1 00:00:00,080 --> 00:00:03,360 Speaker 1: Hello, od Loots listeners. This is Carmen, producer of the show, 2 00:00:03,400 --> 00:00:05,760 Speaker 1: here to tell you that we're recording the show live 3 00:00:05,880 --> 00:00:09,520 Speaker 1: at the Untitled supper Club in Chicago on September twenty fifth. 4 00:00:09,800 --> 00:00:12,040 Speaker 1: Check out the show notes for a link to purchase tickets, 5 00:00:12,200 --> 00:00:15,360 Speaker 1: or go to Bloomberg dot com slash odd Lots Hope 6 00:00:15,360 --> 00:00:15,880 Speaker 1: to see there. 7 00:00:18,760 --> 00:00:32,479 Speaker 2: Bloomberg Audio Studios, Podcasts, Radio News. 8 00:00:34,560 --> 00:00:38,120 Speaker 3: Hello and welcome to another episode of the Odd Lots Podcast. 9 00:00:38,159 --> 00:00:39,519 Speaker 3: I'm Joe Wisenthal and. 10 00:00:39,479 --> 00:00:40,440 Speaker 4: I'm Tracy Alloway. 11 00:00:40,640 --> 00:00:42,839 Speaker 3: Tracy, did you catch any of the clips from the 12 00:00:42,840 --> 00:00:44,880 Speaker 3: big Chinese military prayer? 13 00:00:44,960 --> 00:00:45,320 Speaker 4: I did? 14 00:00:45,520 --> 00:00:47,959 Speaker 5: I did, so this was the This is actually really 15 00:00:48,000 --> 00:00:49,320 Speaker 5: good timing. So we're recording that. 16 00:00:49,440 --> 00:00:51,000 Speaker 3: They know how to put on a parade. They really 17 00:00:51,080 --> 00:00:52,400 Speaker 3: know how to put on a military prede. 18 00:00:52,440 --> 00:00:54,480 Speaker 4: We're recording this on September fourth. 19 00:00:54,920 --> 00:00:58,920 Speaker 5: We just had a massive military parade in Beijing that 20 00:00:58,960 --> 00:01:01,360 Speaker 5: She Shan being put on. This was while Putin was 21 00:01:01,360 --> 00:01:04,280 Speaker 5: there and also Kim Jong un. And there were tanks, 22 00:01:04,360 --> 00:01:07,040 Speaker 5: there were helicopters. There were lots and lots of drones, 23 00:01:07,280 --> 00:01:09,240 Speaker 5: nuclear capable missiles. 24 00:01:08,880 --> 00:01:11,600 Speaker 4: Or robot ducks, robot wolves, oh. 25 00:01:11,520 --> 00:01:15,360 Speaker 5: Much more sinister. There were also eighty thousand doves to 26 00:01:15,480 --> 00:01:18,040 Speaker 5: mark China's victory in World War Two. And I have 27 00:01:18,080 --> 00:01:20,600 Speaker 5: to say, when I first saw that, I was reading 28 00:01:20,600 --> 00:01:23,880 Speaker 5: a translation of the parade and it said eighty thousand pigeons, 29 00:01:24,440 --> 00:01:26,320 Speaker 5: and I thought, like, wait a second, are we bringing 30 00:01:26,360 --> 00:01:28,880 Speaker 5: back carrier pigeons for military use or what? But it's 31 00:01:28,920 --> 00:01:30,959 Speaker 5: eighty thousand symbolic doves. 32 00:01:30,840 --> 00:01:33,320 Speaker 3: The year of the view that China won World War Two. 33 00:01:33,440 --> 00:01:35,000 Speaker 3: Now that's a joke. I don't want to I'm not. 34 00:01:34,959 --> 00:01:36,800 Speaker 4: Interested in is that what the episode? 35 00:01:36,880 --> 00:01:40,640 Speaker 3: I'm not interested in getting into debates about attribute. It's 36 00:01:40,680 --> 00:01:43,000 Speaker 3: actually I'm not that interested in that topic. I feel 37 00:01:43,000 --> 00:01:45,399 Speaker 3: like that would be a big diversion. But yes, whatever 38 00:01:45,440 --> 00:01:46,880 Speaker 3: I see the I don't know. I don't know anything 39 00:01:46,880 --> 00:01:50,240 Speaker 3: about weapons. I'm like a bad man in that respect. No, 40 00:01:50,320 --> 00:01:51,559 Speaker 3: I feel I'm what happened all. 41 00:01:51,480 --> 00:01:53,760 Speaker 5: The military history books you're reading. I guess those are 42 00:01:53,800 --> 00:01:54,520 Speaker 5: outdated weapons. 43 00:01:54,560 --> 00:01:57,520 Speaker 3: I'm interested in, like sort of the economics of the politics. 44 00:01:57,520 --> 00:02:00,400 Speaker 3: But when I see people posting about, oh, this is 45 00:02:00,400 --> 00:02:05,080 Speaker 3: a fourth gen hypersonic whatever, like, I have no idea. 46 00:02:05,160 --> 00:02:07,440 Speaker 3: It's probably like what some people think about when you 47 00:02:07,520 --> 00:02:10,519 Speaker 3: and I post about, you know, the UK two ten 48 00:02:10,800 --> 00:02:13,760 Speaker 3: linkers spread or something like that. 49 00:02:14,160 --> 00:02:16,160 Speaker 4: You know, it means something something. 50 00:02:17,000 --> 00:02:17,240 Speaker 6: You know. 51 00:02:17,320 --> 00:02:19,400 Speaker 3: It also is like, Okay, a lot of people like 52 00:02:19,400 --> 00:02:22,080 Speaker 3: to flex their knowledge. Again, a lot of men on 53 00:02:22,120 --> 00:02:24,720 Speaker 3: the internet like to flex their knowledge about stuff like that. 54 00:02:24,840 --> 00:02:27,440 Speaker 5: Everyone wants to be an armchair military strategist, oh yeah, 55 00:02:27,480 --> 00:02:28,720 Speaker 5: or procurement specialist. 56 00:02:29,000 --> 00:02:30,720 Speaker 3: Although being said, there are a couple of things that 57 00:02:30,760 --> 00:02:33,200 Speaker 3: I'm interested in. One is sort of did the military 58 00:02:33,240 --> 00:02:36,040 Speaker 3: parade tell us anything new about the state of the 59 00:02:36,160 --> 00:02:39,400 Speaker 3: art of Chinese military technology? But also you know, of course, 60 00:02:39,440 --> 00:02:42,480 Speaker 3: several months ago, there was a sort of brief conflict 61 00:02:42,720 --> 00:02:46,040 Speaker 3: between India and Pakistan that was sort of believe earlier 62 00:02:46,040 --> 00:02:49,120 Speaker 3: in the summer or late spring, and there were battles 63 00:02:49,120 --> 00:02:51,360 Speaker 3: between fighter jets, and for a moment there was a 64 00:02:51,360 --> 00:02:55,240 Speaker 3: lot of question about did this reveal something about the 65 00:02:55,320 --> 00:02:58,040 Speaker 3: state of the art of who has the best air force? 66 00:02:58,120 --> 00:03:00,440 Speaker 3: Who has the best air force technology? And it's like 67 00:03:00,639 --> 00:03:03,000 Speaker 3: pouring over the data to see what we learned, and 68 00:03:03,080 --> 00:03:05,640 Speaker 3: so it is a good time to maybe get a 69 00:03:05,680 --> 00:03:09,440 Speaker 3: temperature check on some of these questions about who has 70 00:03:09,480 --> 00:03:13,800 Speaker 3: the best weapons and the concerns or the anxiety and 71 00:03:13,880 --> 00:03:17,040 Speaker 3: dc about where we stand, where allies stand, and so forth. 72 00:03:17,360 --> 00:03:19,239 Speaker 3: Lots of interesting questions being raised right now. 73 00:03:19,120 --> 00:03:21,080 Speaker 5: Right and there's clearly a lot of angst about the 74 00:03:21,200 --> 00:03:24,480 Speaker 5: US's position in terms of military power right now. I 75 00:03:24,560 --> 00:03:27,040 Speaker 5: gotta say it, when it comes to India Pakistan, everything 76 00:03:27,080 --> 00:03:31,640 Speaker 5: I know about India Pakistan air force tensions comes from 77 00:03:31,720 --> 00:03:33,400 Speaker 5: the Bollywood movie vir Zara. 78 00:03:33,600 --> 00:03:34,360 Speaker 4: Have you ever seen that? 79 00:03:35,040 --> 00:03:37,360 Speaker 5: So basically I don't know a lot, but it's a 80 00:03:37,360 --> 00:03:40,920 Speaker 5: great movie. It actually really encapsulates like Pakistan India. 81 00:03:40,720 --> 00:03:44,280 Speaker 4: Relations quite well. But anyway, screen, yeah, there we go. 82 00:03:44,400 --> 00:03:46,400 Speaker 3: Okay, okay, Well, I'm really excited to say we have 83 00:03:46,400 --> 00:03:48,880 Speaker 3: someone who knows about this much more than the two 84 00:03:48,880 --> 00:03:51,760 Speaker 3: of us. We literally have the perfect guest, someone who've 85 00:03:51,760 --> 00:03:53,680 Speaker 3: wanted to talk to you for a long time. Kelly Griico, 86 00:03:53,800 --> 00:03:57,120 Speaker 3: Senior fellow at the Stimson Center. So, Kelly, thank you 87 00:03:57,160 --> 00:03:59,120 Speaker 3: so much for coming on odd lots. 88 00:03:58,840 --> 00:03:59,960 Speaker 7: Hi, thank you for having me. 89 00:04:00,440 --> 00:04:03,360 Speaker 3: Let's start with the parade. Anything strike you there? 90 00:04:03,720 --> 00:04:06,360 Speaker 6: You know, I think, as an aviation geek, I was 91 00:04:06,400 --> 00:04:10,960 Speaker 6: a little disappointed because we didn't really see any new aircraft. 92 00:04:11,040 --> 00:04:14,600 Speaker 6: There were some support aircraft enabling aircraft they displayed. I 93 00:04:14,640 --> 00:04:17,440 Speaker 6: was really hoping we might see their new sixth generation bomber, 94 00:04:17,560 --> 00:04:20,479 Speaker 6: the Age twenty, but they didn't give us a preview 95 00:04:20,480 --> 00:04:23,080 Speaker 6: of VAT or the aircraft, you know, the six Gen 96 00:04:23,160 --> 00:04:25,760 Speaker 6: fighters that we had seen earlier in this past year, 97 00:04:26,160 --> 00:04:27,840 Speaker 6: so it was sort of the you know, the J 98 00:04:28,000 --> 00:04:31,080 Speaker 6: twenty that their fifth Gen was certainly flying. I'd say 99 00:04:31,080 --> 00:04:33,200 Speaker 6: the biggest takeaway though for me that I was thinking 100 00:04:33,200 --> 00:04:35,680 Speaker 6: about what would a US military parade look like and 101 00:04:35,680 --> 00:04:38,920 Speaker 6: how would that compare to a Chinese military parade, And 102 00:04:39,120 --> 00:04:41,480 Speaker 6: what really struck me was actually the number of on 103 00:04:41,680 --> 00:04:44,240 Speaker 6: manned systems, the drones. I don't think you would see 104 00:04:44,240 --> 00:04:47,200 Speaker 6: that in an American parade to the same degree. And 105 00:04:47,279 --> 00:04:50,120 Speaker 6: also just a variety of types of drones. You know, 106 00:04:50,160 --> 00:04:51,960 Speaker 6: if you were having the Air Force do a parade 107 00:04:51,960 --> 00:04:53,560 Speaker 6: and you said, okay, you have to come out with 108 00:04:53,640 --> 00:04:56,280 Speaker 6: you know, your drones, we would see really high end 109 00:04:56,320 --> 00:04:59,120 Speaker 6: capabilities that look more like fighter aircraft, and we might 110 00:04:59,160 --> 00:05:02,960 Speaker 6: see some of the SMA drones, but really not anything 111 00:05:03,000 --> 00:05:05,880 Speaker 6: in between as much. And that's the space where China 112 00:05:06,000 --> 00:05:09,400 Speaker 6: is clearly developing that in between space in particular to 113 00:05:09,440 --> 00:05:11,000 Speaker 6: have a lot of options in variety. 