Episode 737: Maritime Statecraft and its Future, with Hunter Stires

Episode Transcript
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Speaker 1 (00:00):
And welcome for board everybody. Glad to have you with
us today, and if you are with us live, i'd
like to extend the altar call to you. You can
find the live studio chat room. Go ahead, dive in
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during the course of the show. So if you have
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you would like for us to direct to our guests,

(00:21):
that will be the perfect place to do it because
we'll be right there with you. And as always, if
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look us up. We'll be there and that way, if
you can't join us live, we'll be waiting for you
when you have a next opportunity. And today we're going
to dive into a topic that's always popular with NIRATS regulars.

(00:43):
We will to look at how naval ship building, commercial
ship building and commercial shipping is linked together to create
the healthy and effective seapower ecosystem that we need as
a maritime and aerospace power to be able to protect
our nations interest. And it's a thread that just it
weaves its way in and out of any conversation you

(01:06):
have about national security. And for those that have been
with us for the years, you know this is a
topic that comes up in almost every show. And I'm
just real excited having coming on today is a returning guest,
Hunter Steiers, the founder and CEO of the Maritimes Strategigic Group. Hunter,
Welcome back to Midreps.

Speaker 2 (01:25):
Sal Evil one. Is wonderful to be back. Thanks for
having me back on the show.

Speaker 1 (01:28):
Did to kick it off the origin of our show
here is back last week a little bit more in
a week maybe about last week, you and Steve brock
over at SIMSEK you published The Maritimes date Craft and
its Future, and if folks haven't read that yet, the
link will be up on the show page. And in
it you outline a process It started when you were
working with Second Half Del Toro. Y'all were looking at

(01:51):
trying to connect what in many cases are defined as
different problems of the naval shipbuilding, commercial ship building, and
commercial ship being with the US flag on it. And
you've made the argument I started working in the direction
that these aren't three different threads, but there are actually
three different lines that need to be woven together. Talk

(02:11):
a little bit about how you and second now Del
Toro got this idea and how y'all started to pursue
it in the previous administration.

Speaker 2 (02:19):
Thanks so much, Sal, Yeah, this has been a really
fun and exciting journey intellectually, strategically, all of that in
terms of just sharing my own perspective of kind of
where I sort of entered into the story here.

Speaker 3 (02:31):
So a lot of this.

Speaker 2 (02:33):
In terms so my own thinking on this, you know,
started to develop probably. I mean I could go back
to when I was I was doing a stint working
on the corporate side in the UST maritime industry back
in twenty nineteen, and then eventually when I was fast
forward a little bit, I was on the Navy staff
in Entree and five and sent a conversation with some
folks down the space at N seven who were thinking

(02:55):
about how do you build maritime power in a budget
neutral environment? And so as part of this I put
it to them, well, you know, one of the things
you could do, as with the Navy is essentially you
think about what defines a healthy seat power ecosystem and
you see a symbiotic relationship in that healthy ecosystem between
the Navy and the commercial merchant marine, commercial shipping and
shipbuilding and commercial shipbuilding and naval shipbuilding, and in the

(03:17):
United States, we have really let that go. And so
essentially what I put forward there was, hey, what if
we kind of throw our, you know, the Navy's political
weight behind bringing commercial shipping and shipbuilding back to the
United States, And so kind of put together sort of
some initial thoughts for them, and you know, it sort
of sat there for a little while and.

Speaker 3 (03:36):
Then you know, moving forward.

Speaker 2 (03:38):
So you might remember, I think it was the last
time I was actually on the show was shortly after
we launched the Americanian Counter Insurgency Project with the Naval
Institute in the July twenty twenty two issue of Proceedings.
It's actually a mutual friend who of course has been
on this show and a wonderful friend and intellectual intellectual partner,
Brent Sadler. He was hosting Admiral Guilde over the Hair

(04:00):
Foundation for Speaking Engagement, and he created an opportunity for
me to brief Adam will Gilda, his head of na Z,
Captain Matt Culpus there as well as the senior advisor
to the sector to sector a del Toro Captain us
Andy retired steep Rock, and so we had incredibly generous
of Brent to create that opportunity. And so essentially in

(04:21):
this conversation I sort of put forward to the group
kind of three essential ideas. One was maritime insurgency and
counter insurgency counter insurgency in the South China see. One
was this set of ideas that it started kind of
percolating in terms of throwing the Navy's political weight behind
the rebuilding the commercial merchant marine, which of course would
happen with non Navy dollars commercial shipping and shipbuilding, and

(04:43):
that in a way where that would then have really
important downstream effects to the Navy in terms of the
shipping and shipbuilding. And then the other one was fielding
the capability to reload vertical launch systems at sea, which
I know is something that we very much care about,
something I've been you know, focused on ever since my
first Proceedings article back in twenty sixteen on the Asiatic

(05:04):
Fleet and what we can learn from them closing that
that gap and major strategic and logistical vulnerability for our navy. So,
through that conversation Steve Steve Rock, who is my my
wonderful co author and you know, and I'd say one
of the best bosses I've ever had, by the way,
he he got really excited about this, and he thought

(05:26):
that this, this this thinking was worth pursuing further. So
we then kind of we put our heads together, we
started collaborating on this, and then.

Speaker 3 (05:34):
He put this, put this this work.

Speaker 2 (05:36):
As we were, you know, continuing to develop this thinking,
and he put it in front of the secretary, and
the secretary he thought it was.

Speaker 3 (05:43):
He thought it was he liked the cut of the gym.

Speaker 2 (05:46):
He was so he said, let's do it and and
and get this guy in my team more or less,
and off we went. And it was so it's been
a really fun journey of the over the past couple
of years. And then eventually, you know, went from that
kind of informal collaboration and to eventually came on the
team full time as the maritime strategists to the secretary
reporting to Steve. Steve was in office of one. I

(06:06):
made him an officer of two, reporting directly to the secretary,
and so we had a lot of fun as we
were we were making this happen and so essentially we
designed this strategy essentially to be able to be executed
by a very small group of people between Steve and
I and the Secretary and then bringing in you know,
key players from you know, around the ecosystem and around
the department and and friends from outside the department in

(06:29):
order to drive this forward.

Speaker 3 (06:31):
But really, you know, it is it.

