LaPlante is the undersecretary of defense for acquisition and sustainment at the United States Department of Defense. And he joins us today during his lunch hour, I’m betting, so we’re very lucky to have him.

To his left, of course, is James Morin. James is vice president of the Defense Systems Operations, and the executive director for the Center for Space Policy and Strategy of the Aerospace Corporation. He’s also former director of Cost Assessment and Program Evaluation at the Department of Defense. And he’s a CFR member.

And then to his left is Jennifer M. Stewart. Jen is the executive vice president for strategy and policy of the National Defense Industrial Association. She’s also a counselor at WestExec Advisors, where we all fondly think of Michelle Flournoy leading that effort. She’s former chief of staff to the secretary of defense at the Department of Defense. And thank you for making this. I suspect it’s your lunchtime as well.

STEWART: Good to be here.

LONG: Great. Thank you for joining the meeting. I’m going to start out with a question, of course, for the undersecretary, Dr. LaPlante. In today’s strategic peer-to-peer conflict environment, there’s a lot of conversation around town, not only within the think tank community but the national security community, sort of a place where our strategic economics and our strategic security concerns intersect, is our defense—our military-industrial base.

And some concerns that some of the decisions we’ve made over the last decades, whether it’s an inventory on time, or you need to divest to invest, have led us to an issue where with perhaps an unanticipated ground war in Europe that is moving through munitions and some of our industrial base is challenged. At the same time that we’re looking at a possible peer-to-peer conflict with China there are conversations regarding concerns on the industrial base. What is the state, in your mind—you have a front-row seat—of our military-industrial base?

LAPLANTE: Yeah, thank you. And thanks for having me here. It’s great to be on a panel with distinguished guests, including this gentleman to my left, Jamie Morin, who—you know, even though he led CAPE, he’s still a really, really great guy. (Laughter.)

Yeah, so I guess the industrial base is a great question. You know, if you go back to first principles and say, well, what’s the challenge of our time? National Defense Strategy says that China’s the pacing challenge, and we can’t take our eye off that. Almost every—you know, as the secretary says—almost every week we have to come back to that, remind ourselves of that. And that, at the same time, we’ve got the issues, of course, with Ukraine and then the broad industrial base underneath it.

It's not a—there’s not a simple answer. It’s actually—I’ll say a couple things. Number one is, I sometimes find it not helpful to—and sometimes not helpful to use the term “defense-industrial base.” I know—although I know we know what it means, because the industrial base of our country and our allies and partners is so much more intertwined perhaps than people realize. Even when you get below—like, I see Jim Taiclet’s here, or—hi, Jim—below the primes, there’s a lot of—a lot of intermixing between the private sector and between what you traditionally think would be DOD. That’s point one.

Point two, I would say that we are in this—we’re in a year—and I’m hoping this is true—of really a big-time transition in how we think about manufacturing, design, and production, and sustainment in the defense world. And, you know, I think that there was a really good article in the New York Times about a month ago, where the author went back—I think he interviewed Norm Augustine about the Last Supper. Did anybody see that article? He showed the chart of the actual notes that Norm Augustine took after the meeting with Les Aspin?

So this is not an accident. This was—this was—you know, people say, how did this happen? Well, it’s like, no, we planned it. This was deliberately done by the government. It was decided that we were not going to need the industrial base that we had during the Cold War. We were not going to need the shipyards. We were not going to need the arsenals. We were not going to need—fill in the blank. We were going to need from this number to this. And as the article said, in the session Les Aspin said: We’re not going to do it for you. You guys figure it out.

And so, you know, you know, you’ve all see the charts that show the providers go from this in the early ’90s to this. So that wasn’t—that wasn’t just it happened, or we looked the other way, or we forgot about it. That was a deliberate strategy. And you think about the alternative. Think about, no, we should have kept most of those things going, just funded them. I don’t think the country would have accepted that. It wouldn’t have made any sense.

LONG: But if we agree we are where we are, are there challenges—

LAPLANTE: What I was going to say, though, is where we’re going. Where we also went was we went to minimizing inventory. And so that’s where we are right now. So what’s changed now is that we’ve gotten acceptance—I think, broad acceptance politically on we can’t let this happen again. That we did let this go too far. And this goes back decades. And that we need to—need to rebuild and rebuild. And that the other piece of it is really focused on production. We have not focused on production in this country in defense. So that’s where we’re going. Now, we’re in the middle of a pivot. And it’s really kind of exciting to see. There’s actually a lot of really good news going on. So, anyway, that’s my short answer—a longer answer to the question, sorry.

LONG: No, that’s great. And actually, I think what you’re talking about is this a decision and we need strategic patience, if anything.

LAPLANTE: Or impatience. I mean, I’m impatient about it too. But, you know, I’m just thinking about this. When you focus on one thing in production, and in long-lead items and break it down, you can really break a lot of barriers. It just takes focus and you can’t do business as usual. In the 155 situation, it’s a famous one. First of all, I have in front of me, we have provided 1 ½ million 155 rounds to the Ukrainians—1 ½ million. If I had come to one of these events three years ago and said: Hey, guys, we got to do 155 rounds and not talked about AI, you guys would have given me a hard time. So we’ve been able to do that.

The actual production on many of these things is already increasing. It’s double right now even where it was a couple months ago. So there’s a lot that we’re in the process of that’s happening right now, but we have a lot more to do, particularly when it comes to things that would be relevant in the Indo-Pacific.

LONG: That’s terrific. There have been a number of war games that have been talked about in the community that have shown, or purportedly have shown, that our holdings of munitions will be depleted within just the first couple weeks of contact in a scenario where Ukraine is more or less status quo, and China invades Taiwan, just as an example.