114 00:05:11,360 --> 00:05:13,760 Speaker 5: Yeah, so one of the things we did see was 115 00:05:14,080 --> 00:05:17,359 Speaker 5: a new like unmanned air vehicle. I think it was 116 00:05:17,400 --> 00:05:20,520 Speaker 5: called like loyal wingman or something like that. It does 117 00:05:20,560 --> 00:05:23,000 Speaker 5: seem that China is putting more emphasis on, i guess, 118 00:05:23,080 --> 00:05:27,160 Speaker 5: like a sort of holistic approach to its air capabilities, 119 00:05:27,200 --> 00:05:30,240 Speaker 5: where like maybe some of the traditional aircraft are basically 120 00:05:30,279 --> 00:05:34,120 Speaker 5: playing support roles for drones and vice versa. Is that 121 00:05:34,160 --> 00:05:35,760 Speaker 5: the direction that they seem to be going in. 122 00:05:36,200 --> 00:05:38,960 Speaker 6: Yeah, I think that is actually a fair conclusion to say, 123 00:05:39,000 --> 00:05:42,440 Speaker 6: which given the emphasis they placed on drones, and that 124 00:05:42,520 --> 00:05:45,120 Speaker 6: word these days is almost it's really useful, and in 125 00:05:45,120 --> 00:05:48,000 Speaker 6: some ways it's not. It means different things to different people, 126 00:05:48,080 --> 00:05:49,840 Speaker 6: but I'm going to use it just to mean that 127 00:05:49,880 --> 00:05:54,480 Speaker 6: there's not a human being inside the platform. So we saw, 128 00:05:54,720 --> 00:05:57,400 Speaker 6: you know, cross domains, the air domain, the sea domain, 129 00:05:57,600 --> 00:06:00,320 Speaker 6: the land domain, lots of these kinds of drones, and 130 00:06:00,400 --> 00:06:02,640 Speaker 6: it does seem that they're moving towards a model where 131 00:06:02,720 --> 00:06:05,520 Speaker 6: they lead with the drones and the human beings are 132 00:06:05,720 --> 00:06:08,640 Speaker 6: more in a role of enabling that as opposed to 133 00:06:08,680 --> 00:06:12,119 Speaker 6: perhaps the drones helping to support or enable the human 134 00:06:12,160 --> 00:06:13,320 Speaker 6: beings that are operating. 135 00:06:13,520 --> 00:06:15,919 Speaker 7: And so that is quite a different model potentially. 136 00:06:16,400 --> 00:06:18,400 Speaker 5: Joe, there's one thing we should say before we go 137 00:06:18,480 --> 00:06:21,800 Speaker 5: any further, which is I know European defense stocks have 138 00:06:21,800 --> 00:06:24,320 Speaker 5: gotten all the attention this year, but actually, if you 139 00:06:24,360 --> 00:06:27,440 Speaker 5: look at Chinese defence stocks, they went absolutely crazy. So 140 00:06:27,720 --> 00:06:30,359 Speaker 5: pull up I wrote this down earlier. Pull up Avic 141 00:06:30,680 --> 00:06:36,760 Speaker 5: Chingdu Aircraft. Okay, so that had a massive run up 142 00:06:36,800 --> 00:06:40,520 Speaker 5: this year. It's come down basically since the military parade, 143 00:06:40,560 --> 00:06:42,880 Speaker 5: but it's still up like fifteen percent year today. And 144 00:06:42,920 --> 00:06:46,560 Speaker 5: in general, Chinese defence stocks have been outperforming the broader markets. 145 00:06:46,640 --> 00:06:50,120 Speaker 5: So you can see people are getting excited about defense. 146 00:06:50,279 --> 00:06:53,200 Speaker 3: In January twenty twenty three, this was a ten dollars 147 00:06:53,279 --> 00:06:56,279 Speaker 3: un stock. Now it's at eighty three, so yeah, it's 148 00:06:56,279 --> 00:06:59,560 Speaker 3: not just Europe that's rallying. You mentioned your disappointment. What 149 00:06:59,680 --> 00:07:02,400 Speaker 3: was it this sixth gen plane that they didn't show? 150 00:07:02,680 --> 00:07:04,680 Speaker 3: What do these things mean? I see this, Oh they're 151 00:07:04,720 --> 00:07:07,120 Speaker 3: unveiling their fifth gen plane, their sixth gen plane. Where 152 00:07:07,400 --> 00:07:10,880 Speaker 3: are gens? Generations? Are they comparable? Are they like for like? 153 00:07:10,920 --> 00:07:13,880 Speaker 3: Are these useful terms? Talk to us about what these 154 00:07:13,960 --> 00:07:16,120 Speaker 3: terms mean and how you understand them or how you 155 00:07:16,160 --> 00:07:16,640 Speaker 3: state them. 156 00:07:16,840 --> 00:07:18,800 Speaker 6: Yeah, so this is a great question. You know, we 157 00:07:18,880 --> 00:07:21,440 Speaker 6: talk a lot about generations. I'd like to think that 158 00:07:21,520 --> 00:07:24,360 Speaker 6: you know, say that these are scientific terms that are 159 00:07:24,440 --> 00:07:27,200 Speaker 6: used with these very clear criteria. The reality is that's 160 00:07:27,240 --> 00:07:30,920 Speaker 6: not entirely the case, and people will even disagree about 161 00:07:31,200 --> 00:07:33,720 Speaker 6: what aircraft whether it belongs in you know, fifth gen 162 00:07:33,800 --> 00:07:36,400 Speaker 6: or fourth gen. But what basically what we try to 163 00:07:36,440 --> 00:07:39,920 Speaker 6: do with the generational term is group aircraft together where 164 00:07:39,920 --> 00:07:44,200 Speaker 6: it seems like there's some leap or magnitude difference in 165 00:07:44,280 --> 00:07:47,240 Speaker 6: terms of the kinds of capabilities it has. So if 166 00:07:47,280 --> 00:07:49,680 Speaker 6: you look at fourth gen, which was developed mostly in 167 00:07:49,720 --> 00:07:53,360 Speaker 6: the seventies, it was really the emphasis was on maneuverability 168 00:07:53,480 --> 00:07:56,240 Speaker 6: and being able to dog fight, whereas when you get 169 00:07:56,240 --> 00:07:58,920 Speaker 6: to the fifth gen, this is when we see stealth, 170 00:07:59,160 --> 00:08:02,360 Speaker 6: the aircraft that look much more futuristic. The weapon bays 171 00:08:02,400 --> 00:08:05,040 Speaker 6: are internal to try to help with that stealth, and 172 00:08:05,080 --> 00:08:07,480 Speaker 6: then we also see the start of really these turning 173 00:08:07,520 --> 00:08:11,840 Speaker 6: into much more computer based systems with sensors and trying 174 00:08:11,880 --> 00:08:14,360 Speaker 6: to integrate some of these sensors. That's where like the 175 00:08:14,400 --> 00:08:16,880 Speaker 6: F thirty five the F twenty two come in. And 176 00:08:16,960 --> 00:08:20,080 Speaker 6: now the reality is those aircraft which develops a twenty 177 00:08:20,160 --> 00:08:23,400 Speaker 6: years ago, we're now moving into the sixth generation, which 178 00:08:23,440 --> 00:08:25,600 Speaker 6: is a continuation of the stealth and I'll just say 179 00:08:25,600 --> 00:08:28,240 Speaker 6: there's two really defining features for six gen. 180 00:08:28,680 --> 00:08:29,600 Speaker 7: One is that. 181 00:08:29,520 --> 00:08:32,320 Speaker 6: It's tail us it doesn't have a vertical tail to 182 00:08:32,400 --> 00:08:34,920 Speaker 6: again improve with that stealth also help with range. 183 00:08:35,320 --> 00:08:36,880 Speaker 7: And then the other part of it is. 184 00:08:36,800 --> 00:08:39,080 Speaker 6: Something that you mentioned earlier, which is this loyal wingman 185 00:08:39,200 --> 00:08:42,480 Speaker 6: concept that it won't just be a manned fighter, you know, 186 00:08:42,520 --> 00:08:45,079 Speaker 6: with a human inside, but that will also be cooperating 187 00:08:45,080 --> 00:08:48,480 Speaker 6: with these really high end drones that are capable operating 188 00:08:48,520 --> 00:08:50,240 Speaker 6: either alongside it or ahead of it. 189 00:08:50,559 --> 00:08:52,160 Speaker 3: By the way, Tracy, we have to say I'm not 190 00:08:52,200 --> 00:08:55,760 Speaker 3: totally surprised that there is not nice definitions of various gins. 191 00:08:55,800 --> 00:08:57,680 Speaker 3: And the only reason I say that is because based 192 00:08:57,679 --> 00:09:01,600 Speaker 3: on our semiconductor episodes, you can't even get consistent definitions 193 00:09:01,640 --> 00:09:04,200 Speaker 3: of like what is a four nanometer? And so if 194 00:09:04,200 --> 00:09:07,240 Speaker 3: you can't even get an agreed upon definition of what 195 00:09:07,400 --> 00:09:10,000 Speaker 3: is this sort of nanometer size and a chip, I'm 196 00:09:10,040 --> 00:09:12,520 Speaker 3: not surprised that there is not agreed upon definitions of 197 00:09:12,559 --> 00:09:15,480 Speaker 3: things more vague like a generation of aircraft technology. 