Speaker 1: From Bloomberg News and iHeartRadio It's the Big Take, and
Speaker 1: West Consova Today growing doubts about America's military readiness. In
Speaker 1: his nineteen sixty one farewell address, President Dwight Eisenhower famously
Speaker 1: warned about the danger of building a business of war.
Speaker 1: We annually spend on military security alone more than the
Speaker 1: net income of all United States corporations. Now, this conjunction
Speaker 1: of an immense military establishment and a large arms industry
Speaker 1: is new in the American experience. In the councils of government,
Speaker 1: we must guard against the acquisition of unwarranted influence, whether
Speaker 1: sought or unsought, by the military austrial complex. The potential
Speaker 1: for the disastrous rise of misplaced power exists and will
Speaker 1: persist more than sixty years later. The United States spends
Speaker 1: more on its military than any nation on Earth. My
Speaker 1: Bloomberg colleagues Peter Martin, Courtney McBride, and Rock Sena Torone
Speaker 1: report that now the rise of China and the strain
Speaker 1: the war in Ukraine has put on US weapons stockpiles
Speaker 1: have some inside and outside the military questioning whether the
Speaker 1: Pentagon has become too big and too slow to keep
Speaker 1: up with a rapidly changing world. They're here with me
Speaker 1: now to tell us what they've learned. Pete. In reporting
Speaker 1: this story, you found growing concern among some top generals
Speaker 1: and Defense Department officials, contractors, policy experts that the US
Speaker 1: military is in danger of falling behind its rivals. Can
Speaker 1: you describe the conversation that's happening right now in military circles.
Speaker 1: Something that I found really interesting reporting this was that
Speaker 1: there are hundreds thousands of people in Washington who spend
Speaker 1: their lives immersed in what's called the defense industrial base,
Speaker 1: right or the military industrial complex, And a lot of
Speaker 1: the time, these people who have exquisite technical expertise decades
Speaker 1: of experience, don't kind of come out and see the
Speaker 1: light of day too much. But as we started reporting
Speaker 1: this story, we realized that these problems which have been
Speaker 1: known about for years and years, and if you talk
Speaker 1: to these kind of old defense hands, they're like, oh, yeah,
Speaker 1: everyone's known about this for the longest time. But these
Speaker 1: problems are really bubbling up in the minds of top
Speaker 1: policymakers now. And there's kind of been this clarifying moment
Speaker 1: I think over the last eighteen months that's brought this
Speaker 1: stuff to the four. There was China's hypersonic missile test
Speaker 1: stific an event of a test of a hypersonic weapons system,
Speaker 1: and it is very concerning. So it's a very significant
Speaker 1: technological event that occurred or test that occurred by the Chinese,
Speaker 1: and it has all of our attention. But that's just one.
Speaker 1: That's just one which was pretty shocking for policymakers in
Speaker 1: Washington because hypersonics was an area where the US had
Speaker 1: the lead for a long time, but now China has
Speaker 1: kind of moved ahead, and that's something that speaks to
Speaker 1: some of these problems with getting innovations to the warfighter
Speaker 1: when it comes to the defense industrial base. There was
Speaker 1: the rapid depletion of US munition stockpiles when it came
Speaker 1: to supplying Ukraine, and there's this kind of looming worry
Speaker 1: about supply chains and the vulnerabilities that might be there
Speaker 1: because of Chinese parts and components, and so all of
Speaker 1: these things have started to kind of press policymakers as
Speaker 1: they think about, Okay, we have the strongest and best
Speaker 1: military in the world with the most impressive technology, but
Speaker 1: do we have enough things and can we produce them
Speaker 1: quickly enough in order to actually fight the kind of
Speaker 1: war that would be needed with an adversary like China,
Speaker 1: and so this has really become a press issue. Roxanna,
Speaker 1: You've been covering the US military for quite some time.
Speaker 1: Why is the Pentagon struggling a bit to adapt? It's
Speaker 1: because it's so big, and it is the biggest military
Speaker 1: in the world and the best military in the world.