Jen, what do you think, to the extent that there are criticism or concerns as—or things that we’re pivoting to avoid, what are the challenges of the current status of the—of the base?

STEWART: Thank you for that. And I will start with where Dr. LaPlante talked about. This is a strategic opportunity and a pivot for the industrial base right now. There’s a couple areas that we’re focusing on right now to support Dr. LaPlante’s efforts with industry. And he also—and I’ll let him talk about it—has Dr. Erin Simpson taking the lead in making sure that we get out of crisis response mode and in more of a proactive, strategic posture with the industrial base. And I want to talk about a couple of areas there.

The first is, when we have talked to the suppliers for the munitions industry, they have highlighted a couple key barriers that they’re worried about right now as we do the multiyear procurements. The first is, we are trying to map for them where we’re seeing a gap between the solicitation and getting on contract, because inflation rates are causing challenges for many of the small suppliers right now. The second is, we are still seeing workforce challenges. And that’s not just in munitions. That’s in the shipyard, the submarine construction industry. And so we’re trying to work with our regional industrial hubs, state, local governments, to see what we can do to augment and support what’s going on on the federal side.

And the third area I want to talk about is supply chains. Both the single points of failure within the domestic production lines and then, to be direct, also some of the challenges we’re seeing on the international side. One of our member companies brought it to my attention yesterday that we really are needing to take a look at a propellent that is a sole source that there’s only one country right now that is able to produce it at volume, at scale. And so this is going to take years, but I think the encouraging point is, is that Ukraine, if there’s any silver lining, has really focused public policy attention, political attention, on some of the structural challenges that industry’s been dealing with for a while. And we need to season, harness that interest in a way that’s constructive and disciplined over the long term.

LONG: I’m going to turn to Jamie in just one minute. The last point that you were raising, that also gets to things like the rare earths and minerals, which are scarce worldwide. Where not only are we competing with the rest of the world, but we’re competing within ourselves for the use of some of the minerals, in particular, that both have, like, industrial commercial application, as well as the defense.

STEWART: Yes. And I know we need to move on, but let me just stay on that point too. High interest on the Hill on rare earth minerals. The next step is to really sit down and have a disciplined approach. And map what the political constraints on domestic production will be, and where we may need to shift some of the supply lines with our friends overseas as well.

LONG: Jamie, I know that you’ve looked at this from a—from a strategic standpoint really globally. And what is your take on the challenges and where we might be going as far as initiatives, and whether they’ll be sufficient, and sort of a strategic-level review?

MORIN: Sure. I mean, let’s back up and elevate a moment, right? We’re talking about the industrial base today. And we’re talking about it in terms that a decade ago we would have called industrial policy. And we would have said that with an eyebrow raised, right, like, can’t go there. We’re having that conversation now and we’re talking in those terms in part because of the searing experience with the COVID pandemic, right, where government had to get enormously more active in both—in all—in a whole bunch of areas of the economy.

But also, and fundamentally because of the PRC challenge, right, if you look at how people were talking about this challenge fifteen years ago, and how they’re talking about it today, look at, you know, individual scholars and experts. Almost everybody probably in this room, almost everybody watching online, has moved in their views and their positions. People have hardened here, and the threat appears more acute. And if we are unable to deter conflict in the Asia-Pacific, it is extremely likely to be a societal level conflict, right? This is not a limited kind of conflict. We would certainly hope it doesn’t escalate—

LONG: All the more reason for us to double-tap on our industrial base now.

MORIN: Exactly. And so the question becomes then, if that’s—if that’s the strategic environment we’re in, the bases of U.S. national power include the traditional industrial base, but it includes a much broader swath of the economy. And if we are going to really be successful in that competition, I think it gets to a kind of core argument, which is we need to be able to first redefine what is international security industrial base to broaden it dramatically.

We need to change how government deals with that industrial base in order to reduce the barriers to, you know, players that are not the traditional players, contributing in a meaningful way. And we need to figure out how to harness our ally and partner advantages, which means both working with them to lower barriers for us to sell to them, and probably the flipside, right? That there’s going to be areas where we’re going to integrate more actively with them.

All three of those have hard issues associated with them. But I think only if we get at that can we—can we really move the needle here. You know, Jake Sullivan has been giving some really interesting speeches lately, right? He was at Brookings last week. Back in the fall, he was at Georgetown. And you hear when he’s out there giving talks this really clear line to mobilizing these different elements of national power and pulling them together.

There are areas where we are not going to be comfortable with reliance, internationally and certainly with potentially unfriendly nations. And there’s areas where we are going to very consciously going to make decisions that we’ve got to be a major step ahead. And in both of those cases, it’s going to require a level of activism that historically is challenging. Bill has been doing this in response to the urgent crisis in Ukraine. And I think it’s tremendous progress. But we got to—we got to do it for the longer-term challenge as well.

LONG: Dr. LaPlante—or, Undersecretary LaPlante—

LAPLANTE: Yeah, Bill. (Laughter.)

LONG: I prefer that, call me Bill.

MORIN: We’ll call you Bill.

LONG: Thanks.

LAPLANTE: Just not late for dinner, you know the drill.

LONG: Bill, Jamie raised some really good points. I mean, if you—if you think about the time constraints of us coming to this realization post-COVID, a real global shock of supply chains, the department has done some amazing things. Would love to hear a couple of examples of how you’ve pivoted, number one. Number two, and I think Jamie and Jen are both alluding to the fact, there’s only so much the Department of Defense can do. Are there things that if you were queen for a day that you would wave your wand beyond the department and have those addressed from a—from a more national perspective?