Speaker 2 (06:34):
I'd say it's a testament to both Steve and Secretary
adul Toros, their their intellectual leadership and their just leadership
period that you know they were willing to embrace new
thinking even when it comes from unlikely places, and that
you know they're their willingness to seek to drive positive
change even when it is as we say, as we
say in the article, a lot of the solutions here

(06:55):
are outside of the traditional lifelines of the Navy. And so,
you know, I really give an enormous credit to Steven,
Secretary del Toro in terms of their creativity and their
energy and their drive in this to be willing to
go outside the usual comfort is frankly what other people
try to make the kind of relatively confined, you know

(07:15):
comfort area of what is defined as the kind of
the department of the Navy's corresponsibilities because it takes that
kind of true energetic leadership to you go outside that
across the interagency to drive positive change. Have you know, really,
I think if this bears out, I think we'll have
very far reaching effects in making things better across the portfolio.

(07:36):
So I think that's a bit of the sort of
some of the origin story. And have to get into
more of the details as we go, as we go
on through the conversation.

Speaker 4 (07:44):
Yeah, it's it was a good time in my part
that I happened to be reading Nicholas Lambert's The Neptune Factor,
which which explains to me some of the theories more
cogently than Alfred Thayer Mahan did in his book Influence
of Seatpower History. And when I when I was reading
your stuff, I was looking at you know this, this
is the same cycle we had these sort of after

(08:06):
the Civil War with the Navy had sunk to a
pretty miserable condition. I think we I don't think we
had much in the way of a merchant marine at
that time. Mahan comes along, writes this, his book gets
everybody excited about about the Navy strategy and and it
turns out Grand strategy. Talk a little bit about you know,
the influence of Mahan your on your work and uh

(08:28):
and what you see if there's a connection there.

Speaker 3 (08:30):
Oh, there absolutely is.

Speaker 2 (08:31):
I mean, we spent a lot of time actually thinking
specifically about that period of time of the eighteen seventies
into the eighteen eighties. As you said, that was a
period of significant underinvestment in the navy. You have the
country essentially sort of turns inward after the Civil War
and essentially you know, focused on on on the interior
or the western frontier and so forth. And so what
winds up happening in that period of times You get

(08:53):
a kind of a wake up call from an unexpected place,
and that comes in the in form of the War
of the Pacific where eventually Chile is going after Peru
and Bolivia and very effectively. You know, Chile had really
invested in its navy and had developed a very respected
naval force. So it proved decisive in the conflict. And
so the United States, of course, with our Monroe doction,

(09:16):
which is you know, more that kind.

Speaker 3 (09:19):
Of as uh, I forget exactly which article there was
an article.

Speaker 2 (09:21):
Today that was describing it more as a psychological bluff,
which I think is generally accurate than necessarily an enforceable
policy at that point in time, due to our under
investment in our maritime power. What you had, and I
should also note on the merchant marine side, the Civil
War is a real you might call it a firebreak
or kind of make comparison to like, you know, the

(09:42):
Cape T Barrier or something like that in terms of
American commercial maritime power, because you had a very large
proportion of the US merchant marine either captured or sunk
or otherwise interdicted by Confederate raiders, and then you had
about it, I think it was about a third of
the US merchant marine in order so a much larger
proportion of the fleet actually gets sold into foreign flags

(10:04):
in order to avoid the risk of being attacked by
the Confederate raiders. So you have this kind of this
twin Nator in American maritime power at this point. So
fast forward again now eighteen seventy nine, eighteen eighty, and
the United States notices that Chile is beating up on
its neighbors and decides that, you know, we're we're the

(10:27):
big power in the region, and we might like to
put a stop to that, and so we make diploblanic
overtures to we try to pressure the Chileans to essentially
come to the diplomatic table and accept American mediation of
the conflict.

Speaker 3 (10:39):
And the Chileans.

Speaker 2 (10:40):
Basically politely tell us to ask us, you know, have
you checked your copy of their equivalent of JENUS fighting
ships recently? And we essentially replied, well, let's check. And
we realized that and I want to say it was
either Wharton or I forget exactly which officer, who is
obviously very closely engaged in these in these discussions in

(11:01):
the formation of things like the Naval Institute who made
the observation that in looking at the at the naval
balance of power at this point in time, the Chilean
Navy could have steamed into San Francisco Harbor and dropped
five hundred pound shells in the middle of the street
without the new US Navy being able to do anything
about it. And so that essentially forces our diplomats to
sort of, you know, take say Hama Hamadahamana, I have

(11:23):
to basically, you know, stand down from attempting to mediate
the conflict. And what the United States decided, you know,
we made essentially a national decision that we didn't like
that answer, and so we set about seeking and seeking
to change that answer. And so within a year you
see the formation first of the Office of Naval of
the Office of Naval Intelligence, and the first first place
they send everybody to go, you know, for intelligence, is Chile.

Speaker 3 (11:46):
Shortly afterwards, within the.

Speaker 2 (11:47):
Year we order our first steal warships. Within another year,
eighteen eighty four, you formed the US Naval War College.
And then from so essentially have this national movement Cochere
you have Theodore Roosevelt publish Hit, his work on the
Naval War of eighteen twelve. By eighteen ninety you have
Alfred ther Mahan publishing The Influence of Seatpower on History.

(12:10):
And so we make a national national decision to reinvest
in the foundations of our sea power. And within a
matter of years, early eighteen nineties, there was another crisis,
with a minor crisis with Chile. And by that point
the new Steel Navy has enough combat power that we
can win that diplomatic crisis in a way that is
satisfactory to American political and diplomatic interests. A few years

(12:32):
after that, we were able to defeat the Spanish very
resoundingly in the Spanish American War, both both off Cuba
and wars opening all the way across the world in
the Battle of Middlea Bay and in the Philippines Campaign,
which is a real testament to American expeditionary naval power.
And then from there it's just a matter of time

(12:52):
you have the great what you have we know, the
Great White Fleet. One of my favorite cases is actually
a couple of years before that, in terms of what
is effective naval diplomacy look like, is actually Venezuela in
nineteen oh one, when in nineteen hundred nineteen o one
were essentially there is a crisis where the British and
the Germans are trying to collect debts from Venezuela. So

(13:15):
the custom at the time was that the major European
power would send a naval force, seize the custom's house
and essentially collect their debts. And you know, there's a
bit concern that the Germans were going to parlay that
into access and to get a naval base in Chile,
very much in violation of the Minro doctrine and the
Roosevelt corollary, and Roosevelt and Theodore Roosevelt is now as president,

(13:40):
makes highly effective naval deployment where and his diplomacy and
his use of the navy is so subtle that historians
have debated for a century whether or not the deployment
ever happened.

