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"Building the Base" - an in-depth series of conversations with top entrepreneurs, innovators, and leaders from tech, financial, industrial, and public sectors.
Our special guests provide their unique perspectives on a broad selection of topics such as: shaping our future national security industrial base, the impact of disruptive technologies, how new startups can increasingly contribute to national security, and practical tips on leadership and personal development whether in government or the private sector.
Building the Base is hosted by Lauren Bedula, is Managing Director and National Security Technology Practice Lead at Beacon Global Strategies, and the Honorable Jim "Hondo" Geurts who retired from performing the duties of the Under Secretary of the Navy and was the former Assistant Secretary of the Navy for Research, Development & Acquisition and Acquisition Executive at United States Special Operations Command.
Lauren Bedula 02:05
Welcome back to Building the Base, Lauren Bedula, here with Hondo Geurts, and I know I'm particularly excited to have Congressman Joe Courtney with us today because my home state is Connecticut, and Congressman Courtney has spent a lot of time focusing on armed services. I know you have a naval base in your district and have championed a lot of issues around the defense industrial base. So, we're excited to get into that today. So, thanks so much for joining us.
Congressman Joe Courtney 02:39
Great. Well Go Huskies. Thank you, Lauren, and really appreciate the opportunity to be with you and my good friend, Jim Geurts, who really did great service for the country during my time with him at the Department of Navy, and this is a topic that is near and dear, it's not just because of my service on the Armed Services Committee, but I also sit on the Education and Labor Committee, and I'm on the Subcommittee for Higher Education and Workforce Development, which, coming from a state like Connecticut... well as Governor Bill Neal, who was governor several decades ago, but he used to say, you know, we're never going to mind calling Joe for all our large commodity crops. I mean, we will succeed as a state by investing in people. And I still those words ringing in my ears. And I do think right now, we're at a moment, where, frankly, not just Connecticut, but the whole country, you know, should really start paying attention to what's happening in the labor market and what this means for the defense industrial base, which is a really serious issue. And hopefully we will get into that today.
Hondo Geurts 03:50
Well, Congressman, for so many years, I was on the other side of the mic where you were grilling me in a number of hearings, though it's fun to be on this side of the mic, and it's good to see you again. You know, we're going to deep dive into some of the industrial base issues. I know you and I worked so hard over the years, but, you know, for many folks, they sometimes think senior folks had this grand vision and we had this perfect path planned. And we knew exactly what we wanted to do. We just had to fight there to get it. For most of us, it's been meandering. What's your background? What happened early on which allowed you, drove you to serve the country in this important role on Capitol Hill?
Congressman Joe Courtney 04:37
Well, thanks. You were an outstanding witness before our subcommittee. I did not grow up in a political family at all. My dad was a lifelong Republican actually, he served in the FBI. He was an agent during World War Two, tracking, Nazis across the country, but he was not political at all, in fact, he looked down on politicians a little bit. But I had an experience of being an intern, which happened in my first year in law school. My dad was a lawyer and was a big influence in my life and was following his inspiration. While working at the state capitol as an intern and being part of the legislative process with a very effective member, the light bulb went off over my head. If you talk to other members of Congress, the experience of internships really has been life changing for a lot of people. Nancy Pelosi was an intern, Steny Hoyer was an intern. I tell that story when I'm talking to high school kids about what they ought to be keeping their eye on as they go through the next levels of their in their life. In one of my first campaigns to four terms in the General Assembly, I chaired the Public Health and Human Services Committee. I loved every minute of it. My family was growing and it's a part time position. So, step back from public service for 12 years the seat that I now occupy had been Chris’ Dad's congressional seat before he went to the Senate. The guy who I interned for lost the seat in 2000, so I stepped up and ran in 2002. I came up short and lost the race, which is not always the worst thing in the world. I tell this to young people-- it isn't a straight line in terms of just how you find yourself in not just politics, but life in general. Then took a second stab at it in 2006 and learned a few lessons from that first campaign. I squeaked by with a whopping vote margin of 83 votes out of 241,000. So, my first nickname in Congress was landslide Joe. I don't recommend recounts for anybody, which we had to go through. Sometimes winning by a close margin is a good lesson that these positions are not yours. They're very fragile. You really must pay attention to the people who send you there. So anyway, the margins have been a little better since the 83 votes. The experience of being a legislator, where you're really trying to focus on results, I find very satisfying because you're part of it-- you have to focus your analysis as a lawyer and as a public official in terms of crafting legislation. You also must negotiate with a lot of people that aren't quite as interested in your issue as you are. It's a process that I find extremely stimulating, and you learn something every day. As much as people are turned off by politics, I really try to convey that message, particularly when I'm talking to people. It is just incredibly satisfying and gratifying. Also, it can be fun. You really have to get past some of the negativity that surrounds politics and serving in public office.
