Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the Odd Laws podcast.
Speaker 3: I'm Joe Wisenthal, and I'm Tracy Alloway.
Speaker 2: Tracy, you know, I think we're roughly maybe a little
Speaker 2: bit less than two weeks into the war in Iran.
Speaker 2: We are recording this March twelfth, twenty twenty six, and
Speaker 2: there are of course extraordinary number of questions about the
Speaker 2: timing and the duration of the war. We know already
Speaker 2: that the economic impact has been quite significant, particularly if
Speaker 2: you just look at commodity markets. But one of the
Speaker 2: questions that sort of may help determine timing or outcome.
Speaker 2: I guess you know when we talked about this in
Speaker 2: after the war in Ukraine started. Wars are about supply
Speaker 2: chains in large sense, and quite obviously, wars are about
Speaker 2: size and the scale of the arsenals and how fast
Speaker 2: they can be replenished.
Speaker 4: Right, Two things I know wars logistics, yes, and also
Speaker 4: war is a racket. And the only reason I know
Speaker 4: that is because I just literally downloaded the book, so
Speaker 4: I'll know more about that in a second.
Speaker 3: But you're absolutely right.
Speaker 4: I do not like talking about war or conflict or
Speaker 4: military stuff in general, but I do enjoy talking about
Speaker 4: supply chains.
Speaker 3: And there's one crucial supply.
Speaker 4: Chain that we haven't really discussed in detail ever before,
Speaker 4: but it keeps coming up more and more in this conflict.
Speaker 2: Yeah, that's right. So obviously, you know, you see these
Speaker 2: numbers and I don't know how real they are, but
Speaker 2: their extraordinary. You know, that's like Iran can launch an
Speaker 2: attack against a military base and in nearby country, et cetera.
Speaker 2: So I'll just talk about the extraordinary efficacy of cheap
Speaker 2: drones and so forth, and then you hear about the
Speaker 2: extraordinary cost of basilid defense, right.
Speaker 4: So putting on our old international relations hat. Yeah, A
Speaker 4: lot of what we used to study was this idea
Speaker 4: of asymmetric warfare, right, And the classic examples that would
Speaker 4: come up would be guerrilla warfare, where you know, you
Speaker 4: have a less well equipped army that is engaging in
Speaker 4: exhausting skirmishes against like a better equipped, larger army, and
Speaker 4: it's a way of like offsetting their own weaknesses against
Speaker 4: the strengths of another force. Nowadays, we don't really have
Speaker 4: that kind of ground conflict knock on wood, but you're
Speaker 4: seeing it, some people say, play out in this arena
Speaker 4: of missiles, which is really where all this conflict is
Speaker 4: playing out is in the missile space. So you hear
Speaker 4: these stories about like Iran is launching these drones that
Speaker 4: cost I think twenty five thousand dollars upopo some of them,
Speaker 4: or putting minds in the Strait of Hormuz, which are
Speaker 4: also very cheap relative to some other tactics. And meanwhile
Speaker 4: you hear things like, well, the UAE's missile defense system
Speaker 4: costs like millions of dollars per pop literally per pop
Speaker 4: against a drone. And meanwhile the US is firing you know,
Speaker 4: interceptor missiles or whatever that cost again millions and millions
Speaker 4: of dollars.
Speaker 2: Yeah, and you hear and you know, again the math,
Speaker 2: the sort of missile math, seems very lopsided. And then
Speaker 2: of course the question is just the pure numbers and
Speaker 2: how many do you have? And what is the capacity
Speaker 2: to ramp up production, et cetera. All huge questions that.
Speaker 3: Are where do missiles actually come from?
Speaker 2: Where they made?
Speaker 5: That's right?
Speaker 2: Anyway, we have a ton of questions and we don't
Speaker 2: have the answers, but we're going to learn a lot.
Speaker 2: We have the perfect guest, someone who knows about this intimately,
Speaker 2: someone who focuses on this entirely. We're going to be
Speaker 2: speaking with Tom Kerrico, Senior Fellow and director of the
Speaker 2: Missile Defense Project at CSIS, and he's going to walk
Speaker 2: us through all of this and how to think about
Speaker 2: the supply chain of these armaments. So, Tom, thank you
Speaker 2: so much for coming on odd Lacks.
Speaker 5: Hey, great to be with y'all.
Speaker 2: Thank you so much. What do you tell us just
Speaker 2: to begin? What do you do? What is the focus
Speaker 2: of your work?
Speaker 5: CSIS Center for Strategic International Studies, I would say, is
Speaker 5: the main defense think tank in Washington, d C. It's
Speaker 5: been around since you know, I think the sixties in
Speaker 5: the Cold War. And within CSI asked, there's sort of
Speaker 5: the department that focuses on hard power to focus on
Speaker 5: defense department centric things, and within that I run the
Speaker 5: Missile Defense Project And so basically think mud to space, uads,
Speaker 5: cruise missiles, ballistic missiles, space sensors, you know, everything in
Speaker 5: that window, both offense and defense is what my team
Speaker 5: kind of studies, writes about, comments upon and hosts just
Speaker 5: a lot of events and commentary.
Speaker 4: Actually, before we even get into missiles, this is a
Speaker 4: question I wanted to ask, but why do we have
Speaker 4: defense think tanks anyway?
Speaker 3: Like why do these exist?
Speaker 4: Because if you think about military conflict in the US,
Speaker 4: presumably there should just be one actor engaged in military
Speaker 4: conflict with other states at any one moment of time,
Speaker 4: and that's the actual US government, the Department of Defense
Speaker 4: slash Department of War. Why do we need private actors
Speaker 4: opining on military Harry tactic strategy, supply chains at all.
