"From Production Lines to Front Lines," with Becca Wasser and Philip Sheers of CNAS

Lauren Bedula 0:01 Welcome back to Building the Base. Hondo Geurts and Lauren Bedula here with an exciting update from our friends from the Center for New American Security. Today's guests are Becca Wasser and Philip Sheers, who just recently report released their report focused on the defense industrial base. It's called "From Production Lines to Front Lines," and they're here with us today to share lessons learned and kind of the way forward on this front so thank you both for joining us today. Becca Wasser 0:25 Thank you so much for having us. Philip Sheers 0:27 Thanks for having us. Hondo Geurts 0:27 So before we dig into the industrial base and how we're gonna reinvent it over the next several decades, how about a little background from you guys, maybe begin where, what got you into this? I don't know how somebody gets I thought I was the only way excited about the industrial base. But what got you in the topic? And same with you, Phil. Becca Wasser 0:48 Yeah. So I have to be honest, I am relatively new to the defense industrial base space, if you will. You know, I've been sort of a defense strategist for a while, and I've done a lot of war gaming, which has had me looking at some of the operational issues that are most pressing, but the gap seems to be the defense industrial base. You can come up with a new operational concept, you can come up with a new defense strategy, but do you have the defense industrial base that can actually build the things that you need? And so that is what drove me to start to do this line of effort and to do the research that comprised this report. And so hopefully we're going to be able to fill that gap. Hondo Geurts 1:29 Where was home, where did you grow up? Becca Wasser 1:31 So I'll try really hard not to let my accent come out too much, but I'm from New Jersey, very proud of it, but very proud to have left. So, you know, somehow or another, New Jersey to the defense industrial base. I'm not really sure where the linkage is there, but here we are. Lauren Bedula 1:48 Love it. Philip, what about you? Philip Sheers 1:50 Yeah, I'm also from the tri state area. I'm a proud New Yorker, born, raised in New York City, specifically Brooklyn, maybe some defense industrial base ties there with older, long lost ship building industry in and around Brooklyn. But I moved down to DC a few years ago, and I've been a research assistant supporting Becca and other senior staff at the Center for New American Security for going on a year and a half now. And I think similar to Becca, I'm also new to the defense industrial base topic, but for me, what's always been interesting about it is that it just seems like such an important but such an often overlooked element of strategy discussions, especially at the higher level, there are always conversations about the operational concepts that are going to be important in future conflict, but having the defense industrial base to support those concepts is just as critical as the concept itself, it seems like. So that's been something that's been really exciting to dive into. Lauren Bedula 2:47 Well, I have to say, I'm from Connecticut, so... we are also interested in just what like piqued your interest, in defense in general. I know for me, being in the area, it was September 11, but curious, if you guys have stories along those lines, maybe not the industrial base specifically, but what about defense and national security? Becca Wasser 3:06 So I, too am from that 9/11, generation. I was in high school at the time, and I've got very pinpointed memories of that day, and that really just piqued my interest in national security, which, over time, evolved into the hard defense side of security. So like you, I think we've got some very similar stories, probably, that we could share. Philip Sheers 3:30 Yeah, I mean, 9/11 of course, unforgettable experience as a New Yorker, which I do remember I was, I was, I was four or five years old, but I do remember, you know, you might be surprised, but I do remember. But I think actually the my interest in national security and defense issues actually comes from my non New York side of my family, which is half French. So my mom is French, and I have a lot of family out in France. And growing up, when we visit, we have a lot of family out in Normandy. And so I actually went to the D-Day beaches, in my opinion, at a far too young an age, maybe nine or eight years old. And so the impression was very lasting, and really got me thinking about how significant these types of issues are, and the fact that, yes, countries actually can and do go to war, and it is serious. You know, it's not just a story or a story or a figment of your imagination, and it can happen again. So that's, I think, what sort of got me interested. Lauren Bedula 4:26 And if we think about the 25 years since 9/11 there have just been incredible changes in the industrial base. I'm sure you all know, of course, very well, after going through this process with the report, can you talk a little bit about the evolution over the past several decades, and your take on where we stand today. Becca Wasser 4:44 So I think what we've seen is just continued defense industrial consolidation. It started long before, sort of the early 2000s but it has only continued. And I think another element of that is the lack of responsiveness within the defense industrial base. I think the best example in, you know, sort of the 2000s is we've demonstrated that we can do it, but it takes a ton of effort from senior leaders to actually create a response to Battlefield change. We saw that with MRAP, but we haven't really seen that in a sustained way since then. So even now, as we're looking at what's occurred in Ukraine, we've been trying really hard to surge capacity where possible, to ramp up production of 155, and we've only been able to do that so much not to say that there haven't been Herculean efforts to be able to arm Ukraine, but it still demonstrates that there just isn't that responsiveness to changes within the defense industrial base to be able to