Lauren Bedula 08:43
Well, our show is focused on collaboration between the high-tech sector and the defense community, and the changing nature of the defense industrial base. I was wondering if you could give our listeners your take on what's going on. You see it at the local level. But more broadly speaking, in the defense industrial base, I know you recently wrote an op ed that we were excited to see. Maybe dive into that a little bit.
Congressman Joe Courtney 09:06
Sure. For your listeners who aren't familiar with the landscape in Connecticut, there’s a very dense defense presence in our state with Pratt Whitney aircraft, which is one of the iconic companies that built engines for the Air Force and the Army Air Force back before there was an Air Force. Sikorsky Aircraft, which is the Blackhawk helicopter (the presidential green one). We also have General Dynamics’ Electric Boat. Combine those three big companies...those are 10s of 1000s of jobs in our state and all the small shops that feed into them. What's driven the success in Connecticut is obviously innovation. Investing in people creates an environment that enables innovation. Igor Sikorsky (who invented the helicopter) and Electric Boat have been building submarines for the past 120 years. Both were innovators. That's one of the key elements in terms of a successful industrial base. Another piece of it is having a workforce. You're talking to 1000s of people that you need to execute in terms of these large platforms--- you can't just walk off the street and start working there on day one. For our country, there's a few things that have been happening recently that I think really forces us to pay attention to the fact that we have a skills gap right now that is going to hinder the ability of our country to really meet the moment in terms of what our defense needs are. Number one, we have a very sizable workforce in our country, right up to the end of the Cold War, which results in a lot of downsizing. During that time, a lot of different defense programs across the board saw a reduction, a lapse in hiring. And now with the uptick in terms of just the demand signal, world events all happen to be external. We had a very fragile workforce pre COVID; aging, baby boomers, with sort of Gen Z, and in some Gen X, that's finally starting to get ramped up in terms of hiring post-covid. That has really accelerated the retirement of baby boomers. You can see this in companies like electric boat, where their workforce was mainly comprised of baby boomers. And now it is a very small portion: we have whole divisions and cohorts in the shipyard here that have worked there five years or less. They're hanging in there, doing good work. Part of it is because there are some new innovative technologies in terms of handheld computer devices, virtual design, etc. There has been some silver lining to this in terms of a new population of people who are adept at handling electronic devices. But the bottom line is, is that we still have large shortfalls out there in terms of the number of people that we need to hit the production goals. I see it very much on a local basis. As we're sitting here having this interview, there's 680 job openings in the shipyard just in Groton alone. Again, there's another shipyard from Quonset point, which actually has a larger number of unfilled positions that are there. You can't just hold a job fair, and somebody walks in and telling you “You're hired”. Rather, you've got to have some skill set to take on this work. I can stop there for more questions. But you know, there are solutions to this-- we really need to focus on those solutions.
Hondo Geurts 14:10
Yeah, sure, maybe a few can and in the app. You brought up a couple of existing either authorities or laws and something you and I used to talk a lot about before asking for new authority, maximize the use of the authority you currently have. Can you remind us of some of those kinds of on the books or easily reauthorized authorities that you think would have really a profound impact on this critical problem?
Congressman Joe Courtney 14:38
Sure. If you look at defense manufacturing, the real workhorse programs that give employers job-ready applicants is number one, in the education side, the Career and Technical High Schools, tech schools. There was a time when those were viewed as people going for shop and car repairs, and there's nothing wrong with that, because we need people to repair automobiles. But now that we're seeing the career and technical skills, shifting into welding, electricians, sheet metal work, the type of skills that meet local economic market labor market demand, the quality of the work that graduates from career and technical schools are doing is not the problem. The capacity to graduate enough people to really meet the moment if the issue. Secretary Cardona, from the US Department of Education, he came down to the shipyard and visited, we went over to one of the tech schools there that, again, is just doing great work. And what the Department of Education is now looking at doing is really extending these types of curricula outside of career technical schools into comprehensive high schools. No major “regular” high schools offer these types of curriculums for people. And the good news is that it's been well received on a pilot basis for comprehensive high schools that are now giving kids this new curriculum. I was at a supply chain machine shop the other day, and one of the suppliers into some new program was an 18-year-old young girl who had just graduated from preschool to comprehensive high school. She was fabricating metal, metal pieces weighed more than she did. But she was operating that thing like she was playing the piano. They literally just hired her straight out of one of those programs that's there, and she loves it. She was very excited to be doing this.