Speaker 3 (13:51):
And yet the.

Speaker 2 (13:52):
Germans back down and the crisis is resolved to American
satisfaction without the Germans getting a naval base. You know,
having a naval as president totally helps. And then you know,
and then from there you get you know, he sends
the Great White Fleet around the world, and and you
we wind up coming out of the First World War
with a with a needy second to none. So this
is a so I you look today, and so as

(14:15):
we were examining the situation today, we see a lot
of echoes in the sense that you know, certainly we
are in a far better position than we were in
the late eighteen seventies or early eighteen eighties. I mean
we still we are, you know, the most powerful navy
in the world. But nevertheless, there we are coming off
a multi decade period of under investment in our sea power,
both commercial and navel. And so the the Secretary Sectuary

(14:37):
Deltura likes to say that you know, the you know,
the only the only way to this, the only the
best time to start is now.

Speaker 3 (14:43):
And it might take a while.

Speaker 2 (14:44):
And you know, he said, he likes to say that,
you know, it might take it took us twenty to
thirty forty years to get us get us here. I
personally don't think it will take us that long to
get out. I think once the improvements start driving as
we are starting to see, I think it's we're going
to be able to put it together a lot faster
than we necessarily give ourselves credit for. And I think
that a lot of the history kind of points to

(15:04):
that that you can see a fair amount of improvement
pretty rabid.

Speaker 1 (15:08):
And I think the historical part of that is important
for people to understand who maybe is just taking a
snapshot here and going, oh my gosh, it's like this
nation which is shocking a nation just geographically such an
hour that we go through this title action of world

(15:29):
beating navy to almost intentional neglect to rebuild back that
the tide comes in and out, and you hint it
on there a part of your opening, I would just
want to quote the opening of the article to everybody,
quote with shipping a shipbuilding receiving high level political and
diplomatic attention across two administrations. After decades in neglect, the

(15:49):
United States has a chance to realize a much needed
maritime revival. Having initiated a change in course from the
past forty years of stagnation, Washington should double down on
its winning bipartisan strategy to build maritime power through allied
investments in US shipping and shipbuilding. And I think it's
important also to people we're not just talking about the
military side, but also the commercial side. There are three

(16:12):
triggering words in there that got to me that I
just wanted to pull a thread on a bit. The
first trigger was you do emphasize. And I like the
fact there's a chance, which means there's an open door
here that we can can step through. That doesn't mean
we're going to nothing is granted. My dad always used
to say, son, nobody owes you a living nobody owes

(16:32):
you a world beating navy and merchant force. You have
to have to earn it and build it. The second
part is the decades of neglect. I think that is important.
This isn't something that happened two years ago, four years ago,
or fourteen years ago. This should not be a shock
to anybody in the national security space. This is something

(16:52):
that's a problem, as you folks in DC will appreciate.
It's a problem that people have been appreciating for a while.
The whole question is getting action. And I also like
the fact that you said two administrations because that underlines
something that I really wish we saw more of. Because
people can disagree on an item here and there. For instance,

(17:14):
I disagree with your take on what we're doing with
Finland with icebreakers, That's okay. What I'm interested in is
the big pixels. Let's look at the big pistol pixels
in a bipartisan manner, and I would almost state that
it's more than two administrations. I think the bold faced
italic underline twenty twenty one President Obama's Pacific Pivot speech

(17:37):
that should have been the moment do we say, okay, gang,
aren't we going to need a larger navy to do that?
Dot dot dot? But here we are, fourteen plus years
after the pivot, still still talking about the pivot there,
but there are people more people working on it, so bipartisan.
I think it is a bipartisan issue. And for that

(17:57):
the executive branch can bounce for one party to another,
but there is some continuity there in the legislative branch.
You want those Stenisis, you want those vincens. You want
those people in the Senate, in the House that really
have their understanding and their focus and their priority in
that way. And we saw a little bit of that
with now Ambassador to the UN Mike Waltz in the

(18:19):
House and Senator Kelly from Arizona as well with the
Ships Act. Talk for a bit what you see as
that bipartisan overlap that's consistent, and who are some of
those leaders that we have in the House and Senate
that can help. At the end of the day, what
you need is the money in the law to be

(18:40):
adjusted so that we can start getting some traction in
some of these slippery areas. Yeah.

Speaker 2 (18:44):
Absolutely, I mean it's been really gratifying to see that
this approach has had such remarkable intellegical staying power across
that political transition and so seeing that consistency in terms
of I mean, you know, from President From's first phone
call with the President South Korea when he was president elect,
he was like, yes, we need that essentially, you know
that it actually took you know, I remember the reporting

(19:07):
at the time was that the South Grands were rather
taken by surprise. So like, hey, you want to talk
North Korea and he says, I don't want to talk
North Carea, Let's talk shipbuilding. And that's really really encouraging,
and I should I should add in terms of from
that early stage. Pardon, from that early stage, you know,
starting back in twenty twenty one, and then developing as
they continue to develop through twenty twenty two. I mean,
really the end goal of the strategy in terms of

(19:28):
as we saw as a key way really the way
out of the situation, and as we talked about in
the article, really the goal of when we say, okay,
let's throw the Navy's political weight behind rebuilding the commercial
merchant marine. You look at who builds ships in the
world today and ninety percent are between three countries of China, Korea,
and Japan. Thank goodness, we like two of those, and
by some studies, the Koreans and the Japanese are, you know,

(19:50):
in terms of their production processes for shipbuilding, and it
is worth and worth remembering they build both some of
the world's best commercial ships as well as highly respected
combatants that are respected by their American counterparts.

Speaker 3 (20:04):
He just destroyers and things like that.

Speaker 2 (20:06):
And so there crucially their company being dual used. What
you see there is essentially what you what you want
to see in terms of health, what a healthy seatpower
ecosystem looks like. Of the commercial basically under rights and
subsidizes naval ship building because the money is actually being
made over on the commercial side and a relatively small
proportion of the nation's overall seapower resources are actually being

(20:30):
devoted to the name that essentially that overall industrial base
is much larger than whatever it is that you need
for the navy, and then the Navy basically gets to
skim off the top of the industrial base, the sailors,
the overall resources, the secondary supplier things like that. Technologically,
they are about forty years ahead of us by by
by some measures. Certainly that assessment was born out when
you know, the Secretary and went over to Korea, Japan.