198 00:09:15,559 --> 00:09:19,560 Speaker 5: Absolutely, on this note, when it comes to developing new aircraft, 199 00:09:19,720 --> 00:09:23,319 Speaker 5: is it mostly an iterative process, like we just improve 200 00:09:23,440 --> 00:09:25,960 Speaker 5: upon the existing technology, And I guess like what's the 201 00:09:26,000 --> 00:09:28,680 Speaker 5: catalyst or the decision that goes into you know what, 202 00:09:28,760 --> 00:09:32,000 Speaker 5: we're going to scrap this existing design it's no longer 203 00:09:32,160 --> 00:09:35,400 Speaker 5: useful or whatever. We're going to start something entirely new. 204 00:09:35,880 --> 00:09:39,079 Speaker 6: Yeah, those are great questions once the air force itself 205 00:09:39,160 --> 00:09:41,880 Speaker 6: is often wrestling with. I would just say one thing 206 00:09:42,000 --> 00:09:44,520 Speaker 6: that you ask about is this sort of iterative improvements 207 00:09:44,520 --> 00:09:46,760 Speaker 6: on technology, And the answer to that when it comes 208 00:09:46,760 --> 00:09:50,000 Speaker 6: to fighter aircraft and bombers is yes. I was thinking 209 00:09:50,080 --> 00:09:52,320 Speaker 6: about this, you know, preparing for this podcast and thinking 210 00:09:52,320 --> 00:09:55,520 Speaker 6: about the historical development of fighter aircraft, and you go 211 00:09:55,640 --> 00:09:57,559 Speaker 6: back and look, it really hasn't. 212 00:09:57,360 --> 00:09:59,080 Speaker 7: In some sense, it hasn't changed that much. 213 00:09:59,280 --> 00:10:01,400 Speaker 6: You know, the mission that these aircraft were doing in 214 00:10:01,440 --> 00:10:03,839 Speaker 6: World War One and World War Two, you know, trying 215 00:10:03,880 --> 00:10:07,040 Speaker 6: to clear the air space of other aircraft, trying to 216 00:10:07,080 --> 00:10:11,440 Speaker 6: support you know, ground forces or surface forces through attacks 217 00:10:11,440 --> 00:10:14,760 Speaker 6: on the ground, delivering effects. That hasn't really changed. The 218 00:10:14,800 --> 00:10:17,679 Speaker 6: missions haven't really changed for these aircraft. And you know, 219 00:10:17,760 --> 00:10:19,920 Speaker 6: once you get to you know, certainly, you know, second 220 00:10:19,960 --> 00:10:22,920 Speaker 6: third generation, they start to look like fighter modern fighter 221 00:10:22,920 --> 00:10:26,080 Speaker 6: aircraft to the naked eye, and so each generation is 222 00:10:26,200 --> 00:10:30,480 Speaker 6: improving in some way iteratively, the technology this is evolution, 223 00:10:30,720 --> 00:10:34,240 Speaker 6: not revolution in terms of the technological developments. Even things 224 00:10:34,280 --> 00:10:37,640 Speaker 6: like stealth right, we see that, as you know, often revolutionary, 225 00:10:37,760 --> 00:10:41,520 Speaker 6: but it's really an improvement on the existing technology. And 226 00:10:42,160 --> 00:10:45,880 Speaker 6: because it's evolution and not revolution, in terms of capabilities 227 00:10:45,880 --> 00:10:47,680 Speaker 6: that are being added, there's marginal gains. 228 00:10:48,000 --> 00:10:50,200 Speaker 7: So the more you're trying to improve. 229 00:10:49,880 --> 00:10:54,040 Speaker 6: This existing technology and sort of extend this existing technology, 230 00:10:54,440 --> 00:10:57,920 Speaker 6: the costly or it's becoming but you're getting perhaps less 231 00:10:58,040 --> 00:11:01,120 Speaker 6: in terms of the actual capabilities that gaining each time. 232 00:11:01,480 --> 00:11:04,000 Speaker 6: So it's becoming more and more expressive to create a 233 00:11:04,000 --> 00:11:07,920 Speaker 6: new generation with more fancy tech. And then that raises 234 00:11:08,360 --> 00:11:11,120 Speaker 6: the question that their second question, which is when do 235 00:11:11,160 --> 00:11:14,080 Speaker 6: you decide, okay, it's worth investing in a new aircraft 236 00:11:14,360 --> 00:11:18,559 Speaker 6: with new technology versus trying to extend existing aircraft. You know, 237 00:11:18,640 --> 00:11:22,360 Speaker 6: there was talk, for example, of taking US fitzgeneration aircraft 238 00:11:22,360 --> 00:11:24,600 Speaker 6: like the F thirty five, the F twenty two and 239 00:11:24,720 --> 00:11:28,240 Speaker 6: pairing those with these you know, high end drones that 240 00:11:28,280 --> 00:11:31,520 Speaker 6: are called collaborative combat aircraft, pairing them together to this 241 00:11:31,800 --> 00:11:34,560 Speaker 6: manned unman teaming or do you really need a whole 242 00:11:34,640 --> 00:11:38,840 Speaker 6: new manned fighter aircraft to operate alongside those? Is it 243 00:11:38,880 --> 00:11:41,600 Speaker 6: worth the investment, and so those are hard choices in 244 00:11:41,640 --> 00:11:43,400 Speaker 6: terms of what you really think you're gaining in terms 245 00:11:43,440 --> 00:11:46,760 Speaker 6: of capability with a new aircraft versus trying to sustain 246 00:11:46,800 --> 00:11:49,240 Speaker 6: what you have in terms of maintenance costs. 247 00:11:48,880 --> 00:11:50,640 Speaker 7: And the ability to upgrade those systems. 248 00:11:51,040 --> 00:11:53,600 Speaker 3: So obviously we don't know that much about the sixth 249 00:11:53,679 --> 00:11:55,960 Speaker 3: gen jet in China. I know there were like a 250 00:11:56,000 --> 00:11:58,320 Speaker 3: few clips that were on the internet several months ago, 251 00:11:58,440 --> 00:12:01,559 Speaker 3: and people like yourself tried to divine as much as 252 00:12:01,600 --> 00:12:04,720 Speaker 3: you could based on a few seconds of video, and 253 00:12:04,760 --> 00:12:07,360 Speaker 3: I'm sure you learned something. Although to the naked I 254 00:12:07,520 --> 00:12:09,240 Speaker 3: was like, it looks like a plane to make you 255 00:12:09,320 --> 00:12:09,760 Speaker 3: just love. 256 00:12:09,640 --> 00:12:13,120 Speaker 7: That the Chinese has happened to be you fly over cities. 257 00:12:13,280 --> 00:12:16,280 Speaker 3: Yeah yeah, But where do we stand here, like from 258 00:12:16,320 --> 00:12:19,199 Speaker 3: the you inside the Pentagon or at the Air Force, 259 00:12:19,200 --> 00:12:21,640 Speaker 3: et cetera. When they see those same videos and they 260 00:12:21,679 --> 00:12:24,880 Speaker 3: know where we're at, what do people feel about where 261 00:12:24,960 --> 00:12:27,440 Speaker 3: the US stands in comparison to China right now in 262 00:12:27,480 --> 00:12:29,520 Speaker 3: terms of our cutting edge versus their cutting age? 263 00:12:29,800 --> 00:12:30,040 Speaker 7: Yeah? 264 00:12:30,080 --> 00:12:31,600 Speaker 6: So you know, I think the truth is that you 265 00:12:31,720 --> 00:12:34,319 Speaker 6: get different answers from different people, and sometimes I think 266 00:12:34,320 --> 00:12:37,679 Speaker 6: that might also reflect different interests that they have in 267 00:12:37,720 --> 00:12:41,000 Speaker 6: the development of six gen aircraft. Just as a caveat, 268 00:12:41,080 --> 00:12:43,240 Speaker 6: let me just say that the Chinese actually demonstrated what 269 00:12:43,280 --> 00:12:46,760 Speaker 6: looked like two six gen aircraft in late December to 270 00:12:46,840 --> 00:12:50,000 Speaker 6: Mark Miles's birthday. You know, one that looks like it 271 00:12:50,080 --> 00:12:53,080 Speaker 6: might be more of a fighter bomber was much larger 272 00:12:53,200 --> 00:12:55,400 Speaker 6: the J thirty six, and another that looks more like 273 00:12:56,120 --> 00:12:58,880 Speaker 6: you know, a fighter aircraft in terms of size and things. 274 00:12:58,880 --> 00:13:01,440 Speaker 6: That ja what people are calling the We don't know 275 00:13:01,440 --> 00:13:03,520 Speaker 6: a lot about those aircraft. My guess is that they 276 00:13:03,559 --> 00:13:06,760 Speaker 6: were demonstrator aircraft, not things that are operational and production 277 00:13:06,840 --> 00:13:10,040 Speaker 6: that they're very early in their flight process and testing. 278 00:13:10,520 --> 00:13:12,320 Speaker 6: You know, you heard a lot of people saying, oh, 279 00:13:12,400 --> 00:13:15,679 Speaker 6: look see we're behind. They're flying these aircraft already, the 280 00:13:15,760 --> 00:13:17,880 Speaker 6: six gen. But the reality is the United States has 281 00:13:17,880 --> 00:13:20,480 Speaker 6: been lying six gen what we know about since at 282 00:13:20,559 --> 00:13:24,920 Speaker 6: least twenty twenty its own demonstrator aircraft. So I don't 283 00:13:24,960 --> 00:13:27,120 Speaker 6: think the United States is actually behind in terms of 284 00:13:27,120 --> 00:13:31,040 Speaker 6: six gen technology. Same thing with the collaborative combat aircraft, 285 00:13:31,120 --> 00:13:33,320 Speaker 6: the drone portion. I think we're actually ahead in that, 286 00:13:33,520 --> 00:13:36,719 Speaker 6: probably against China. On the exquisite side of things, the 287 00:13:36,800 --> 00:13:40,199 Speaker 6: United States, I think is ahead of China, And certainly 288 00:13:40,520 --> 00:13:43,160 Speaker 6: there was already a discussion happening about whether to proceed 289 00:13:43,200 --> 00:13:46,000 Speaker 6: with the six gen air Force aircraft, a fighter aircraft 290 00:13:46,000 --> 00:13:49,160 Speaker 6: which is now called the F forty seven. China flew 291 00:13:49,200 --> 00:13:51,400 Speaker 6: it around the time that the decision was being made. 292 00:13:51,640 --> 00:13:54,640 Speaker 6: That Trump administration decided to go ahead with it. So 293 00:13:54,679 --> 00:13:58,040 Speaker 6: we're continuing with the development of our own six gen 294 00:13:58,080 --> 00:14:00,599 Speaker 6: fighter aircraft. We already have a six gen bomber, the 295 00:14:00,679 --> 00:14:03,520 Speaker 6: B twenty one, So we're ahead of the Chinese certainly there. 296 00:14:03,880 --> 00:14:06,280 Speaker 6: So I don't think we're certainly behind. The issue might 297 00:14:06,320 --> 00:14:09,840 Speaker 6: be it's not justly who gets there first in the 298 00:14:09,920 --> 00:14:12,840 Speaker 6: terms of sixth gen, but who's able to really scale up? 299 00:14:13,040 --> 00:14:14,800 Speaker 6: And I think that's when we maybe should be a 300 00:14:14,840 --> 00:14:17,880 Speaker 6: little bit more concerned about China, is their ability to 301 00:14:17,960 --> 00:14:19,720 Speaker 6: scale might be quite greater. 302 00:14:35,240 --> 00:14:39,040 Speaker 3: Tracy, there's this very good book, Wages of Destruction. 303 00:14:39,960 --> 00:14:41,640 Speaker 4: No, but I thought you're gonna say movie Tech. 304 00:14:42,600 --> 00:14:44,080 Speaker 3: You never know what should have got thrown you. Of 305 00:14:44,120 --> 00:14:45,720 Speaker 3: the three books that I've read in my entire. 