Speaker 1: Welcome to mid Rats with sal from Commander Salamander an
Speaker 1: Eagle one from Eagle Speak at Seer Shore your home
Speaker 1: for a discussion of national security issues and all things maritime.
Speaker 1: And welcome board everybody. Thank you for joining us for
Speaker 1: another edition of mid Rats. And if you are with
Speaker 1: us live, I'd like to go ahead and extend the
Speaker 1: altar call for you. If you can find the chat room,
Speaker 1: go ahead and homp on in with the rest of
Speaker 1: the usual suspects. What we like to do is we
Speaker 1: mon hear the chat room during the course of the show.
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Speaker 1: already going over to iTunes or speaker or wherever those
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Speaker 1: go ahead and subscribe. That way, we'll be ready for
Speaker 1: you when your schedule allows. And on today's topic, I'll
Speaker 1: tell you what it's like we were talking about in
Speaker 1: the pre show. It is quite timely, especially for Americans.
Speaker 1: When you look at the origin story of the United
Speaker 1: States and where we started, what kicked off our revolution,
Speaker 1: It was multi calls all but one of the core
Speaker 1: reasons involved maritime trade protectionisms, taxes, the whole nine yards.
Speaker 1: And when you look at the history of the conflicts
Speaker 1: that we've had, most of are declared and many of
Speaker 1: our undeclared wars, and depending on how you to find it,
Speaker 1: including one that's going on right now, we're fought about
Speaker 1: out or can be traced too. The safety of our
Speaker 1: maritime commerce, sea lines of communications, and general unfettered access
Speaker 1: to the open seas. And if you don't know history,
Speaker 1: just grab a map, grab a globe, pull up Google Earth.
Speaker 1: What you want if we want to do when you
Speaker 1: look at the United States, zoomed out a bit, We've
Speaker 1: got oceans to the east and west of US, and
Speaker 1: these oceans are between our allies, our markets, and also
Speaker 1: our global competitors on the world stage. And today we're
Speaker 1: going to address that topic with a real wide net
Speaker 1: with our returning guest, Ross Kennedy. Ross is a logistics
Speaker 1: and trade expert who's worked at the intersection of global trade,
Speaker 1: supply chains, and national security for two decades in support
Speaker 1: of US national interest and private sector clients. Ross, welcome
Speaker 1: back to INTERTS.
Speaker 2: Well, I appreciate it, sal If you'll bear with me here,
Speaker 2: I'm this seance to summon the ghost of Alfred Thayer
Speaker 2: Mayhan so that I really can be sure I'm on
Speaker 2: point with those topics.
Speaker 1: Well, Dan, we'll try not to dig too much into
Speaker 1: of the nineteenth century or even earlier. We're going to
Speaker 1: stick to the topics today because there's plenty of stuff
Speaker 1: that we can we can hit on, because it's with
Speaker 1: the new administration, there's always opportunity, there's always change, there's
Speaker 1: always different personalities. We haven't even been two months in
Speaker 1: the new administration, and we've seen a lot of naval
Speaker 1: and maritime issues continually to get mentioned from the President
Speaker 1: on down. And just wanted to ask you, based upon
Speaker 1: once we knew the results of the election in November,
Speaker 1: kind of what you were expecting to see from the
Speaker 1: new administration and really the global conversation on these topics,
Speaker 1: what has kind of surprised you the most and what
Speaker 1: are some topics that you're still waiting to break above
Speaker 1: the background noise? Once more and more people come into
Speaker 1: a position in the administration.
Speaker 2: All those are good questions, broadly speaking, based on the
Speaker 2: work that I was involved in that I knew it
Speaker 2: would be informing administration policy on a range of issues,
Speaker 2: but you know, either all of them directly or very
Speaker 2: adjacent to trade more economic warfare type of concepts, as
Speaker 2: well as immigration. The thing that we didn't have as
Speaker 2: much discussion around was really specifically the issues of maritime
Speaker 2: commerce that I've been involved in for the last twenty years.
Speaker 2: And the speed and the roundedness, sort of the all
Speaker 2: encompassing nature of what we have seen really shows I
Speaker 2: think that there is a functional understanding within in the
Speaker 2: inner circle, certainly which I'm not a part of, but
Speaker 2: that in the last four years that this administration team
Speaker 2: has been listening and they have been studying the issues,
Speaker 2: they have gotten sharp on the fact that ninety percent
Speaker 2: of everything manufactured in the world moves on water. That
Speaker 2: the eroded edge or margin of air that the US
Speaker 2: had throughout packs Americana, on maritime commerce, on shipbuilding, on
Speaker 2: our navy, everything that touches the water, they do seem
Speaker 2: to understand at a very important level that none of
Speaker 2: it matters if we can't manufact things, and none of
Speaker 2: it matters if we can't protect the things that we manufacture,
Speaker 2: and then we ship to and from the four corners
Speaker 2: of the globe. And I am astonished in a very
Speaker 2: positive way at the emphasis and the focus that the
Speaker 2: administration has shown subsequent to the November election, not only
Speaker 2: on trade. I think we expected that tariffs, we expected
Speaker 2: a rebuilding of steel and aluminum. We expected all of that,
Speaker 2: reasonably so given the tone and tenor of the first administration.
Speaker 2: But the emphasis and the focus on shipbuilding does show
Speaker 2: that they have been listening. When Heritage Foundation, you know,
Speaker 2: in the Maritime working group there that's led by Brent Sadler.
Speaker 2: You know, I'm not going to name everybody that was
Speaker 2: involved in that, but I was John Conrad who really
Speaker 2: kind of in my view, stands heads and shoulders above
Speaker 2: everybody else in terms of his grasp of the all
Speaker 2: of the domains of this at some level. And you
Speaker 2: had others in there as well who really understood all
Speaker 2: the domains of the issue. And then I thought, well,
Speaker 2: maybe this will be the extent of it. You know,
Speaker 2: we'll get some reporting out, we'll be able to influence
Speaker 2: a little bit. We'll nibble at the margins, but we're
Speaker 2: going to run into, you know, the various lobbies. We're
Speaker 2: going to run into NAVSI, We're going to run into
Speaker 2: the Coastguard, We're going to run into the foreign flag
Speaker 2: ocean carriers. And surprising to me at least is the
Speaker 2: extent to which the Trump administration has come in, you know,
Speaker 2: barrels blazing on a whole range of these issues, not
Speaker 2: just ship building, not just ports and terminals, and you
Speaker 2: know the cybern you know, infrastructure threats from putting Chinese
Speaker 2: components into our ports. It's been everything, and it's it's
Speaker 2: a little unnerving. I guess that that we're throwing all
Speaker 2: of this, you know, into the pot at once to
Speaker 2: see what we can make boil out of it. But
Speaker 2: at the same time it it kind of has to
Speaker 2: be that way. And you know, for those of us
Speaker 2: who have been waiting, you know, in my case twenty
Speaker 2: years and in the case of a lot of others,
Speaker 2: much longer to see real focus, directed action on this
Speaker 2: or at least on the issues. At some level. I
Speaker 2: content building the plane as we fly it and and
Speaker 2: failing forward a little bit to figure out where where
Speaker 2: the gaps are that we can address and imediately. It
Speaker 2: is certainly one approach. It's frightened a lot of people.
Speaker 2: It doesn't frighten me, but it is perhaps the only
Speaker 2: course of action we could have taken is to view
Speaker 2: and interpret all of these as interrelated, sort of tidally
Speaker 2: locked issues, and that we can't just prioritize rack and
Speaker 2: stack and begin chipping away from the top. We have
Speaker 2: to really begin addressing all of it at once and rapidly.