(20:52):
The technologies that they saw over there, Steven, the Secretary went,
I was the reach back support here in the States.
They what they saw there was like it was like
nothing that ever seen in American yark and what that actually
comes back to is sort of that other kind of
root cause of how we got to the situation that
we're in today, which is essentially that you know, in
terms of the we talked about kind of the Last

(21:13):
Supper and the essentially the consolidation of the defense industrial base,
and you know, I like to put it fram it
that essentially, you know, we won the Cold War because
we prove that capitalism and market competition is a better
way of doing business than communism and a planned economy.
And then as soon as we won, we systematically engineered
all the capitalism out of our defense progurement system. And

(21:34):
so we don't have a capital system right now. Now
that we have these kind of monopoly monopoly in relationships,
we have a you know, it's Soviet style planned economy,
and why are we surprised that it's not going very well?
You don't have competition, You don't have that impulse, that
competitive impulse to make new investments into your underlying processes
to get more efficient and get better, higher quality, higher,

(21:55):
higher efficiency, all of those things. When you don't have
that competitive impulse, then you know, why are we supp
rised that you are not seeing those kinds of results.
So Essentially, we you know, want to pull on the
thread that you mentioned in terms of this question of
the Allied ship build Allied investment, and that is, you know,
that is the the core goal of of the strategy

(22:15):
is how do you get the world class ship shipping,
shipping and shipbuilding players from our allies who are both
can build both use the term of US equivalent combatants
or near near equivalent combatants and commercial ships with that
dually use business model and all those technologies and industrial
processes and know how and expertise. How do we get
them to invest in America and bring those talents to

(22:38):
the United States. Now you mentioned in terms of the
ice breaking icebreakers saying so you certainly Davy Shipbuilding very
proud that they that a lot of engagements with them
in Secretary del Toro as they were focusing on, you know,
how do they build a US shipyard and you know,
you acquire US shipyard and bring their talents to the
United States. And so that is exactly what we want.

(22:58):
Where I would say getting in to okay here, you
know an area of divergence here that we are seeing
which I think is actually potentially like critical in terms
of that I think it could actually seriously set the
strategy back. Is i'd say rather surprisingly for an administration
that considers itself America first, that we are seeing in
this administration more openness to outsourcing, even and they claims

(23:21):
US as a temporary stop gap, I would say it
is it is actually mutually exclusive between outsourcing shipbuilding even
as that stock gap.

Speaker 3 (23:29):
When you look at the actual.

Speaker 2 (23:30):
Business incentives associated with you know, world class shipbuilder making
investments in the United States, what they really want is
access to the US government market. That is the single
biggest point of leverage that we have to encourage these
world class players to invest, whether it's from Korea, whether
it's from Finland, that that is what they want. So
that and the and there's all this law. There's all
these really really good reasons why the United States does

(23:53):
not outsource government shipbuilding overseas. One is the technical security element,
which is, you know, you've got to make sure that
you know our designs, our subsystems, things like that they
are they're secure against foreign compromise. Another is the is
the geos strategic which is every single one of the
relevant world class yards that we are talking about here,
they are close under the guns I mean, we're not

(24:16):
even talking about the medium range weapons that Russian and
China field. We're talking about the short range, short range weapons.
I mean, we're talking about at Helsinki, we are talking
about Busan, Alsan, Gyoja Island, southern Japan. All of that
that is within that short range threat threat envelope. And
these are our adversary's most plentiful classic weapon. Now maybe

(24:36):
that's not Maybe those shipyards aren't the first thing they
shoot at. Maybe they might not even be the second
thing they shoot at. They're probably the third. My mentor
at the Naval War College, Jim Holmes, he likes to
talk about how the in commercial that commercial competition is
different from commercial competition in that in the commercial world,
Ford is not trying to actively blow up Toyotas factory.
And the case of the global shipbuilding arena, when ninety

(24:58):
percent of the world ships are built in China, Korea, Japan.

Speaker 3 (25:00):
That is literally not true.

Speaker 2 (25:02):
You have one of those three competitors that has a
robust arsenal of weapons with which to target the shipyards
of its opponents, and it is only proven to assume
that they are ready and willing to take that step.
So that, and we've seen China in terms of its
own maritime strategy. They clearly are very Mahannian as they're
in terms of how they are going about this, and

(25:23):
they have taken you over the last twenty years a
series of clearly very intentional steps to take control and
a certain dominance over the global maritime transportation system. And
that goes, you know, yes, shipbuilding, where they have really
made a major national investment in this highly recommend csis's
report on They have actually two reports that are focused

(25:45):
on kind of their dulys shipbuilding juggernaut and sort of
how you got there in terms of the state subsidies
giving people land to build shipyards and then allowing frankly
very capitalist sounding experimentation and competition among these different players.
They have since consolidated, but is in that early days
they were, you know, it was much more in that
kind of let a thousand flowers blown in terms of

(26:05):
their shipbuilding enterprise and a lot of subsidies, they're able
to undercut a lot a lot of their competitors and
drive them out of the market, as we saw in
the section three oh one investigation of anti competitive Chinese
ship building practices, which you know, we played a role
in helping to catalyze so that is a they've been
very intentional about that and so and you look at

(26:27):
really where the wheels came off for us.

Speaker 3 (26:29):
Where did it start?

Speaker 2 (26:30):
It stopped when we the US governments just made the
decision back in the nineteen eighties to stop supporting the
US commercial maritime industry BOLLS shipping and shipbuilding. The programs
that we had, the operational differential subsidy and the construction
differential subsidy, they were imperfect. They didn't incorporate a competitive
market element to kind of keep costs down, and so
you have some abuse of that system which lead to

(26:51):
a collapse of that political that political support but what
you have. But nevertheless they were reasonably functional. And you know,
back in the day, we I think we had it.
By the time we ended that program, I think we
were something like maybe five percent of the world's commercial
shipping shipbuilding, and it was growing with reform. Certainly, Jerry
Hendrix has written about there's a really interesting divergence between

(27:13):
our policies towards the shipbuilding sector versus towards the commercial
aircraft sector. And we continue subsidizing commercial aircraft, we drop
a commercial shipbuilding like a hot potato, and one wither's
the other thrives. So right there you have this this
national choice that we made to disinvest from commercial shipping
and shipbuilding, and we are and I love this line

(27:35):
from Colin Gray that essentially, you know, a tactical mistake
might kill you today, operational mistake might kill.

Speaker 3 (27:39):
You next week.