LAPLANTE: Yeah. Sure, I’ll try to take that on, and be quick here. First, on the lessons from—they’re all tied together, actually. COVID, supply chain, and Ukraine actually are much more continuous topics than people realize, even in the Pentagon. So many people probably in the room know that a lot of the contracting that was done during COVID for the equipment for the respirators, Defense Production Act, even though maybe HHS or somebody’s in front, the contracting was done by the Pentagon. In fact, we were still doing a lot of that contracting up until about a month ago. We had—our rapid reaction contracting teams did most of the contracting for COVID.

So what we did is when Ukraine—we just turned them on this. So we took all the lessons learned from rapid contracting in COVID and the Defense Production Act—you guys remember that was used during COVID—we’re now using the Defense Production Act significantly here when it comes to Ukraine and China. It’s a different world. We were given, back in February, a waiver from the president that in five or six key areas, including critical minerals, that we don’t have to go back to the executive—to the White House for permission. We have the authority to go forward with DPA Title 3 regardless.

There’s been—I’ve got it right in front of me—how much has been in DPA Title 3 alone just in the last year is $800 million, whether it’s on strategic critical materials, missiles, solid rocket launchers. So there’s a lot that’s going on. In fact, I’ve got in front of me how much has actually been put on contracts—

MORIN: And, Bill, DPA Title 3 is when the government’s making seed investments—

LAPLANTE: Yeah, sorry about that. I apologize. Washington-speak. Defense Production Act, it’s been around for a long time. But it allows you—the two types of it that you hear a lot is Title 1, which allows you to prioritize some item higher than something else. So a lot of times we’ve been giving out that Title 1 prioritization for things for Ukraine. Title 3 is actually funding. Now, the funding isn’t used to buy the stuff off the production line. Like in COVID, it wasn’t used to buy vaccines or buy masks. It was used to set up the production lines to increase rates.

So we’ve been using DPA Title 1 and 3 continuously the last year. And I would say most of the contracting—and Jim knows this—that we’ve been doing for Ukraine, we’ve been managing to get the work under contract within weeks, most of the contacting that can be done. We have a few—we took—one contract was too long, but most of them are going pretty fast now. Now, finding—and getting back to your question about suppliers, suppliers and inflation, I’ll just tie that up—it is a real issue. Because even if we do multiyear with a prime, if you’re a supplier and what are you going to sign up for, what’s your inflation assumption? Even if you put an equitable price adjustment with the prime, which is to deal with inflation, how does the prime do it with their supplier?

LONG: It doesn’t necessarily trickle down.

LAPLANTE: No. And so there’s a lot of complexities there. But I think, getting back to what we’ve learned, we’ve learned a lot. And the system is working. And I think people would be surprised at how much it’s working. I spent—and talk about international progress, final point. I spent all last week in Europe. Every day with my equivalents of every NATO country, every contact group. And all we’re talking about together is our industrial base. And I will say a couple things. Number one, it’s going to become a big focus of NATO. All the national armaments directors of NATO, we were together most of last week.

And then the contact group, that’s the group that Secretary Austin has, fifty countries, I met with every one of their NADs on Friday on Ukraine. And we’re all talking and setting up multiyear, multinational contracts. We’re setting up production lines in multiple countries. Everybody’s got the same supply issues. We’re comparing notes. I would say in many ways we’re a little bit ahead. And I don’t say that to say that that’s good news or whatever, meaning I think we’ve been dealing with it for about a year. I think the Europeans are starting to take it on, like, in the last four or five months. You may have seen the EU made the announcement about 2 billion euros for a million 155 rounds. They’re just starting to think about how they would even do that contracting.

So but it is—it’s a different world. And every country sees it this way. The secretary-general of the U.N. sees it this way. It is a different, different world. And right now and Jim and other companies are talking to other countries about setting up production lines there. There are production lines being set up in this country of companies that are European based. It’s just—it’s completely changed.

LONG: Can I ask a quick, Jen. And thank you for that, particularly the recent trip to NATO.

LAPLANTE: Yeah.

LONG: The Defense Production Act, the DPA, and DIANA, which is the defense industrial agreement, I can’t word, that’s being contemplated with NATO—

LAPLANTE: It’s important we have the acronym. We just don’t know what it stands for.

LONG: Yeah, it’s a stupid acronym. Anyway, the agreement for coproduction or for leveraging production with NATO countries and other allies. And I think there’s even one that Congress is at least considering where there would be coincidence of industrial collaboration with Israel. All those are on the table. I was the chair of NATO’s high-level group for nuclear. Love our NATO allies. If we look at our experience with F-35, look at that experience, look at some of the commitments with the lag time with our NATO allies with Ukraine in getting things actually on the ground, there’s certainly optimism but is that going to be enough? The DIANA, the collaboration with our allies, the DPA, from a commercial standpoint, as an investor, I need multiyear or I’ve got a problem with my quarterly reporting and my fiduciary responsibilities to my—to my corporate owners. Jen?

STEWART: So, no. Not without modernization in foreign military sales processes and regulations, ITAR, EAR. Right now we have member companies who are reporting it takes the same amount of time to do business with a major NATO ally, the U.K., with a—as it does with a major non-NATO ally with whom Washington’s having some political challenges right now.

LONG: A decades-long problem.

STEWART: Right.

LONG: Going to address how many times before? (Laughs.)

STEWART: And you and I talked about this beforehand, right? So my optimism in this area is to take advantage of the political will behind AUKUS. It’s a strategic priority for the president—

LONG: For those of us who aren’t familiar with AUKUS, would you mind?

STEWART: So Australia, United Kingdom, United States. There’s two pillars. One is nuclear submarine technology and, ultimately, production for the Australians. Major geostrategic priority for the administration, the absolute right geostrategic priority for the administration. And then pillar two looks at deepening interoperability and cooperation on technology priorities, such as cyber, hypersonics, electronic warfare. These are absolutely the right priorities, but we have member companies right now who are directly reporting that it’s taking months to share technical data between themselves and our Australian allies. It’s taking months and it’s taking the same amount of time, and they can’t distinguish in the interagency process for review trying to work with the United Kingdom in some of these areas and, again, a non-NATO partner, not even ally, with whom Washington has serious political challenges right now.