306 00:14:45,600 --> 00:14:47,440 Speaker 4: Life, what's the third one? I don't know. 307 00:14:48,240 --> 00:14:50,720 Speaker 3: Morality and Literacy by Walter onol Oh. Yeah, did you 308 00:14:50,720 --> 00:14:53,920 Speaker 3: bring that up a lot, but wars are one obviously 309 00:14:53,920 --> 00:14:56,520 Speaker 3: partly on the advanced tech, but also on just the 310 00:14:56,560 --> 00:14:59,960 Speaker 3: ability to produce at scale, which is of course made 311 00:15:00,080 --> 00:15:01,480 Speaker 3: your concern here. 312 00:15:01,520 --> 00:15:05,000 Speaker 5: Well, wait, does that actually apply to fighter jets? So 313 00:15:05,240 --> 00:15:08,360 Speaker 5: does quantity matter in air combat in the sense that 314 00:15:08,560 --> 00:15:11,840 Speaker 5: you know, if I have like one hundred make twenty 315 00:15:11,880 --> 00:15:16,280 Speaker 5: ones or something really outdated, can I actually succeed against 316 00:15:16,320 --> 00:15:20,040 Speaker 5: like one F forty seven, the new, like next generation 317 00:15:20,160 --> 00:15:20,760 Speaker 5: fighter jet. 318 00:15:21,400 --> 00:15:21,640 Speaker 7: Yeah. 319 00:15:21,640 --> 00:15:23,600 Speaker 6: So this is something the United States again has debated 320 00:15:23,640 --> 00:15:25,600 Speaker 6: for a long time when we go back to the 321 00:15:25,600 --> 00:15:28,600 Speaker 6: Cold War and the Soviets and we're facing an enemy 322 00:15:28,600 --> 00:15:31,840 Speaker 6: that had a quantitative advantage. They're just able to produce 323 00:15:32,000 --> 00:15:34,400 Speaker 6: more numbers, more people. And one of the things the 324 00:15:34,480 --> 00:15:36,520 Speaker 6: United States decided to do is to develop what's called 325 00:15:36,520 --> 00:15:38,960 Speaker 6: an offset strategy, and it did try to gain an 326 00:15:39,000 --> 00:15:42,200 Speaker 6: advantage through quality, a quality advantage in terms of the 327 00:15:42,240 --> 00:15:45,320 Speaker 6: technology to make up for the lack of numbers. And 328 00:15:45,360 --> 00:15:47,880 Speaker 6: so to some extent, yes, you can do that, but 329 00:15:48,000 --> 00:15:51,200 Speaker 6: there comes a point in which you can't make up. 330 00:15:51,080 --> 00:15:53,560 Speaker 7: For a lack of simple mass in numbers. You know. 331 00:15:53,640 --> 00:15:55,280 Speaker 6: One of the challenges I would just say is against 332 00:15:55,360 --> 00:15:59,600 Speaker 6: China is they may have a sufficient quality and quantity 333 00:15:59,680 --> 00:16:01,240 Speaker 6: right that you know, it's a little bit of a 334 00:16:01,280 --> 00:16:03,760 Speaker 6: different kind of adversary in that way, but in just 335 00:16:03,760 --> 00:16:05,320 Speaker 6: in terms of how much you can make up for it, 336 00:16:05,360 --> 00:16:07,240 Speaker 6: I think there are a couple things that are specific 337 00:16:07,440 --> 00:16:09,800 Speaker 6: as well to the end of Pacific theater that make 338 00:16:09,840 --> 00:16:13,760 Speaker 6: it harder to operate with a smaller number of exquisite, 339 00:16:13,920 --> 00:16:17,240 Speaker 6: high end platforms, even if they're enormously capable. I would 340 00:16:17,280 --> 00:16:20,360 Speaker 6: say one is just simply that air warfare itself has changed, 341 00:16:20,640 --> 00:16:24,680 Speaker 6: and so particularly with the sensors that are now available, 342 00:16:24,720 --> 00:16:26,680 Speaker 6: you know, and all kinds of domains to be able 343 00:16:26,720 --> 00:16:28,960 Speaker 6: to look for these aircraft and try to find them, 344 00:16:29,080 --> 00:16:32,240 Speaker 6: you know, the threat environment has changed, and that having 345 00:16:32,240 --> 00:16:35,520 Speaker 6: a small number of very expensive aircraft is inherently kind 346 00:16:35,520 --> 00:16:38,640 Speaker 6: of fragile because if you start losing some of these, 347 00:16:38,880 --> 00:16:42,680 Speaker 6: you started treating significant amounts of capability very quickly, and 348 00:16:42,760 --> 00:16:45,800 Speaker 6: with the kinds of sensors and the kind of surface 349 00:16:45,800 --> 00:16:49,360 Speaker 6: to air missiles air defense systems that China's developed, that 350 00:16:49,480 --> 00:16:52,280 Speaker 6: kind of threat environment that's more likely to happen. So 351 00:16:52,320 --> 00:16:54,400 Speaker 6: that's one, and then the second I would just say 352 00:16:54,440 --> 00:16:57,640 Speaker 6: is that an aircraft cannot be in two places at once. 353 00:16:58,120 --> 00:17:00,560 Speaker 6: I know that seems pretty obvious, but in the end 354 00:17:00,560 --> 00:17:03,400 Speaker 6: of Pacific this really matters because of the ranges. 355 00:17:03,000 --> 00:17:03,920 Speaker 7: We're talking about. 356 00:17:04,280 --> 00:17:07,280 Speaker 6: You know, fighter aircraft were originally developed for the European theater, 357 00:17:07,800 --> 00:17:10,080 Speaker 6: and you see that reflected in the kinds of ranges. 358 00:17:10,119 --> 00:17:12,439 Speaker 6: So they have a range often of around like on average, 359 00:17:12,480 --> 00:17:16,160 Speaker 6: about six hundred nautical miles without aerial refueling. That works 360 00:17:16,200 --> 00:17:19,520 Speaker 6: great in Europe because there are plenty of airfields you 361 00:17:19,520 --> 00:17:22,359 Speaker 6: can land at back up airfields and to be able 362 00:17:22,400 --> 00:17:24,840 Speaker 6: to you know, even on the ground get refueled. In 363 00:17:24,880 --> 00:17:27,199 Speaker 6: the end of Pacific, you know, if you look at 364 00:17:27,240 --> 00:17:31,560 Speaker 6: like a Taiwan's contingency, potentially you can maybe operate fighters 365 00:17:31,600 --> 00:17:35,080 Speaker 6: from say Okinawa, US fighters from Okinawa without aero refueling. 366 00:17:35,400 --> 00:17:36,200 Speaker 7: Even if you were to. 367 00:17:36,160 --> 00:17:39,280 Speaker 6: Operate them from other places in Japan, the main island 368 00:17:39,280 --> 00:17:42,000 Speaker 6: of Japan, you would need aerial refueling in order to 369 00:17:42,040 --> 00:17:44,720 Speaker 6: be able to get to the theater of operations in return. 370 00:17:45,280 --> 00:17:48,720 Speaker 6: And so when you need that kind of air refueling capability, 371 00:17:49,080 --> 00:17:51,639 Speaker 6: but you also have a traveling these longer distances, it 372 00:17:51,640 --> 00:17:54,720 Speaker 6: means you can't do as many sorties every day or 373 00:17:55,119 --> 00:17:57,800 Speaker 6: limits to number of sorties. You need more aircraft just 374 00:17:57,840 --> 00:18:00,680 Speaker 6: to be able to even create some kind of consistent 375 00:18:00,800 --> 00:18:03,560 Speaker 6: presence in the area of operations. 376 00:18:04,200 --> 00:18:06,760 Speaker 7: So you know, mass does matter in certain ways. 377 00:18:06,880 --> 00:18:08,639 Speaker 6: And this is I think something we're seeing, you know 378 00:18:08,680 --> 00:18:10,320 Speaker 6: in Ukraine, you know we've seen it. 379 00:18:10,359 --> 00:18:11,600 Speaker 7: I think even in the Middle East. 380 00:18:11,680 --> 00:18:14,639 Speaker 6: It's kind of returned back to that time when you 381 00:18:14,640 --> 00:18:17,920 Speaker 6: know industrial scale matters, particularly in great power of congleics. 382 00:18:18,160 --> 00:18:21,480 Speaker 5: That makes sense. Can I ask this a slightly personal question, 383 00:18:21,560 --> 00:18:24,480 Speaker 5: but since Joe mentioned at the beginning of this conversation 384 00:18:24,760 --> 00:18:27,960 Speaker 5: how much men like to sit around and talk about 385 00:18:28,040 --> 00:18:31,720 Speaker 5: military strategy, it actually reminded me so occasionally when I 386 00:18:31,800 --> 00:18:33,720 Speaker 5: visit my dad, I am forced to go to the 387 00:18:33,920 --> 00:18:36,840 Speaker 5: American Legion Club and there are a lot of old 388 00:18:36,880 --> 00:18:41,040 Speaker 5: guys there talking about air force and other military things, 389 00:18:41,119 --> 00:18:44,080 Speaker 5: and one thing that always comes up is this idea 390 00:18:44,240 --> 00:18:48,080 Speaker 5: of air superiority. And I never really know quite what 391 00:18:48,119 --> 00:18:50,480 Speaker 5: they mean, because it just sounds like, okay, if you're 392 00:18:50,640 --> 00:18:53,200 Speaker 5: if you have air superiority, then you're going to win. 393 00:18:53,560 --> 00:18:56,919 Speaker 5: But my understanding is it's something like much more subtle 394 00:18:56,960 --> 00:18:59,400 Speaker 5: than that, like something that actually comes on a range. 395 00:18:59,440 --> 00:19:02,240 Speaker 5: Even though it's sounds very binary what is it? What's 396 00:19:02,280 --> 00:19:03,320 Speaker 5: air superiority? 397 00:19:03,880 --> 00:19:06,920 Speaker 6: Yeah, let me first to say, if air superiority allows 398 00:19:06,960 --> 00:19:09,399 Speaker 6: you to win wars, then you know the Taliban should 399 00:19:09,400 --> 00:19:10,520 Speaker 6: not be empower. 400 00:19:11,920 --> 00:19:13,840 Speaker 3: Would a cake walk in Vietnam too? 401 00:19:14,119 --> 00:19:18,160 Speaker 6: Yeah, exactly, if only we're so simple, but so air superiority. 402 00:19:18,240 --> 00:19:19,760 Speaker 6: So I think first I would just say, is to 403 00:19:19,760 --> 00:19:22,680 Speaker 6: start with the term air control, which is this idea 404 00:19:22,760 --> 00:19:25,639 Speaker 6: that what degree are you able to actually control the 405 00:19:25,680 --> 00:19:27,960 Speaker 6: air space to be able to on the one hand 406 00:19:28,080 --> 00:19:32,199 Speaker 6: use it, access it yourself and use it militarily, but 407 00:19:32,359 --> 00:19:35,520 Speaker 6: also to deny the adversary the ability to access and 408 00:19:35,520 --> 00:19:36,520 Speaker 6: control the air space. 409 00:19:37,200 --> 00:19:39,400 Speaker 7: And so if you think about that air control, there. 