Hondo Geurts 17:16
You know, it's, it's interesting, we sometimes think of shipyard workers, and big guys like me with big necks. And certainly, there's a physical element to it. But I was with Senator Kane and got asked if there is a place for folks with disabilities, your unique needs in the shipyard? And it got to me thinking, as we enter the robotics age in some of these machineries, it's less about the brawn and more about the brains. There's going to be an interesting shifting of the industrial base workforce. And the bad news is, a lot of them are inexperienced, the good news is, are digital natives, and might be able to bring something. We spent a lot of time together and hearings and whatnot. I always appreciated your focus on the mission in Congress and not getting too wound up. And being able to separate national security issues from domestic and constituent issues. Do you sense that you sent to Congress getting more serious about national security in a bipartisan manner, while everything else is getting kind of more and more partisan? Or do you see that partisanship leaking into national security discussions?
Congressman Joe Courtney 18:40
The good news is that if you look at since February 24, 2022, the invasion of Ukraine, there's been an impressive sequence, sequence of bipartisan response with the supplemental funding bills, there were three of them very sizable. The first one passed unanimously, second one, there was a little bit of leakage, there was probably about 10 or less. The third one that was 57, no votes, which is starting to climb up to a much more noticeable situation that's there. And we're about to hopefully take up another supplemental as part of the omnibus. So, for the $7 billion. There definitely are more voices that are raising questions about whether we should keep “throwing money” in Ukraine, which is a total distortion and misrepresentation of what we're doing with that type of policy decision. So, hopefully we're going to test that again, the defense authorization bill this year passed 329 to one on one. And if you break down again, that vote was really a center left center right coalition that was in the overwhelming majority. And there were people on both sides of the spectrum on the far ends of the spectrum that were right and left, that were the no votes there. So, that's the encouraging perspective that we still have a sweet spot center of gravity that is now responding to what's happening in Ukraine. The defense bill that I mentioned, raised the top line from President Biden's original submission by $25 billion. And I think that's actually a blow up or even a little higher, up the final version of this. I think if you went back two years ago, with a new Democratic president, Democratic Senate, Democratic House and Senate, you would see defense budgets getting passed by much larger increases in spending, from what President Biden submitted, I think a lot of people would have rolled their eyes. So, it does show the world gets a vote. And the place, despite all its negativity, has some impressive results. But you can't take it for granted. You really must keep working on the other two programs that I'm going to mention really quickly. There was a National Apprenticeship Act, and the Workforce Investment Opportunity Act. The National Apprenticeship Act was passed in 1937. The Fitzgerald Act, by Mr. Fitzgerald was the congressman from my district, from Norwich, Connecticut, and he worked as a 15-year-old foundry and never got a college education. He experienced what the old days of apprenticeships were like - it was a very exploited type of system where employers treated people like virtually nothing. And his lot basically established national standards in terms of how apprentices are treated. But number two, their program that they're in is adhering to a standard. Whether you're a welder or boiler maker, you name it, you're getting a certificate that you can take to a different employer or a different part of the country, and people are going to have confidence that you really know what you're doing. So, the problem with it is that it's been woefully underfunded. And it's also been very limited in scope in terms of sort of how it's used. And we have a bill to reauthorize it for the first time in over 80 years, that would actually extend the reach of the apprenticeship program to more underserved communities. Who never really when you think of apprenticeships, you don't usually think of women and people of color. That is happening to some degree right now. But this would turbocharge that and, and would extend it to other sectors like it, healthcare, because it is a faster way to connect people to a job without traditional educational paths. The other is the Workforce Investment Act, which is a pre apprenticeship program that's been around since the 1990s. Same thing, it's actually had really impressive results. But it's federally funded, locally organized in terms of the curriculum. And what this revised version will do is size it up. And same thing extended to sort of other sectors and other underserved populations. We need to do that right now. There are 10 million job openings in the country. Labor participation rates are going down. There's only one way you can solve that, in my opinion, which is to close the skills gap. And these three different programs have shown successful results addressing that issue.