Speaker 1: And I think the planning part of it is always
Speaker 1: extremely ambitious, and when you finally put it on paper
Speaker 1: and put it in practice, it doesn't work out that
Speaker 1: well because there's so many rules, so many regulations. The
Speaker 1: bureaucracy moves so slowly that it doesn't leave any room
Speaker 1: for creativity. They don't foster creativity because creativity means risk,
Speaker 1: and so the US military doesn't want any of these
Speaker 1: risks because they need to show that they can put
Speaker 1: together these ambitious concepts and have these weapons that no
Speaker 1: one else has. But that comes with tremendous downsides because
Speaker 1: the industry will build what the Pentagon tells them to
Speaker 1: along the way require change. The Pentagon changes some of
Speaker 1: the requirements. Technology doesn't work. It's either too ambitious or
Speaker 1: the industry sold something that is too ambitious that they
Speaker 1: can't follow through. So I think it's a combination of
Speaker 1: just ambition, bureaucracy, and just inertia. A lot of the
Speaker 1: problems with the Pentagon really came forward when the US
Speaker 1: started supplying Ukraine with weapons to fight off rushing I
Speaker 1: was pleased to announce another major round of US security
Speaker 1: assistance designed to meet Ukraine's urgent battlefield requirements, and this
Speaker 1: two point five billion dollar package is one of our
Speaker 1: largest yet. And then realized that that was rapidly depleting
Speaker 1: US stockpiles, that they didn't have enough weapons, and they
Speaker 1: didn't have a way to replenish them very quickly, that
Speaker 1: that had all deteriorated exactly. So, after the end of
Speaker 1: the Cold War, the US kind of study repositioning its
Speaker 1: defense industry for short, sharp, high tech conflicts where the
Speaker 1: US would go in with huge strength and win very
Speaker 1: quickly and hopefully keep the price tag a little bit
Speaker 1: lower for the US taxpayer. The result of that is
Speaker 1: that there is this widespread perception now that the US
Speaker 1: isn't equipped for a major war against an industrial power
Speaker 1: like China and to a lesser extent, Russia. And so,
Speaker 1: you know, you think of supplying things like Stinger surface
Speaker 1: to wear missiles or Javelin anti tank missiles. US stocks
Speaker 1: depleted very very rapidly. Is the US supplied Ukraine over
Speaker 1: the course of the last year, as Ukraine took on
Speaker 1: Russia's economy, which is ten times smaller than China's, and
Speaker 1: so the scale of that problem would be magnified greatly
Speaker 1: when it comes to taking on the PRC. The best
Speaker 1: example to just think about the stockpiles here is munitions. Right.
Speaker 1: So the Pentagon basically when they plan their budgets, they
Speaker 1: usually take money out of the munitions because it's easier
Speaker 1: to cut bullets then to only fund three quarters off
Speaker 1: the F thirty five. And so they want to show
Speaker 1: that they can proceed with the high tech programs. They
Speaker 1: don't want to delay things. They're funding these programs, but
Speaker 1: then they basically take money out and then later on
Speaker 1: they don't put the money back. And so now we
Speaker 1: realize that we have depleted that budget bucket, and now
Speaker 1: we're in trouble because it comes down to bullets, right,
Speaker 1: It comes down to munitions, It comes down to artillery
Speaker 1: in a war, and so just the accounting of it
Speaker 1: is surprising, and there's a certain amount of sort of
Speaker 1: maneuvering and perhaps hope that if from the army side,
Speaker 1: for instance, they cut some of the tanks that they
Speaker 1: actually would hope to build in a given year, that
Speaker 1: Congress will stuff the money back in. And I think
Speaker 1: that has happened a few times with that borrowing from
Speaker 1: the munitions account that Roxanna is talking about. But then
Speaker 1: the money never gets put back in, and if the
Speaker 1: US doesn't deplete those munitions, then no real harm is done.
Speaker 1: But as we're seeing now with the Ukraine Security Assistance effort,
Speaker 1: those stockpiles are being diminished. Fifty nine additional Bradley Infantry
Speaker 1: fighting vehicles and ninety Striker armored personnel carriers, fifty three
Speaker 1: M reps and three hundred and fifty up armored humves
Speaker 1: and it will provide thousands more, even as some US
Speaker 1: planners are realizing that perhaps the stockpiles should have been
Speaker 1: bigger to begin with, and there's not a way for
Speaker 1: the contractors to rapidly increase the production to refill the stockpiles. Courtney,
Speaker 1: some of those defense contractors you're talking about have said
Speaker 1: that the supply chain issues we saw across all kinds
Speaker 1: of industries during the pandemic are somewhat to blame. Does
Speaker 1: that explain a lot of this? I think that's part
Speaker 1: of it, But a much bigger part is the embrace
Speaker 1: of the sort of just in time supply philosophy, which
Speaker 1: you may work for a commercial retailer but doesn't work
Speaker 1: for defense contract acting. If you need to rapidly spin
Speaker 1: up production, what do you mean by just in time?