Speaker 2: So that has been the most unexpected. Perhaps we could
Speaker 2: have known a little bit when you know, we were
Speaker 2: looking at the islwu strike on the East coast and
Speaker 2: on the Gulf coast with the long shoreman, and you know,
Speaker 2: President elect Trump at the time the first time around,
Speaker 2: you know, intervened at some level and then certainly intervened
Speaker 2: when when waiting period or the cooling off period was
Speaker 2: coming in and gave full throated support to the longshoreman
Speaker 2: and really took aim at the foreign flag carriers, which
Speaker 2: was really the first indicator that he had chosen a
Speaker 2: side in this issue of you know, the legacy protectionist
Speaker 2: ways and which we've gone about a lot of things.
Speaker 2: Wece the mostly foreign owned ocean carriers and terminals and
Speaker 2: infrastructure that they operate in the US. He was siding
Speaker 2: with the Americans, but it wasn't a typical pro union approach.
Speaker 2: It was a I'm getting your guys back here because
Speaker 2: I'm betting on America. But we still got a lot
Speaker 2: to work on type of approach. And I think that
Speaker 2: that was the savvy and the smart play to build
Speaker 2: some political capital there on the American side, but then
Speaker 2: to come back with you know, the USTR Section three
Speaker 2: oh one recommendations that we saw, you know, back in
Speaker 2: the later part of February into early March, about you know,
Speaker 2: tolling ships in fleets that are manufactured in China or
Speaker 2: have a large preponderance of their fleets manufactured in China.
Speaker 2: Is it worrisome, sure, you know to some people. But
Speaker 2: to those of us that have been in this fight
Speaker 2: for a long time, we would rather gamble on being
Speaker 2: able to figure it out along the way than doing
Speaker 2: nothing at all. So that's a long way of saying
Speaker 2: I am surprised in a pleasant way and extremely motivated
Speaker 2: to whatever part I and anybody else I know to
Speaker 2: be on the side of the angels here can play
Speaker 2: in all of this, you know, I think it's full
Speaker 2: steam ahead for everyone.
Speaker 3: Sometime ago we had a guest to propose or was
Speaker 3: proposing it essentially a cabinet level maritime directors what do
Speaker 3: you ever call it? Maritimes are to coordinate all these
Speaker 3: all these activities. I think that would be required to
Speaker 3: get us back where we want to be. Now, what
Speaker 3: they've done in this administration is take part of the
Speaker 3: National Security Council and converted into an offices ship building.
Speaker 3: What do you know about what the office ship building?
Speaker 3: And are they going to be able to coordinate or
Speaker 3: are they even in the business to coordinate all the
Speaker 3: things that you just talked about. It's a pretty complex process.
Speaker 2: I think domiciling it in any one office And again
Speaker 2: I'm not speaking with the voice of anybody here. This
Speaker 2: is just me sitting in my office chair talking to
Speaker 2: you guys. Certainly my personal views informed this, which for
Speaker 2: reasons obvious, I have to be very clear about. My
Speaker 2: personal view is that you would see a hybrid approach
Speaker 2: rather than domiciling it in one. We really have three
Speaker 2: main when you roll it all up, three main stakeholders
Speaker 2: in particularly shipbuilding, but the larger maritime infrastructure economy at
Speaker 2: SC very much speaks for one of the largest stakeholders,
Speaker 2: at least in terms of budget and in terms of
Speaker 2: amount of political capital expended on the hill in the
Speaker 2: executive branch. And that's that's military shipbuilding. Now I would
Speaker 2: roll coast guard and primarily law enforcement single purpose platforms
Speaker 2: into that as well. But being able to project force
Speaker 2: at sea ensure the safety of the global commons and
Speaker 2: our literal and outer shelf waters, that's one domain. It's
Speaker 2: I think fair or as good an educated guests as
Speaker 2: any if you've got to do it fast to have
Speaker 2: NSC have its hands on that. But I don't think
Speaker 2: they are the only stakeholder. And I think we missed
Speaker 2: the boat a little bit. I'm about to run out
Speaker 2: of maritime analogies, so bear with me. But I think
Speaker 2: we miss that if we just focus on what we've
Speaker 2: always focused on, which we know it's not working. We
Speaker 2: know NAVC and PEO ships are to put it, as
Speaker 2: you know, an an ineffective, insane asylum inside of a
Speaker 2: walled garden is probably even being charitable. There's a lot
Speaker 2: of that needs to happen there. But that's institutional reform
Speaker 2: that is addressing things that have built up over forty
Speaker 2: and fifty years as we've seen the rise of the
Speaker 2: primes and revolving doors and decreased understanding of what it
Speaker 2: actually takes to build a ship. So it's not all
Speaker 2: navci's fault, but how they respond to the current political
Speaker 2: environment and to the current needs of our countries. Certainly
Speaker 2: they have a role in that, but I think NSC
Speaker 2: is a pretty good arbitrator for speaking for the military
Speaker 2: side and the law enforcement side. You also have MARAD.
Speaker 2: You know, the fact that we don't have any people
Speaker 2: that would fall, you know, in an active duty type
Speaker 2: of career that would fall under the jurisdiction of MARAD.
Speaker 2: So we don't have any merchant marine, active or retired
Speaker 2: that are in key functions of power right now. But
Speaker 2: that is the voice of the commercial shipbuilding industry, that
Speaker 2: is the voice of our auxiliaries, that is the voice
Speaker 2: of the US Flag's ability to project force and support
Speaker 2: the projection of force into the world. When you look
Speaker 2: at any sort of great power conflict, the essentialness of maritime,
Speaker 2: the ability to mobilize and move a massive amount of
Speaker 2: tonnage of cargo and fuel and essential supplies into a theater.
Speaker 2: We've really degraded that, whether it's land, air, or sea
Speaker 2: or space forces on Army fights on its stomach and
Speaker 2: military fights on its stomach and its ability to provision
Speaker 2: and protect its baggage train. And that's Marid's responsibility, along
Speaker 2: with a lot of other functions, and they don't to
Speaker 2: my view, they don't have enough of a seat at
Speaker 2: the table. But then you look downstream of all of
Speaker 2: that again, if we keep the ninety percent rule, it's
Speaker 2: less for the United States because we're not a net
Speaker 2: export economy. If we keep that ninety percent rule, of
Speaker 2: everything that's made in the world moves on water. All
Speaker 2: the things that we need to build ships, the vast
Speaker 2: majority of them are imported from overseas. That's certainly true
Speaker 2: when we look at critical components and systems and semiconductors
Speaker 2: and all these other things that we need to build
Speaker 2: missiles and controllab modules for the bridge and all this
Speaker 2: other stuff that those are all made in the modern
Speaker 2: day and age with machines that we don't build ourselves
Speaker 2: from minerals we don't either have or will take a
Speaker 2: long time to exploit what we have available in the
Speaker 2: US and the North America. All of that comes on water,
Speaker 2: and then you talk about our entire economy of hard goods.
Speaker 2: We're a net importer and a net consumer. And so
Speaker 2: the commercial sector, meaning the private sector importers and exporters,
Speaker 2: need to have a seat at the table too, and
Speaker 2: that's probably best represented by you know, someone or someone's
Speaker 2: out of the Department of Commerce. So you have these
Speaker 2: three stakeholders that are sitting at the table, only one
Speaker 2: of which really has a voice and that has primacy
Speaker 2: on this issue. And you have a relatively small maritime
Speaker 2: team that you know is in the NSC that is
Speaker 2: predominantly legacy navy or that is predominantly of the older
Speaker 2: school shipbuilding model that has consistently eroded in capability, you know,
Speaker 2: for the last generation or two. And so should they
Speaker 2: have a voice at the table ten percent? There's not
Speaker 2: a doubt in my mind. But there's no mechanism that
Speaker 2: I've seen yet that that resolves the competing or cooperative
Speaker 2: needs and capabilities of these domains to have somebody that
Speaker 2: can adjudicate them. And you know something I've spoken with,
Speaker 2: you know, John Conrad and others on the NSC about
Speaker 2: and others that are definitely informing and advising. Is that
Speaker 2: I think the best way to perhaps go about this
Speaker 2: is not to make it some large scale interagency effort.