410 00:19:39,240 --> 00:19:42,080 Speaker 6: Is a spectrum, as you said, of degrees of air control, 411 00:19:42,359 --> 00:19:45,879 Speaker 6: and you know it can be completely contested and neither 412 00:19:45,960 --> 00:19:48,600 Speaker 6: side has it. It's you know, mutual air denial. Neither 413 00:19:48,600 --> 00:19:51,720 Speaker 6: side is really able to exploit access the airspace or 414 00:19:51,720 --> 00:19:54,800 Speaker 6: deny the other side the ability to access it. Or 415 00:19:55,080 --> 00:19:58,159 Speaker 6: air superiority is a higher degree of control, and the 416 00:19:58,200 --> 00:20:01,160 Speaker 6: way it's defined as it's usually time bound in terms 417 00:20:01,200 --> 00:20:03,520 Speaker 6: of area and the amount of time. You're able to 418 00:20:03,520 --> 00:20:06,119 Speaker 6: have a jup this degree of control, but you're able 419 00:20:06,160 --> 00:20:11,200 Speaker 6: to operate conduct operations without prohibitive interference. 420 00:20:10,600 --> 00:20:11,480 Speaker 7: From the adversary. 421 00:20:12,280 --> 00:20:14,720 Speaker 6: So you're able to basically do what you want with 422 00:20:14,840 --> 00:20:18,760 Speaker 6: the airspace degenerating effects you know, on the ground to 423 00:20:18,800 --> 00:20:21,800 Speaker 6: support you know, the joint force, without the adversary being 424 00:20:21,840 --> 00:20:24,120 Speaker 6: able to unduly interfere in your operations. 425 00:20:24,160 --> 00:20:26,480 Speaker 7: And you know, that's pretty subjective criteria. 426 00:20:26,520 --> 00:20:29,359 Speaker 6: I would just note, whereas you know, there's a degree 427 00:20:29,400 --> 00:20:32,880 Speaker 6: beyond air superiority, which is actually air supremacy, and which 428 00:20:32,880 --> 00:20:34,760 Speaker 6: is something I would argue the United States has had 429 00:20:34,840 --> 00:20:36,760 Speaker 6: by a large you know, the last twenty years, it's 430 00:20:36,760 --> 00:20:39,960 Speaker 6: been air supremacy, which is effectively you are the only 431 00:20:40,000 --> 00:20:42,479 Speaker 6: actor really operating in the air space. 432 00:20:42,560 --> 00:20:44,600 Speaker 7: The adversary, you know, is not. 433 00:20:44,560 --> 00:20:47,720 Speaker 6: Able to really bother you at all in terms of 434 00:20:47,760 --> 00:20:50,880 Speaker 6: the airspace, and it's essentially a permanent condition. The United 435 00:20:50,920 --> 00:20:55,120 Speaker 6: States ruled the skies over Afghanistan, over Iraq during those wars. 436 00:20:55,520 --> 00:20:57,880 Speaker 6: It was really more air supremacy, which is and I'll 437 00:20:57,880 --> 00:20:59,479 Speaker 6: just say, we've gotten very used to it, but it's 438 00:20:59,520 --> 00:21:02,960 Speaker 6: actually a historical anomaly that's really not the reality. We've 439 00:21:03,000 --> 00:21:06,160 Speaker 6: usually had to fight for air superiority, even and including 440 00:21:06,160 --> 00:21:10,000 Speaker 6: against Vietnam, particularly over North Vietnam. It was really quite 441 00:21:10,400 --> 00:21:13,280 Speaker 6: back and forth in terms of air superiority and fighting 442 00:21:13,280 --> 00:21:14,040 Speaker 6: for the air control. 443 00:21:14,480 --> 00:21:17,359 Speaker 3: So this might be actually a good time to pivot 444 00:21:17,400 --> 00:21:20,000 Speaker 3: a little bit to the recent conflict. I guess it 445 00:21:20,040 --> 00:21:24,000 Speaker 3: was in May where we saw Indian and Pakistani air force, 446 00:21:24,240 --> 00:21:27,360 Speaker 3: the air forces shoot at each other. What did we learn. 447 00:21:27,440 --> 00:21:30,399 Speaker 3: This wasn't a dogfight in this sort of classical sense, 448 00:21:30,480 --> 00:21:33,600 Speaker 3: but it was the situation which seems to be fairly 449 00:21:33,720 --> 00:21:36,760 Speaker 3: rare in modern times, in which we had competing air 450 00:21:36,760 --> 00:21:39,200 Speaker 3: forces shooting at each other in the sky. So why 451 00:21:39,200 --> 00:21:40,840 Speaker 3: don't you talk to us a little bit big picture 452 00:21:40,840 --> 00:21:44,320 Speaker 3: maybe then we'll drill down about who backs either side 453 00:21:44,359 --> 00:21:46,520 Speaker 3: in terms of where they get their planes and what 454 00:21:46,600 --> 00:21:49,439 Speaker 3: we learned, what kind of data we amassed from that period. 455 00:21:49,840 --> 00:21:52,520 Speaker 6: Yeah, so, you know, it is unusual to see two 456 00:21:52,800 --> 00:21:56,360 Speaker 6: essentially modern air forces attacking each other or fighting each other, 457 00:21:56,400 --> 00:21:59,000 Speaker 6: having some kind of exchange, particularly in air to you know, 458 00:21:59,040 --> 00:22:01,480 Speaker 6: and also an air to air exchange as well as 459 00:22:01,480 --> 00:22:04,840 Speaker 6: ground to air. So you know, the Indians we're operating 460 00:22:04,920 --> 00:22:07,639 Speaker 6: kind of a mix of you know, some French aircraft, 461 00:22:07,800 --> 00:22:11,359 Speaker 6: some you know, Russian aircraft, whereas on the other side 462 00:22:11,400 --> 00:22:15,639 Speaker 6: we had the pakistanis where it seems using Chinese aircraft, 463 00:22:15,920 --> 00:22:19,720 Speaker 6: older Chinese aircraft of the JAY ten and also Chinese missiles. 464 00:22:19,760 --> 00:22:22,679 Speaker 6: They were using something called the PL fifteen. It's an 465 00:22:22,680 --> 00:22:25,240 Speaker 6: export version, so it's not quite as good as what 466 00:22:25,280 --> 00:22:29,399 Speaker 6: the Chinese operate as a PL fifteen, but it's interesting 467 00:22:29,440 --> 00:22:31,720 Speaker 6: and I think surprising to many people because it is 468 00:22:31,840 --> 00:22:34,560 Speaker 6: clear that in this exchange that kind of happened almost 469 00:22:34,600 --> 00:22:36,960 Speaker 6: like Western style, you know, they're. 470 00:22:36,880 --> 00:22:38,159 Speaker 7: Meeting towards at the border. 471 00:22:38,560 --> 00:22:40,439 Speaker 6: What was surprising to think to many people is that 472 00:22:40,440 --> 00:22:43,320 Speaker 6: it's clear that Indians lost some aircraft. And it's still 473 00:22:43,320 --> 00:22:47,439 Speaker 6: debated how many aircraft, what type of aircraft, but you know, 474 00:22:47,480 --> 00:22:50,480 Speaker 6: there is some photographic evanist to suggests they lost some aircraft, 475 00:22:50,840 --> 00:22:53,480 Speaker 6: and I think that surprised people to see that they 476 00:22:53,520 --> 00:22:56,639 Speaker 6: did lose these aircraft. And you know, certainly, you know, 477 00:22:56,680 --> 00:22:59,280 Speaker 6: both sides, you know, engaged use this as you know, 478 00:22:59,440 --> 00:23:02,040 Speaker 6: as part of the narrative, right, but we got to 479 00:23:02,040 --> 00:23:04,600 Speaker 6: see the PL fifteen, you know, in action, this missile 480 00:23:04,640 --> 00:23:06,960 Speaker 6: for the first time, and also see these Chinese fighters, 481 00:23:07,200 --> 00:23:09,679 Speaker 6: and I think it just surprised people to see that 482 00:23:09,720 --> 00:23:13,840 Speaker 6: the Pakistanis were successful in the sense of actually achieving 483 00:23:13,840 --> 00:23:14,520 Speaker 6: some kills. 484 00:23:14,880 --> 00:23:17,679 Speaker 5: You know, you mentioned India having some Russian aircraft, and 485 00:23:17,680 --> 00:23:19,840 Speaker 5: that reminded me of another question that I wanted to 486 00:23:19,880 --> 00:23:23,120 Speaker 5: ask you, which is, you know, India still famously flies 487 00:23:23,400 --> 00:23:26,840 Speaker 5: Make twenty one's aka the Flying Coffin, although I think 488 00:23:26,880 --> 00:23:29,360 Speaker 5: they're about to retire them. So this is also good 489 00:23:29,359 --> 00:23:33,680 Speaker 5: timing for this particular discussion. But how do countries make 490 00:23:33,720 --> 00:23:38,280 Speaker 5: the decision to, I guess buy aircraft from other places 491 00:23:38,480 --> 00:23:41,119 Speaker 5: rather than try to develop their own industry, Because I 492 00:23:41,119 --> 00:23:44,280 Speaker 5: think India isn't even planning to replace the MiGs with 493 00:23:44,400 --> 00:23:47,280 Speaker 5: something homegrown. It's going to buy something from France. So 494 00:23:47,320 --> 00:23:48,840 Speaker 5: why do countries choose to do that? 495 00:23:49,280 --> 00:23:51,080 Speaker 7: Yeah, so this is a great question. 496 00:23:51,280 --> 00:23:54,480 Speaker 6: Airpower from the beginning has been very expensive to have 497 00:23:54,520 --> 00:23:57,320 Speaker 6: an air force, to have a major air force, because 498 00:23:57,359 --> 00:23:59,919 Speaker 6: it's not even just the fighter aircraft that you need 499 00:23:59,960 --> 00:24:00,560 Speaker 6: to develop. 500 00:24:00,640 --> 00:24:01,919 Speaker 7: You need to develop all the other. 501 00:24:01,800 --> 00:24:07,080 Speaker 6: Supporting aircraft, things like a wax airborne warning and control systems, 502 00:24:07,240 --> 00:24:11,200 Speaker 6: air refueling, potentially, you know, intelligence surrounds of perconnissance aircrafts. 