So the goal of industry is to work through the interagency, and this ties in your piece of DOD is absolutely a strong partner with industry. We’re grateful. We’re grateful for Dr. LaPlante’s leadership. But in these areas, pulling in the State Department, pulling in Commerce, pulling in the political—and harnessing the political will that the White House can bring, and then working with Congress to drive reform, and then make sure that reform gets replicated quickly in the regulatory process is a key challenge, and a key opportunity for us right now.

LONG: Jamie.

MORIN: Yeah, I mean, just to build on where Jen’s going, right? You can go back to those talks that National Security Advisor Sullivan has been doing. You know, he uses metaphors like “a small yard with a high fence” when it comes to questions of export control. We don’t need to control everything. Historically, we’ve controlled way too much, and we’ve made our job harder than it has to be to collaborate. But the stuff we need to control we really need to control. It is very easy for that approach to turn into keep the yard the same size and build the walls taller. And that would be self-defeating. It also would be very easy to not dig the tunnels into the neighbors’ yards that are our buddies, our friends, our allies, our partners, that make it easy for us to exchange things even that are within those walls with them when it makes sense. And so I think we need to do both of those things.

All of this really comes back to this question of how do we broaden that base of support that we can get for U.S. national security purposes? And I think that the allied piece is very important. The building up the traditional, the industrial base is very important. But I think the critical thing is for us to figure out in what areas can we broaden that base to include commercial, industry, and other new entrants?

LONG: So are you arguing—I think one of—for those of you who are familiar with SOCOM’s, Special Operation Command’s, unique authority for rapid development, rapid deployment, they have an ability to reach out into the commercial sector and take COTs, or off-the—commercially oriented technologies and things and redirect it toward a defense and security capability. Are you—are you imagining something like that writ large, or something even broader?

MORIN: I mean, I think that’s an example of the sort of thing I’m discussing. I think it’s got to much more pervasive than that. And the department’s done a lot in this area, right? They’ve aggressively used other transaction authorities to work with nontraditional providers, and traditional providers. There’s a ton going on here. But the way I think about it is—and this will come out wrong—but the easy problems are the COVID and the Ukraine problems, where you have a crisis staring you in the face and you can mobilize, you know, twenty-seven interagency meetings and all the senior leaders in the Department of Defense on a crisis basis. The hard problems are the ones that are indeterminant—at an indeterminant time in the future, and hopefully won’t happen, but might. And that’s why I’m pulling us back to the Pacific conversation here.

In those cases, there’s a lot of long lead choices. So I work day-to-day right now in space. Aerospace is a federally funded research and development center, technical advice to the U.S. space programs across the whole enterprise. Commercial space, probably everybody knows, is going wild. Some commercial space capabilities are super easy for the intelligence community and the Department of Defense to take advantage of. You know, someone’s giving you a new image, that’s not an incredibly hard thing to incorporate into using it. Other things—

LONG: Jaime, I need to give Bill the last word. So I just—

MORIN: No, this will be quick. Other things are much harder and require lead time. And so if we’re doing something that relates to a Pacific challenge and it’s going to take five years to integrate the capability into the stealth bomber, or whatever, we got to make those decisions now. We got to convene those discussions. And we have to have the tactical insight now so that we can make investments and work with new providers, not just old providers, to deliver those capabilities with sufficient lead time. So hopefully we’ll work that all out, Bill.

LONG: Bill, I want to give you the last word.

LAPLANTE: OK.

LONG: Those who are concerned—a couple congressmen just met with CSIS and talked about concerns on our—the status of our industrial base. Think tanks, war gaming, we’re running out of munitions if China attacks Taiwan. What are they missing? And if you could give them three or four takeaways and either say you noted, we’re addressing them, be patient. Or, there are several things I need you to understand as you go forward. What would your takeaway be?

LAPLANTE: Yeah, a couple—first thing, in my—in our engagements with the Hill, both sides of the aisle, uniformly we’re all on the same page. You’d be surprised. We’re all on the same page. I mean, there’s—so I don’t think there’s anything that people are, quote/unquote, “missing.” I think—let me describe what I think the situation is. First of all, I do want to highlight—Meg (sp) said something really important about AUKUS. AUKUS will not work if we don’t have the data sharing piece figured out. And everything she said is exactly right—it’s exactly right.

And one other piece on the FMS in general. We had yet another tiger team look at FMS. I think we were told it was the latest one. And it should be coming out very soon. Basically, the way I took away from all the work done of theirs, there’s two obstacles in FMS. One is getting from the LOR to LOA, which is very bureaucratic, very interagency. That’s where you hear the worst horror stories, usually. But then once you get the LOA, letter of approval, then you’ve got this production problem. Then you go to the back of the line and you’re not getting your thing till 2028, OK?

So if you oversimplify, think about that. Well, the production issue, this goes back to the Hill, what I’m really trying to get folks on the Hill to understand, and they do, is focus—we’ve got to focus on production. Production, production, production. The multiyear contracts—we have to follow through with the multiyear contracts. And, frankly, we’re going to need to resource it. When you look at—one of the things that this accelerator is doing that was mentioned, that Erin Simpson’s leading, is trying to get at this long lead time. Is look at what’s compressible time to do produce something. If you had magically had everything, what is the amount of time it would take?