Speaker 2: It's not to you know, get eighty chiefs at the
Speaker 2: table with no Indians to be able to do the work.
Speaker 2: My gut here is that you get two experts out
Speaker 2: of MARID, you get two experts from NSC, and you
Speaker 2: get two experts out of Commerce that each really have
Speaker 2: a narrow, tight focus on the regulations and authorities and
Speaker 2: needs of the stakeholders of those different entities. That put
Speaker 2: six at the table. You do then have a ship
Speaker 2: building ZAR or a maritime ZAR where the one thing
Speaker 2: they focus on is the big picture. Who acts as
Speaker 2: as a seventh and as an advisor and a voice
Speaker 2: of the president directly the way zars do into that process.
Speaker 2: And then whatever comes out of that deliberative process, you know,
Speaker 2: the sausage can be made there. It can be ugly,
Speaker 2: you know, it's everybody turns their phones off and you
Speaker 2: know they're you know, doing the work wherever that you
Speaker 2: know that they can get red and tooth and claw
Speaker 2: in there and resolve this because we need to do
Speaker 2: that healthy debate, violently, healthy debate is absolutely a part
Speaker 2: of this because we don't have the luxury of time
Speaker 2: to do this forever and be extremely cautious and deliberate,
Speaker 2: So we just got to get ourselves into a room
Speaker 2: and wreck this out. But that committee of seven then
Speaker 2: pushing up to somebody who has that sober mindset of
Speaker 2: let's look at the numbers, now, let's look at the
Speaker 2: facts and figures and capabilities and resources. That could be
Speaker 2: an entity like OMB that might have the ability to
Speaker 2: do that, or some of the other offices or economically
Speaker 2: focused groups of advisors that the President necessarily leans on,
Speaker 2: that whoever that may be, could adjudicate what comes out
Speaker 2: of that Committee of seven, and from that, I think
Speaker 2: you get a more well rounded, balanced set of perspectives
Speaker 2: and policies that can then be rapidly implemented down and
Speaker 2: out through the interagency by whatever means are appropriate. Allowing
Speaker 2: a relatively small of the job, more narrowly focused group
Speaker 2: to kind of encompass the needs and wants and trying
Speaker 2: to speak for all of these stakeholders. I think it's
Speaker 2: just too big, too big of an ask with the
Speaker 2: world as it is, within the amount of work that
Speaker 2: has to be done because and then one of the
Speaker 2: reasons I suggested bringing in like an ANEC like the
Speaker 2: National Economic Council or OMB to be able to adjudicate
Speaker 2: a lot of this is because a huge amount of
Speaker 2: this work is going to involve foreign partners potentially coming
Speaker 2: in Koreans or Japanese doing joint venture shipyards. We know
Speaker 2: CMA has announced that they're looking at doing something similar
Speaker 2: as well, investing into shipbuilding and infrastructure here. So we
Speaker 2: have to have that sort of diplomatic and economic perspective
Speaker 2: to help governing guideline. A lot of this it's going
Speaker 2: to take subsidies, it's going to take taxes, it's going
Speaker 2: to take being able to pull from the USTRS China
Speaker 2: ship Port too, the funds that we build from additional tariffs.
Speaker 2: You know, someone has to be able to speak for
Speaker 2: that and say, Okay, here's the pot of money and
Speaker 2: here's how much we're going to allocate to the efforts
Speaker 2: that these committees of competing in cooperative entities have pushed
Speaker 2: up to us. So that's my hope is that we
Speaker 2: see something that's more in alignment with that as it evolves.
Speaker 2: And my hope is that we do continue to as
Speaker 2: painful as it may be fail forward.
Speaker 1: You mentioned forty to fifty years to get here, and
Speaker 1: this is something, like you said, it didn't happen overnight,
Speaker 1: and it's not something that's going to, unfortunately be fixed overnight.
Speaker 1: As there's a lot of talk about not just in
Speaker 1: the shipbuilding arena, but the economy in general, reshoring, reindustrialization.
Speaker 1: But after forty or fifty years, and you covered on
Speaker 1: some of those points, you just can't flip a switch
Speaker 1: and have it take place.
Speaker 3: You need to have.
Speaker 1: Interior lines of communication with supply chains. You need the
Speaker 1: companies all along the supply chain that are also have
Speaker 1: had the business long enough that they've been able to
Speaker 1: be continuing businesses. I'm old enough to remember, especially in
Speaker 1: places like San Diego at the end of the Cold War,
Speaker 1: the amount of companies to just shut their doors because
Speaker 1: there if you don't get orders for a year, you
Speaker 1: can't stay in business. And so we've let it atrophy
Speaker 1: and on the vine for so long that you need
Speaker 1: to have from your raw materials a look at. And
Speaker 1: I like how you mentioned a department of commerce, but
Speaker 1: this really is I hate to use this overuse phrase
Speaker 1: all the time, but it does need to be a
Speaker 1: whole of government because when you look at a lot
Speaker 1: of the resources and raw materials that do have available
Speaker 1: in the US is everything from the regulations and involving
Speaker 1: environmental impact statements to local zoning issues. That we've gone
Speaker 1: for so long without having to access these things throughout
Speaker 1: the economy that there needs to be a long term
Speaker 1: structure in place that survives this administration and going on
Speaker 1: the institutions and the practices that got us here over
Speaker 1: forty years, Is that the same type of infrastructure that
Speaker 1: can get us back to where we'd want to be there?
Speaker 1: Does there need to be a look at breaking things
Speaker 1: down to parade rest and building something that could push
Speaker 1: in a better direction.
Speaker 2: I think the existing infrastructure that we have necessarily plays
Speaker 2: a role, particularly some of the more be circumspect and
Speaker 2: speaking particularly maybe about business practices or whatever, if only
Speaker 2: because I don't feel like getting my phone or email
Speaker 2: flooded with with you know, angry responses. But we do
Speaker 2: have yards in the US that have some level of
Speaker 2: integrated infrastructure. Hostile USA and Mobile is a great example,
Speaker 2: where they have their own steel and aluminum forging and
Speaker 2: working capabilities there. Not every shipyard has something like that.
Speaker 2: We've got coast guard ships being built in the yard
Speaker 2: that you know is mostly sand, gravel and mud let
Speaker 2: alone having a steel mill attached to it. But when
Speaker 2: we look at the whole of the capabilities, we need
Speaker 2: to be very honest with ourselves about what each yard
Speaker 2: is capable of and allowing them to rise to the
Speaker 2: excellence they are currently capable of, and resourcing and supporting
Speaker 2: them and keeping them aligned. But what I would envision,
Speaker 2: what I would hope, is that we see green field
Speaker 2: models emerge from new types of primes or disruptive clusters
Speaker 2: of existing ones, or people that have adjacent domain knowledge
Speaker 2: that are more of a maritime innovation cluster within an
Speaker 2: area's You know, the Golf is really an obvious place
Speaker 2: because of its access to deep water ports, because of
Speaker 2: the very cheap energy of that is produced immediately offshore
Speaker 2: and then refined right there. You know, your your biggest
Speaker 2: inputs for shipbuilding, if you're not going fully robotic, are
Speaker 2: going to be manpower and energy, And the Golf has
Speaker 2: a history culture of shipbuilding. It would be very easy,
Speaker 2: relative to a lot of the other challenges I think,
Speaker 2: to invest into and reinforce and expand that doing a
Speaker 2: like a maritime innovation SEZ, like a special economic zone
Speaker 2: that carries FTZ privileges so the materials can be imported
Speaker 2: and converted. So substantial transformation is the term that commerce
Speaker 2: and Customs uses when you take a raw input that
Speaker 2: is dutiable and tariff at a certain amount, but then
Speaker 2: it becomes a constituent component of something manufactured inside the
Speaker 2: United States. Very often there are exemptions for duties and
Speaker 2: tariffs on that. So it enables us to not cut
Speaker 2: off our nose to spite our face on critical things.