Speaker 5: Yeah, that's a good question, that's a fair question, and
Speaker 5: I think I would answer it with what folks coming
Speaker 5: out of d D always say, which is is the
Speaker 5: world's largest bureaucracy, and quite literally, they don't have time
Speaker 5: to think that. That is what senior officials say all
Speaker 5: the time. And when you go in you also tend
Speaker 5: not to have new ideas, and so it's kind of
Speaker 5: an opportunity for idea generation. And this is not my formulation,
Speaker 5: this is what you frequently hear from people who go
Speaker 5: in and out of government that they need those idea
Speaker 5: generation in a way to be contracted out by those
Speaker 5: people who have time. And so, having said that, a
Speaker 5: lot of people who go into government come from the
Speaker 5: think tank world, come from the policy worlds, I think
Speaker 5: I would put it rather, and they go out. I
Speaker 5: think they write some things, they reflect on things, and
Speaker 5: study things, and then they kind of perhaps go back
Speaker 5: in to together.
Speaker 2: Let's talk about from the outside perspective. You know, you
Speaker 2: try to estimate the size of the arsenal various different
Speaker 2: weapons that the US has. How transparent is the government
Speaker 2: about the size of stockpiles? And how much is one's
Speaker 2: job from the think tank world from the outside an
Speaker 2: exercise and triangulation, inference and so forth to be able
Speaker 2: to understand these things. And then just like after besides
Speaker 2: this sort of approach you take to measuring these things,
Speaker 2: what are some of the numbers that we're talking about
Speaker 2: right now.
Speaker 5: Yeah, So, look, it's got a very case to case.
Speaker 5: But I would say in many respects, although it's the
Speaker 5: government's job to keep a number of things secret so
Speaker 5: that the bad guys don't know exactly what we have
Speaker 5: or how many we have, rather I would nevertheless say
Speaker 5: that to a very large extent, we are a democracy,
Speaker 5: and a lot of detail is available in the budget
Speaker 5: books that go over to Congress every year. One of
Speaker 5: the budget request, the annual Lune request, comes out and
Speaker 5: so there is a pretty good amount of tracking. If
Speaker 5: you want to understand what kind of defense department you have,
Speaker 5: look at the money, and so there's a there's a
Speaker 5: decent amount of information out there about you might say,
Speaker 5: the garden variety missiles, the garden variety capabilities that have
Speaker 5: to be you know, deliberated, appropriated by Congress, and then
Speaker 5: also built by industry. And so while exact numbers are
Speaker 5: kept sensitive, you can get pretty close in terms of
Speaker 5: these dollars and this number of rounds you can get.
Speaker 5: You can get pretty close.
Speaker 4: Can you For those who haven't been following this as
Speaker 4: intensely as you have, can you paint a schematic of
Speaker 4: the kind of missiles where we're talking about when we
Speaker 4: talk about the situation in Iran right now? And what
Speaker 4: exactly are the different missile types being used for I know,
Speaker 4: guys love talking about missile names right and being like
Speaker 4: armchair militaries. So some people might know this already, but
Speaker 4: for the benefit of those of us who have it,
Speaker 4: you know, we just see a missile and it's a missile.
Speaker 4: What are the different types that are currently being deployed?
Speaker 5: Basically, there's platforms and there's projectiles. You know, aircraft, ground vehicles,
Speaker 5: ships and this sort of thing. But basically, since the
Speaker 5: nineteen sixties there's been a high, high degree of emphasis
Speaker 5: on essentially guided missiles, precision guide of munitions of various kinds,
Speaker 5: and also standoff capability and so you know, indirect fire cannons, guns,
Speaker 5: this kind of thing began to be replaced by much
Speaker 5: more over the horizon capabilities that could fly out of
Speaker 5: good ways come back down, and especially in terms of
Speaker 5: terminal guidance, could then find a ship on the ocean,
Speaker 5: or find using terrain mapping or what have you. So basically,
Speaker 5: since the kind of the precision guidance revolution in the
Speaker 5: seventies especially, just been an enormous amount of progress. And
Speaker 5: so frankly, this tech technological progress is no longer that
Speaker 5: a monopoly of the United States as it perhaps once was.
Speaker 5: It's ubiquitous even folks like Iran, North Korea and that
Speaker 5: kind of thing habit. And so that's the baseline. And
Speaker 5: so there's Look, there's different kinds of missile ry, and
Speaker 5: a missile etymologically speaking, is simply that which is sent.
Speaker 5: There's ballistic missiles, the fly gravity's rainbow mostly unpowered for
Speaker 5: most of their flight, cruise missiles that are essentially aerodynamic
Speaker 5: and use lift and drag to travel, some kind of
Speaker 5: jet engine or what have you. And then there's these
Speaker 5: new classes of things that are kind of blending. You know,
Speaker 5: people talk about hypersonic gliders that may start off with
Speaker 5: a ballistic push, but then have the maneuver the speed
Speaker 5: of a ballistic missile, but the maneuverability of a cruise
Speaker 5: missile or aircraft, you might say. And so it's a
Speaker 5: it's a rich and diverse spectrum that has emerged over
Speaker 5: the years. And as a former Biden administration officials said,
Speaker 5: and I like to repe missiles truly have become weapons
Speaker 5: of choice. It's the thing for which we reach early
Speaker 5: and often in a conflict, and largely because of the
Speaker 5: combination of that precision guidance and that standoff capability. And
Speaker 5: so when the first Trump administration wanted to go hit Syria,
Speaker 5: you know, they sent fifty nine Tomahawks, that's a cruise
Speaker 5: missile to go get them. And in this conflict there
Speaker 5: has been enormous, and I would say a scary amount
Speaker 5: of missiles expended on the part of the United States,
Speaker 5: hundreds and hundreds on the part of Iran lashing out
Speaker 5: basically all of their neighbors with the combination of ballistics,
Speaker 5: and a lot of these drones are essentially cruise missiles.