Speaker 2 (27:40):
A strategic error in strategy or state craft that is
going to that might take decades to reveal itself in
its full horror. And here we are coming back to
this question in terms of the Allied investment in the
United States. I mean, you know that I just want
to come back to the footstomping of what do they want?
They want access to the US government market investing in

(28:01):
shipyard in the United States in the current environment, it
is not necessarily like there is risk involved to the
company in terms of making such a large investment when
you've got in a potential customer that's kind of trying
to get it back together. In terms of the US government,
in terms of the US government restarting through things like

(28:21):
the Ships for America Act, some version of support for
commercial shipping and shipbuilding. By the way, I love the
way that the team that was doing the drafting over
in between Mark Kelly's office representative gir Mendi, Todd Young,
and Trent Kelly, and of course key early role by
Mike Waltz and his team early on in the drafting

(28:42):
process where they got to in terms of designing the
strategic Commercial Fleet, which is essentially synthesizing operational and construction
differentials in a program that has a competitive element, a
competitive contracting element. I think that is really really smart.
I think that will fix a lot of the challenges
that were associated with the previous iteration that we had

(29:02):
before we killed it in the eighties. But again coming
back to looking at it from the standpoint of these
different firms, you know this is is it is a
business risk of investing in the United States. It is
incumbent on the United States to and the US government
to make that as as the environment is warm as
possible support them however they can to facilitate their investment
in their entry into the US market, creating a US

(29:24):
subsidiary that is your full US compliant, US control on
the board and so forth. But the challenge is what's
the big carrot that would induce them to make that
kind of decision in the first place, it is you know,
they're seeking the very lucrative US government and ship looking market.
So logically speaking, if you if you then agree to outsource,

(29:47):
even temporarily, do these companies yards right now, you're giving
away all your leverage. You are surrendering your best negotiating
position for basically nothing concrete in return. As opposed to say, Okay,
I'm going to I'm going to forego that short term
sugar high of I'm going to get a couple of ships,
you know, perhaps sooner, which I think, by the ways,
it's a dubious prospect in itself. Uh, you know, the

(30:08):
prospect that you know, oversea shipbuilders could get up to
speed on the requirements and the systems and the processes,
all of these things.

Speaker 3 (30:15):
You know.

Speaker 2 (30:16):
As much respect as I have for these firms, I
think that it's that is a much longer road than
I think anybody gives it credit for once you get
into the details. So I don't necessarily believe the claims
of that, you know, an outsourced thing would get you something,
you know, in the nearer term. And at the same time,
once you do that, you know, now the camel's nose
is under the tent in terms just in terms of
the appetite of oh, well, now this is a this

(30:37):
is an option that we've we've had and at what
point what leverage do you have to ensure that everybody.

Speaker 3 (30:42):
Follows through on their commitments in terms of dust in
the United States.

Speaker 2 (30:45):
So in terms of that that structure of how you
proceed in terms of full fulfilling and executing and reaping
the promise of the strategy, it really requires you stand
firm on that position that you know, we build our
worships here in America. Maybe there's trade space in terms
of on the commercial side, I mean, the strategic Commercial
Fleet has a really smart mechanism in the law of

(31:08):
the first seven years you can flag and use ships
to kind of get the sea lift force that are
again that's going to be operated by commercial carriers in
international trade, and then after seven years it's got to
be US built that I'm comfortable with that trade space.
I don't think that trade space exists, I exist or should.

Speaker 3 (31:27):
Exist for the government side.

Speaker 2 (31:28):
So prompted by your point about the ice breakers, but
I think that covers that particular issue, but publicly might
come back welcome your thoughts and we can can go
back and forth on that.

Speaker 4 (31:37):
Yeah, I think we've suffered through a number of short
term stopgap measures like nineteen is the maritime Security program,
which was right, you know, identified after we had to
hire a bunch of ships that did not meet US
standards to bring equipment over for a desert storm. You know,
that kind of thing. I think stopped a lot of

(31:59):
the growth of what should have been a worthwhile industry
in developing these maritime security ships a long time ago.
But I also think I've loved your comment about the
about the monopoly and the monopoly of the of the
big three contractors. We just had a conversation with the
one of the the Adrule president Chris Rose, and you

(32:19):
know he he identifies that exactly right. He says, it's
the same thing you said that when you're it has
ceased being a free market thing. It has become a
Styllus type top down request and they don't have to
operate economically because they have these costplost contracts. It is

(32:39):
it is vital that we get out of that. And
you know my androl is not since they're not traded
on the any market yet they're not entering as shareholders
the way that some of these big companies are. And
I noticed in your your piece too that you took
some of those big companies to task because they instead
of developing their shipyards to do better and to make better,

(33:01):
they have invested their money buying their own stock back
and another thing.

Speaker 3 (33:05):
Yeah, so thank you, thank you for bringing that up.
That's uh.

Speaker 2 (33:07):
And gentlemen, let me thank thank you for your excellent
piece on this subject a couple of weeks ago that
was really really excellent. Also want to highlight Marty Bollinger's
piece in the February issue of Proceedings on on how
shareholder interests are odds with navy needs. So, in terms
of my own involvement in this particular issue, you know,
certainly you know, near and dear to my heart back

(33:28):
in it would have been in February of last year,
as we were getting ready for the secretaries addressed to
West you know, get exactly where I was, Well, I
think it's coming out of Steve's office. Steve had the
the skiff. You had two doors into the second Haw's office.
You shared a wall with the CNL, which is pretty cool.

Speaker 3 (33:47):
Place kind of saying it was cool digs, and all
of a.

Speaker 2 (33:50):
Sudden I had the thought of, I wonder, as we're
dealing with in terms of we're finding out about a
lot of delays across the entire portfolio and underperformance and
things like that. I thought occurred to me. And you know,
I wonder what these companies buyback programs and dividend programs
look like in terms of, you know, how are they
using their cash? And you know, so I I did

(34:12):
kind of put a research into that and was quite
dismayed by what I found that these programs were quite large.

Speaker 3 (34:17):
I put that in front of Steve.