produce what is needed at the time of need, or within the range of when it could actually be useful. Because I think we've seen time and time again, you can ramp up production of something, but is it delivered at the time you need it, or is it delivered at the time an ally and partner needs? And some of that goes into the really sort of ossified bureaucratic processes that we have in place. So FMS being a great example, and obviously we've seen time and time again efforts to reform the foreign military sales process. But those haven't really been successful, and they haven't been lasting. I know last night there was a new executive order signed trying to go after this issue. Once again, we'll see if there's any tangible impact. But you know, I'm not holding my breath necessarily. Hondo Geurts 6:43 So there's, you know, been a lot of study. Your report talks a lot about the customer side, how maybe the DOD can be a better customer. But I also sense there's some structural issues on the industrial side that are either causing this or causing barriers. What's your sense on structural issues on the industrial side, even if the customer had it right and they had requirements that were, you know, not as dynamic, and had funding there, do you still think we would have an issue with the current approach in the industrial base and maybe what are some of our recommendations you guys have on how to address some of those issues? Philip Sheers 7:26 Yeah, I think the structural issues are manifold, but one that I would point to is the supply chain fragility that is underpinning a lot of the capacity and responsiveness shortcomings that Becca you were just talking about, I think we actually outlined it. Hondo, you have the report open. It's the first graphic we have. I think, the the outsourcing of many of our supply chains overseas, specifically to regions the world that are largely influenced or controlled by our adversaries, or directly to our adversaries ourselves, or to allies in those regions that might be challenged by our adversaries to get those supply chains through to us, poses as a real challenge for how we might continue to resupply our forces or build things in the future of great power conflict. And so that's a major structural hurdle. But there's also a domestic structural hurdle, which is that a lot of our supply chains rely on single or sole source, sub tier suppliers. And even if, as you say, we had a more transparent demand signal from government to industry, I think we also need to build out that supply - build the base - a little bit more so that when we have huge spikes in demand, we're not running into as much of these bottleneck problems where one sub tier supplier is completely overtapped. Or conversely, when demand goes down, those much more fragile sub tier suppliers are no longer able to keep their doors open, and then that creates all sorts of follow on efforts or follow on problems for when the next surge does come. Lauren Bedula 9:05 I like that plug there. Thank you. I want to back up a little bit and just talk about like, how did you approach this problem, what did the process look like? Who did you speak to? How did you come up with all of these ideas and recommendations? Becca Wasser 9:21 I feel like the question is, who didn't we speak to? We talked to a lot of folks, and one of the things that I really wanted us to be able to do is to bring together different perspectives. So we held a number of round tables looking at different bits and pieces of the problem in these bite sized chunks. And we brought together industry, we brought together government, allies and partners, folks from the Hill. We tried to be as broad as possible, to make sure that we were understanding what it meant to be the customer and what it meant to be the supplier, and also making sure that when we were talking to folks from industry, we were talking to all folks within industry, right? So we we were talking quite closely with the primes, some of the new entrants, but also folks who exist in some of those lower levels of sub tiers where possible, because, as Phil mentioned, that's critically important and often something that's overlooked. So we tried to do that, but we also tried to approach all of this from what could we as two people, relatively new to this space, bring that's different? You have people who can, you know, recite acquisition practice, chapter and verse. That's not going to be me. So trying to think through where we could have a unique perspective. And it is making that link between defense strategy to the defense industrial base. I know that, you know, more recently, we had the defense industrial strategy to me that wasn't necessarily the linkage that I was looking for. And so trying to think through, how can we fill that gap? And hopefully we've done at least a first salvo in trying to do so. Lauren Bedula 11:00 What surprised you most? Philip Sheers 11:03 Great question. I might need to think for a second. Becca Wasser 11:09 Well, while you're thinking, I can jump in. What surprised me most probably the tagline, "it's the workforce, stupid," right? One of the greatest limitations that we are going to have to what we've been doing, what we're going to be able to do, and frankly, if we are going to make, you know, manufacturing and production great again, it comes down to the workforce. And right now, it's just not there and it's just not available. So if we're going to make any changes, we do need to think about that side of the equation, which kind of, like the sub tiers, sometimes gets massively overlooked. Philip Sheers 11:44 I think that is similar to the direction that I was going, which is, I was surprised that we, I think, found really good solutions, like we, and that's, you know, obviously we do our best and we want to do the job which is to come up with some solutions. But I think often in this, in this space and in defense policy these days, there can be a lot of pessimism about whether or not these problems are just intractable and whether they really are good solutions. And we have two case studies in the report that look at ship building and look