Speaker 2: So by setting up you know, and I would think
Speaker 2: being head of the Senate Armed Services Committee, someone like
Speaker 2: Senator Wicker out of Mississippi would be interested in that,
Speaker 2: or you know, a pretty visionary governor like someone like
Speaker 2: Governor DeSantis in Florida, where you have all of the
Speaker 2: constituent ingredients, but nobody's figured out how to really make
Speaker 2: that recipe sing. And so if we take an approach
Speaker 2: of doing a you know, a maritime innovation shipbuilding cluster,
Speaker 2: then you would necessarily be able to tie all of
Speaker 2: the beneficiaries of that, all of the stakeholders of that,
Speaker 2: because it's not just the shipyard and a lot of
Speaker 2: incentives that we've seen in the past have been aligned
Speaker 2: directly to the prime contractor that builds the ships, but
Speaker 2: they're sourcing from networks of hundreds or thousands of small
Speaker 2: businesses or medium sized businesses that very much have skin
Speaker 2: in the game tied to the success and funding of
Speaker 2: the primary program and initiative that USG might be supporting.
Speaker 2: But they're locked out. They don't receive the same benefits,
Speaker 2: they don't receive the same incentives, they don't receive the
Speaker 2: same love and support and safety net, right that the
Speaker 2: big primes do. And so the primes then are in
Speaker 2: the way. And we've seen this with Oneyson Ingles, We've
Speaker 2: seen it with numerous others, right, I shouldn't even name one,
Speaker 2: because it's all kind of this way everywhere that you
Speaker 2: have all of these downstream small businesses that are making
Speaker 2: parts and systems and components who don't have the safety net.
Speaker 2: They don't have access to the same capital, they're not
Speaker 2: publicly traded where they could, you know, do a raise,
Speaker 2: or they could access other market mechanisms that could help
Speaker 2: them float these things. Because you're talking particularly if you're
Speaker 2: looking at a coast guard or you know, an ABC
Speaker 2: managed program, you're looking at eighteen to twenty four months
Speaker 2: in a lot of cases before an invoice gets returned.
Speaker 2: I know of one company right here in Minnesota where
Speaker 2: I'm sitting now who they are are They sole source
Speaker 2: for the new generation of kinetic shield you know, ballistic
Speaker 2: shielding for They've outfitted ten of the carriers so far.
Speaker 2: They're supposed to be beginning work on the Harley Burke program.
Speaker 2: But these are the ballistic shields that you know when
Speaker 2: you have guys top side that are on the guns
Speaker 2: or moving along certain pathways where they have exposure to
Speaker 2: small arms and larger caliber ordinates. The current systems are
Speaker 2: completely non violet or you know, they don't work, They collapse,
Speaker 2: they break, they don't meet performance specifications. And this small
Speaker 2: little company with twelve people in Minnesota is the single
Speaker 2: point of failure for the new generation. They can't get
Speaker 2: anybody have PEO ships to slide them even a fraction
Speaker 2: of the dollar amount that they're owed for work already performed,
Speaker 2: let alone for committed, allocated and outlaid funding that has
Speaker 2: vanished and gone to other programs or what. We can't
Speaker 2: treat our small businesses like this, so we have to
Speaker 2: hold everybody is equal and their value for their role
Speaker 2: in the supply chain, doing an Sez type approach on
Speaker 2: the water where everybody involves shares and the benefits. They
Speaker 2: share the risk equal to their cotribution to it, but
Speaker 2: we give them more upside than downside. We provide a
Speaker 2: safety net for them. That type of program I think
Speaker 2: would be able to It wouldn't just reinforce the existing base.
Speaker 2: It would spark or accelerate interest of people who can
Speaker 2: come in. They can be paid higher wages than they are.
Speaker 2: I think it was John Conrad that posted on X
Speaker 2: the other day about who's going to go do extremely
Speaker 2: dangerous work welding on a ship for twenty five dollars
Speaker 2: an hour, you know? And it was a job posting.
Speaker 2: I think it was from I think it was from
Speaker 2: the Newport News shipyard. He's right, he's right. When you
Speaker 2: average that out to a full time a full time
Speaker 2: equivalent worker, that's a little over fifty thousand dollars a year.
Speaker 2: For someone whose skills in the auto industry or in
Speaker 2: the offshoil and gas industry, they would get paid double
Speaker 2: or triple that. So we have to take a look
Speaker 2: at the impact on the human and you know, sell
Speaker 2: to your point, the impact on the environment, the removal
Speaker 2: of NEPPA, the environmental protection regulations or certainly mitigating them.
Speaker 2: It's five six seven years to do a large scale
Speaker 2: industrial infrastructure project, whether it's something like an oil and
Speaker 2: gas refinery, whatever, it's five to six years just to
Speaker 2: get that thing off the ground. And by then you're
Speaker 2: ten to fifteen million, and the whole just on conducting
Speaker 2: regulatory reviews, environmental assessments, all of that. We've got to
Speaker 2: get out of our own way to some level, and
Speaker 2: then we can worry as well about building and attracting
Speaker 2: an ecosystem of talent and suppliers, and we can bet
Speaker 2: on ourselves. Again. The mechanisms exist to do that, but
Speaker 2: the political will right now is in the way because
Speaker 2: the primes don't want to lose the competitive edge that
Speaker 2: they have. You have people on the hill that don't
Speaker 2: want to see or revival of this type of thing,
Speaker 2: and then you have all of these little tribal interests
Speaker 2: within us G where everybody wants the biggest piece of
Speaker 2: the pie because at some level they think they're entitled
Speaker 2: to it, and so it's either share and share alike,
Speaker 2: share the risk and share the benefits, and everybody wins,
Speaker 2: or it's going to be more of the same that
Speaker 2: we've seen, where the primacy of jones Ac, the primacy
Speaker 2: of Navy, the primacy of whatever whoever's arguing at the
Speaker 2: time on the hill wins out, and then we just
Speaker 2: have to laid ourselves another eighteen to twenty four months
Speaker 2: while everybody who can be part of the solution either
Speaker 2: starves on the vine or just goes and finds another
Speaker 2: productive use for their capabilities.
Speaker 3: You know, as you were talking, I was thinking about Solendra.
Speaker 3: You remember Solendra. Yeah, So here here's a company that
Speaker 3: was funded up front as far as I can tell,
Speaker 3: to produce those things called solar pounds, right, and they
Speaker 3: spent the money or money just disappeared, they went broke.
Speaker 3: And I'm thinking, well, here's this little company in Minnesota
Speaker 3: producing this stuff. Why are the heck are we not
Speaker 3: prefunding some of these outfits. We know they got a product.
Speaker 3: I've seen DARPA do this. Why are we not you know,
Speaker 3: give them a little money to get them, get them
Speaker 3: keep them going while we wait for the other ponderous
Speaker 3: funding mechanisms to shift into gear. I mean, I foresee
Speaker 3: that kind of problem going on with all the food
Speaker 3: chain you talk about as you try and get the
Speaker 3: little pieces of parts and components to start rolling towards
Speaker 3: the shipyards that are going to produce what we need
Speaker 3: to add, which is ships.