503 00:24:11,200 --> 00:24:13,600 Speaker 6: It's a whole group of aircraft, and then being able 504 00:24:13,640 --> 00:24:17,879 Speaker 6: to maintain them and then develop that whole industrial scientific base. 505 00:24:18,240 --> 00:24:21,679 Speaker 6: It's actually significant barriers just in terms of the scientific 506 00:24:21,760 --> 00:24:25,399 Speaker 6: industrial base, the scientists, the engineers, the materials that you 507 00:24:25,440 --> 00:24:27,879 Speaker 6: need to collect, the secure supply chain. So there's a 508 00:24:27,880 --> 00:24:30,760 Speaker 6: lot of barriers to entry. In terms of developing your 509 00:24:30,760 --> 00:24:34,439 Speaker 6: own indigenous aircraft. One of the options, and these aircraft 510 00:24:34,480 --> 00:24:38,240 Speaker 6: themselves are quite expensive to develop, is to develop, you know, 511 00:24:38,440 --> 00:24:41,000 Speaker 6: is to buy it from another country, whether that can 512 00:24:41,040 --> 00:24:44,440 Speaker 6: be Russia or China, or the United States or the French, 513 00:24:44,600 --> 00:24:47,320 Speaker 6: you know, even the South Koreans now, so that it 514 00:24:47,359 --> 00:24:49,480 Speaker 6: can be an attractive option because you avoid a lot 515 00:24:49,480 --> 00:24:53,399 Speaker 6: of those startup costs and the price point might actually 516 00:24:53,440 --> 00:24:56,440 Speaker 6: be lower than in developing your likely to be lower 517 00:24:56,480 --> 00:24:59,639 Speaker 6: than developing your own indigenous system, in part because unless 518 00:24:59,640 --> 00:25:02,360 Speaker 6: you're able to to export that indigenous system to others, 519 00:25:02,680 --> 00:25:04,960 Speaker 6: it's going to really drive up the cost, the pre 520 00:25:05,040 --> 00:25:07,960 Speaker 6: unit cost for yourself. So like even the United States, 521 00:25:08,119 --> 00:25:11,120 Speaker 6: the F thirty five, for example, our cost is dependent 522 00:25:11,119 --> 00:25:12,000 Speaker 6: when we pay. 523 00:25:12,119 --> 00:25:13,520 Speaker 7: For it for the US military. 524 00:25:13,560 --> 00:25:15,639 Speaker 6: It's dependent on our ability to sell it to others, 525 00:25:15,800 --> 00:25:17,920 Speaker 6: and it helps drive down the pre unit cost. 526 00:25:33,359 --> 00:25:37,000 Speaker 3: When we think of civil aviation, there's Boeing Airbus and 527 00:25:37,040 --> 00:25:40,440 Speaker 3: then there's the Brazilian one, and then of course people 528 00:25:40,480 --> 00:25:42,800 Speaker 3: are interested in what's going to happen with COMAC. But 529 00:25:42,800 --> 00:25:45,679 Speaker 3: that's about it. Right, there's two and a half to 530 00:25:45,760 --> 00:25:49,840 Speaker 3: maybe three whatever maybe four potential players in this space 531 00:25:49,880 --> 00:25:52,239 Speaker 3: that are of any scale. It does seem as though, 532 00:25:52,280 --> 00:25:56,600 Speaker 3: when it comes to military aircraft that the geographic range 533 00:25:56,640 --> 00:25:58,560 Speaker 3: of production is much wider. 534 00:25:59,000 --> 00:26:00,840 Speaker 7: I mean in terms of geogrange. 535 00:26:00,920 --> 00:26:04,280 Speaker 6: Yes, I would say that is true, like the Turkey. 536 00:26:03,600 --> 00:26:05,240 Speaker 3: Is now, yeah, the Turk That's what I That's where 537 00:26:05,240 --> 00:26:06,920 Speaker 3: I was going to. I know, I knew that the 538 00:26:06,960 --> 00:26:09,600 Speaker 3: Turkish had their own fighter jet, et cetera. So it 539 00:26:09,600 --> 00:26:11,840 Speaker 3: does seem as though countries that aren't in the civil 540 00:26:11,840 --> 00:26:15,280 Speaker 3: aviation game at all are in the military game. 541 00:26:15,640 --> 00:26:18,680 Speaker 6: Yes, they're you know, they range in terms of their quality. 542 00:26:18,920 --> 00:26:20,960 Speaker 6: You know, they squeeze even with the Grippin, that's a 543 00:26:21,000 --> 00:26:24,560 Speaker 6: great fighter aircraft, the Grippin, especially the price points. So 544 00:26:24,680 --> 00:26:27,880 Speaker 6: it is a competitive market in certain respects, in terms 545 00:26:27,880 --> 00:26:30,679 Speaker 6: of certainly in terms of geographic range. The number of 546 00:26:30,680 --> 00:26:33,520 Speaker 6: countries that are you know, have had traditionally these kinds 547 00:26:33,520 --> 00:26:36,240 Speaker 6: of industries and continue to support them. And you know, 548 00:26:36,280 --> 00:26:38,240 Speaker 6: it's interesting that countries, you know, to see the kinds 549 00:26:38,240 --> 00:26:40,520 Speaker 6: of choices they make about what kind of aircraft they're 550 00:26:40,560 --> 00:26:43,840 Speaker 6: going to purchase. You know, often we're in competition with 551 00:26:44,040 --> 00:26:46,960 Speaker 6: our own allies for these contracts with others, which I 552 00:26:46,960 --> 00:26:49,040 Speaker 6: think is always interesting, you know, with the French and 553 00:26:49,560 --> 00:26:52,439 Speaker 6: you know, the Japanese joined a six gen project with 554 00:26:52,520 --> 00:26:55,960 Speaker 6: the Brits and the Italians. So it's interesting that we're 555 00:26:55,960 --> 00:26:58,680 Speaker 6: competing with our own allies often for you know, other 556 00:26:58,760 --> 00:27:00,200 Speaker 6: countries contracts. 557 00:27:00,240 --> 00:27:03,280 Speaker 3: Since I mentioned civil aviation, obviously we all we all 558 00:27:03,280 --> 00:27:06,240 Speaker 3: know about the troubles at Boeing and the door flies 559 00:27:06,280 --> 00:27:08,679 Speaker 3: off or whatever. It's been one thing after another. It 560 00:27:08,720 --> 00:27:10,520 Speaker 3: seems like it's been a few months not going what 561 00:27:10,680 --> 00:27:11,359 Speaker 3: since we're head. 562 00:27:11,200 --> 00:27:13,359 Speaker 4: Of vowing, you probably just changed in. 563 00:27:13,480 --> 00:27:15,680 Speaker 3: Yeah, I hope not, but I don't, you know, I 564 00:27:15,720 --> 00:27:19,080 Speaker 3: don't follow the goings on on the defense side of 565 00:27:19,160 --> 00:27:22,359 Speaker 3: the American aviation industry does not garner nearly the same 566 00:27:22,440 --> 00:27:26,000 Speaker 3: headlines or the same types of headlines, et cetera. But 567 00:27:26,119 --> 00:27:28,240 Speaker 3: if just take it in isolation, if you were to 568 00:27:28,280 --> 00:27:31,520 Speaker 3: look at Lockheed Martin over the last several years, how 569 00:27:31,520 --> 00:27:34,520 Speaker 3: well is it operating as a company as far as 570 00:27:34,760 --> 00:27:38,520 Speaker 3: we can tell in terms of its ability to ramp 571 00:27:38,600 --> 00:27:41,960 Speaker 3: output at scale and to continue to produce high quality 572 00:27:41,960 --> 00:27:42,800 Speaker 3: goods at scale. 573 00:27:43,160 --> 00:27:43,440 Speaker 7: Yeah. 574 00:27:43,480 --> 00:27:47,080 Speaker 6: So if we're talking specifically the defense in industry in 575 00:27:47,080 --> 00:27:49,560 Speaker 6: the United States in general, I see scale is a 576 00:27:49,600 --> 00:27:50,280 Speaker 6: real problem. 577 00:27:50,640 --> 00:27:50,840 Speaker 5: You know. 578 00:27:50,960 --> 00:27:54,040 Speaker 6: One of the things about the US preference often for 579 00:27:54,160 --> 00:27:58,800 Speaker 6: exquisite systems means exquisite systems with lots of components, you know, 580 00:27:58,920 --> 00:28:01,760 Speaker 6: and these are technology complex and it's really hard for 581 00:28:01,840 --> 00:28:04,000 Speaker 6: US to ramp up production of these things. 582 00:28:04,280 --> 00:28:05,560 Speaker 7: It's been much easier. 583 00:28:05,240 --> 00:28:08,399 Speaker 6: To ramp up production of artillery, for example, as opposed 584 00:28:08,440 --> 00:28:11,399 Speaker 6: to the Patriot system. And that just simply has to 585 00:28:11,440 --> 00:28:14,719 Speaker 6: do with the reality of the complexity and concerns and 586 00:28:14,760 --> 00:28:18,000 Speaker 6: also some challenges around supply chain bottlenecks. 587 00:28:18,080 --> 00:28:20,560 Speaker 5: Yeah, this is what I wanted to ask. So there 588 00:28:20,560 --> 00:28:23,560 Speaker 5: have been production problems with like the next gen F 589 00:28:23,640 --> 00:28:27,000 Speaker 5: forty seven famously, right, which is being developed by Boeing. 590 00:28:27,480 --> 00:28:31,120 Speaker 5: How much does the sort of ecosystem of supply chains 591 00:28:31,200 --> 00:28:36,399 Speaker 5: and component manufacturers matter when you're making new military aircraft 592 00:28:36,440 --> 00:28:39,480 Speaker 5: and trying to you know, do something that's cutting edge. 593 00:28:39,560 --> 00:28:41,520 Speaker 6: A lot, you know, I would just say, if you 594 00:28:41,560 --> 00:28:44,440 Speaker 6: look at the F thirty five, the fifth gen fighter 595 00:28:44,640 --> 00:28:48,160 Speaker 6: that the United States operates it's had a very troubled history. 596 00:28:48,600 --> 00:28:52,959 Speaker 6: It has been constantly delayed and cost overruns have been 597 00:28:53,000 --> 00:28:55,400 Speaker 6: extraordinary for that aircraft, and it's had a lot of 598 00:28:55,400 --> 00:28:58,560 Speaker 6: difficulties even in the upgrades. And there was just another 599 00:28:58,960 --> 00:29:02,479 Speaker 6: I think it was a Congressional Budget Office study talking 600 00:29:02,520 --> 00:29:06,000 Speaker 6: about the challenges related to there's supposed to be a 601 00:29:06,080 --> 00:29:08,080 Speaker 6: series of upgrades that are being done and it looks 602 00:29:08,120 --> 00:29:10,360 Speaker 6: like they're going to be delayed, and some of that 603 00:29:10,560 --> 00:29:14,440 Speaker 6: is related to problems with supplies. Even when we were 604 00:29:14,440 --> 00:29:17,880 Speaker 6: talking around tariffs, you might remember with the Chinese and 605 00:29:17,920 --> 00:29:20,800 Speaker 6: they put these export controls on some of the rare 606 00:29:20,840 --> 00:29:23,120 Speaker 6: earth minerals. Believe it or not, some of those rare 607 00:29:23,160 --> 00:29:24,959 Speaker 6: earth minerals are things that we actually use in our 608 00:29:24,960 --> 00:29:28,520 Speaker 6: fighter aircraft. That China has, you know, the majority of 609 00:29:28,520 --> 00:29:32,080 Speaker 6: the refining capacity. So trying to make this with a 610 00:29:32,120 --> 00:29:35,800 Speaker 6: secure supply chain, including the materials in particular, is a 611 00:29:35,920 --> 00:29:38,840 Speaker 6: challenge and one that you know, I think there's biparts 612 00:29:38,880 --> 00:29:42,080 Speaker 6: in support right now for trying to address this issue, 613 00:29:42,200 --> 00:29:43,800 Speaker 6: but it's not one I would just say that I 614 00:29:43,800 --> 00:29:45,920 Speaker 6: think the United States can address alone. I think it's 615 00:29:45,920 --> 00:29:49,000 Speaker 6: going to require, you know, other allies and partners to 616 00:29:49,000 --> 00:29:51,720 Speaker 6: try to create that ecosystem, but in a way that's 617 00:29:51,760 --> 00:29:52,360 Speaker 6: more secure. 