at 155 millimeter artillery shell production. And there are really interesting ideas that we've come across and that we've sort of developed for how we can expand ship building capacity in the United States by tapping into other workforces across the country, including workforces that are inland and could possess a lot of the potential manpower. And if we can scale those workforces the potential to contribute to ship building projects, and then on the commercial side of what's possible for artillery shell casting, I think we tapped into some really interesting potential for how commercial technologies and commercial manufacturing can actually really help to scale up artillery shell production. And there's, again, back to the supply chain side, another question of how you fill those shells with explosives and propellants, and where we get that from. But there is it's I was just surprised, pleasantly surprised, and really encouraged to think that, you know, there really are pathways to success and solutions here, if we can figure it out. Hondo Geurts 13:17 So maybe for those who haven't had a chance to read the report, where would you focus some of your more either impactful or unique recommendations, especially those you think can be implemented, or at least start on the implementation path fairly quickly. Becca Wasser 13:35 So we've got a bunch of really specific, pinpointed recommendations, particularly for what Congress can do. So one of them is to change some of the procurement processes so you can actually procure some of the most critical components, say, solid rocket motors, for example, without the end item. Right now you're only able to do, you know, multi year procurement, for example, if there is an end item, but there's so many different components that we know that we're going to need that they're... solid rocket motors, for example. They're used in drones. They are used in munitions. There are so many different uses for them, and there's been a bit of a crunch and a shortage. So if that's the case, an easy way to try and bolster production of them is to make sure that we can have them procured in large numbers. And it's making a small change like that that could actually make that happen. I think another really actionable one is again, going back to the workforce. There are so many different initiatives. You know, we've got things like Teach for America and AmeriCorps, for example. These are public service initiatives. Why isn't AmeriCorps expanded out to include the defense industrial base if we're looking for folks to join the defense industrial based workforce? Well, we need to create incentives, and we need to create those nice and early, and that's an easy one that can be made, that could have, perhaps, maybe not, an immediate impact in what the DIB is able to produce, but over time, will actually bear fruit. Philip Sheers 15:18 And I'll just add, as somebody who did Teach for America and was in AmeriCorps. I'm curious like that would have really potentially changed my calculus if I could have, if I had seen other opportunities besides teaching. I was interested in teaching, obviously, but it's interesting to consider what, how many gains that could net you in terms of potential pipelines. Lauren Bedula 15:36 Well, it's something we talk about quite often, and I'm glad to hear your optimism around the issue and around solutions. We like the idea of highlighting best practices or highlighting what works, rather than admiring the problem as it's so easy to do. Can you talk about the role think tanks play in this ecosystem and how you hope to see implementation of these recommendations are for our listeners who might not be based here in DC or really fully understand the Washington DC ecosystem. Just to talk a little bit about that. Philip Sheers 16:09 I could start, but I think maybe Becca, you might have more to add being a little bit more of a seasoned Think Tank expert than I am. But I think one of the, one of the great, one of the great things that think tanks can bring to bear is convening power for different stakeholders on issues, and I think that that's really important when you're considering how multifaceted these problems are and how they affect different stakeholders across the policy space. It's not enough, like Becca was saying earlier, to only talk to industry or only talk to A&S or to only talk to other academics. It's in bringing all those and only talking to also allies and partners. It's in bringing all those different corners together that you can see how these different pieces can fit and which solutions need to be tailored better to create that kind of synergy. Becca Wasser 16:54 And I think, a really clear role that think tanks have, it's advancing actionable policy recommendations, and that's very much what we tried to do in this report, not only to, you know, look at the problem in an interesting way, but to say, here's what you can do about the problem, and it's not all sort of pie in the sky recommendations, right? We do have some future focused case studies, which would require some major paradigm shifts in how both government and industry does business. But we do have some really, you know, to our point, before our example, before we have some really sort of clear, actionable policy recommendations that Congress, the White House, that industry can make tomorrow. So I think it's advancing some of those policy recommendations, and being an outside voice that says that. We're not within the government, we're not within industry. So it's having that kind of removed voice to be able to say, here's what the problem is, and here's what we think you might be able to do about it. Hondo Geurts 17:57 So there's a lot of talk about dual use and leveraging commercial capacity. And a sense, in many cases, our defense industrial base is so 1980s and the way they produce things, fair or not, one of your recommendations is to embrace new paradigms of production. You spoke a little bit about one. You don't have to buy everything at once. You can buy the long lead stuff and have it on the shelf. What other areas did you see in terms of using novel