Speaker 5: When you're over one thousand colinars in range, you know
Speaker 5: it's essentially a cruise missile, these heads, for instance. And
Speaker 5: so then you have the missile defense world. And you know,
Speaker 5: it wasn't that long ago when in polite society it
Speaker 5: was conventional wisdom that it was impossible to hit a
Speaker 5: bullet with a bullet. Over the past especially five years,
Speaker 5: that has been completely utterly refuted, and in conflict after
Speaker 5: conflict in Ukraine, in the Red Sea operations, in the
Speaker 5: defense of Israel a couple of times now we've seen
Speaker 5: an extraordinary degree of missiles being defeated by a combination
Speaker 5: of effects, not just missile on missile, but a combination
Speaker 5: of effects. And now you know, we're kind of surprised
Speaker 5: when we miss at some of these things. And what
Speaker 5: was once an American idiosyncrasy, the pursuit of this missile
Speaker 5: defense capability is now very much a global phenomenon. After
Speaker 5: the Ukraine conflict, especially in Europe, the European Sky Shield Initiative,
Speaker 5: Germany buying and Israeli Aero three system for ballistic missile
Speaker 5: defense has been a sea change. The demand signals, the
Speaker 5: supply and demand signal of long range standoff and the
Speaker 5: means to contend with it is very much a global phenomenon.
Speaker 5: I'll say that the top two priorities for aid for
Speaker 5: Ukraine over the past four years were what long range fires,
Speaker 5: missiles and a defense. They went so fares to put
Speaker 5: the Patriot launch rot on their currency because it has
Speaker 5: basically kept them kept them sovereign. And these are the
Speaker 5: top I didn't know that.
Speaker 1: It's fun.
Speaker 5: I've got one on my office.
Speaker 3: Right, the currency, not the missile.
Speaker 5: Right. I'm still trying to buy a Patriot for they
Speaker 5: won't again working on it.
Speaker 2: That was already extremely helpful. But just to go back,
Speaker 2: use the word scary to talk about the sort of
Speaker 2: volume of activity that the US has or how much
Speaker 2: we've fired already. What did you mean by that? Unpacked
Speaker 2: that statement a little bit.
Speaker 5: Yeah, So let me just say that missile defense will
Speaker 5: not win a war for you, but its absence will
Speaker 5: lose one, or could lose one pretty quickly. And so
Speaker 5: I said a moment ago that Ukraine the missile defense
Speaker 5: has helped keep Ukraine sovereign right. If not for being
Speaker 5: able to thwart these incoming era and missile attacks, it
Speaker 5: would have been a very different situation. Let go back
Speaker 5: to the last summer in the hundreds of missiles six
Speaker 5: hundred and fifty projectiles from multiple parts of the Middle
Speaker 5: East coming at Israel all at once during the Twelve
Speaker 5: Day War. If those hundreds and hundreds of objects had
Speaker 5: arrived all at once as they were intended to do,
Speaker 5: in a place the size of New Jersey, it would
Speaker 5: have been catastrophic. Surprisingly enough, almost everything was defeated. And
Speaker 5: so it is missile defense buys time to end the
Speaker 5: threat by other means, it does not end the threat itself. Now,
Speaker 5: what I said last summer after that conflict ended the
Speaker 5: Trump administration basically through the Iranians a lifeline and said, hey,
Speaker 5: we're going to stop. I said, that's going to be
Speaker 5: a mistake, because what's going to happen is the Iranians
Speaker 5: are going to rebuild, and then we're going to come
Speaker 5: and we're going to do this again in a year
Speaker 5: or so. And I was wrong because it didn't take
Speaker 5: a year nine months. And why that matters, and why
Speaker 5: it's scary is because it's about capacity. Capacity of defensive
Speaker 5: interceptors buys time, but it takes a heck of a
Speaker 5: lot of time to produce that capacity. And so this
Speaker 5: gets to the specter an ope coming out on this,
Speaker 5: the specter of going Winchester, of running out of defensive interceptors,
Speaker 5: and that would be a very bad day. And so
Speaker 5: when you talk you hundreds and hundreds of missiles are
Speaker 5: going to require hundreds of interceptors. That was last year
Speaker 5: again this year, and so that's the scary part is
Speaker 5: is the massive expenditure of these things. And I want
Speaker 5: to quote General Kaine, the Chairman of the Joint Chiefs,
Speaker 5: who said, who's asked do we have enough? And he said,
Speaker 5: we have enough for this conflict. That is not the
Speaker 5: same as saying that we have enough for the other
Speaker 5: tasks that we have around the world, most significantly deterring
Speaker 5: a conflict with China. And so we have now cut
Speaker 5: in very substantially to our total inventory of missile defense interceptors.
Speaker 5: The numbers, complete numbers are not not been released. We've
Speaker 5: done a study on this from what it was last year,
Speaker 5: and it was a lot. And so why that matters.
Speaker 5: Right now, we're moving patriots and perhaps some FADO those
Speaker 5: missile defense systems from South Korea and Japan to the
Speaker 5: Middle East. That's significant because their job is to be
Speaker 5: in the Pacific and to deter to provide a defensive
Speaker 5: deterrent to Chinese adventurism or to North Korean adventurism or
Speaker 5: what have you. And so you know, we've been saying
Speaker 5: different administrations have been saying that we're going to pivot
Speaker 5: to the Pacific since the Abomba administration. We're still kind
Speaker 5: of waiting for that to happen. We keep lurching back
Speaker 5: to Europe and to the Middle East. And in fact,
Speaker 5: a lot of the administration officials in this Pentagon have
Speaker 5: been among those who said, hey, we got to focus
Speaker 5: on China, we got to focus on the Pacific. And
Speaker 5: what they're doing right now is presiding over an extraordinary
Speaker 5: vaporization of our inventory in a very short win of time.