And then, in select areas, let’s buy enough stuff ahead of time to put those in stock, such that we could surge in these four areas, double our production for six months. We’re actually going through the process of doing—how you would do the requirements. Then, here’s the hard part in Washington, you have to fund it. And we have a habit of not funding those things. The reason industry is very skeptical is they’ve heard it before. And, you know, this is the third or fourth time we’ve run out of munitions in the last twenty years.

So the question is—so, for the Hill, it’s stick with us, let us do the multiyear. And if you think that everybody’s in favor of multiyears, they’re not. There is people that—and for legitimate reasons. But the reason that munitions—Jamie knows more about this than anyone—is because of fungibility. The liquidity of the defense budget is highly prized by people CAPE. (Laughter.) And comptroller types, rightfully so. Well, how do you get liquidity? Operations and Sustainment, flying hours—remember sequester—and the workforce, and munitions. That’s your liquid. That’s your one-year stuff.

So buying four, five years in advance, three, four years, you’re taking away liquidity from people who need it. They’re not going to like it. But the Congress has to commit to it too. And this is not just the authorizers. The appropriators. This takes away liquidity to the appropriators. And I’m not being pejorative about it. It’s a legitimate issue. So Congress needs to help us there. And they also have to say—we’re going to come to them and say: OK, no kidding, you want to have surge capacity for an INDOPACOM? Where we double these four production lines, and double means within a month they’re going to—double means there’s going to happen within a month. We’re going to prebuy all the stuff, we’re going to work with the workforce, with industry. These are the four lines. Here’s the bill. (Laughs.)

LONG: Bill, I’m going to cut you off there, it’s a perfect place, if you don’t mind, and we’ll do—we’ll do questions and answers. That’s a perfect message.

Gentleman in the—there you go. Thank you. Sorry I can’t read your name tag from here.

Q: No, it’s fine. Thank you for your—

LONG: Please introduce yourself first.

Q: Yes, of course. Josh Silverstein, Cybersecurity and Infrastructure Security Agency. An amazing discussion.

Dr. LaPlante, the majority of the U.S. economy, including most critical infrastructure, is outside the DIB. It’s overseen by other federal regulators and its risk is managed generally by other sector risk management agencies. I’m curious, what would you say you’re looking for from the domestic interagency in terms of support? And what, if any, points of tension do you think need to be managed between DOD and the rest of the federal government?

LAPLANTE: Yeah, I don’t know that there’s points of tension. I think where we end up—this is where the dividing line, and not in a bad way, the good way. This happened with the—we just did a bio review, a biotech review. It’s really remarkable and it’s hopefully going to come out soon. We looked at, what is the DOD part of the bio problem, which is protecting our force and our bases, and how does that distinguish from the bio problem, let’s say, HHS has, which is protect the population. And there is a difference. There’s commonalities. There’s difference. That’s sort of how we often look at the infrastructure, the same way. Whereas we worry about our bases, we worry about our families and our warfighters.

And then, of course, the connection to the community, the critical infrastructure, we know is where we interface with these other agencies. I still think that all of us want to make sure that the critical vulnerabilities in our infrastructure, how it interacts with our defense logistics, defense bases, that those are all understood. And I know, having worked at many of these places—at Johns Hopkins, and MITRE, and Draper—you know, this is a longstanding thing, all the issues of getting into critical infrastructure and fixing it. I would just say, we got a lot more work to do. We got a lot more work to do.

And I’ll never forget, one time I was on an undersea warfare study of protecting—using UUVs to protect undersea infrastructure. We started doing this study, and then we realized it was really about protecting the oil undersea infrastructure as well as cables. So we went and we interviewed the oil companies. And said, how do you protect it? And they said, well, no, that’s what we pay taxes for. (Laughter.)

LONG: Should we take a question from the audience on remote?

OPERATOR: We will take our next question from James Gilmore.

Q: Thanks very much for the wonderful presentation. This is an important, topical thing here. And I’m grateful for it. I’m Jim Gilmore. I’m the past governor of Virginia, and immediate past ambassador—United States ambassador to the OSCE in Europe.

My question is going to be to ask the panel to assess the risk increase as a result of what you say you’re doing. What you say you’re doing right now, it’s clear to me, is you’re ramping up and beginning to address the deficiencies that we’ve seen over the last number of years. In the Japanese war in World War II, they were reduced by sanctions in their ability to get aviation fuel and naval fuel. And they also noticed the United States ramping up. And the result was they felt they were out of time. And as a result of that, Pearl Harbor happened.

My question to you is, is the policies you’re discussing here today increase the risk of an immediate attack by the Chinese on Taiwan, because they think that watching you they may be running out of time? Thank you.

LONG: That’s always a fun one for someone to answer. (Laughter.) Undersecretary?

LAPLANTE: Yeah, no, it’s a very valid concern. I mean, we often say that—or, I’ve said and others say, that production itself should be a deterrent. It’s like if you—you know, as I’ve said to people before, if—you know, we’ve been working on hypersonics for a long time. We’re finally getting to production. That’s really when you pay attention, is when you get to production. So I think the thing with China is we have no interest—and I’m just repeating what the administration policy is—no interest in conflict with China, none whatsoever. And we are—we are making sure, though, that our industrial base and our military forces can be a deterrent. That’s where we’re at. And we certainly are not doing it for any other reason. But it is always something that I think is on everybody’s mind, to make sure that we don’t drive behavior that is unintended.

LONG: Great. Jen, you have a policy background, did you want to add something?

STEWART: I do. Ambassador, thank you for the question. It’s strategically important. I would start with the administration’s policy right now on integrated deterrence. And interagency-level policy will set the conditions for that piece of it. But I’m thinking through my head of there are other strategic areas of preparedness, such as neo-operations, where we’re constantly working through what is the—what is the pivot point of if we were to issue an execute order, would that trigger conflict? And what we always come back to is it would be strategic negligence not to be prepared. And I think that applies to the defense industrial base as well.