Speaker 2: It's you're right, I mean at and we could do
Speaker 2: a whole other series of episodes. And you know, Mark,
Speaker 2: I know you and Salad both been you know, absolutely
Speaker 2: beating this horse for as long as the shows existed,
Speaker 2: and certainly before. But procurement reform is such a gigantic
Speaker 2: elephant to try to eat all at once. But the
Speaker 2: things that you can do that can chip away at
Speaker 2: it are you have to decouple at some level the
Speaker 2: necessity of living and dying on government funding from the
Speaker 2: speed at which capital and op X is outlaid in
Speaker 2: the private sector. If you want to have a robust
Speaker 2: private sector capability to reinforce and support our national security
Speaker 2: and shipbuilding priorities. Right, And so the big picture thought
Speaker 2: I had is if we're serious about setting up a
Speaker 2: US sovereign Wealth Fund, and Mike got the amount of
Speaker 2: money that we outlay to do nation building and economic
Speaker 2: development in other countries through DFC, through support of the
Speaker 2: Inter Americans Bank, inter America's bank. All of these fund
Speaker 2: the XM Bank of the country of Gangana, which I'm
Speaker 2: very familiar with, having spent a lot of last year,
Speaker 2: are working on some different issues in the oil and
Speaker 2: gas side, and a couple of other things. You know,
Speaker 2: they just received, they've they're already a billion into XM
Speaker 2: Bank for a lot of projects, all of which, of
Speaker 2: course are critically necessary, and all of which, of course,
Speaker 2: we have tied to our strategic interest because of Exon
Speaker 2: being sort of the primary stakeholder in the amazing oil
Speaker 2: and gas flne there over the last decade that they've
Speaker 2: built up. And then we just threw another five hundred
Speaker 2: and twenty something million and XM funding at that. Where's
Speaker 2: a funding mechanism like that for our own critical industries
Speaker 2: inside of our own shores and inside of our own territories.
Speaker 2: Right what we have Usbi, we have Guam, We're probably
Speaker 2: going to have Greenland at some point, right we have Micronesia.
Speaker 2: We have all of these outlying things where a very
Speaker 2: very small internal investment into something would have enormously positive
Speaker 2: impacts on the population and our relationships with these territories.
Speaker 2: But have enormously strong benefits and generate reasons to be
Speaker 2: able to have a robust blue water capability to defend
Speaker 2: and protect these territories, not just just the bases like
Speaker 2: we have at Guam, but to really bolster them and
Speaker 2: reinforce them and invest into those populations. If they're going
Speaker 2: to be our territories, then we need to take care
Speaker 2: of them. But we also have to take care of
Speaker 2: our people here, you know, konus, right. So if we're
Speaker 2: going to outlay a billion and a half in the
Speaker 2: last three years to a relatively small but strategically critical
Speaker 2: ally like Guyana down in South America, why does no
Speaker 2: funding mechanism really exist that is as fast that bets
Speaker 2: on America? So if we have a sovereign wealth fund,
Speaker 2: why wouldn't we reduce the risk of CAPEX loss upfront
Speaker 2: and say, okay, for the first x amount of the
Speaker 2: projected cost of building the shipyard and getting the first
Speaker 2: you know, getting the first keel laid, the US government
Speaker 2: will subsidize up to eighty five percent of the potential
Speaker 2: loss in years one through five. And for this, right,
Speaker 2: because that's what that's what unlocks private capital is de risking,
Speaker 2: it's why XM Bank exists is so that we can
Speaker 2: de risk American investment abroad so that regular capital can
Speaker 2: catch up to it and not at a massive interest
Speaker 2: rate that they need to be able to invest into
Speaker 2: these things. But if we're going to do that, then okay, great,
Speaker 2: a new shipyard. Let's say it's five hundred million to
Speaker 2: acquire the land, build the infrastructure, get everybody trained up,
Speaker 2: et cetera, over say three years. Right, all that has
Speaker 2: to be de risk. And in doing that, the US
Speaker 2: Sovereign Wealth Fund couldn't you know, could hold ten percent
Speaker 2: equity in the project and in the company that comes
Speaker 2: out of it. However we want to do that didn't
Speaker 2: have to be that, but we have to have some
Speaker 2: mechanism that exists. I hesitate to use the word slush fund,
Speaker 2: but certainly a very large pull of discretionary capital directed
Speaker 2: by the executive branch, may be funded by tariffs, may
Speaker 2: be funded by the USTR Section three zero one, you know,
Speaker 2: China ship tolls and our ports. But however we get
Speaker 2: to that betting on ourselves and investing into ourselves every
Speaker 2: amount of investment that the US government makes into a
Speaker 2: private sector company. I think historically the return is two
Speaker 2: dollars on every one input, just just upfront. And that's
Speaker 2: that's a direct investment. That's not including the indirect growth
Speaker 2: of local communities and local education centers and upskilling of
Speaker 2: you know, skilled tradesmen and the benefit that they bring
Speaker 2: to the communities. Investing into ourselves as the wisest thing
Speaker 2: we can do, and nobody is really talking about that
Speaker 2: except direct or indirect subsidies or you know, whatever it
Speaker 2: may be. China squared that circle by being an authoritarian country,
Speaker 2: by mandating that all the ships there serve a dual
Speaker 2: purpose use that they build, and by heavily subsidizing at
Speaker 2: every level and controlling cost. Well, that's not how the
Speaker 2: United States does things, but it doesn't mean that our
Speaker 2: lack of imagination on the capabilities and tools and frankly
Speaker 2: the American spirit right that we have. We still need
Speaker 2: to bet on ourselves the same way China bet on theirselves,
Speaker 2: but we just need to look at the problems set
Speaker 2: a little different way. And an extension of that, and
Speaker 2: we'll make this one quick, is that we self embargo
Speaker 2: an enormous amount of things. Alaska is a treasure trove
Speaker 2: of energy and of mineral wealth. Ninety eight percent of
Speaker 2: the cargo that moves in and out of Alaska every
Speaker 2: year is maritime. But because of the Jones Act and
Speaker 2: because it's it's relatively small quantities today that are coming
Speaker 2: out a lot of the stuff that moves out of
Speaker 2: Alaska from an exports and containers on very small ocean
Speaker 2: going barges, right. And that's that's Linden, I believe, is
Speaker 2: the contractor, and they bring it all into the Pacific Northwest.
Speaker 2: It's a short sea route. But Linden's ability to grow
Speaker 2: and expand is constrained because of the larger market forces.
Speaker 2: They work with what they've got available to them to
Speaker 2: continue making money. But if we need graphite that's going
Speaker 2: to move from you know, the GRAPHI what is it
Speaker 2: the Graphite River project or whatever it may be that
Speaker 2: graphite one has up in Alaska, GRAI. We are one
Speaker 2: hundred percent net import dependent on substantial amount of that
Speaker 2: comes from China. Right. So China cut graphied off along
Speaker 2: with germanium and gallium and numerous other things over the
Speaker 2: last couple of years. They put export controls on them
Speaker 2: coming to the US. Degree to which we can get
Speaker 2: that graphite to the manufacturing center that graphite one is
Speaker 2: built in Ohio. Time routes exist for that. It would
Speaker 2: be cheaper net to move it on an ice ship
Speaker 2: from Alaska all the way down to the Panama Canal
Speaker 2: and bring it all the way up you know, translated
Speaker 2: to barge bring it all the way up the Mississippi
Speaker 2: River to the Ohio and then into Ohio. That would
Speaker 2: still be cheaper. Then move it into the PNW and
Speaker 2: then having to rail across the country into Ohio, or
Speaker 2: doing a rail direct through Canada using one of the
Speaker 2: new Canadian flag carriers with CPKC and CN to land
Speaker 2: at Ohio as well. There's a lot of friction. The
Speaker 2: closer you get to the road rail land, the more
Speaker 2: friction there is in logistics and supply chain. It's an
Speaker 2: immutable fact. Moving in on water is the most expeditious
Speaker 2: way to do it, but we can't do it today
Speaker 2: because we don't have a single Jones Act capable dry
Speaker 2: bolt vessel they could carry that graphite. So when we
Speaker 2: imagine the problem, we import a huge amount of recycled metal.