Speaker 5: And so what I worry about. You've heard of the
Speaker 5: Davidson window, the former head of Indo Pecon, who said, hey,
Speaker 5: he worries that China would be ready to move against
Speaker 5: some of their neighbors by twenty twenty seven, what I
Speaker 5: worry about most is that this extraordinary expenditure of stuff
Speaker 5: is not going to be replaced in a year, absolutely not,
Speaker 5: and that, in fact, this may kind of be a
Speaker 5: self fulfilling prophecy of encouraging, of tempting China to do
Speaker 5: something very bad.
Speaker 4: Joe, I haven't heard the term going Winchester. I'm Winchester
Speaker 4: for years and years and years.
Speaker 5: Do you remember that.
Speaker 3: No, it's running out of ammunition.
Speaker 1: Yeah.
Speaker 4: The only reason I know this is because my dad
Speaker 4: made me watch like an inordinate amount of military movies
Speaker 4: growing up. But anyway, I'm very curious about something you said,
Speaker 4: which is that you can't win a war with missiles,
Speaker 4: and it seems like miss with miss oh, I'm sorry.
Speaker 3: With missile defense.
Speaker 4: But with offense presumably you can, which seems to be
Speaker 4: the strategy right now.
Speaker 5: Well, and so let me speak to that. The joint
Speaker 5: forest are the United States and working with Israel hit
Speaker 5: you know, I think it's up to five thousand targets
Speaker 5: within the first several days of the war. Well, they
Speaker 5: were doing so from Afar, they were doing so from standoff.
Speaker 5: And so while they're not releasing the numbers of the
Speaker 5: Tomahawk missiles of the JASM, of the l rasms and such.
Speaker 5: They not releasing those. One may easily surmise that a
Speaker 5: significant number of those targets were serviced by these long
Speaker 5: range things, of which we have finite quantities, and so
Speaker 5: the offensive strike capabilities is also even more important as
Speaker 5: a deterrent, and we are chewing those up by at
Speaker 5: least the many hundreds, and it may I suspect turn
Speaker 5: not to be thousands, and that's also part of the
Speaker 5: scary war.
Speaker 4: Can you give a little bit more detail on I
Speaker 4: guess the procurement process for different types of missiles, because
Speaker 4: I'm very curious about the thinking that goes behind, you know,
Speaker 4: someone saying that we want to have this many long
Speaker 4: range defensive missiles versus this many you know, maybe short
Speaker 4: range defensive missiles. How do those decisions actually get made.
Speaker 5: That's a good question. You know. It fundamentally comes down
Speaker 5: to an idea, an idea of the order of battle,
Speaker 5: of how a conflict may play out. And so you know,
Speaker 5: this is the job of the military planners and the
Speaker 5: joint staff to kind of think that through. And I
Speaker 5: hypothesize this is how many how many missiles we would
Speaker 5: need to have in theater, how many aircraft, how many ships,
Speaker 5: And this is how we might be able to marshal
Speaker 5: a force, and conversely, how we think the other side
Speaker 5: might be able to marshal their marshal their forces. I
Speaker 5: will say that the Ukraine conflict especially made folks realize
Speaker 5: so that our estimates of what we would likely need
Speaker 5: were dramatically too low. And so I'm just going to
Speaker 5: give one example, but I think you're going to see this,
Speaker 5: and in fact, there are news developments over the past
Speaker 5: year that gratify this in different ways. That in April
Speaker 5: of last year, the US Army quadrupled its objective acquisition
Speaker 5: number of how many Patriot packed three missiles it needed
Speaker 5: to buy over the next coming years. Quadrupled that number
Speaker 5: from like three thousand and something to thirteen thousand and something.
Speaker 5: And I think kind of behind the scenes, you're seeing
Speaker 5: a recognition, as we've seen the Ukrainians and the Russians
Speaker 5: use enormous numbers of projectiles or missiles of different kinds,
Speaker 5: kind of a sinking in that oh, in an actual conflict,
Speaker 5: this would ramp up dramatically. And so even before the
Speaker 5: Twelve Day War last summer between Israel and Iran and
Speaker 5: are being involved. Even before that, the Pentagon began to
Speaker 5: do a few things, some really important things. The Biden
Speaker 5: administration had been ramping up a number of missiles of
Speaker 5: offensive and defensive, of various stripes. You probably remember the
Speaker 5: discussion about attackers of whether we could spare any a
Speaker 5: tackles to give to Ukraine, and the Bide administration didn't
Speaker 5: at first, and then they eventually did. That was true
Speaker 5: with a lot of munitions over the past four years.
Speaker 5: Flash forward to last spring. Incoming Deputy Secretary Steve Feinberg,
Speaker 5: who comes out of the private capital world as as
Speaker 5: you listeners no doubt know, came in and began to
Speaker 5: call in the CEOs of a number of defense companies,
Speaker 5: and I will say metaphorically grabbed them by the lapels
Speaker 5: and shook them to say, we need to maximize production.
Speaker 5: You know, I respect his respect for hard power. And
Speaker 5: over the next six months, from a basically Memorial Day
Speaker 5: last year, over the next six months you began to
Speaker 5: see a lot of drills and a lot of figuring
Speaker 5: out of just how many Tomahawks and all these offensive
Speaker 5: and defensive missiles and how much solid rocket motor production
Speaker 5: we could do on and on and so over the
Speaker 5: past two months since in January and February of this year,
Speaker 5: all that work was basically publicized, and at least in
Speaker 5: press releases it said that rethum of ramp up five munitions.
Speaker 5: There's more to come. By the way, Lockeyed announced bad
Speaker 5: and Pack three Patriot that they were going to quadruple
Speaker 5: fad and go on the Patriots side from six hundred
Speaker 5: a year to two thousand a year in production. And
Speaker 5: we're going to go from by the way, from tomahawks
Speaker 5: cruise missiles from fifty seven requested last year, which is
Speaker 5: a pittance to their goal is one thousand a year
Speaker 5: of tomahawks. And what I would say is that those
Speaker 5: are all very sensible moves, very belated by the way,
Speaker 5: that are properly allowing the lessons of the past a
Speaker 5: couple of years to be applied. Break that was all
Speaker 5: before we went to war with the Roan. And so
Speaker 5: now the ramp it's called the munition's ramp, hasn't yet begun.