Speaker 2 (34:18):
Steve decided to put that in front of the secretary,
and the Secretary said, okay, we're gonna, you know, take
this on in his speech to the West Conference. We've
got it, you know, you know, a pretty seizable reaction.
And so certainly it's been a uh, it's been gratifying
between you and and Martin Bulger of certainly more more
financially literate experts than myself to have that that view

(34:39):
that hey, this is this is a problem born out
And you know, to be clear, I'm not against buybacks
in general. I think, you know, if you have if
you're if you're if you're killing it, and you're you've
got things, you know, coming along, your programs are on
time and on budget, and you're delivering through your customer
you know, by all means reward your investors on you know,
great job. But any environment where these core businesses are

(35:03):
not fulfilling their their contracted contractual obligations to the navy,
they are or if not, or at the very least
they are behind them their contractual obligations to see you know,
such large use as of capital being you know, being
deployed into you know, essentially this kind of accounting gimmick
that I think we as the customer were right to
be upset about that, and that is we're well within

(35:25):
our rights to be upset about. So I think that's
a so it certainly when we talk about you know,
one of the biggest issues that we talked about is
the is workforce and people to say, oh my gosh,
we can't get enough labor. This that the other thing
certainly that gets deployed by a lot of some of
the incumbent players against you know, the idea of new
market entrants in the form of the Koreans, or the fins,

(35:48):
et cetera. And I really I push back on that
argument because you know, frankly, the biggest problem that we
face on the workforce side is right now we choose
not to pay people enough.

Speaker 3 (36:00):
Back in the day, we and you certainly.

Speaker 2 (36:02):
Moldowney's has talked about this in amble Downey, the NAMC commander,
you know, publicly, very effectively, where he says, back in
the day, we used to pay shipyard workers about three
three times the uh the local kind of going wage
in the service economy, which is only appropriate when you
consider the nature of the work. Nowadays we pay shipyard

(36:24):
workers but one point two times the wage of whether
it's minimum wage or the wage of the service economy.
So what you're essentially asking, you know, you're offering people
the choice of let's see, you could go, you know,
go work in Starbucks or Duncandonuts, whatever it is, and
you can you know, work inside in air conditioning and
heat heated indoor space you're making coffee for for people

(36:46):
and you can get people's name wrong when you are
calling up calling out the orders or hear me out.
You could go work outside in the heat, in the cold,
at long hours, physical labor in a dirty industrial environment,
and we're gonna pay you about the same. Why are
we surprised that people aren't necessarily signing up for that proposition?
And the other aspect of this is that, you know,

(37:07):
when you consider that labor is a relatively small proportion
of the overall top line cost for ship. I mean,
I remember it was, and you know, don't quote me
on the specifics, but it was something like that when
they assessed that if you were to double or triple
the all the weight is right now, it would increase
the cost of the ship by you know, something around
call it five percent. So and then okay, so, yes,
the cost of the cost goes up, but the ship

(37:29):
actually might actually get built that thinking about, okay, what
is the incentive? How do we incentivize people to want
to come be shipbuilders and welders rather than Barista's it is?
This is it is, it is totally doable. Part of
you know, I actually see you hear people say, oh
my gosh, it's going to compete for labor or something.
In terms of when you get a new market entrant,
whether it's han A, you know, the fens or pick

(37:53):
your player. In terms of coming to enter into the
market in the given region.

Speaker 3 (37:57):
I really do. I reject the premise in the sense of.

Speaker 2 (38:01):
When someone comes in and you have you know, all
of a sudden you have tension in the labor market,
wages are going to go up, and then wagers are
going to continue to go up until you have more
people enter the market and meet the need. And I
think there's also a really good example of and you know,
I give Steve, you know, enormous credit on this. You know,
he was really he was out on point on this.

(38:22):
You look at the agreement that was created between at
Bartlett and his team and the International Brotherhood of Boilermakers
to create a rotational expeditionary workforce that would essentially you
bring in welders from the construction trades, people who weld
things that you really want to stay standing, things like
bridges and buildings and things like that. So they know

(38:42):
how to weld, they're already an itinerant. They move around
the country where the work takes them, and essentially, you know,
what they came up with was a program by which,
you know, Bartlett and his team would essentially train and
certify these already well trained welders. This is how you
weld things slightly differently in order to weld on a
you know, in a navy ship and this, and then
we certify you and then and then they are certa

(39:04):
they can go and go to work on navy programs.
And so the first cohort went to go work on
I think it was the JFK Newport News.

Speaker 3 (39:13):
From from what I'm hearing.

Speaker 2 (39:14):
That that is going really really well. You think about,
you know that it's a perfect example of okay, bringing
in people from you know, you know, other sectors of
the economy in this case and immediately adjacent sector of
the economy in terms of you know, can work construction,
and you bring that in to help solve maybe workforce needs.
So I think there's and getting back to you know,

(39:35):
in terms of the stock buy backpoint, it's a it's
also very hard in terms of when getting back. It
really does bring back to that root of when you
don't have the market competition, you don't have that imperative
to make you know, those kinds of well.

Speaker 3 (39:48):
Workforce investments as well as capital investments. I mean, we'd
hear a.

Speaker 2 (39:51):
Lot about it would be kind of funny where essentially
the uh, you know, a lot of the players would
come come to the Navy and say, we need you
to basically fork over a bunch of money to make
this particular capital investment, whether it's in workforce quality, alife
might be you know, the parking garage or something like that.
And in the current broken paradigm, yeah, of course it
would make sense for the Navy to pay for that

(40:13):
because you know that essentially, you know, it's sort of
similar to that old adage about if somebody always you money,
that you're in your debt and somebody always you a
lot of money, you're there, your partner, and we are
very much each other's partners between the Essentially, when the
Navy's dependent on the shipbuilders to build the ships, and
the shipbuilders start dependent on the Navy as it's only
as their only client, well here you are, and it's
that monopoly monopoly relationship.

Speaker 3 (40:34):
And so but.

Speaker 2 (40:36):
Then what happens is then it's certainly in that debate
last year about the in terms of the buybacks, and
then here well after they'd come to say, you know,
make this, Please give us some money to make this
investment in order to you know, help attract and retain workers,
whether it's parking your Otherwise then we'd here, you know,
in terms of, oh, why are you taking issue with
their stock buybacks? Look at all the investments that were

(40:56):
making Look at this parking garage.

Speaker 3 (40:59):
It's a and.

Speaker 2 (41:02):
So all of a sudden, it's kind of circular. Hey,
on a minute, we paid for the parking garage here.
You didn't invest your money in the parking garage.

Speaker 3 (41:08):
You invested it over in the stock buyback. So it's a.