Lauren Bedula 24:07
Those are fantastic programs. And I heard an interview this week, I thought was interesting. The former CEO of Cisco talked about how we might be moving from the great resignation, as some have called it to the great recommitment. And we're at this interesting time from an economic perspective. Typically, the defense industrial base isn't hit very hard from a recession because the government is such a consistent customer. But right now, they're dealing with inflation. And so, if there is a recession, with inflation, how are you thinking about how that might impact the workforce or the defense industrial base more broadly speaking?
Congressman Joe Courtney 24:42
Well, hopefully we're not going to have that, but it's not a far-fetched scenario. The defense bill that we may pass in a few days is going to give the Department of Defense some flexibility to make up inflation adjustments, particularly for wages. As you know, we're hearing from some of the large manufacturers, they're now competing with McDonald's. And Amazon, if we're talking an entry level job offers 15 or $20 an hour, it used to be considered a sweet first job. But now, some of these other occupations which are not as rewarding by any stretch and don't have the advantages of advancement in terms of falling into higher pay levels. But nonetheless, that's a real reality that's there, and you're worried about it being recession proof in terms of defense. If there was some benefit of the labor market, maybe tightening up a little bit is that I think it may make defense manufacturing and defense jobs more attractive, because it just would be more secure.
Lauren Bedula 26:02
And something we focus on on our show, too, is some of the newer entrants who might be venture backed, looking to go and spend as many cycles because they can't have maybe as high burn rate during a more difficult economic time. But something to keep in mind is your point that the government is a great customer to have, because of that consistency, once you get in. So, we're interested in seeing what happens.
Hondo Geurts 26:24
So sorry, I'd be remiss without kind of getting your view on the current state of cheap power with all your hard work on the sea power subcommittee. And a concerted effort by the nation over the last couple of years, to try and reverse the trends and get back in the shipbuilding world. But where do you see that going right now? Are we closing the gap? We kind of lagging and we mentioned labor, are there other things that are holding us back from getting on the page? We really need to ensure we've got the strongest Navy in the world for decades to come.
Congressman Joe Courtney 27:04
Capacity at the end of the day is the biggest constraint in terms of growing the size of the fleet. If you look at budgets going back the last six years, Congress has raised the top line on shipbuilding account, every single year, whether it was President Trump or President Biden. I think that's an interesting data point - there is growing consensus about the fact that the post-cold war holiday is over. And we heard Secretary Austin talking about his budget this afternoon that there were nine new ships. The budget passed in the House was 13. And we're not sure if it's going to hold that point there. Sealift is one of the other weak links in our just sea services, particularly when you talk about the Indo Pacific where the tyranny of distance makes the limb so important. We have started new sealift build program, using a somewhat different model, more private sector of vessel contract manager. At the Philadelphia shipyard, which had a workforce level that was at a 24 year low, it's now at the 2000, with this new maritime training vessel, and you see this assembly line for ships under construction at the same time. It's less than a year per ship, in terms of production, and that cadence and repetition you can use private sector acquisition and planning to really reduce the price and increase the volume. So that's the kind of thing that is a lot of fun, because, frankly, that's originated in our subcommittee. I think there's some hopeful signs, the office agreement, which, as David Ignatius described, was the most significant national security development in decades. The rollout of the plan begins in March, in terms of how Australia is going to have a fleet of nuclear powered conventionally armed submarines against a tri partite agreement with the UK as well. That's going to be another sort of stress on the industrial base to try and help our great ally. We must deal with what is clearly identified as a critical component of deterrence.
Hondo Geurts 30:06
You've been very active, particularly with Australia over the years and having kind of industry group and promoting Buy America. And certainly, hawkish is another pretty large step there. Are we doing enough with our allies in your opinion? Or is there more we could be doing with our allies, both to ensure they can grow some capacity as well, as we can leverage their equipment from a supply chain perspective? How do you see that balanced against kind of this, you know, Buy America in the literal sense, sometimes movement that we see outside of Congress?