Speaker 5: And the other kind of scary thing is it hasn't
Speaker 5: begun because the money wasn't there, and the appropriations bill
Speaker 5: that came out in January, I guess became law in
Speaker 5: early February last month. The language said, oh, by the way,
Speaker 5: we know we Congress, the appropriators know that this appropriation
Speaker 5: is twenty eight point eight billion with a b short
Speaker 5: of what the Pentagon requested just for munitions. And so
Speaker 5: there's a couple of things going on here. One, we
Speaker 5: already had that twenty eight billion and change shortfall for
Speaker 5: Fly twenty six and then and because of that, you
Speaker 5: can't put things on contract adambly to start this seven
Speaker 5: year process. That is a good plan, very good plan.
Speaker 5: And on now we have just gone and vaporized many
Speaker 5: billions of dollars and hundreds and probably thousands of missiles
Speaker 5: over the past two weeks. And so you put that
Speaker 5: together and it's not a very good picture. And so
Speaker 5: at the very minimum, Congress is going to have to
Speaker 5: step up, I believe it for a communition supplemental in
Speaker 5: the very near time.
Speaker 2: So let's talk about the binding constraints to really ramping
Speaker 2: up production, because there's clearly the political constraint, and by
Speaker 2: political I mean appropriations. Votes have to happen to say
Speaker 2: we're going to allocate these dollars to defense. Okay, we
Speaker 2: understand that part there's politics that's difficult. Let's talk about
Speaker 2: the binding physical constraints. So when you say, okay, you
Speaker 2: want to go from fifty seven to one thousand, what
Speaker 2: are we talking about in terms of the facilities that
Speaker 2: we have the natural resources I imagine rare earth metals,
Speaker 2: and certain key commodities, maybe choke points or bottlenecks in
Speaker 2: this process. We all would love, I presume, to have
Speaker 2: an infinite number of missile defense capabilities, etc. We would
Speaker 2: like to not have to choose between Korea and the
Speaker 2: Middle East, of the golf allies and so forth. But
Speaker 2: what are the physical constraints as you see them to
Speaker 2: ramping up production?
Speaker 5: Yeah, well, you mentioned their unlimited supply. If I'm not mistaken,
Speaker 5: there was a presidential tweet the other day saying that
Speaker 5: we had a virtually unlimited supply, and I would just
Speaker 5: say that that is a state that is problematic relatives reality.
Speaker 5: So look, you just listed off facilities, long lead items
Speaker 5: for production, and you'll like supply chain issues. There's also people.
Speaker 5: There's also the workforce. You know, there's basically one facility
Speaker 5: in Tucson, Arizona that cranks out tomahawks. For instance, There's
Speaker 5: a small number of things, and so actually, when you
Speaker 5: start looking at the supply chain, it is a surprising
Speaker 5: degree and there's been a number of papers written on this,
Speaker 5: although there's a lot more to ascertain is there's a
Speaker 5: lot of bottlenecks, So there's a lot of soul source
Speaker 5: for some widget and to the Pentagon's credit, over the
Speaker 5: past several years, there's been a lot of I would say,
Speaker 5: not naval gazing is a bad term, but a lot
Speaker 5: of introspection trying to figure out an understand to at
Speaker 5: least truly intellectually understand what is the supply chain. And
Speaker 5: there's still some opacity to that. But nevertheless, the primes
Speaker 5: that defense, prime companies and the Department have been looking
Speaker 5: into this and I think has been illuminating in terms
Speaker 5: of the bottlenecks and sole source issues. And so you've seen,
Speaker 5: for instance, I would say, a series of experiments trying
Speaker 5: to a get private capital and involved the Office of
Speaker 5: Strategic Capital. When that was first being stood up, I
Speaker 5: asked the guy in charge of it, I said, I
Speaker 5: really want to know one thing, are you going to
Speaker 5: be big enough to matter? You know, America's asymmetric advantage
Speaker 5: to use that phrase, America's asymmetric advantages. We're a wealthy country.
Speaker 5: We have to leverage that private wealth, and I think
Speaker 5: there's a number of initiatives on that front that will
Speaker 5: direct and helping to direct private capitals to the supply
Speaker 5: chains for things that matter to defense. The other thing,
Speaker 5: a couple of experiments going on here are investment in,
Speaker 5: for instance, solid new solid rocket motor producers. Everybody knows
Speaker 5: SpaceX and space launch side of the things. There's also
Speaker 5: a lot of kind of new startup companies for solid
Speaker 5: rocket motors. I think this is good. I think this
Speaker 5: is necessary, and if they are big enough to matter,
Speaker 5: then we should absolutely be doing all that. At the
Speaker 5: same time, there is the risk that we're I like
Speaker 5: to say, fiddling with the base and the treble knobs
Speaker 5: and not turning up the volume. And that essentially means.
Speaker 5: There's two big companies that do SRM solid rocket motors,
Speaker 5: and one of them just got a billion dollar equity
Speaker 5: stake investment by the Pentagon. That is Al three Harris
Speaker 5: that has had Aerojet as a subsidiary. The other big
Speaker 5: one of courses is North of Grumman, which owns and
Speaker 5: assumed or ATK in the past and so on the
Speaker 5: solid rocket motor front, there's these experiments going on and
Speaker 5: these investments. The Biden administration put two hundred and sixteen
Speaker 5: million dollars into aerojet in Canden, Arkansas, which is actually
Speaker 5: one of the handful of places where we kind of
Speaker 5: keep it away from polite society. You don't want big
Speaker 5: things blowing up near cities, which is one of the
Speaker 5: challenges of reduction as well. A third type of experiment,
Speaker 5: and this is coming out of steam Feinberg in particular,
Speaker 5: is that in this plan, this initiative to get this
Speaker 5: munitions ramp, he's doing something very different, which is he's
Speaker 5: asking the primes to lean in on their own dime.