Speaker 2 (41:12):
So I In terms of the solution here again, it's
I think it's you look at kind of the immediate
incentives of everybody involved. It makes sense why they're doing
what they're doing. It makes sense that we're upset. And
so I'm not sure if it's a legislative solution of
in terms of okay, in order to make a buyback,
you need to, you know, you got to serive either

(41:33):
your government programs are all okay, and there's some kind
of process in that, whether it's a regulatory or otherwise.
I'm not sure people who are smarter than me can
can address what that writing answer looks like, at least
for you know, as I was kind of going into it.
You know, the immediate answer, the long term answer is
ultimately market competition. But you know, we don't have capitalism,

(41:55):
and I'd like some because capitalism is good and competition
is good. It leads everybody to be uh the better,
better or best version of themselves. That is a bringing
back that imperative through world class competition from uh these
fantastic ship you know, shipbuilding allies, getting them to invest
here in the United States. Really, you know, over the

(42:16):
long term is the way out. And that's where and
brings us back actually, you know, getting back to the
interconnectedness of all of us. It brings us back to
why don't why outsourcing is a bad idea because when
you outsource, you kill the incentive for them to do
exactly that bring all that technology, invest in the capital,
invest in the workforce.

Speaker 3 (42:33):
It's a hard road.

Speaker 2 (42:34):
So essentially the focus needs to be for the US
government to figure out how do we support those world
class shipbuilding players from our allies to make that investment
feel comfortable making that investment know they've got a return
coming on the other end if we can help bridge
that gap. But you stand firm that we United States
builds our warships in America, and perhaps we can create
that if we pass the Just for America Act. Strategic

(42:56):
commercial fulle can help in terms of those that initial
subset of commercial ships which are going to be you
know in international trade where which is if that works
for that first seven years. But again that is a
different model. That is the one area of than the
government ship building. There's not the trade space on the
government ship building. There shouldn't be that that trade space
on the government ship building. It did difference perhaps a

(43:17):
different story for that initial phase of what we want
in terms of commercial ship building. But ultimately it's about
get the world class shipbuilders and and also the world
class ship owners, get them to invest here, bring their
talents and make it happen here in America, because that
is ultimately what's going to fulfill the you know, strategic
imperative of you know, how do you have a you know,
a shipyard that in a time of crisis or conflict

(43:40):
can continue operating, just you know, in light of the
fact that you know, long range missiles are a lot
more complex and difficult and larger and more expensive to
make than a short range missile. And so you know, yes,
yes there are intercontinental missiles, but there's a lot fewer
of them intercontinental missiles, and there are short range missiles,
and so you need to have something that is and
a capability. But from a business risk standpoint, from strategic

(44:03):
risk standpoint, geopolitically, you need to have that capability in
the United States where you have some element of strategic
sanctuary and all this it is decisions.

Speaker 1 (44:12):
I want to go back to South Korea for a second.
Whenever we look at what really is incredible, I think
back to my late father and his cohort who came
of age during the Korean War, growing up listening to
them talk about Korea and Vietnam. But you know, in Korea,
by the time the armistice was signed that ended what

(44:33):
we call the Korean War. South Korea, which before the
war was a relatively uneducated, rural backward it was the
backward part of the Korean Peninsula. It was just devastated,
its capital devastated. The whole country was just literally broken
down to parade rest and it's rebuilt and we look
at where it is today. And I always thought that

(44:54):
my dad's friends, and they've all passed, they would look
where Korea. The whole idea of a South Korean company
in buying the Philly Shipyard, which during their salad days,
it's hard to find something more red, white and blue
than the Philly Shipyard of the nineteen fifties. Well, we've
talked about a few things here that we talked about
the nineteen eighty one change on how we imperfectly helped

(45:18):
the civilian shipbuilding part of the industry. And in your
article you talked a bit about the nineteen ninety three
Last Supper, and we've also talked a bit about used
to be. People don't realize that, but it used to
be illegal for all companies, not just those who get
eighty percent of their income stream from DoD to do

(45:39):
stock buybacks. That was a change in nineteen eighty two.
So nineteen eighty one and eighty two were forty four
and forty three years ago. That's as far away as
the beginning of World War two, and when we were
building the fleet that would fight the Spanish American War
at the end of the eighteen hundreds, nineteen ninety three,
thirty two years ago. From the start of World War

(46:01):
two back to before World War One even started, these
were all decisions that we made, and here we are,
we find ourselves where we had the South Koreans coming
in to help us, which is great. It's good to
have friends, But there were decision trees for decades, and
you mentioned four decades in the article, but the South
Koreans also had decision trees coming from ground zero. You know,

(46:22):
besides those couple of legal instances from decades ago that
we're looking at, when you look at the success the
South Koreans have, besides the twenty twenty five technical assistance
they can give us to help, what was some of
that perspective our worldview that the South Koreans had where
they reached that juncture on the road where we went

(46:42):
to the right, they went to the left, and in
twenty twenty five, I think what's happening speaks for.

Speaker 2 (46:48):
Itself absolutely to your point about in terms of the
cultural moment and frankly the cultural symbolism of in terms
of South Korea investing in the United States, I mean,
I would say, certainly in terms of the press coverage
and over there, I'd say, you know, it's a not
insignificant national moment, and and you know in terms of
you know, will deserve national pride that you know, the
notion of now you have American naval leaders, the leaders

(47:10):
of the greatest navy in the world coming to South
Korea to say, come invest in America and bring or
know how bring your expertise. That that is something in
which you know, I think my perception is that, you know,
South Korea can rightfully take pride. Certainly, when we talk
with Ki Sanshang, the CEO of h D Hyundai, he's
he's spoken about how I think he was his grandfather

(47:33):
was inside the Postsan perimeter, and he really talked about
his gratitude towards to the United States for uh essentially
saving his countries and his family. Likewise, I mean DK
Cam the head of the CEO of Hanla, he was
educated here in the United States. So I think there's
a you know, I think it's it's worth worth noting
in terms of the the it's broader than just the

(47:55):
economic bonds. There is a you know, get you know,
we're tied by blood in this regard in terms of
that we have shed blood together, and you're absolutely right
in terms of there was a national decision by South
Korea to invest, national use, national treasure in developing this industry.
And likewise, it's similar in Japan and we actually played

(48:16):
a key role in that it's part of the reconstruction
of Japan a World War Two that we were going
to say, hey, bring back you guys are really good
at at shipbuilding. You gave us a real run for
our money in the Pacific War. Let's bring that back
on the commercial side. And what you saw was, frankly,
a lot of the technology. And even so, I think
some of the equipment that was associated with the American