Congressman Joe Courtney 30:53
Sure. I do think that the Buy America movement really made sense in terms of supply chains that were relying on China to build critical defense platforms. At that point, I think there really is a change that was greatly overdue. In the case of AUKUS, for example, one of the key threshold issues that we have to deal with is technology sharing and technology transfer, because this is a program that's going to be on Australia's dime. And they are not going to spend that dime, if it's just going to be buying off the shelf from the UK or the US. They want to have their own part in the industrial base; they're very clear eyed about the fact that a country of less than 30 million people that has no nuclear industrial base to speak about today can't possibly do heavy lifting. But there's no question that this program is big enough that there'll be plenty of room for them to participate. There clearly are other programs, like F35s in the wake of Ukraine; we've seen some almost like a stampede, Finland, Germany. But again, one of the key features of that program was the joint allied participation in terms of being part of both production and sustainment. And, and that's also I think, one of the selling points. That program is awesome and has gotten very popular.
Lauren Bedula 32:49
We've talked about a lot of great ideas around workforce and talent. I'm curious to get a little bit more of a personal question, something we like to talk about on our show is mentorship and the importance of mentors. You also talked about internships and what that enables, did you have any special mentors in your life that you wanted to give a call out to?
Congressman Joe Courtney 33:09
So again, former Congressman Galenson was a very effective legislator when I worked for him in the General Assembly. When he was a member of the General Assembly, you walk in as a complete sort of newbie when you're there. And there were just some really great examples of people who served on committees handled their duties as chairs, and we just had some incredibly clever, folks. Because you do need to be agile in the legislative process to find those key moments of overlap with people that you may not agree with. Coming to Congress, my first chairman on the Armed Services Committee was Ike Skelton, who was just this incredible, knowledgeable leader on the Armed Services Committee. He was full of stories; he knew Harry Truman; those kinds of things are just so exciting when you get to meet people and have those kinds of experiences. Jack Murtha, who was an iconic defense appropriator from Pennsylvania and spent 30+ years in the Marine Corps. He's the guy who we brought to electric boat my first four months in office. We had sort of a breakthrough moment to get higher funding for advanced procurement to get that Virginia program, which had been limping along at one sub a year. He was instrumental in transforming what a declining shipyard is, and to know this incredible sort of growth center. The day he brought the bill out was a Saturday, which was unusual for the House to be in session. I sat right behind him the whole debate, because this moment was so important for the district. So there are just a lot of great people that I've worked with; public service is a learning experience, and it’s very rewarding.
Hondo Geurts 35:53
You know, it's interesting, you see a lot of things in Congress and the partisanship on both sides sometimes. I was always struck by you and Representative Whitman. The two of you were very well aligned on what's best for the nation in the Navy, not what's best for one party or the other. In our committee and just personally, working very closely across the legislative and the executive branches, there's this perception that it's always got to be a contest or confrontational. You're a great example of how to actually work across both branches. What advice do you give to others in any of the branches on how to best work across and build trust to get to a positive relationship rather than a confrontational relationship, even on key issues?
Congressman Joe Courtney 36:55
So, you know, most people who run for office do it because they're very motivated and have strong beliefs. And that's across the board. And that's a good thing. Because you want people who are serving for the right reasons, because they really are out for the public interest. But you have to also realize that a legislative body is not a debate club. You're there actually, to act and to do things and to get results. Acting and doing things doesn't mean going on cable shows and just trying to be as outrageous as possible. It really is about trying to find that sort of key tactical pathway that involves trying to find people on the other side. That can really mean the difference between failure and success. I mean, there are certainly a lot of examples of bills that pass and get to the President's desk and are straight party line votes. But in fact, the majority of the ones that do get to the President's desk, if you really break it down and analyze them, they don't predominate as party line votes, they really are a mixture of people on both sides. So, it's not like you're being naive or dishonest with yourself. But working with the other side is a successful strategy for getting things for your district. The most important thing you can look back on, as a legislator, when you're done is signing bills and programs that have your name in them. And it doesn't have to be just your name. Sam Rayburn, who was one of the most successful members of Congress in American history said that the people who succeed are the ones who share credit, not take credit. And that is something that I believe so deeply, and it's not based on sort of just my own sort of view of the world, it's based on real life experience. And honestly, that is how you get things. That's how you succeed.
Lauren Bedula 39:21
Well, on that collaborative and action-oriented note, I want to say thank you so much for taking the time to chat with us today. Your message to me was really clear. At the end of the day, the defense industrial base depends on the people in the workforce. So, thank you for all you're doing to strengthen that and support that.
Congressman Joe Courtney 39:38
Thank you, Lauren, and good luck with your podcast. You guys are very focused on really, I think, talking to people out in the economy right now. Workforce issues are number one, two, and three in terms of the thing that keeps people up at night, so thank you for doing this.
Lauren Bedula 39:59
You're awesome. And thank you so much.