Speaker 5: And when I say lean on their own dimes, I
Speaker 5: mean a lot of dimes, because we're talking about double
Speaker 5: digit billions. He's basically asking the companies to pony up
Speaker 5: out of their internal funds, publicly traded companies again to
Speaker 5: on spec begin to invest in these facilities. Now, if
Speaker 5: you're a publicly traded company, that's sticking your neck out,
Speaker 5: and there has been the customer here, THEDOD is a
Speaker 5: monopsony in terms of buying things that blow up the
Speaker 5: customer has not been very reliable over the years, and
Speaker 5: of all the things DD buys, munitions has been a
Speaker 5: sine wave up and down, lots of very cyclical and
Speaker 5: so that hurts the certainty of industry to be able
Speaker 5: to invest and hire and buylong lead items, et cetera.
Speaker 5: And that's why you need multi year pro caumer That's
Speaker 5: why you need a seven year window, and that's why
Speaker 5: this whole ammunitions plan makes sense if we can get
Speaker 5: it off the ground.
Speaker 4: Joe I was going to say we should sound the
Speaker 4: monopsy clacks him, but I don't think we want any
Speaker 4: loud noises on a podcast about missiles. Tom, What about
Speaker 4: if we can't ramp up production really quickly? There are
Speaker 4: existing missiles out there, although to your point, there's a
Speaker 4: dwindling stockpile, but our missiles like I don't know, shoes
Speaker 4: or a jacket. Can you just like tap your allies
Speaker 4: and say, well, we loaned you a missile, can we
Speaker 4: have it back and use it now? And then, if so,
Speaker 4: what is that actually mean for some of our allies
Speaker 4: who are still engaged in conflict like Ukraine. I see
Speaker 4: there's a there's a headline out there right now saying
Speaker 4: that in recent weeks Ukraine's F sixteen jets have been
Speaker 4: starved of US made missiles, and now we have other
Speaker 4: allies like the Gulf States, who need some of their
Speaker 4: missiles more than ever.
Speaker 5: So you raise a really good point, and I'll tell
Speaker 5: you if I had a nickel for every time the
Speaker 5: Trump administration one point oh or two point zero said
Speaker 5: to our allies, hey, you need to spend more on defense.
Speaker 5: You need to be buying more American That was just
Speaker 5: an executive order a couple of weeks ago saying, you know,
Speaker 5: we shall use the sale of American weapons to our
Speaker 5: allies as an instrument of foreign policy. We've always kind
Speaker 5: of done that basically since forever. But it was, you know,
Speaker 5: a little bit of chest beating and saying, hey, you
Speaker 5: our friends need to buy more American made products. And
Speaker 5: there's good reason for that. America makes the best of
Speaker 5: the kind of exquisite Crown jewels, capabilities for seekers and
Speaker 5: things that hit molt with bullets, to be sure, But
Speaker 5: there is also a problem. There are eighteen countries there
Speaker 5: used to be nineteen, now eighteen countries that operate the
Speaker 5: Patriot Missile Defense System globally, and the Biden administration had
Speaker 5: to suspend the deliveries of Patriot missiles to basically everybody
Speaker 5: a couple of years back because they had to send
Speaker 5: more to Ukraine. Right, So, in terms of our allies,
Speaker 5: it's actually that on the one hand, we're telling them
Speaker 5: buy more of American stuff, and then the second thing is, oh,
Speaker 5: but we might not be able to fulfill your orders
Speaker 5: of the things you already bought. Like that's the problem.
Speaker 5: That's one of the big reasons why this ramp needs
Speaker 5: to happen is not merely for US needs, but also
Speaker 5: to provide this the deliveries that we want our friends
Speaker 5: and allies to be equipped with, and we want them
Speaker 5: to buy not just because we have some commercial interest
Speaker 5: a lot of times US taxpayer and set footing the
Speaker 5: bill for some of these things, but because we want
Speaker 5: interact operability. We want Australia and Japan to be operating
Speaker 5: Tomahawk and just destroyers so that our just destroyers and
Speaker 5: our Tomahawk weapons system they can all work together and
Speaker 5: the whole be more than more than the s of
Speaker 5: its parts. So there has been a lot of leaning
Speaker 5: on the Europeans to send stuff to the Ukrainians, and look,
Speaker 5: it is their backyards. It kind of makes sense for
Speaker 5: them to be ponying up for their security. You know,
Speaker 5: the polls pull into remembers the Soviet boot quite well,
Speaker 5: and they in a handful of other countries have been
Speaker 5: especially at the tip of the forefront to help to
Speaker 5: help the Ukrainians. So this is very much a global
Speaker 5: phenomenon and there are to your point, a lot of
Speaker 5: entangling relationships in terms of the deliveries of systems the
Speaker 5: acquisition of systems. You know, Denmark, for instance, just decided
Speaker 5: they were going to buy a French Stamptee air defense
Speaker 5: system rather than Patriot, not because Patriot was better, and
Speaker 5: frankly it wasn't because of the whole Greenland thing. It
Speaker 5: was because of schedule, because there's a long queue of
Speaker 5: partners that want that stuff and sometimes you need stuff
Speaker 5: sooner as opposed to the best.
Speaker 2: Can you talk about you know, at the very beginning,
Speaker 2: we talked about the asymmetry of these very ostensibly very
Speaker 2: cheap drones and very expensive missile defense, saying you just
Speaker 2: think if they're really if the drones are as cheap
Speaker 2: as advertised, there could just be quite a lot of
Speaker 2: them and you could chew through that missile defense. How
Speaker 2: do you talk to us about that math? How real
Speaker 2: are these numbers that you see, like twenty thousand dollars
Speaker 2: drone versus four million dollar defense missile, because that seems
Speaker 2: pretty brutal, But how do you see that equation?