Speaker 1: So that's you know, having equipment inventory arrive right before
Speaker 1: you need to sell it, or in the case of
Speaker 1: a military right before you need to use those munitions
Speaker 1: you have them in hand. That doesn't work when you're
Speaker 1: operating in terms of wartime contingencies and suddenly you need
Speaker 1: to use or supply a partner with massive amounts of
Speaker 1: artillery ammunition. And then you also have to think about
Speaker 1: the fact that there are different incentives operating for a
Speaker 1: private sector firm like a Lockheed or a Boeing or
Speaker 1: a BAE then for the defense department. So these companies
Speaker 1: are accountable to shareholders and they're looking at profit maximization.
Speaker 1: They're not going to expend tens of millions of dollars
Speaker 1: just to potentially have the capacity for increased production. If
Speaker 1: the government tells them it needs it. And that's the
Speaker 1: other issue. The defense industry is suffering from a lack
Speaker 1: of skilled workers. And when you have to ramp up
Speaker 1: like that, it's really hard because you know, you have
Speaker 1: to train them. There's a bunch of other hoops that
Speaker 1: they have to jump through. So it's not as easy,
Speaker 1: you know, as a commercial company to build these weapons
Speaker 1: because you need a certain type of trained person to
Speaker 1: do it. And you know, one of the things that
Speaker 1: the contractors are consistently telling the Pentagon is that they
Speaker 1: need certainty so they can hire and train and maintain
Speaker 1: those skilled workers, and they can have the you know,
Speaker 1: the assembly lines open and ready to expand, but only
Speaker 1: if they have long term contracts that give them some
Speaker 1: financial security to do so. These companies are hobwired to
Speaker 1: sell to the Pentagon. That's in many cases the sole
Speaker 1: customer that they have. If they want to sell to
Speaker 1: foreign customers, they need sign off from the US government.
Speaker 1: And so everything about how to be profitable as a
Speaker 1: large defense contractor flows from being able to build what
Speaker 1: the Pentagon wants, being able to build it on the
Speaker 1: timeline that the Pentagon wants, following the thick handbooks of
Speaker 1: regulations that are involved there, and so you know, really
Speaker 1: defense contractors have kind of remade themselves in the image
Speaker 1: of the Pentagon, and so getting away from that or
Speaker 1: saying to them, like you should be thinking long term,
Speaker 1: you should be building out extra capacity in less in
Speaker 1: case the US wants it is not really a realistic
Speaker 1: proposition if you have to justify your actions as a
Speaker 1: defense industry executive to shareholders. And some of those same
Speaker 1: things that Pete is talking about are actually barriers to
Speaker 1: entry for smaller companies, perhaps more innovative companies that might
Speaker 1: have something to offer to the Pentagon. I wanted to
Speaker 1: ask exactly about that, because it used to be that
Speaker 1: there were a lot of defense contractors and now it's
Speaker 1: dwindled down to really five big players. How did it
Speaker 1: happen that the industry has so consolidated that you really
Speaker 1: have just a bare handful responsible for producing almost everything
Speaker 1: that the military requires. So in the aftermath of the
Speaker 1: Cold War, US politicians got very excited about this idea
Speaker 1: called the peace dividend, this idea that you could bolster
Speaker 1: domestic economic growth by reducing military spending and diverting those
Speaker 1: efforts elsewhere. And of course the big adversary for decades.
Speaker 1: The Soviet Union was winding downs, and so this existential
Speaker 1: threat that required such a huge military was seen as
Speaker 1: no longer necessary. It had completely disappeared. And you know,
Speaker 1: after the Soviet Union, foul military planners were rethinking what
Speaker 1: America's national security environment looked like. This was going to
Speaker 1: be an environment where failed states were a problem, where
Speaker 1: terrorists popped up and were a threat to the US.