Speaker 2: We're a net exporter, but we import a lot and
Speaker 2: so there's a delta there. And when you look at
Speaker 2: the problem. It's because the United States, we're exporting recycled
Speaker 2: metal all over the world. One of the biggest buyers
Speaker 2: recycled US metal is China, and they're smelting it down
Speaker 2: and putting it right back into the ships that they're
Speaker 2: threatening us with. But because we don't have dry bulk
Speaker 2: vessels in the Jones Act, our Jones Act, you know,
Speaker 2: qualified dry bulk vessels. We only have four in the
Speaker 2: US flag, but none of them are Jones Act qualified.
Speaker 2: We have no dry bulk vessels to be able to
Speaker 2: move recycled metal from one part of our shoreline to
Speaker 2: another one of our coasts, particularly the steel and aluminum
Speaker 2: industry in the Northeast and in the Rust Belt, where
Speaker 2: we can make use of our own recycled metal. It's
Speaker 2: cheaper to import it from somewhere else in the world,
Speaker 2: bring it through the port, put it on rail, bring
Speaker 2: it to the smelters, than it is for us to
Speaker 2: truck it ourselves, let alone put it on water. That
Speaker 2: is astonishing to me, but it's not an insurmountable problem.
Speaker 2: It simply lacks the political will and a big part
Speaker 2: of the existing system that we have built that reinforces
Speaker 2: that supply chain silliness. You know, that's that's what we
Speaker 2: have currently running the show at the top of the
Speaker 2: last administration, this administration all over the hill. It's it's
Speaker 2: that that outmoded way of things. Because people are trying
Speaker 2: to protect their ivory towers, their walled gardens, they're their
Speaker 2: personal little fiftems. They're going to have to sacrifice that
Speaker 2: or we're all going to suffer. And everybody has to
Speaker 2: look at it that way.
Speaker 1: We have this interlocking web of unintended consequences. It just
Speaker 1: lay one barrier after another between where we know we are,
Speaker 1: where we know we want to be, but just getting there.
Speaker 1: You have all these trips. The conversation I've had one
Speaker 1: of them that I'll mention here in a second. Jerry
Speaker 1: Hendricks and I a few years ago, we're both up
Speaker 1: on Google Earth going just look at it is. Back
Speaker 1: when we had a lot more warships, a lot more
Speaker 1: merchant ships, a much more vibrant shipbuilding capability. Our coasts
Speaker 1: are lack of a better phrase, littered with a superb
Speaker 1: disused and abandoned infrastructure. And the interesting thing about shipyards,
Speaker 1: if you just want to look at shipyards as a
Speaker 1: sub sector, of larger reindustrialization, and you just can't put
Speaker 1: them anywhere you want to. If you want to build tractors,
Speaker 1: you can put tractors near a railhead about anywhere in
Speaker 1: the country, and you can build tractors and get tractors around.
Speaker 1: But shipbuilding you have geography. Geography is important and also
Speaker 1: access to other railheads, while we use that to be
Speaker 1: able to bring in the substantial amount of material it
Speaker 1: takes to build ships. So we have all over this
Speaker 1: country places that used to have shipyards, and if we
Speaker 1: wanted to expand it, we have to look back. And
Speaker 1: I'm just going to use a handful of them. And
Speaker 1: if folks want to cope on Google Earth and look
Speaker 1: out of them yourself, they're very impressive. The old Brooklyn
Speaker 1: Naval Yard, Mayor Island, San Francisco's Hunter's Point. Even in
Speaker 1: Puerto Rico there's a disused dry dock that everybody fishes
Speaker 1: at now and you can go to North Charleston that boy,
Speaker 1: if we ever want to reactivate that, we need to
Speaker 1: move fast. But they's a really nice development's taking place
Speaker 1: and North Charleston that will again make it politically impossible
Speaker 1: to do here in a few years. So if you
Speaker 1: can get that appreciation, you can get the ball rolling.
Speaker 1: Then you have to look at, okay, where are we
Speaker 1: going to have these additional construction and maintenance facilities? Are
Speaker 1: probably going to go back to the places they used
Speaker 1: to be. What have you seen? And this is not
Speaker 1: just political but also legal. The ability if we are
Speaker 1: serious about this, to be able to claw back some
Speaker 1: of this disused and repurposed infrastructure that we have up
Speaker 1: and down both coasts.
Speaker 2: Well, if we look at where the predominant amount of
Speaker 2: Kaiser shipyards who are in World War two, right the
Speaker 2: fabled Liberty ship arsenal democracy part of the you know,
Speaker 2: larger military build up. You know, those yards were established
Speaker 2: as green fields in the Los Angeles area, San Francisco area,
Speaker 2: and then in the Pacific Northwest, and they would still
Speaker 2: be viable if not for the really really insane state
Speaker 2: level provisions and attitudes of a lot of the political
Speaker 2: leaders and you know in the PNWN in California. So
Speaker 2: if you say, oh, well that's that's maybe viable, but
Speaker 2: potentially a non starter because typically the governors of those
Speaker 2: states as it stands right now, may not want to
Speaker 2: give President Trump a win. Then we have to look east,
Speaker 2: and we have to look south at the Gulf, or
Speaker 2: we have to look at Puerto Rico, which I am
Speaker 2: sure that their economy would appreciate a massive injection of liquidity,
Speaker 2: capital and skilled labor or opportunities to upskill into skilled labor.
Speaker 2: So we have to look at the theory of the
Speaker 2: real upfront and trust that we can build that rising
Speaker 2: tide or an undertow that drags some of the dumber
Speaker 2: priorities out to see with it, so that we can
Speaker 2: get a three coast shipbuilding strategy. Again, the most thriving
Speaker 2: of those sectors right now, as such as it is is,
Speaker 2: you know, is on the Gulf of America coast, which
Speaker 2: I threw that in of course just to be able
Speaker 2: to say Gulf of America, but on the East coast
Speaker 2: as well. Like you said, North Charleston's fantastic. They are
Speaker 2: building a ton of infrastructure out but Charleston ten years
Speaker 2: ago is not what Charleston looks like today, right So,
Speaker 2: but you still have a very very large amount of
Speaker 2: industrial space that Kindri Morgan owns and operates in North Charleston,
Speaker 2: right on the other side of the river. You still
Speaker 2: have room to grow in Virginia. There's things you could
Speaker 2: do in Georgia, there's things you could do on the
Speaker 2: Atlantic side of Florida, North Carolina, and moving all the
Speaker 2: way up. You want to co locate as close to
Speaker 2: the infrastructure you have existing as possible. A lot of
Speaker 2: our seil and aluminum manufacturing is still kind of in
Speaker 2: the northeast, mid Atlantic part of the country, so that's
Speaker 2: a great obvious place to start. Right Our cheapest energy
Speaker 2: that's available to us is in the Gulf, so that's
Speaker 2: a great obvious place to start. And you can you
Speaker 2: can build a ring road around, you know, from Texas
Speaker 2: to Mississippi to Alabama to Florida and you know Louisiana
Speaker 2: as well. That bolsters the existing industry, allows them to
Speaker 2: bring their costs down for existing programs that they're doing
Speaker 2: and make them part of the solution too. Where I
Speaker 2: think the political viability question comes in is going to
Speaker 2: be the state level fight for how they index their
Speaker 2: larger connectivity to federal programs, to funding to how much
Speaker 2: of the Union do they really see themselves as a
Speaker 2: part of. And they're not going to play arbitrage games
Speaker 2: against other states, you know, so it has to be
Speaker 2: a level of cohesion amongst the governors and and the
Speaker 2: state legislatures around a national vision for reinvigorating maritime greatness.