And as we think about looking at surge capacity too, it’s going to be important to be disciplined and think about it from a simultaneity perspective, which I know is a bit of a third rail in Washington for resourcing reasons. But we need to be careful that we are not so broad in our depth that we’re not deep in our depth in the munition production lines that Dr. LaPlante was talking about too, and that we’re mapping common areas deep into the supply chain that are not going to be just in conflict with different munitions lines, but particularly different sectors of the U.S. economy.

There’s one electrical component right now that is in direct competition with the automobile industry and the cellphone industry. And the timeline is two years. And our consumption rates and our stockpiles are—the planning assumption is six months. And so we can think about that now, we should be thinking about that now, and that doesn’t take away the decision space ultimately from the president, supported by the State Department, supported then by the Department of Defense and other parts of the interagency.

LONG: That’s great. Jen and I had a brief simultaneity conversation before we came in, which is why she looked at me whenever we knew it was the third rail. (Laughter.)

From the side of the room, the gentleman in the yellow tie, please.

Q: Thank you very much. My name is Matt Napoli from Naval Reactors. Thank you for the works on AUKUS. We’re working really hard on pillar one.

The production that you mentioned is incredibly reliant upon the associated workforce, in particular skilled labor. Jamie mentioned this earlier during his remarks. What is the department’s approach to balance between manufacturing capacity increases and skilled workforce and labor?

LAPLANTE: Well, I would say a couple things. And, first of all, it’s come up several times. And it’s right to bring up the workforce. Workforce is an issue broadly in our economy, and it’s an issue in our defense economy. And I would say a couple things. One is, I think most high-tech companies, including defense companies, their voluntary attrition pre-COVID, to post-COVID, to now—let’s just say now—has basically doubled. Or maybe it’s come down a little bit with the economy cooling off. It’s particularly acute, and you would appreciate this, naval reactors and their shipyards. And it’s not just attracting the talent, it’s keeping the talent.

And what’s concerning in some of these places are the demographics of the turnover. It’s not just the raw numbers of the voluntary attribution, but it’s also who is leaving. And it is oftentimes, not always, people who are early career, maybe only been there one or two years. And we still have no—we don’t completely understand this. I mean, there’s people like Jim here who probably can speak more to it. And it’s different by area and geography. But it’s really a problem.

Now, as far as the difference between a skilled worker and a production worker, well, they can be the same thing. If you look at some of the production lines now, though, are getting so automated that perhaps it’s less workforce dependent. But what we’re finding, and this is one of the key things, for example, in the Columbia-class, which is the modernization of the Ohio replacement, has been getting the workforce trained up to be able to take the technical data packages and the instructions that are—that are written down on how to perform a certain act on a design, and go into production, and actually doing it. There’s no replacement for doing it. It’s what’s called the learning curve.

So if all these—with these new workers, that’s what everybody’s going through right now. And it’s a real challenge. I think the other piece that really we’re trying to focus on, it was mentioned earlier about regional governors, what the governors can do to help us. Virginia’s done a lot, by the way, speaking of Virginia.

LONG: My home state.

LAPLANTE: Yes. There’s, like, great welding schools that are going on down in Virginia. There’s—but we’re still not doing enough. So it’s really—it’s probably the key—the key issue for us right now, just in our economy.

LONG: Thank you. Oh, sorry, go ahead, Jamie.

MORIN: Yeah, my boss, Steve Isakowitz, kicked off an effort about a year ago—little over a year ago, called Space Workforce 2030. And it was organized across the space sector on bringing talent in, particularly diverse talent. I mean, in the national security world if the only people that are seeking out those jobs are people that look like Bill and I, we are not going to compete successfully. We need to broaden the base. We need to make it an attractive value proposition for people from all walks of life. We got to knock down barriers that keep young people from seeking technical careers, and from seeking careers that touch national security. And there’s probably a list of ten or twenty things that, if we take them on one by one, we will significantly broaden the ability to reach across the U.S., and again across allies and partners, to get the talent we need. This is—like, this is an existential issue. We’ve got to take this on very seriously.

LONG: I don’t mean to cut you off. We have time for one more question. OK, go ahead, let’s go an internet one.

OPERATOR: We will take another question from Gideon Rose.

Q: Hi. First of all, thank you guys so much. Gideon Rose, fellow here at the Council. This is a wonderful session. And I have become increasingly convinced that this issue is far more important than many others that are sexier and get a lot more attention. So great to have such a high-quality panel on such an important issue. And it’s actually really encouraging to hear you, because I was getting more gloomy.

And on that front—(laughter)—since Undersecretary LaPlante mentioned pipeline security, I guess I want to ask: Who blew up the Nord Stream pipeline? And what are the implications—(laughter)—of that event to our future vulnerabilities?

LAPLANTE: You know, I don’t—I only know what’s in the news. I’m not going to comment—I just know—all I can say is read the news, Google it, decide for yourself.

LONG: Why don’t we just skip the part about who blew it up and go to the infrastructure.

LAPLANTE: You’d be surprised. All kidding aside, I don’t mean to be flip, I apologize if I sounded flip. The transparency of what is actually happening that you can see just from the news and what is released and online, and what is actually going on, it is pretty remarkable, you know, how it is. And it goes back to the pre-invasion, when the U.S. released—declassified, basically, intelligence saying it’s going to invade. I mean, it’s really been—I think if you’re paying attention, if you’re reading the different bloggers, the writers, they’re pretty accurate on what’s going on. They’re pretty accurate. So anyway, I’ll answer that question.