Speaker 5: I have to say that has to be the most
Speaker 5: repeated cliche that's put out to the most repeated headline.
Speaker 5: You know, I think the Irenians heads are a little
Speaker 5: bit more than twenty thousands. Of course, there's lots of
Speaker 5: really super small short and stuff, but when they're talking
Speaker 5: about going to a couple of thousand kilometers, I think
Speaker 5: the numbers quoted someone fifty and eighty thousand. There's some
Speaker 5: poetic justice that we capture some of those sh heads
Speaker 5: in an American company reverse engineered them. They're called Lucas
Speaker 5: Lucas drones, and we sent some some of them back
Speaker 5: at Ukraine, and the quoted cost for that I think
Speaker 5: was I think was thirty thousand dollars. So that's good.
Speaker 5: You need affordable mass, you need a treatable mass, and
Speaker 5: so that phenomenon. Look, Ukraine is producing millions millions per
Speaker 5: year of many of them are very very small, but
Speaker 5: millions of drones, I mean, it's darkening the sky as
Speaker 5: it were. Most of them don't last there long. Most
Speaker 5: of them may only fly once, for instance, and so
Speaker 5: that is certainly a phenomenon, a major trend. But you know,
Speaker 5: going back to the cost per round, people like to
Speaker 5: count the cost of a missile because it's kind of
Speaker 5: easy to count. The things that are harder to count,
Speaker 5: that are frankly bigger is often the massive quantities of
Speaker 5: jet fuel that are used to drop much cheaper gravity bombs,
Speaker 5: and so I think it is actually rather misleading to
Speaker 5: just look at the cost of the Patriot or the
Speaker 5: cost of the standard missile or what have you. If
Speaker 5: you had to throw one thousand drones to have the
Speaker 5: same effect as one twelve hundred kilometer range Tomahawk missile,
Speaker 5: you might not even be able to get there. Tamahawk
Speaker 5: missiles are longest range missile and it's got five hundred
Speaker 5: pound warhead. These drums don't have that kind of warhead,
Speaker 5: so therefore they don't have the kind of effect. So
Speaker 5: there's a It really comes down to what is it
Speaker 5: you're trying to do? And oh, by the way, the
Speaker 5: platforms and it's the whole operational cost that matters, including,
Speaker 5: by the way, the cost of operational failure. You know,
Speaker 5: I'd like to say I've had plenty of admirals say
Speaker 5: this on stage with me at Suisias over the years,
Speaker 5: because I always asked this point. A ship captain, when
Speaker 5: he sees a cruisemuscile come into his ship is not
Speaker 5: going to pull out his slide role or his pocket
Speaker 5: calculator and say what's the cost of that hoo the
Speaker 5: drone and what is the cost of the missile? We're
Speaker 5: going to do that. No, they're going to protect the ship.
Speaker 5: They are going to go for mission success. And so
Speaker 5: you say, well, that's value versus cost, and that's true.
Speaker 5: But the cost, the real cost of the Iran operation
Speaker 5: is not going to be the munitions. It's going to
Speaker 5: be the enormous steaming of the USS forward from Venezuela
Speaker 5: to the Middle East. It's going to be the people
Speaker 5: and all in the jet fuel and all of these
Speaker 5: other things. And by the way, with the facility repair,
Speaker 5: those things are going to eclipse the cost of the munitions.
Speaker 5: So nevertheless, defense is hard. It is hard to hit
Speaker 5: an incoming screaming rantry vehicle from four hundred klometers away,
Speaker 5: for instance, And so defense of the interceptors are going
Speaker 5: to be more expensive than offensive ones. That's just a fact.
Speaker 5: And that's again why missile defenses won't win a war.
Speaker 5: They can only buy you time to win that to
Speaker 5: end the threat by other means. And that's why you
Speaker 5: have all these other things as well. And I'd like
Speaker 5: to say, you could throw a thousand cheap UAVs into
Speaker 5: the sky and it won't do the job of a
Speaker 5: single patriot. Interceptor. Capability matters too.
Speaker 4: So you mentioned ending the threat just then, And this
Speaker 4: is the other big question that I and I imagine
Speaker 4: a lot of other people have at the moment. With
Speaker 4: a ground conflict, you can kind of envision an endpoint
Speaker 4: where you know, an army comes marching into a state
Speaker 4: capital and that's pretty much the end of the conflict.
Speaker 4: With missile warfare, it seems like it can go on
Speaker 4: for a very long time, and I'm not quite sure
Speaker 4: what the defining point is at which two sides basically say, okay,
Speaker 4: we're done. Now someone's one and someone's lost.
Speaker 5: Yeah. Well, and that was the case in the nineteen
Speaker 5: eighties between the between Iran and Iraq, for instance, lots
Speaker 5: of lots of missiles going back and forth. So you've
Speaker 5: hit on a couple important points there. One, as is
Speaker 5: often observed, it's really hard to do everything with their power.
Speaker 5: It's hard to know if you have destroyed things on
Speaker 5: the ground without being there. And that's why I said,
Speaker 5: you know there there is at least going to be
Speaker 5: the need. Whether that need is met or not, there's
Speaker 5: going to be the need to have some forces on
Speaker 5: the ground, could be special forces, could be partners from
Speaker 5: other countries, but there's going to be that felt need
Speaker 5: to figure out did we hit that underground missile city
Speaker 5: for instance, uh point two. You know, everybody, myself, other folk.