Speaker 2: And on that premise, I certainly don't see the three
Speaker 2: West Coast states playing ball initially initially, but they will
Speaker 2: if you have successful pilot programs, you know, somewhere on
Speaker 2: the East Coast and somewhere in the golf that shows
Speaker 2: this can be done. Money talks bs walks all day
Speaker 2: every day, including in politics. And if these states begin
Speaker 2: thriving and begin attracting skilled talent, if their education systems
Speaker 2: begin receiving the benefits of additional trades and union jobs
Speaker 2: and capabilities that are paying into communities, and property taxes
Speaker 2: are increasing, standards of living are increasing, that's going to
Speaker 2: be very hard to ignore. So it's not about providing
Speaker 2: favors to politically favored states where governors or delegations are
Speaker 2: very very friendly to President Trump. It's about going, what
Speaker 2: is the shortest line of site we have to something
Speaker 2: effective and viable and right now that's working within the
Speaker 2: political realities that we have. Long term, I want to
Speaker 2: see every single Kiser yard, every single other yard that
Speaker 2: we had in World War Two. I would love to
Speaker 2: see it or something like it back online and to
Speaker 2: see that just that vibrant belief that we can do
Speaker 2: the impossible, which you know Henry Kaiser and his team
Speaker 2: did with We're gonna build a ship in four days,
Speaker 2: and they did it. Technically, they did one in a
Speaker 2: little over two days, but that needs to be contested
Speaker 2: because then you know, it was pre built into like
Speaker 2: four pieces that just had to be welded together in
Speaker 2: two days. But four days is astonishing, right, But they
Speaker 2: took a they couldn't have done that without taking a
Speaker 2: modular approach to shipbuilding, which is really where that was designed.
Speaker 2: They didn't build it from the keel up right. They
Speaker 2: built it in modules and brought everything in together. They
Speaker 2: craned it in and it sort of snapped into place.
Speaker 2: So we take a look at platforms that have existed
Speaker 2: over the years that we've kind of never really invested
Speaker 2: into because maybe we lack imagination, or maybe they were
Speaker 2: built by the wrong shipbuilder, didn't have enough lobbying dollars
Speaker 2: or whatever it may be. But we look at like
Speaker 2: FSF one ceafighter, you know club broups, you know Dreamboat
Speaker 2: one of my favorite ones too, And we look at
Speaker 2: the approach to that. We look at the approach that
Speaker 2: some of the smaller USV aus V builders ones that
Speaker 2: are playing in those that space, you know, your black
Speaker 2: seas and your surrounds and your androls. You know, Androl
Speaker 2: Boeing took twenty years to do an XLUUV with ORCA.
Speaker 2: It's still not a viable functional program. Andral I think
Speaker 2: it was in four years from prototype to sellable design
Speaker 2: that other countries are currently buying, Androl did it in
Speaker 2: something like four. So we have to find a way
Speaker 2: to reconcile competing interests and allow new innovation, new designs
Speaker 2: to emerge that are designed for high survivability, modularity, multiple
Speaker 2: you know, multiple modes and modality things that are you
Speaker 2: know CIMC haterred type stuff, you know, Humanitarian Assistant's disaster
Speaker 2: response type platforms that swap a few modules out and
Speaker 2: they can become you know, short sea high speed cargo
Speaker 2: ships swap another few modules out. They can be doing
Speaker 2: military operations round fleet escorts or basically being missile barges
Speaker 2: right as part of a fleet escort, or as part
Speaker 2: of a power projection for structure being able to do
Speaker 2: more with less initially and focusing on speed, reasonable cost,
Speaker 2: and what gets us the shortest path to being able
Speaker 2: to expand into larger platforms. A very reasonable place to start.
Speaker 2: Beginning with greenfield or acquiring the bones of a really
Speaker 2: good shipyard that maybe has just been tied for too
Speaker 2: long to government programs and can't cash flow any longer.
Speaker 2: Something like that is probably the way to go. It's
Speaker 2: probably what will happen. But if we don't begin at
Speaker 2: the outset with an aligned strategy of how we're going
Speaker 2: to reconcile stakeholders, how we're going to deploy capital to
Speaker 2: incentivize this, and then how we're going to nurture and
Speaker 2: cultivate a maritime ecosystem that the needs of all stakeholders,
Speaker 2: including the American taxpayer, are recognized. We've got to be
Speaker 2: able to do both sort of in parallel and then
Speaker 2: merge them quickly, as quickly as possible, as quickly as
Speaker 2: rational and viable down the line into one large, coherent
Speaker 2: strategy that is largely operated by, funded by, and built
Speaker 2: by the private sector.
Speaker 3: Yeah, speaking of a strategiery the reacquisition or whatever, just.
Speaker 2: How George Bush's based in my head when you said.
Speaker 3: That, Yeah, That's what was in my head too. So
Speaker 3: what about the reacquisition or whatever we've done with the
Speaker 3: Panama Canal. You know, we let we defend the choke
Speaker 3: points of down through the Red Sea and through the
Speaker 3: Spraate of horor moves we've let you know, But the
Speaker 3: Chinese are everywhere now, including having bases and other assets there.
Speaker 3: Has the Panama Canal kind of been reclaimed? And what
Speaker 3: other trick points should we be worried about that we
Speaker 3: take a look at too as we go along.
Speaker 2: The one that worries me the most over the horizon
Speaker 2: is the Arctic shipping route for a number of reasons
Speaker 2: you know that are all strategicy related. It's one of
Speaker 2: the primary drivers of President Trump's emphasis on Greenland. Greenland
Speaker 2: is probably its own thing, but bringing Tom Dan's on
Speaker 2: for that would probably be a better thing than I
Speaker 2: can speak to, because Tom's actually been to Greenland, and
Speaker 2: the last Kennedy man in my family that's been there
Speaker 2: was when my grandpa did several TD wise there in
Speaker 2: the fifties. But over the horizon, the Arctic c ro
Speaker 2: out is the Arctic Corridor, which Russia and China are
Speaker 2: far better position to exploit than we are right now.
Speaker 2: That's the one that worries me the most. As far
Speaker 2: as in our own backyard, there's two, one existing and
Speaker 2: one that could be where we would have the ability
Speaker 2: to have some optionality. The number one is the Panama Canal.
Speaker 2: President Trump, Sex State Rubio did a really, really, really
Speaker 2: good job. As much as it may have offended the
Speaker 2: delicate sensibilities of people who aren't prone to liking that
Speaker 2: the team, anyway, it worked. It worked because it's an
Speaker 2: approach that works in Latin America, which was very much
Speaker 2: the Teddy Roosevelt carrot and stick. You do the thing,
Speaker 2: you get the benefits, you don't do the thing, or
Speaker 2: you work against what we're trying to do, and it's
Speaker 2: going to be problems. Right remember nineteen eighties and you know,
Speaker 2: a bunch of jar heads showed up. Do we need
Speaker 2: to remind you of the history? Taking that approach worked there.
Speaker 2: Not only did we get very very firm commitments both
Speaker 2: behind the scenes and publicly on the security relationship and
Speaker 2: Panama in the US both understanding the role that they
Speaker 2: have as stakeholders in this. But I think it was
Speaker 2: two weeks ago, maybe or a week and a half ago,
Speaker 2: was announced. The Blackrock to the extent I trust anybody.