or more modern productionapproaches that might be useful as we think about this new version of the defense industrial base? Becca Wasser 18:39 I think it depends on what you're trying to produce. So here we might see more of the traditional models of production for really exquisite systems, exquisite munitions, aircraft, you name it. But I think as we start to emphasize attritable mass trying to use new forms of production, whether that is in some of the design stage with some of the digital tools, or whether that is looking at, you know, different forms of 3D printing for different components, different forms of modular production and modular design. These are things that we can do for some of those, you know what are supposed to be lower cost, attritable mass systems. So I think we can see a little bit of a shift there. But also, even on the exquisite side, it's just making some smart choices about the things that you have. So for example, thinking about modular munitions, thinking about what you can produce on the same line, the way in which you can have different synergies that hopefully not only drive down costs, but allow you to ramp up production, or at least have the flexibility to ramp up production if there's an uptick in need. Hondo Geurts 19:55 Yeah, I think one of the issues we're gonna be faced with is as we lost production as a nation, we lost the ability to produce tooling, and machines for production. And so I think as we think about, how do we rebuild that, your recommendations on how to build that back in the new way, not in the old way, would be very impactful. Becca Wasser 20:19 It's always interesting when you go and you walk a factory floor, and you see some of the new stuff, but then you see this, like one machine in the corner that, like, seems a little bit rickety, and it's spinning, maybe it's smoking, who knows what's happening. And that is the most critical piece of equipment on the entire floor, and it was probably produced in 1950 if not earlier, and it's still there. So to your point, absolutely right, we need to think about what's new, because right now, I think there's a lot of equipment and a lot of tooling that we're using that, frankly, is aging out. Lauren Bedula 20:51 And you talked about over time, just consolidation in the industrial base is something that you've found through this work. One of your recommendations is focused on encouraging competition. Can you talk a little bit about that recommendation? Philip Sheers 21:05 Yeah, I think that that hits at a few different points, but I think it's, I think we're seeing competition start to peak in some or come back in some sectors. But I think that recommendation we really, I take it really as targeting the sub tier as we were talking about earlier, although I think it does apply to the primes too. And the idea is that it can create some more redundancy and resilience, as well as incentives for innovation within the supply chain, so that companies are more driven to reduce costs and compete for contracts and put forward innovative practices or products that are more likely to win those contracts, but also by investing more in those in potential secondary source I think we, we call for a dual source acquisition approach. We can, we can increase the resilience and redundancy of those supply chains. Lauren Bedula 22:04 And one of my favorite topics is around just partnerships and how we think about the international environment now that landscape is shifting so much. Any thoughts there? Becca Wasser 22:13 Oh, so many thoughts. This too is also my hobby horse. I mean, there's just so much that can be done when it comes down to defense industrial cooperation with allies and partners and co-production, in particular, right now, there's just not enough capacity in the US defense industrial base, and if we want to ramp up, that requires us to work with allies and partners. Some of it is just in steadying the demand signal, whether that is through FMS orders, whether that is through pool demand, say, for things like ice breakers, we just don't have that inherent within the United States right now. So thinking also about the ways in which we can ramp up production, we can take advantage of really critical know how that some of our advanced allies have, if you look at Japan, South Korea, for example, they are master ship builders and in ways that we just aren't. So how can we learn from them and use that to feed back into our own defense industrial base to create a more resilient and productive ship building base? I also think that what's commonly overlooked is some of the broader operational and strategic need for working with allies and partners. For example, being able to repair large warships overseas. We might want them to remain in theater, say in the Indo Pacific, at the potential point of need in a potential conflict, or to enhance deterrence in relative peace time, same thing with wanting to have stockpiles of critical munitions overseas, but also the ability to ramp up and produce those munitions if they are expended, say In a long, protracted conflict. All of that requires the United States working with allies and partners, because most of the time when we look at future conflict, we're expecting to fight in the Indo-Pacific or elsewhere overseas. Hopefully it's not going to be the homeland, but that requires us just starting to make some of these changes and working with allies and partners now, and ultimately, all of that feeds back to the US defense industrial base and to the US economy in a way that I think is often overlooked. Philip Sheers 24:30 And just to figure on that, I think... it is so often overlooked. And I think especially in the ship building industrial base, there are great examples of how our allies and partners have invested heavily to support us shipbuilding. And there's often some skepticism of shipbuilding going overseas, and there's lots of sensitivities around that, but looking at Honolulu investment affiliate shipyards, looking at AUKUS, is incredible investment in the US shipbuilding industrial base. There really is huge potential for allies and partners to