Speaker 1: The idea of a large industrial war involving land armies
Speaker 1: and huge protracted conflicts was something that was supposed to
Speaker 1: belong to the past, and so the US and the
Speaker 1: Pentagon in particular, the hope that the defense industry would
Speaker 1: respond accordingly. And there was this kind of extraordinary clarifying
Speaker 1: moment in the early nineties where then Deputy Secretary of
Speaker 1: Defense William Perry called in the largest defense contractors and
Speaker 1: told them, you guys need to consolidate, or there's not
Speaker 1: going to be enough of a pie for you in
Speaker 1: the future. And they did. They followed his lead. It
Speaker 1: was just this kind of epochal event known now by
Speaker 1: defense industry inside is There's the Last Supper, This kind
Speaker 1: of clarifying moment where they realized that, you know, this
Speaker 1: was the direction of things and they'd better follow or
Speaker 1: face extinction. And they did. They really did start to
Speaker 1: kind of gobble each other up. Is that right, Roxana,
Speaker 1: Yes they did. And now we're down to five basically,
Speaker 1: and who are the five? It's lacked Martin Boeing, General
Speaker 1: Dynamics north of Grumman and Raytheon when we come back,
Speaker 1: why it matters that just five companies are left to
Speaker 1: build the military's big weapons systems. So there's consolidation of
Speaker 1: the defense contracting industry, five companies now dominating it. How
Speaker 1: has that affected the ability of the Pentagon and also
Speaker 1: these companies to be innovative, to be creative, to come
Speaker 1: up with new ideas, to be agile and quick. So
Speaker 1: it has definitely affected it because there's very little incentive
Speaker 1: to be innovative and creative because that means going off
Speaker 1: the path that the Pentagon is basically laying out for you.
Speaker 1: If the Pentagon doesn't want to buy it or doesn't
Speaker 1: want to invest in it, that there's no point in
Speaker 1: coming up with some innovative technologies. But that would be
Speaker 1: unfair to the industry. They do spend some money on
Speaker 1: research and development to come up with new and innovative technologies, right,
Speaker 1: but it makes it really hard for for example, you
Speaker 1: know you had the rise of Silicon Valley. It makes
Speaker 1: it really hard for those types of companies to go
Speaker 1: into business with the Pentagon because of all the regulations.
Speaker 1: There's a lot of security clearance required. They can't do
Speaker 1: business with anyone else if they end up doing business
Speaker 1: with the Pentagon. So there's just no real incentive to
Speaker 1: move fast and to offer certain things to the Pentagon
Speaker 1: when it comes to the new tech companies. The best
Speaker 1: example of this would be SpaceX, who had to sue
Speaker 1: the government to be allowed to compete for national security
Speaker 1: space launches basically launching satellites into space for the Pentagon,
Speaker 1: because the Pentagon was giving all these contracts and focused
Speaker 1: on the United launch allowance. It's basically a venture between
Speaker 1: Boeing and Lockheed Martin. But they couldn't do these launches
Speaker 1: without Russian made rocket engines, and so ellen Musk had
Speaker 1: to sue the government. He eventually won and now is
Speaker 1: one of the bigger providers of these satellite launches. But
Speaker 1: it took a lot of patients and it took a
Speaker 1: lot of great to do this. It was this really
Speaker 1: fascinating study done by the Hudson Institute, which is a
Speaker 1: Washington think tank, where they kind of looked at dozens
Speaker 1: of weapons systems and figure out what does the timeline
Speaker 1: look like from going from inception of an idea through
Speaker 1: to delivery, and they found pretty shocking stuff. And this
Speaker 1: evolution that's taken place from the nineteen fifties where it
Speaker 1: took on average, I think one year to go from
Speaker 1: identifying a need to issuing a contract to today where
Speaker 1: it takes about seven years to go from identifying a
Speaker 1: need to issuing a contract. Then once that contract is
Speaker 1: issued for an innovative weapons system in the case of
Speaker 1: the F thirty five fighter, it took a further twenty
Speaker 1: one years to get it from contract to something that
Speaker 1: was usable for the military. So it's really an extraordinary
Speaker 1: timeline when you think about how quickly technology is developing.
Speaker 1: And meanwhile, China in particular has decreased the amount of
Speaker 1: time it takes to go from concept to actual reality
Speaker 1: exactly moving from the air to the ground. Corney, what
Speaker 1: does this mean for more conventional WESTMN systems for fighting
Speaker 1: on the ground, which, as we're seeing now in Ukraine
Speaker 1: in other places is still really relevant. The army has
Speaker 1: no successors to the Abrams tank and the Bradley fighting vehicle,
Speaker 1: which were developed through the sixties and seventies, fielded in
Speaker 1: the eighties and made their debut in Desert Storm back
Speaker 1: in nineteen ninety. They have been top of class, but
Speaker 1: are losing ground to competitors, both friendly and not so friendly.
Speaker 1: I think there was also this period of the War
Speaker 1: on Terror in some ways kind of vindicated the decisions
Speaker 1: that were made at the end of the Cold War.