Speaker 2: Blackrock is lowest on the list, but they are at
Speaker 2: least American dominciled and subject to our jurisdiction. The Blackrock
Speaker 2: and Mediterranean Shipping Company you know, which is privately and
Speaker 2: it's the largest in the world for ocean care for
Speaker 2: container cargo. Very powerful company, very powerful family. The Aponte
Speaker 2: family owns that they operated out of their headquarters in
Speaker 2: Geneva in Switzerland. But black Rock and MSc came together
Speaker 2: and took down a deal to completely acquire all the
Speaker 2: port and terminal holdings worldwide of Hutchinson and Hutchison, you know,
Speaker 2: is a Hong Kong domiciled company that long ago fell
Speaker 2: into this way and jurisdiction of the PRC, whatever anybody
Speaker 2: wants to say about it. So in that an American
Speaker 2: investment capital group and a more or less aligned private
Speaker 2: sector entity out of Switzerland got together and did a
Speaker 2: deal that took Hutchison out of the Port of Balboa,
Speaker 2: which by container volume I think is number one. It's
Speaker 2: on the Pacific side of the Panama Canal because it's
Speaker 2: a major tranship hub for anything going south to Latin
Speaker 2: America or coming north out of Latin America. A lot
Speaker 2: of it transships right there and then moves through the
Speaker 2: canal and goes tour from the US. So that's it
Speaker 2: for this early in the game. An extremely positive indicator
Speaker 2: that Panama has gotten the message. They bailed at the
Speaker 2: very first action they took after Sexy at Rubio's visit
Speaker 2: was they announced that they were going to be the
Speaker 2: first career be in a re Latin American country to
Speaker 2: pull out of Belton Road China's large scale investment program,
Speaker 2: which there's more Belton Road investment in the Caribbean right
Speaker 2: now than there is US investment. It's our backyard, right
Speaker 2: We've really dropped the ball on keeping an eye closer
Speaker 2: to home because we've been worried about, you know, into
Speaker 2: pay Coom and Yukom and Sentcom and pretty much every
Speaker 2: other com except Southcom. So that is an extremely good
Speaker 2: sign in progress that Panama withdrew from Belton Road, that
Speaker 2: they're forcing the sale of certain assets to US or
Speaker 2: US adjacent entities. The thing I would like to see
Speaker 2: more action on that I haven't really seen any discussion
Speaker 2: about is the issue of Taiwantipek, which is a little
Speaker 2: you know the Isthmus, right, it's where Mexico narrows out
Speaker 2: moving south into Central America proper. And there's already work
Speaker 2: being started on the canal and there's not really American
Speaker 2: interest involved in that. And I think about the geopolitical
Speaker 2: and geoeconomic benefits that would come from the US taking
Speaker 2: a leadership role in assisting the Mexican government and doing that.
Speaker 2: And when you do that, Now we have two canals
Speaker 2: that we have optionality on project or to be done.
Speaker 2: Whether it's a partial canal right where you've got a
Speaker 2: dry corridor, say coming out of the Pacific, it meets
Speaker 2: you know, the maritime canal halfway, whatever it may be.
Speaker 2: But it puts US assets, resources and dollars, you know,
Speaker 2: functionally into a critical infrastructure project that benefits Mexico and
Speaker 2: the US and enables US to emerge as a leader
Speaker 2: and investment in our own backyard while China cutter, Saudi Arabia,
Speaker 2: you know, UAE are all dumping billions and billions of
Speaker 2: dollars into our backyard and we're not doing that at all.
Speaker 2: So I want to see those two things short up. Yes,
Speaker 2: we have strategic interests in the straight Age Gibraltar. Yes,
Speaker 2: we have strategic interests in Malacca. Yes, we have strategic
Speaker 2: interests in or Moves and in the Babel mendeb Duez. Right,
Speaker 2: we have strategic interests in all of those. But I'm
Speaker 2: very much aligned with Elbert Colby's general strategy of denial.
Speaker 2: It's a fantastic book. I have an enormous amount of
Speaker 2: confidence in bridges ability to build policy, as they had
Speaker 2: a Dazsdy policy that so we need to get that
Speaker 2: over the finish line and have that mentality there. We
Speaker 2: do need to get our allies to play more, and
Speaker 2: the closer we get to home, the more the US
Speaker 2: has the obligation and the necessity to overspend even to
Speaker 2: maintain primacy on these projects. The two parallel lanes of
Speaker 2: effort of choke points abroad, you know, the North Sea
Speaker 2: is another one, the English Channel. I mean, the world's
Speaker 2: littered with these maritime choke points that at some level,
Speaker 2: our allies and our friends have benefited enormously from strategic
Speaker 2: cooperation with the US, which has been pretty one sided.
Speaker 2: For being honest, we need to have a real conversation
Speaker 2: with them about what the US priorities need to be
Speaker 2: and where our dollars in attention flow, so that yeah,
Speaker 2: you know, long term Arctic, the Arctic route, short term
Speaker 2: Panama getting that right, and then engaging with Mexico on
Speaker 2: a quarter of their own because right now China is
Speaker 2: building a dry canal across Honduras. China has completely taken
Speaker 2: control of that country. There's no doubt the US does
Speaker 2: have the ability at some level to move and scale
Speaker 2: operations there to help push back against it. But generally speaking,
Speaker 2: the next canal of any kind that's going to get
Speaker 2: built in Central America a lot in America is going
Speaker 2: to be the Chinese dry canal through Honduras that bypasses
Speaker 2: the Panama Canal. So for not paying attention to those issues,
Speaker 2: they're going to bite us. But being able to box
Speaker 2: that in with you strategic partnership with Panama, more direct
Speaker 2: American involvement there, but also utilizing a large scale infrastructure
Speaker 2: project in a way to kind of asymmetrically move the
Speaker 2: needle on larger issues with Mexico. There's a huge, huge
Speaker 2: number of offsets to that that I think would be
Speaker 2: very valuable if we could pull it off.
Speaker 1: Well, Ross that has been a great hour. It kind
Speaker 1: of snuck up on me on the end. And for
Speaker 1: the listeners, if they want to keep track of you,
Speaker 1: where's a good place for them to keep their eyes
Speaker 1: And are there some other projects that you're working on
Speaker 1: right now that we should watch out for as well.
Speaker 2: A lot of the work that I'm doing is going
Speaker 2: to be more aligned with administration priorities, particularly in the
Speaker 2: area of export controls, export enforcement, tariffs and trade obviously
Speaker 2: are our big part of a trade war type of footing,
Speaker 2: but being able to protect the ip that our companies
Speaker 2: are building sensitive technologies and components and things like that,
Speaker 2: that'll be a big part of my focus I'm moving forward.
Speaker 2: As far as the day to day brain droppings and
Speaker 2: things like that, Access is kind of my primary platform
Speaker 2: for that. It's at map Human Intent, so that's that's
Speaker 2: probably the best way to find me and engage. And
Speaker 2: for everything that I say that's correct is completely on me.
Speaker 2: Everything that I say wrong, I promise you John Conrad
Speaker 2: told me, and then it's let it come out of
Speaker 2: my mouth. So it's out of my closest friends for
Speaker 2: fifteen years.
Speaker 3: Because it's been great, it's been great talking to you again.
Speaker 3: We need to get you back because I think we
Speaker 3: just barely scratched the surface on this stuff.
Speaker 2: Again, I appreciate it, Mark, thank you sal as well.
Speaker 1: And thank you everybody for joining us for another edition
Speaker 1: of mid Rats. Until next time, hope you have a
Speaker 1: great Navy day.
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Speaker 4: a friend of becrdily for you being to blame for.
Speaker 5: Love early love me, silly faulting your tame. It's a
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Speaker 2: It's a long way to.
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Speaker 5: But my, my, n