MORIN: Gideon’s point gets us actually to something that comes back to the—to Governor Gilmore’s. Which his, hopefully the PRC is watching the incredibly self-destructive choices that Vladimir Putin made. And conducting aggressive operations, a war of aggression, in today’s information environment, and with the sort of transparency that is out there, is an incredibly dangerous activity. And it is not likely to succeed.

LAPLANTE: At last week’s NATO meeting we had as a full member our Finland counterpart, sitting next—

LONG: Who was that? That has to be one of the first meetings that—

LAPLANTE: It was the first one where she was officially a member of the NAD and a member. We have—they were guests before. Sitting next to me, because I guess I’m United States, I’m near the end, right? It’s alphabetical. Is the one in waiting from Sweden, which we hope we said is going to be on it. You know, was Sweden and Finland going to join NATO a year and a half ago? No.

LONG: What do they bring to the table in industrial base—

LAPLANTE: Oh, my gosh, well, they just doubled—yeah, number one, they doubled the border between NATO and Russia, just for one thing. Number two, the industrial base. Finland, by the way, this gets to a positive example of FMS. I think Jim and I talked about this. I believe that it’s positive FMS F-35 example. Imagine that, right? Altogether it’s actually very positive. Finland is getting sixty-five F-35s—sixty-five, OK? They got their letter of approval in February of 2020. They’re getting their planes I think it’s next year. Wow. How did that happen? Well, it happened because we have a high production line for F-35s. It’s one of the few things that we’re producing in large numbers right now in the Defense Department.

So I use that example to tell people who are concerned about FMS, let’s get our production lines hot and, believe it or not, a lot of this stuff will speed up. And so that’s another thing we really are working on with the Congress, so that they—we tried to get some type of revolving fund done last year, but it didn’t go through. But that’s what we need help with Congress. We can find a way to get companies like Jim’s and others money so that they can get the production lines hotter, even before the FMS case has been approved. That’s what we need.

LONG: That’s remarkable.

LAPLANTE: Yeah.

LONG: How about another question? I’m looking for someone in the back, maybe the young women with the glasses. I apologize.

Q: Hi. My name is Marisol Maddox. I’m with the Woodrow Wilson Center’s Polar Institute.

So there was a recent instance that kind of brought up the issue of energy prioritization around surge capacity. And it was Norway, where Nammo was unable to increase the production of the munitions because of TikTok facility, of all companies, had opened and had already secured the fifteen megawatts of energy that was required.

LONG: Shocking that a Chinese company would have locked that in.

Q: Yeah, it’s interesting. And I think even if this was just kind of a coincidence of, yes, you know, we have a lot of energy demands around datacenters for social media, this could also be something that China sees as a strategic way of, you know, looking at places where there may be increased energy requirements to support the defense industrial base, and looking at potential for, you know, oh, well, we happen to need a site, you know, in this area that was going to need this energy. So can you speak to maybe, like, a way we might think about energy prioritization?

LAPLANTE: Yeah. I think so. I think broadly there was a term—I’ve been on too many Defense Science Board studies, more than I want to admit, and many on supply chain. And we were looking at it about three years ago, right at the beginning of COVID it turned out. And we came across this term that was from a professor, a paper out of MIT, called Weaponized Interdependence. And what the idea was, is that because the world’s all so interdependent, and the economics, that how do you, quote, “weaponize” it. And so we said, OK, that’s fine. Let’s look for real-world cases where we’ve seen countries do something with a supply, with an electrical grid, or something else, to impose their political will on another country?

And actually, one of the first cases, the most prominent one we came up with, was about 2010 there was an incident between the—I think it was because the Japanese and the Chinese over a ship that was detained. Does anybody remember this? And back and forth. And China actually used it—they cut off some type of rare earth that they were providing to Japanese. I forget what it was. And it really caught—it was really pretty nasty. And it went—to this day. It actually caused the Japanese to onshore a lot of processing for rare earths. They learned a better lesson for it, frankly, than others did.

LONG: So they’re a little ahead.

LAPLANTE: Yeah. And so I think it’s this issue of we look at the interdependence and look at where—how could you—how could you use that to weaponize it? And you’ll come across lots of things. You’ll come across ball bearings. You’ll come across solid rocket motors. It was mentioned earlier about 155s. It’s really going to—it’s not going to be the (round ?) or the shell. It’s going to be really about the energetics inside there. And, yes, there is a worldwide search for energetics. There’s 3-D printing of energetics going on. There’s a lot happening there. But, yeah, everybody’s watching very, very carefully as to who’s got the critical supply of what, and then what are you doing as a backup? And it’s been fascinating, with this work with Ukraine, about what each country knows about each other’s supply chain, and what they’re willing to share with each other. Just fascinating.

LONG: Actually, gets to Jamie’s point.

Another question from the back? The gentleman with the glasses.

Q: Great. Eliot Pence with Cambium Biomaterials.

Bill, you famously said tech bros really aren’t helping that much in Ukraine.

LAPLANTE: That was—

Q: That is the literal quote, but I understand kind of that you had—

LAPLANTE: Well, I’m not denying the literal quote. I’m just like, OK.

Q: (Laughs.) So given that, what should they be doing for your central concern, which is production?

LAPLANTE: They are doing—actually, actually, let me just back up a second and say: What was—what I’m referring to, whether it’s people that come from the tech world, or the traditional world, or wherever you come from, try to bring solutions that can be—in the Ukraine context—that can be implemented now. So we’re finding—that’s what I meant. I meant that people—I really wanted people to come forward with solutions now. There are from the technical community solutions now being used. The one that’s got the most attention, of course, is Starlink, OK? So there are really good things that are being used from high tech in Ukraine.