618 00:29:53,120 --> 00:29:55,440 Speaker 3: One of the things that has come up on a 619 00:29:55,440 --> 00:29:59,000 Speaker 3: few times we've talked about the defense industry is it's 620 00:29:59,080 --> 00:30:02,959 Speaker 3: very spread out because obviously these big players like to 621 00:30:03,000 --> 00:30:06,800 Speaker 3: have a little employment in almost every congressional district or 622 00:30:06,800 --> 00:30:10,600 Speaker 3: at least every state, for obvious reasons that need no explication. 623 00:30:10,920 --> 00:30:14,640 Speaker 3: Does this create dis economies of skill though, spreading out 624 00:30:14,680 --> 00:30:18,600 Speaker 3: of the supply chain for no economic reason, Yeah, I mean. 625 00:30:18,520 --> 00:30:20,320 Speaker 6: One of the things it certainly does. And we see 626 00:30:20,320 --> 00:30:22,640 Speaker 6: this in the case of the famed A ten. The 627 00:30:22,680 --> 00:30:25,120 Speaker 6: A ten is an attack aircraft that's used for in 628 00:30:25,120 --> 00:30:27,440 Speaker 6: a close air support role. Is that the Air Force 629 00:30:27,480 --> 00:30:29,280 Speaker 6: I don't know how many times now it has tried 630 00:30:29,320 --> 00:30:32,240 Speaker 6: to retire the A ten, arguing that it's not likely 631 00:30:32,280 --> 00:30:35,040 Speaker 6: to be survivable in a future war because it is 632 00:30:35,120 --> 00:30:37,680 Speaker 6: quite vulnerable to especially ground based threats. 633 00:30:37,880 --> 00:30:39,760 Speaker 7: And every time it's tried to retire it. 634 00:30:39,960 --> 00:30:43,920 Speaker 6: There's always someone in Congress that is upset about that 635 00:30:44,000 --> 00:30:46,880 Speaker 6: because their district has A tens and wants to see 636 00:30:46,880 --> 00:30:49,840 Speaker 6: it the program continue. It looks like they're going to 637 00:30:49,880 --> 00:30:53,920 Speaker 6: finally be successful in that retirement. But the spreading out 638 00:30:54,000 --> 00:30:56,520 Speaker 6: of these programs. The district has often made it much 639 00:30:56,520 --> 00:30:59,320 Speaker 6: harder to actually end programs when they need to be 640 00:30:59,480 --> 00:31:02,440 Speaker 6: ended so that you can actually develop new capabilities. I 641 00:31:02,440 --> 00:31:05,040 Speaker 6: think that's one of one of the really big challenges. 642 00:31:05,320 --> 00:31:08,360 Speaker 6: And the other I would just say is also it's 643 00:31:08,400 --> 00:31:10,480 Speaker 6: just the fact that we have the concentration of the 644 00:31:10,520 --> 00:31:15,480 Speaker 6: market around these primes. These firms are long standing, you know, 645 00:31:15,520 --> 00:31:18,520 Speaker 6: they're well developed, but I think to have a really 646 00:31:18,640 --> 00:31:22,000 Speaker 6: vibrant defense industrial base, particularly in terms of innovation, you 647 00:31:22,080 --> 00:31:25,000 Speaker 6: need a lot more players, and it's much harder for 648 00:31:25,240 --> 00:31:28,520 Speaker 6: these smaller defense startups to get into the market, to 649 00:31:28,560 --> 00:31:30,680 Speaker 6: survive in the market and not be squeezed out by 650 00:31:30,760 --> 00:31:34,040 Speaker 6: the primes. You know, there's efforts to try to support 651 00:31:34,040 --> 00:31:36,479 Speaker 6: them in some ways to try to encourage that, but 652 00:31:36,640 --> 00:31:38,680 Speaker 6: that's a real concern for me, particularly when I look 653 00:31:38,680 --> 00:31:41,160 Speaker 6: at like the drone space, for example, I don't see 654 00:31:41,200 --> 00:31:44,800 Speaker 6: the same kind of vibrancy commercial market or the defense 655 00:31:44,840 --> 00:31:48,000 Speaker 6: market around drones like what we see in say China 656 00:31:48,040 --> 00:31:48,640 Speaker 6: for example. 657 00:31:49,200 --> 00:31:51,400 Speaker 5: So this is something that came up in our conversation 658 00:31:51,800 --> 00:31:55,760 Speaker 5: with the Palenteer CTO, this idea of like creating a 659 00:31:55,840 --> 00:31:58,280 Speaker 5: more even playing field. I guess so that you do 660 00:31:58,360 --> 00:32:02,040 Speaker 5: get this network of like come peting players. Just on 661 00:32:02,080 --> 00:32:04,560 Speaker 5: the China note, can you compare and contrast a little 662 00:32:04,600 --> 00:32:10,400 Speaker 5: bit like China's military manufacturing and development capabilities and it's 663 00:32:10,480 --> 00:32:14,280 Speaker 5: again it's ecosystem of manufacturers versus the US, Like what 664 00:32:14,400 --> 00:32:17,040 Speaker 5: exactly are the key differences in your in your mind? 665 00:32:17,680 --> 00:32:21,440 Speaker 6: Yeah, so I think there are a couple differences. Is 666 00:32:21,480 --> 00:32:25,200 Speaker 6: that their capacity to scale up seems to be much greater, 667 00:32:25,280 --> 00:32:28,040 Speaker 6: and so some of that is just simply that they're 668 00:32:28,080 --> 00:32:30,720 Speaker 6: able to turn things out faster in terms of manufacturing. 669 00:32:31,040 --> 00:32:33,840 Speaker 6: Some of that is you know, attention that they've played 670 00:32:33,920 --> 00:32:38,040 Speaker 6: to manufacturing capabilities and more advanced you know methods. That's 671 00:32:38,080 --> 00:32:40,959 Speaker 6: certainly one, you know. And they can get sufficient workers. 672 00:32:40,960 --> 00:32:43,520 Speaker 6: I mean, they have a larger workforce in terms of 673 00:32:43,520 --> 00:32:46,200 Speaker 6: attracting people into into the factories to be able to 674 00:32:46,200 --> 00:32:48,640 Speaker 6: make these things. And there's also I think the other 675 00:32:48,720 --> 00:32:50,720 Speaker 6: difference is, and you hear this a lot from American 676 00:32:50,720 --> 00:32:54,720 Speaker 6: defense industry firms, is that the lack of like consistent orders, 677 00:32:55,000 --> 00:32:57,360 Speaker 6: you know, they don't want to build these factories for example, 678 00:32:57,400 --> 00:33:00,400 Speaker 6: for you know, safe people were talking Patriot missiles, these 679 00:33:00,440 --> 00:33:03,640 Speaker 6: additional factories to produce these missiles so that they're only 680 00:33:03,680 --> 00:33:06,280 Speaker 6: doing it for a couple of years for the US military, right, 681 00:33:06,320 --> 00:33:06,600 Speaker 6: and that. 682 00:33:06,560 --> 00:33:07,960 Speaker 7: Would be highly inefficient. 683 00:33:08,120 --> 00:33:10,920 Speaker 6: They want to know that they're getting long term orders, 684 00:33:11,160 --> 00:33:14,280 Speaker 6: and the US has not been as great about being 685 00:33:14,360 --> 00:33:17,480 Speaker 6: clear about the long term demand signal, whereas I think 686 00:33:17,560 --> 00:33:19,720 Speaker 6: China has been much more successful, and part of that's 687 00:33:19,760 --> 00:33:22,000 Speaker 6: just because of the nature of their system to be 688 00:33:22,120 --> 00:33:25,360 Speaker 6: able to send those signals and work with you know what, 689 00:33:25,400 --> 00:33:30,800 Speaker 6: are effectively state you know, somewhat private somewhat state owned firms, 690 00:33:30,840 --> 00:33:34,040 Speaker 6: supporting them through tax breaks often and also placing much 691 00:33:34,040 --> 00:33:35,560 Speaker 6: as much larger orders. 692 00:33:35,600 --> 00:33:36,080 Speaker 4: In China. 693 00:33:36,120 --> 00:33:38,760 Speaker 5: At least, you know, you're always going to need military 694 00:33:38,840 --> 00:33:41,880 Speaker 5: products for military parades. At least there's always going to 695 00:33:41,880 --> 00:33:42,560 Speaker 5: be a parade. 696 00:33:42,680 --> 00:33:45,200 Speaker 3: But this is the way, I mean, what you're describing 697 00:33:45,320 --> 00:33:49,560 Speaker 3: is essentially the I don't know, the malignant way in 698 00:33:49,600 --> 00:33:53,520 Speaker 3: which the defense industrial complex only grows over time because 699 00:33:53,520 --> 00:33:55,680 Speaker 3: you build these factories and then there are people there 700 00:33:55,680 --> 00:33:57,560 Speaker 3: and you can't just turn them off, or because what 701 00:33:57,600 --> 00:33:59,400 Speaker 3: if you're an award So you just end up in 702 00:33:59,440 --> 00:34:02,120 Speaker 3: the situation and we have this beast that just constantly 703 00:34:02,520 --> 00:34:05,920 Speaker 3: needs to be fed. There is no such thing as Okay, 704 00:34:05,960 --> 00:34:08,560 Speaker 3: we have enough now when it comes to a given 705 00:34:08,600 --> 00:34:09,880 Speaker 3: weapons system, yeah, you know. 706 00:34:09,920 --> 00:34:11,560 Speaker 6: And I think one of the other things is we 707 00:34:11,640 --> 00:34:14,239 Speaker 6: tend to start with the platform or the system we 708 00:34:14,280 --> 00:34:16,759 Speaker 6: want to develop, and then we think about how are 709 00:34:16,800 --> 00:34:19,359 Speaker 6: we going to manufacture it? And I'm always struck by 710 00:34:19,400 --> 00:34:21,640 Speaker 6: that quote by Elon Musk where he says about I 711 00:34:21,680 --> 00:34:22,360 Speaker 6: think it's Tesla. 712 00:34:22,640 --> 00:34:23,920 Speaker 7: The factory is the product. 