Speaker 1: You had this shift to just in time manufacturing and
Speaker 1: this idea that production lines were going to be nimble
Speaker 1: and quick and when you're chasing terrorists around. Actually it
Speaker 1: turned out that the defense industrial base was able to
Speaker 1: meet that challenge pretty squarely. Terrorists don't require super high
Speaker 1: tech solutions and they don't require massive amounts of production.
Speaker 1: But the China as it emerged, and then Russia's invasion
Speaker 1: of Ukraine really highlighted that those assumptions about the adversaries
Speaker 1: that the US was going to be facing were wrong
Speaker 1: and something else was needed. Absolutely, and I think there
Speaker 1: had been a lot of talk about the death of
Speaker 1: tank warfare altogether. I think a lot of people thought
Speaker 1: of it as something of an anachronism, and obviously the
Speaker 1: value of tanks in Russia's war on Ukraine has led
Speaker 1: people to question a lot of those assumptions. There's a
Speaker 1: political problem looming here when it comes to this talk
Speaker 1: of supply chains. When you speak to people who are
Speaker 1: deeply involved in the US events industry, they'll say, well,
Speaker 1: you know, we've got to reshore supply chains. We kind
Speaker 1: of embrace this old vision of globalization anymore. America's got
Speaker 1: to make these parts so that our supply chains is secure.
Speaker 1: And that's all very well and good in theory, and
Speaker 1: then you kind of push them on it a little
Speaker 1: bit and they say, well, you know, the American public
Speaker 1: is going to have to deal with higher costs, and
Speaker 1: you kind of think to yourself, well are you going
Speaker 1: to tell them, because there are arguments about the debt
Speaker 1: sailing at the moment. You know, these are going to
Speaker 1: create political fights, and it's a conversation I don't think
Speaker 1: the US politicians have had with the US public yet.
Speaker 1: So we've talked about a lot of things that we
Speaker 1: know are not working. Well, what is the Pentagon doing
Speaker 1: now to try to rectify this situation to improve it
Speaker 1: in the future. They definitely have learned from the war
Speaker 1: in Ukraine. They're investing more in munition production. They are
Speaker 1: trying to look at ways to move a little faster.
Speaker 1: They're trying to overhaul their planning and budgeting process. In fact,
Speaker 1: their Congress is making them do that, and they're supposed
Speaker 1: to come up with some answers this year. So do
Speaker 1: you definitely see movement and you see the realization. You
Speaker 1: also have Congress who realize that they need to sort
Speaker 1: of back up the Pentagon. They have green lighted a
Speaker 1: lot more multi year contracts that gives a lot more
Speaker 1: predictability to the industry. I mean, one of the things
Speaker 1: that you realize when you look at this problem is
Speaker 1: that almost everyone who's involved recognizes that the system is
Speaker 1: at massive volt from the White House through to the
Speaker 1: bowels of the Pentagon to boardrooms of defense companies. Everyone
Speaker 1: knows that there's a problem, But the system is so
Speaker 1: huge and so sprawling that no one, including Congress in
Speaker 1: the White House, really have the ability to fully get
Speaker 1: their hands around the problem and can only kind of
Speaker 1: look at it from their own narrow perspective. And so
Speaker 1: that makes reforming it a really huge undertaking, and it's
Speaker 1: the kind of action that's not easy to accomplish in
Speaker 1: Washington at the moment. Yeah. I mean, I think John Ferrari,
Speaker 1: who's a retired Army major general who led the Services
Speaker 1: Officer Program an Analysis and Evaluation, said, you're fighting the
Speaker 1: ultimate system. There's actually nobody and no single place to
Speaker 1: go to change it. He said, you know, you can
Speaker 1: poker at it from around the edges, but it's a
Speaker 1: living organism that nobody actually controls, you know. And I
Speaker 1: thought that was just particularly illustrative of the problem in
Speaker 1: all of this. How concern should Americans be about US
Speaker 1: military readiness the ability of the US to fight a war?
Speaker 1: You know, I think there are a couple of ways
Speaker 1: to come at that. If you put your pessimists hat on,
Speaker 1: you would say that the most surefire way to prevent
Speaker 1: a major war with an adversary like China is ensuring
Speaker 1: that the US is ready to fight one. And if
Speaker 1: you are Chinese intelligence and you're looking at the way
Speaker 1: that US munition stockpiles are depleting as America's supplies Ukraine
Speaker 1: against Russia, You're likely to be thinking, well, what do
Speaker 1: America's stockpiles look like when it comes to the kind
Speaker 1: of missiles they'd need to stop US from invading Taiwan,
Speaker 1: And those lessons, I think are pretty sobering and pretty worrying.