Speaker 5: We're getting nervous when day by day would go on
Speaker 5: and the Iranians kept launching. So the good news is
Speaker 5: that the curve is flattening was a phrase from the
Speaker 5: cod COVID years to flatten the curve of the rate
Speaker 5: of fire. And so you take a look at the
Speaker 5: press conferences, that's a very good development that they've gone
Speaker 5: from hundreds a day to smaller numbers. That reflects that
Speaker 5: we are somehow doing something, hitting the launchers, hitting the missiles,
Speaker 5: hitting the command and control or at least the commanders,
Speaker 5: perhaps decentralized commanders. That is a good sign. And add
Speaker 5: to that that we've now gotten This is the two
Speaker 5: most important words from one of the recent press releases
Speaker 5: from Chairman General Kane is he said the words munitions transition,
Speaker 5: which is to say, we don't have to keep using
Speaker 5: one thousand range Tomahawks because the Rangeys don't have air
Speaker 5: defenses anymore. We can use gravity bombs, of which they
Speaker 5: are plentiful. Still had to flying back and forth, and
Speaker 5: that's not cheap. You can fly back your jadeams, your
Speaker 5: small damar bombs. And there was a press release i
Speaker 5: think over the weekend that we were transferring a bunch
Speaker 5: of munitions to Israel, and when you look at it
Speaker 5: and you look what's in that list, it was gravity bombs.
Speaker 5: And the reason that we've gotten there is we no
Speaker 5: longer have to do the standoff stuff. It's good we
Speaker 5: can now do the stand in you know, flying over
Speaker 5: top and dropping these things. But to your point, it's
Speaker 5: still hard to do all that from the air, and
Speaker 5: there is going to be that uncertainty, which is why, frankly,
Speaker 5: you're not going to have perfect military certainty from the air.
Speaker 5: To really end this, you're going to have to have,
Speaker 5: I would say, a political change.
Speaker 2: Tom Karako, thank you so much for coming on. Odd luck.
Speaker 2: I learned a lot from this. Really appreciate you.
Speaker 5: Taking your time. Thanks all, really enjoying.
Speaker 2: I've never heard that going Winchester. That's like a cut
Speaker 2: that comes up in movies.
Speaker 4: You know, my dad's he flew the fifty two bombers
Speaker 4: in Vietnam. So yeah, I have very mixed feelings about
Speaker 4: all of this.
Speaker 2: Defense procurement strikes me as an extremely difficult I don't know,
Speaker 2: game theory equal briand problem to get right. And you know,
Speaker 2: you because you have the monopsony buyer. It's a monopsony buyer,
Speaker 2: but it's also political and the political winds are going
Speaker 2: to change. You have, you know, companies that are naturally
Speaker 2: profit seeking and profit maximizing, and many of them, and
Speaker 2: he alluded to this and we didn't talk about it
Speaker 2: that much, are monopoly sellers, right, Like, if there's one component,
Speaker 2: if they're in we know all about how with advanced
Speaker 2: supply chains of complicated things, you might have millions or
Speaker 2: thousands of parts that go into it and some of
Speaker 2: these parts may be produced by one company. Maybe there's
Speaker 2: like a shiny mirror or something somewhere there's only produced
Speaker 2: by one optical factory somewhere in the United States. Then
Speaker 2: you have the buy American requirements. So then further narrows
Speaker 2: supply chains, et cetera. So you have monopolies and monopsonies
Speaker 2: facing off. And then you know, how do you get
Speaker 2: sustained spending, sustained procurement through the ebbs and tides of
Speaker 2: a war. Extremely difficult challenge.
Speaker 4: It's it's such a weird ecosystem of players in military procurement.
Speaker 4: And the other thing is like, most of the time,
Speaker 4: what you're planning for is a hypothetical conflict, right, If
Speaker 4: an actual conflict emerges, then I guess you have some
Speaker 4: more certainty to a degree about what you need to
Speaker 4: actually fight it. But you know, if just a few
Speaker 4: years ago, if you're sat there and you're going like,
Speaker 4: should we be buying stuff for or with a ranch?
Speaker 4: Would we be buying stuff for China doing something with Taiwan?
Speaker 4: Like these are very different theaters of war. And I
Speaker 4: imagine that if you're a procurement officer, like the temptation
Speaker 4: must be to you always want to have the best,
Speaker 4: like newest, shiniest stuff, and so I'm just fascinated by
Speaker 4: how people actually make those decisions in the face of
Speaker 4: both monetary limits and physical reality and political reality as well,
Speaker 4: which we kind of we glided past, but for obvious reasons.
Speaker 2: Have you seen the photos, I mean, there are photos
Speaker 2: of the US packing up bad missile defense systems from
Speaker 2: South Korea.
Speaker 3: I have not seen that.
Speaker 2: Yeah, if you just search for it, it's kind of
Speaker 2: it feels very when you see the photos. You do
Speaker 2: not feel like, oh, we're a major superpower. It's like, oh,
Speaker 2: here are these missiles. Sorry, we're taking we have to
Speaker 2: move them elsewhere because we don't have enough right now.
Speaker 2: It's pretty it's pretty shocking, but you know, likes it's hard.
Speaker 2: It's hard to argue against the fact that we seem
Speaker 2: to be spread very thin these days. The war in
Speaker 2: Ukraine continues to go on, obviously, there's this new war
Speaker 2: in Iran, and then as you mentioned, you know, at
Speaker 2: least since the Obama administration, they've been talking about the
Speaker 2: pivot to Asia and so forth, and that keeps not happening.
Speaker 2: But there are obligations on the ground there. The whole
Speaker 2: thing seems to spread very thin.
Speaker 4: War is logistics and a racket.
Speaker 3: Yeah, shall we leave it there?
Speaker 5: Let's leave it there?
Speaker 3: All right?
Speaker 4: This has been another episode of the aud Loots podcast.
Speaker 3: I'm Tracy all the Way. You can follow me at
Speaker 3: Tracy Alaware.
Speaker 2: And I'm Jill Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our guest Tom Karrico, He's at Tom Caroco. Follow
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Speaker 3: Thanks for listening,