support us industry and support the US economy. Hondo Geurts 25:02 So in talking about partnerships, maybe focus a little on the commercial side. So if you look pre Last Supper, most of the defense industrial players also had a commercial business. And then over the last 20 to 30 years, we've kind of had the rise of contractors that only do defense manufacturing as kind of their sole business, as we try and bring back manufacturing to the US on a commercial side, do you see that as an opportunity, a risk attention as we try and also bring back manufacturing and manufacturing capacity for the defense. So how should we think about those kind of dual activities going on? Becca Wasser 25:54 I think there's a lot of synergy to be had, but I think there is still a recognition that has to be made about there's only so much capacity, right? There's finite attention, there's finite time, there's finite resources. So what is going to be the priority? But having some of those dual use items, and I say that in terms of what's on the commercial and the defense side, not necessarily in the nuclear space, you know, having some of those dual use items might be a way to offset some of those finite resource constraints as well. And you know, I do look to what's happening with drones. For example, everything that is being used in Ukraine, those are all commercial drones. We look at what's happening with the replicator initiative, where that was trying to bring in commercial drones into the military plan. So trying to think of ways in which we can do more and more of that. But at the end of the day, the risk is, once again, that some of these defense items are just going to be so bespoke. And so even if there is a commercial offering, it's ensuring that it's either small adaptations to those in order for there to be some type of profit or production at scale, as opposed to it just becoming this very specialized widget that's only specific to the US military and not even ally and partner militaries, because too often, if it's for US military use, it ends up being just so detailed in such a way that it can't be sold to even some of our closest allies and partners. Hondo Geurts 27:35 So as a dinosaur here at the table of the older generation, amongst amongst all of you. I'm I'm also optimistic by all the new folks I see entering into whether it's national security or in particular kind of this defense base. What would you say you peers of yours, or the generation now going through high school? Thinking about this. What, when do you see the benefits of getting engaged in this and what kind of, what's the satisfaction you're seeing working in this area that maybe you wouldn't have maybe thought of when you were a junior in high school doing awesome things in New York and New Jersey? Becca Wasser 28:19 Well, Phil's much younger than me, so I'll let him go first. Philip Sheers 28:22 It's funny that you asked me this question, because I'm going back to my high school in a couple of weeks to talk exactly about this issue, which is, what do I enjoy about the work that I do? What surprised me about this field and kind of pitching it to high school students? There's a lot to love about this work. I think one of the things, which is a little bit more of a personal answer, is that it's really challenging. It's really it requires you to do a lot of problem solving. It requires you to think about the precision of your ideas and your words in a way that I at least had, hadn't had to before. And I thought I was a good student. I thought I was a good writer. And when you get into the policy space, your words really have real impact, and they go a long way. So I think that's something that is a challenge that can be appealing for people who who are interested in that. I also think that it's really dynamic and fun to see how these problems evolve and to jump into conversations that that go back decades, even a century. The defense industrial base obviously has a history in this country going back almost a century, if not further, depending on how you want to frame the conversation. But plenty of defense issues are like that. Air Power is an issue like that, where you can jump into a conversation and be part of this longer, longer intellectual discourse. So I think that that's that's something I've really enjoyed as a former Liberal Arts student. Becca Wasser 29:42 I would just say, and this might sound a little bit hokey, but I would say to some of the younger generation, Your country needs you, right? Public service is something that is so incredibly important, and it takes so many different forms. It's not just, you know, being in the military. It's not just working for government, you can have impact, and you can serve your country from, you know, other parts, whether that is in industry, whether that is working at a shipyard or on a factory floor, whether that is ideally working in a think tank. But you know all of this to say is public service is important, and that there's a lot of potential impact that you can have, and that kind of reward is just hopefully, will outlast me, will hopefully outlast them, but just trying to make the case for almost generational change, if you will. Philip Sheers 30:34 And I think you like you said, like, you can have impact. I think that's something that's maybe missed in the younger generations that can impact really be had. And I think it's true, you can, like you write memos for folks who work in the White House, and they read it, and you see how it translates, hopefully, into the policy that you want to see. And you get to interface with people who really have their hands on the wheel, and you get to be a part of these conversations. So that's it. Is real. You can... Becca Wasser 30:56 You can be the change you want to see! Lauren Bedula 30:59 What a great call to action to wrap on Becca, Philip, thank you so much for taking time out of your busy report rollout to tell our listeners about this work, and we're excited to see how the implementation phase goes. It's great stuff. Becca Wasser 31:12 Thanks so much for having us. It's been great. Transcribed by https://otter.ai