Speaker 1: And it's not necessarily because the US plans on fighting
Speaker 1: war anytime soon, but because it needs to have the
Speaker 1: strength to stop one from breaking out. I think the
Speaker 1: optimists angle is that China has huge problems too. The
Speaker 1: US military industrial bases replete with shortcomings. China's is also.
Speaker 1: You know, China faces massive problems when it comes to corruption,
Speaker 1: It faces huge problems when it comes to innovating, even
Speaker 1: on very foundational technologies like semiconductors and jet engines. China
Speaker 1: is struggling and is deploying people to try and copy
Speaker 1: systems from the US. So I think that, you know,
Speaker 1: the optimist case is that the US is still very
Speaker 1: much in the lead, but that there are questions about
Speaker 1: whether it can sustain that. Pepe, you mentioned how the
Speaker 1: F thirty five other weapons systems take decades from concept
Speaker 1: to actually being built. What is in the pipeline now
Speaker 1: as we look at rapid changes in technology that will
Speaker 1: be the weapons of the future for the US. So
Speaker 1: I think there's a lot of focus on autonomous systems,
Speaker 1: you know, submarines that aren't manned, further developments in drone technology.
Speaker 1: But the thing that people are really excited about at
Speaker 1: the moment is this concept called JABC two, which means
Speaker 1: Joint All Domain Command and Control. Basically, it's the idea
Speaker 1: that using satellites, undersea cables, swarms of drones, you ensure
Speaker 1: that the war fighter in the battlefield, the naval assets,
Speaker 1: the fighters overhead, and intelligence are all able to talk
Speaker 1: to each other in real time. And it's the idea
Speaker 1: that the US will have an advantage by being able
Speaker 1: to outthink or think more quickly than its potential opponents.
Speaker 1: And that's what the Pentagon is actively working toward right now.
Speaker 1: They're actively working on that. Yeah, but it is very
Speaker 1: much of the conceptual stage, as you get from the
Speaker 1: clunky Jatz to acronym Courtney Roxanna Pete, thanks so much
Speaker 1: for coming on the show. Thank you, thanks for having us,
Speaker 1: Thank you for having us. When we come back, a
Speaker 1: view of the Pentagon from someone who's been on the inside. Now,
Speaker 1: let's hear another view about the challenges the US military faces.
Speaker 1: Michelle Flournoy is co founder and managing partner of West
Speaker 1: Exact Advisors, that's a national security consulting firm here in Washington. Michelle,
Speaker 1: you served as Deputy Assistant Secretary of Defense for Strategy
Speaker 1: under President Bill Clinton, and then you came back to
Speaker 1: the Department a decade later as Under Secretary of Defense
Speaker 1: for Policy when Barack Obama was president. So, from what
Speaker 1: you've seen, has the Pentagon done a good job of
Speaker 1: adapting over the years. One of my privileges in the
Speaker 1: Pentagon was to work for Secretary of Defense Bob Gates,
Speaker 1: and he used to like to say that we have
Speaker 1: a perfect track record in predicting future conflict. We never
Speaker 1: get it right. And so the Pentagon is always in
Speaker 1: the situation where we've organized, trained, equipped, prepared for conflicts
Speaker 1: that we foresee in the future, and almost always the
Speaker 1: world pulls us in a different direction and you have
Speaker 1: to adapt all of that to a new set of circumstances,
Speaker 1: usually with very little time. What has a Pentagon done
Speaker 1: well in adapting as you describe it, and where has
Speaker 1: it really fallen short? So I think probably our strength
Speaker 1: and adaptation is in our people. When you look at
Speaker 1: how we responded to nine to eleven and the ability
Speaker 1: of particularly of our initially our special operations forces to
Speaker 1: pivot and focus on a very different threat. I think
Speaker 1: that was pretty impressive. I think what's harder is what
Speaker 1: we budget for and procure. Our fiscal year twenty three
Speaker 1: budget request included more than fifty six billion dollars for
Speaker 1: air power platforms and systems, and more than forty billion
Speaker 1: dollars to maintain our dominance at C and almost thirteen
Speaker 1: billion dollars to support and modernize our forces on land,
Speaker 1: and some thirty four billion dollars to take years and
Speaker 1: years to move a weapon system from research and development
Speaker 1: into acquisition and then finally actually fielding it in the force.