What I was really trying to get—and I’m trying to get people to focus on—is focus on problems that are right now for us as well. And another example is counter-UASs. We want nontraditional companies to help us on counter-UASs. It’s a huge issue you saw in the news, even from Russia this morning. It’s a huge issue in Ukraine. We need help from the nontraditionals there as well. That’s what they need to do. And the other piece of it is everybody should focus on—whatever they’re providing, what if it’s successful? How does it scale? And how does it provide at scale? That’s what I want the technical companies to be thinking about. We want them to be pushing the edge with AI and all the rest of it, but we also want them to be providing this now. That’s all I’m asking of folks.

LONG: I actually was talking ahead of time, when we were talking in the back room with Jen, what your department has done, and what the administration’s done is reaching out to tech, has been remarkable. And what you’ve been able to accomplish, I think, in a short period of time with the—really, the goodwill and the collaboration I think bodes very well for the future.

LAPLANTE: Yeah. We just got a new DIU director who’s starting, like, this week. He’s great. He comes—he’s going to be a huge asset to us. Heidi Shyu and I, my counterpart in R&D, we’re looking all around at these additive manufacturing companies. And we’re going to probably do some demos on solid rocket motor additive manufacturing. We want to show—if you saw this, there was a company out of Southern California that’s in the old C-5 warehouse down in Long Beach that just did a solid rocket motor launch.

I think the first stage of it was bigger than this room. And it was 3-D printed—3-D printed! So we’re looking at these companies and saying: How can we inject some of this stuff in? And a lot of it are nontraditional folks doing it. But they’re not just doing the printing, they’re bringing the materials. They’re actually bringing the materials to the problem. And, by the way, Ukrainians are doing 3-D printing all over the place. We’ve given 150 tech data packages to them. They’re 3-D printing their parts right now in Ukraine.

LONG: Actually, innovation on the ground by the Ukrainians is—

LAPLANTE: It’s remarkable. It’s just incredible what they’re doing.

LONG: Are there another question from the internet then, please?

OPERATOR: We will take our next question from Douglas Ollivant.

LONG: Hey, Doug.

Q: Hey, Mary Beth. Great pleasure.

We’ve all talked about how this—you know, this is not the first time we’ve had this problem. This rhymes very much, I think, with a problem that, you know, happened when Mary Beth and I were in government when Bill Gates came to the Pentagon and was briefed on the MRAP program, and was told, oh, this is a non-program of record. We’ll have something for you in three or four years. And to summarize, he essentially said, no, that’s not going to work, used political capital, and picked it up out of the bureaucracy, and essentially ran it from his office, insisting that this needs to happen and I’m going to personally—you know, he became the program manager for the MRAP, in essence.

Are we at the stage where someone needs to do this? Can the bureaucracy, can the systems really respond in time to increased production in a timely enough manner for the current crisis, you know, let alone were China to pop up, or the Iranians to do something? Does this need to be pulled out of the institutions? And who has the political capital to possibly do that?

LAPLANTE: Yeah. Great question. Hopefully you meant Bob Gates. Bill Gates, I don’t know, maybe he was SecDef as well. (Laughter.)

Q: Definitely Bob.

LAPLANTE: OK. Great. Yeah, we all know the MRAP story and everything, how Secretary Gates was the program manager for MRAPs. No, you don’t need—no, you don’t need that. Here’s what I would say about it. First of all, there’s things happening really fast right now all the time. We just did a thing where it was on a month notice. We called—we told any company to come and demo their counter-UAS system. If it’s successful, if we pass it, in thirty days it’s going to go to Ukraine. We just did that. We just got people on contract. We are right now putting—and we can’t talk about the details of it. Again, Jim Taiclet’s here, he knows some of the systems, that have been MacGyvered—that’s the word of the year—MacGyvered, put together with—where we’re talking a sensor from one thing, an effector from another, we’re doing it with other countries, connecting them together in Ukraine, and they’re using it to shoot down UASs right now.

We are taking—the Harpoon example is probably the best one, but I think we have about five other examples that we can’t tell you. The Harpoon example: We had a country in Europe that had excess Harpoons—or, Harpoons on their Navy ships. They said, we can make these available. We went to that country with the contractor, and we—and they proposed putting it on a flatbed truck—two flatbed trucks, one for the canister it the Harpoon missiles on it, another one for the power supply. Connect them with a cable. It was done in two weeks. The next week, the Ukrainians were trained, and the next week they shot and shank two or three Russian ships. That all happened within a month. That stuff is happening right now.

Here's the thing, though, that Secretary Gates, or Bill Gates whichever one, learned during, I think, MRAPs, is that leadership attention really makes a difference. What we’ve done here is we’ve gone to each service, and because the Army did a lot of the contracting for COVID, coincidentally a lot of the contracting for Ukraine has been done by the Army, because it’s mostly been an Army conflict. We’ve learned that they’ve got this rapid contracting thing down fast. I had another service, I won’t name who it is, one of my favorite services, we gave them a rapid contracting job, it kind of sat there.

LONG: Had to have been the Navy.

LAPLANTE: I’m not going to say who it was.

LONG: Just giving you a hard time. Actually, I apologize, I have to cut you off.

LAPLANTE: OK. Well, I was going to say who it was and now I won’t say it. (Laughter.)

LONG: You know, touché, I deserve that. Listen, I want to thank all the members for participating. Just a reminder, today was on the record. I really want to thank the undersecretary. This is a tough topic. Everyone’s talking about it. You were terrific. And thank you for taking the time and interrupt your day.

LAPLANTE: Oh, thank you. And thanks for doing this. I even see some friends here. Hi, Sam, sorry I couldn’t answer your question. Call me tonight, I’ll answer the phone.

LONG: Sorry, Sam. I didn’t realize. Jamie, Jen, thank you very much. I learned a lot and I hope to work with you again. Thank you very much, ladies and gentlemen. I believe there’s snacks or lunch. (Applause.)

(END)

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