713 00:34:24,040 --> 00:34:26,440 Speaker 6: Yeah, And so I think one of the problems is 714 00:34:27,000 --> 00:34:29,400 Speaker 6: the mindset we have, which is like, Okay, here's the platform, 715 00:34:29,440 --> 00:34:31,719 Speaker 6: here's what we wanted to have in capabilities, like this 716 00:34:31,800 --> 00:34:34,200 Speaker 6: is the perfect system, right, and then we think about 717 00:34:34,239 --> 00:34:37,600 Speaker 6: manufacturing it, as opposed to saying, listen, this system is 718 00:34:37,680 --> 00:34:39,200 Speaker 6: only good to me if I'm going to be able 719 00:34:39,239 --> 00:34:41,480 Speaker 6: to scale it up and scale it up rapidly and 720 00:34:41,560 --> 00:34:44,560 Speaker 6: easily enough. And that needs to I think be much 721 00:34:44,880 --> 00:34:47,960 Speaker 6: earlier in the process. And the company is showing that, 722 00:34:48,080 --> 00:34:50,920 Speaker 6: like there's going to be that ability to raampt up production. 723 00:34:51,600 --> 00:34:53,919 Speaker 6: That's just not how we've really approached it, in part 724 00:34:53,960 --> 00:34:57,840 Speaker 6: because we've been accustomed to this paradigm of smaller numbers 725 00:34:57,880 --> 00:35:01,480 Speaker 6: of expensive exquisite systems. But we now need a good 726 00:35:01,600 --> 00:35:04,920 Speaker 6: enough systems in larger numbers, and so that requires a 727 00:35:04,960 --> 00:35:05,600 Speaker 6: different model. 728 00:35:06,280 --> 00:35:08,680 Speaker 5: Okay, Well, on this note, just to sum it all up, 729 00:35:09,120 --> 00:35:13,080 Speaker 5: how screwed is the US militarily versus China? 730 00:35:13,800 --> 00:35:16,439 Speaker 6: You know, I don't think we are. You know, first 731 00:35:16,440 --> 00:35:19,800 Speaker 6: of all, military parades are great. They're fun to watch, 732 00:35:20,160 --> 00:35:22,200 Speaker 6: but it's quite a different thing to actually be able 733 00:35:22,239 --> 00:35:25,799 Speaker 6: to use this capability and to really you know, have 734 00:35:25,880 --> 00:35:28,560 Speaker 6: the skilled personnel that can really operate it. And I 735 00:35:28,560 --> 00:35:30,360 Speaker 6: would just say, you know, this is sort of the 736 00:35:30,360 --> 00:35:32,439 Speaker 6: bean counting version of parade, where we get to see 737 00:35:32,440 --> 00:35:34,640 Speaker 6: some cool things and we don't even really know what 738 00:35:34,640 --> 00:35:38,000 Speaker 6: it looks like inside. Today, when you look at military capabilities, 739 00:35:38,080 --> 00:35:40,680 Speaker 6: you know a lot of it's the computer part and 740 00:35:40,719 --> 00:35:44,439 Speaker 6: the sensors and the integration and that you can't really 741 00:35:44,480 --> 00:35:48,400 Speaker 6: evaluate just through images. And my faith is really that 742 00:35:48,440 --> 00:35:50,319 Speaker 6: I think the United States still maintains an edge in 743 00:35:50,360 --> 00:35:53,600 Speaker 6: those things, and certainly in well trained personnel that are 744 00:35:53,600 --> 00:35:57,200 Speaker 6: able to use their equipment really well compared to the Chinese. 745 00:35:57,560 --> 00:35:59,839 Speaker 6: And so I think, you know, we still maintain certain 746 00:36:00,000 --> 00:36:03,719 Speaker 6: advantages in terms of military effectiveness over the Chinese. They 747 00:36:03,719 --> 00:36:06,960 Speaker 6: have certain advantages in terms of their geography, but you know, 748 00:36:07,160 --> 00:36:09,719 Speaker 6: they're certainly becoming a greater competitor. But if we're trying 749 00:36:09,760 --> 00:36:13,600 Speaker 6: to defend territory, you know, in allied territory like Japan, 750 00:36:14,239 --> 00:36:17,919 Speaker 6: the Chinese still have a much harder problem set of 751 00:36:17,960 --> 00:36:21,680 Speaker 6: trying to overturn, you know, the regional order, particularly with 752 00:36:21,800 --> 00:36:22,520 Speaker 6: US on defense. 753 00:36:22,920 --> 00:36:27,719 Speaker 3: Kelly Grico, fantastic conversation. Fantastic reminder to not always read 754 00:36:27,760 --> 00:36:31,960 Speaker 3: too much into grant propagandistic create is impressive as they 755 00:36:32,040 --> 00:36:35,520 Speaker 3: may as they may be visually. Fantastic conversation. Thank you 756 00:36:35,560 --> 00:36:50,880 Speaker 3: so much for coming on outline. Thank you for having me, Tracy. 757 00:36:50,960 --> 00:36:53,960 Speaker 3: I really thought that was a great conversization just to start. 758 00:36:54,080 --> 00:36:55,960 Speaker 3: I do think one thing we should do more on 759 00:36:56,200 --> 00:37:00,719 Speaker 3: is these efforts to have defense startups, because you hear 760 00:37:00,760 --> 00:37:02,040 Speaker 3: about it a lot, right and there are a lot 761 00:37:02,080 --> 00:37:05,200 Speaker 3: of people associated with the Trump administration who are very 762 00:37:05,360 --> 00:37:09,400 Speaker 3: enthusiastic about the prospect of Southern California tech startups like 763 00:37:09,400 --> 00:37:13,520 Speaker 3: an Anderill or whatever to be more important contractors to 764 00:37:13,680 --> 00:37:16,920 Speaker 3: the Defense Department and so forth. To what degree are 765 00:37:17,000 --> 00:37:19,640 Speaker 3: these efforts successful, how hard is it to sort of 766 00:37:19,640 --> 00:37:21,960 Speaker 3: break the stranglehold that a few large players have is 767 00:37:22,000 --> 00:37:24,879 Speaker 3: an interesting question, but one we should definitely do more on. 768 00:37:25,040 --> 00:37:26,120 Speaker 4: I totally agree. 769 00:37:26,200 --> 00:37:28,160 Speaker 5: The other two things that kind of struck me from 770 00:37:28,239 --> 00:37:33,080 Speaker 5: that conversation was one the idea that quantity still matters 771 00:37:33,200 --> 00:37:36,080 Speaker 5: when it comes to military warfare, and as you pointed out, 772 00:37:36,120 --> 00:37:40,000 Speaker 5: like this is a longstanding theme when it comes to conflict, 773 00:37:40,040 --> 00:37:43,000 Speaker 5: whoever can make the most stuff, yeah, or produce the 774 00:37:43,040 --> 00:37:46,840 Speaker 5: most soldiers tends to win, not always, but mostly. 775 00:37:47,200 --> 00:37:47,640 Speaker 4: And then the. 776 00:37:47,560 --> 00:37:50,520 Speaker 5: Second thing that stood out to me was as Kelly 777 00:37:50,640 --> 00:37:55,280 Speaker 5: was saying at the end, the technological capabilities of competing 778 00:37:55,280 --> 00:37:58,359 Speaker 5: military forces, and the idea that even though we can 779 00:37:58,400 --> 00:38:01,879 Speaker 5: see the shell of a particular product we can look 780 00:38:01,920 --> 00:38:05,920 Speaker 5: at like whatever next generation fighter China is producing, you 781 00:38:05,920 --> 00:38:08,840 Speaker 5: can't see inside of it. So it is really difficult 782 00:38:09,000 --> 00:38:13,279 Speaker 5: to evaluate things like sensor technology or you know, how 783 00:38:13,280 --> 00:38:16,399 Speaker 5: they're targeting their particular targets and things like that. 784 00:38:16,680 --> 00:38:20,440 Speaker 3: The only problem is just by going on literally every 785 00:38:20,560 --> 00:38:24,240 Speaker 3: other consumer industry that we are aware of. Yeah, cars, 786 00:38:24,360 --> 00:38:27,880 Speaker 3: I mean this is a or consumer drones, right, just 787 00:38:27,920 --> 00:38:30,680 Speaker 3: consumer drunes. It looks like they're doing pretty. 788 00:38:30,360 --> 00:38:32,920 Speaker 4: Good, right. The studies aren't good for the. 789 00:38:32,920 --> 00:38:34,680 Speaker 3: Year, yeah, I mean, maybe we don't know what's really 790 00:38:34,719 --> 00:38:37,520 Speaker 3: inside some of these systems. We just see shows. We 791 00:38:37,560 --> 00:38:39,920 Speaker 3: don't know how many of those robot wolves that they 792 00:38:39,960 --> 00:38:43,400 Speaker 3: displayed at the parade, but I've seen some videos on Twitter. 793 00:38:43,440 --> 00:38:45,400 Speaker 3: They look pretty good, and I've seen some other things, 794 00:38:45,440 --> 00:38:48,880 Speaker 3: and you know, it would not be crazy. I would 795 00:38:48,880 --> 00:38:50,960 Speaker 3: surmise that they are decent on the inside. But what 796 00:38:51,000 --> 00:38:54,000 Speaker 3: do I know? And I genuinely think that everyone in 797 00:38:54,040 --> 00:38:56,959 Speaker 3: all rooms, including when we thinking about the US, should 798 00:38:56,960 --> 00:38:59,080 Speaker 3: be on guard for the fact that we're bombarded in 799 00:38:59,120 --> 00:39:01,760 Speaker 3: propaganda these days to an incredible degree. 800 00:39:01,840 --> 00:39:03,880 Speaker 4: Maybe we should go back to carry our pigeons. 801 00:39:04,160 --> 00:39:05,040 Speaker 3: I like that idea. 802 00:39:05,120 --> 00:39:07,040 Speaker 4: Yeah, so do I. Okay, shall we leave it there? 803 00:39:07,120 --> 00:39:07,839 Speaker 3: Let's leave it there. 804 00:39:07,960 --> 00:39:10,360 Speaker 5: This has been another episode of the auth Lots podcast. 805 00:39:10,440 --> 00:39:13,839 Speaker 5: I'm Tracy Alloway. You can follow me at Tracy Alloway and. 806 00:39:13,800 --> 00:39:16,360 Speaker 3: I'm Joe Wisenthal. You can follow me at the Stalwart. 807 00:39:16,560 --> 00:39:20,160 Speaker 3: Follow our guest Kelly Grico. She's at ka Underscore Greco. 808 00:39:20,480 --> 00:39:23,640 Speaker 3: Follow our producers Carman Rodriguez at Carman armand dash O 809 00:39:23,680 --> 00:39:27,279 Speaker 3: Bennett at Dashbot at Calebrooks at Kelbrooks. For more odd 810 00:39:27,320 --> 00:39:29,960 Speaker 3: Lots content, go to bloomberg dot com slash odd Lots. 811 00:39:29,960 --> 00:39:32,799 Speaker 3: We're the daily newsletter and all of our episodes, and 812 00:39:32,840 --> 00:39:34,920 Speaker 3: you can chat about all of these things twenty four 813 00:39:34,960 --> 00:39:37,360 Speaker 3: to seven in our Discord channel. 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