Speaker 1: And so you know, you're buying things now that you'll
Speaker 1: see in ten, fifteen, twenty years. And once those programmatic
Speaker 1: trajectories are set, it's very hard to change or adapt them,
Speaker 1: either because of new circumstances in the world and new needs,
Speaker 1: or because of technology disruption, like better solutions or things
Speaker 1: that you could add and make something better. So those
Speaker 1: are the places where it's really hard to turn. The
Speaker 1: proverbial aircraft carrier. Has Abandagon focused too much on big
Speaker 1: weapons systems at the expense of smaller, more agile weapon
Speaker 1: systems that it would allow it to adapt more quickly.
Speaker 1: I think any American force has to be a mix
Speaker 1: of high end, cutting edge systems that will be kind
Speaker 1: of the backbone of the force structure, like a fifth
Speaker 1: generation aircraft or the world's best aircraft carrier or what
Speaker 1: have you. But the key in this environment where technology
Speaker 1: is changing so fast, threats are evolving so quickly, is
Speaker 1: we have to be able to inject new technologies, new concepts,
Speaker 1: new solutions to marry them up with those legacy platforms
Speaker 1: if we're going to be successful, because once you buy
Speaker 1: that carrier force, that fighter force, you're going to have
Speaker 1: it for decades. Has China been better at adapting and
Speaker 1: being quicker and more agile at changing, I would not
Speaker 1: say so. In general. I think they have stolen a
Speaker 1: lot of intellectual property from our defense contractors. They've copied
Speaker 1: a lot of our systems. What they have been able
Speaker 1: to do is they have a state, an authoritarian system
Speaker 1: that can throw massive amounts of resources. I think where
Speaker 1: they have taken a leap ahead of us technologically, it's
Speaker 1: been less that they've been so good and more that
Speaker 1: we took a break or a pause or didn't move
Speaker 1: something forward. What do you mean by that? Hypersonics is
Speaker 1: a good example where we had a number of programs,
Speaker 1: we had a mixed record, some successes, some failures, and
Speaker 1: then the Department basically didn't invest much in hypersonics for
Speaker 1: a number of years, either believing that they weren't that
Speaker 1: important or believing that the technology wasn't quite ready. Meanwhile,
Speaker 1: the Chinese saw this and just put mass against the
Speaker 1: problem for years and years and years, and then they
Speaker 1: basically caught up and then actually surpassed us in terms
Speaker 1: of fielding a system, and so now we're playing catchup.
Speaker 1: China's hypersonic missile test in twenty twenty one was sort
Speaker 1: of a big wake up call for the US military.
Speaker 1: You described it, I believe as encapsulating a failure to
Speaker 1: transition critical technologies from research and development to production. How
Speaker 1: sort of big a deal was that when it happened? Well,
Speaker 1: I think you know, this is a case that is
Speaker 1: emblematic of a larger problem, which is we are really
Speaker 1: good at inventing those cutting edge technologies, demonstrating them, prototyping them.
Speaker 1: We are not so good at helping them cross the
Speaker 1: valley of death. And actually getting into the force, so
Speaker 1: into production at scale and field it at scale. And
Speaker 1: that's a problem that the department is working on. But
Speaker 1: we haven't consistently cracked the code. Why is that you've
Speaker 1: seen it from the inside since then you've seen it
Speaker 1: from the outside as a consultant and someone who thinks
Speaker 1: all the time about these issues. What is it about
Speaker 1: the Pentagon that doesn't let it work quickly enough? Well?
Speaker 1: I think there are a couple of things. First of all,
Speaker 1: the bulk of cutting edge r and D research and
Speaker 1: development has moved from being US government and Defense Department
Speaker 1: driven to now in many key technology areas that are
Speaker 1: essential for national security, that cutting edge is coming out
Speaker 1: of the commercial sector. So it's not a matter of
Speaker 1: the government investing and then taking a program to production.
Speaker 1: It's a question of innovation adoption. How do you take
Speaker 1: a commercial technology, adapt it and then bring it into
Speaker 1: defense systems. That's a very different challenge, and it means
Speaker 1: that you have to train and incentivize your acquisition workforce differently.
Speaker 1: Is it part of that? Because we went from having
Speaker 1: say seventy defense contracting companies competing for various programs, A
Speaker 1: lot of places go to a huge consolidation where we
Speaker 1: now when we have a handful of them. I do
Speaker 1: think that has been a factor. You know, every program
Speaker 1: that one of the prime contractors wins becomes a do
Speaker 1: or die program. They're very very good at making sure
Speaker 1: that components for those programs are produced. What do you
Speaker 1: know across all fifty states, and so you've got all
Speaker 1: one hundred senators you know, wanting to support your program.
Speaker 1: So we need to get a lot more creative about
Speaker 1: how we partner with commercial companies to get that greater resilience.
Speaker 1: And then there are just things that are not hardware AI.
Speaker 1: For example, well, first of all, moving to the cloud,
Speaker 1: being able to leverage the data, the massive amounts of
Speaker 1: data that d D sits on. I think give credit
Speaker 1: to the Department for really trying to crack the code
Speaker 1: on that, but then starting to use AI to make
Speaker 1: human decision making better, to enable better quality, faster decision making,
Speaker 1: and a whole host of areas that is very ripe
Speaker 1: for the picking now. In twenty twenty, you wrote that
Speaker 1: unless the US invests more in long range missile technology,
Speaker 1: and especially because of cyber capabilities increasing, the US could
Speaker 1: find itself stumbling into a nuclear confrontation with China if
Speaker 1: China were to attack Taiwan. Does that still concern you
Speaker 1: at this moment where there are a lot of height
Speaker 1: intentions and questions about China's intentions with respect to Taiwan. Yeah,
Speaker 1: I do think the relationship is on a downward trajectory,
Speaker 1: despite I think the administration's attempt to try to put
Speaker 1: a floor underneath that. I do think Hijimping is a
Speaker 1: different kind of Chinese leader, and he has made it
Speaker 1: very clear that he views the reunification of Taiwan as
Speaker 1: a legacy issue. It's clear that he prefers to do
Speaker 1: that through political and economic coersion, but he's also told
Speaker 1: his military that if that doesn't work, I want an option.
Speaker 1: I want a real option by twenty twenty seven. So
Speaker 1: to me, that says we have a five year window
Speaker 1: to meaningfully strengthen our ability to deter Jijimping from taking
Speaker 1: that action, whether it's a blockade and invasion. We don't
Speaker 1: know what he would do, but we want to make
Speaker 1: sure that he doesn't have the confidence that he would succeed.
Speaker 1: And there are lots of ways to do that, both diplomatically,
Speaker 1: working with allies, and through the kinds of military capabilities
Speaker 1: that we field, that our allies field, and that we
Speaker 1: helped Taiwan to field. And do you think we have
Speaker 1: those capabilities now that you were pointing to the US
Speaker 1: needing Then I think that we could meet that objective
Speaker 1: if we really put our minds to it, and if
Speaker 1: we reallocate resources in the right way. When you were
Speaker 1: Under Secretary of Defense for Policy when President Obama was
Speaker 1: in office, you were the highest ranking woman in a
Speaker 1: history of the Department of Defense. Has that changed much
Speaker 1: since you were there? And do you think the Pentagon
Speaker 1: would benefit from having more women in senior positions? Well,
Speaker 1: I'm happy to say it has changed. Kathleen Hicks is
Speaker 1: the Deputy Secretary of Defense and she is now the
Speaker 1: highest ranking woman that's ever been confirmed. You also have
Speaker 1: the first time ever Secretary of the Army who's a woman,
Speaker 1: Christ Warmth. And you know, I think the Biden administration
Speaker 1: made a commitment upfront to aim for fifty percent of
Speaker 1: the cabinet to be women, fifty percent of the national
Speaker 1: security leadership to be women, and they've probably gotten closer
Speaker 1: to that goal than any administration here too. For so
Speaker 1: I give them a lot of credit. What I do
Speaker 1: find is, you know, I spent a lot of my
Speaker 1: time when I was under Secretary in the Situation Room,
Speaker 1: in what's called the Deputies Committee, which is sort of
Speaker 1: the deputy's level interagency body that would tee up options
Speaker 1: and make recommendations to the principles and the president in
Speaker 1: national security. What I found was when you have a
Speaker 1: diversity of views, not just gender, but lived, experienced, background, perspective, expertise,
Speaker 1: you more fully explore the issues and the decision space.
Speaker 1: You give the president better options, and usually you get
Speaker 1: better decisions. Michelle Flourne, thanks so much for speaking with me.
Speaker 1: Thank you, thanks for listening to us here at The
Speaker 1: Big Take. It's a daily podcast from Bloomberg and iHeartRadio.
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Speaker 1: the producer of this episode is Vicky Virgolina. Our senior
Speaker 1: producer is Katherine Fink. Raphae alum Seeley is our engineer.
Speaker 1: Our original music was composed by Leo Sidrin, I'm West Kasova.
Speaker 1: We'll be back tomorrow with another big take.