(48:36):
ship building juggernaut fro from World War Two in terms
of the liberty ships and victory ships getting packed up
and sending sent over to those countries. Frankly, but I
think it was totally the right thing to do for
us in terms of giving them that technology to help
them rebuild after this cataclysm so that you can build
a you know, I love doctor the way Doctor Holmes
phrase it. Phrases it that you know, you don't don't
go starting fights if you don't have to, but when

(48:57):
you must fight, fight for a better state of peace.
And so sharing that technology on our part with Korea
in Japan was absolutely part of how do you get
these countries with which, you know, in Japan's case, with
which we have just fought a war, how do you
get them to a better state of peace as a democracy,
as a US ally and then you know, likewise helping
Korea back on its feet, and so that is a

(49:18):
absolutely praiseworthy I think the big mistake that we made
was we didn't keep more of that in terms of
that modular construction technologies that Henry Kaiser developed for the war.
We did not keep more of that for ourselves, and
so essentially revert back to kind of this nut modular
production you know, pre war kind of you know, kind
of these these these previous approaches, whereas you see Korean

(49:40):
in Japan basically retaining that modular construction approach and continuing
to iterate on it and and invest in it and
make it better until because you know, ultimately, you know,
ship building it's it's not it's a well margin industry,
and so you've got to be really efficient if you
if you know how to make if you were going
to make a living. And so certainly, you know, as
we were kind of working on it and developing the strategy

(50:02):
and who we wanted to talk to, I mean, the
competitive set that we're talking about is very small in
terms of the companies who know how to make a
living building ships, and that's who we want and know
how to make it living building ship building world class
commercial ships and can also build ship you know, combatants
with US systems of respected quality in terms you know,
and you know, the Age's combatants is a really good

(50:24):
example of that. And so how do you get them
to bring those those technologies income and you enter the
US market here in the United States and bring that technology,
bring that know how to create that that US competitor
that is going to make everybody here in the United
States kind of get their get their game off. So
I think there and it's a certainly there's a lot

(50:46):
of symbolism in terms of the as you mentioned in
terms of uh, I love Roger Camp's posts on LinkedIn
about certain different ships that have been built at the
Philly Shipyard. I think he was posted at the Valley Forge,
which was built at Philly Shipyard. And then this is
this is the carriers value peop are just mentioned, which
then in the opening phase of the war, when you
essentially we were actually in the moment of significant downsizing

(51:08):
post World War two, where essentially Lois Johnson had kind
of you know, demanded the Navy, you know, demobilized the
point that we were cutting off, cutting well into bone.
I think we were down to I think only six
fleet carriers at the time. Ali Forge is one of them.
All of a sudden, you know, the Air Force's vision
of strategic airpower. Triman turns to them and says, hey,
what are you going to do to go? We were

(51:29):
not going to nuke the North Koreans, but what can
you do to hell? Then they're like, we really don't
want to use that Strata Force fortress bomber in Korea
like we could. We kind of want to keep that
for the nuclear mission. And all of a sudden, here's
this crisis of tactical airpower, and here's the Navy, which
has been advocating forcefully that no, like there is, there's
got to be an intermediate step between do nothing in

(51:50):
nuke them, and that is what seapower is for, and
that they are able to answer answer the bell and
send the Valley Forge into and the Valley Forge is
instrumental in holding the poos on perimeter and then eventually
enabling the counter offensive at landing it in shot. So
and that she and you know a couple of uh

(52:10):
you know, British counterparts are the only source of ally
of their power in that in that moment. So there's
there's a lot of that kind of you know, historical
call and response that I think it is really worth
worth remembering and and I and I think the creenage
and particular Korean counterparts they really appreciate that. And you know,

(52:31):
I could say it goes for for I'd say there's
in terms of Finland too, and now that Finland is
in NATO, I will say Finland for me is personal
and that my grandmother is finished. She was on the
last train out of Honko, which is the major one
of the major Finish ice water ice free harbors. She
was on the last train of out of Hongko in
nineteen thirty nine, nineteen forty as the Russian Baltic Fleet

(52:52):
is steaming into take that that location as a naval
base as part of the terms of the end of
the Winter War.

Speaker 3 (52:57):
Enormous respect for Finland's.

Speaker 2 (52:59):
Capabilities in this and the way that they have stood
up to authoritary and aggression in Europe too, And now
that you know, I think it's entirely salutary and right
that here's this country that has managed to preserve its
democratic government stood up for you know, in a way
that you know, I think Ukraine has done a lot
of learning from today, you know, standing up to aggression.
Very regrettably, the back of nineteen thirty nine, the Allies

(53:21):
it started, they were kind of slow to mobilize it,
you know, some kind of intervention to help help defense,
and you know, it didn't get there in time.

Speaker 3 (53:28):
And I think.

Speaker 2 (53:29):
It's certainly a case study to learn from as we
were thinking about Ukraine, that there is a helping helping democracies,
that democracies must hang together or you know, as Ben
Franklin said, we will hang separately. So that very much
applies in the shipbuilding arena. You see that in Korea.
I think seeing Finland stuff up in this way, and
I and I think there's something really powerful about the

(53:50):
fact that you were seeing the prospect of these companies
investing in the United States, bringing their their technology, they
know how, their expertise, it's it's everything that we want
and there are real you know, I think if we
can support them, I think there are really really good
reasons for these companies to do that. From the stand
point of managing geopolitical risk. Do you really want, certainly

(54:11):
in the case of you know, in terms of ninety
percent of the world's commercial ships being built in China, Crean, Japan,
I mean, they're again all under the guns. You have
a crisis in Northeast Asia. I don't think anybody's getting
any ships, so really helpful to have that kind of
geographic diversity in case of a crisis in Northeast Asia
to be able to deliver to customers. And so it's
a and then you think about in terms of the

(54:31):
European shipping lines, I mean, you know, that part of
the engagement was also pretty fun in terms of helping
them make the connection that as they're ordering all these
ships from China at the same time they're straying to
you know, get really concerned about growing competition from Chinese
container lines in the global container shipping market. Helping them
give a fan connection that guys every order that you

(54:52):
order from the Chinese, you think you're getting a discount
relative to the creans from Japanese. But what kind of
discount do you think the Chinese firms are offering Chinese
shipyard firms, so probably a bigger one. So you are
directly subsidizing the growth of your newest, biggest competitor in
the container shipping market. So it's I think there's a
lot of the you know, in terms of fostering that
kind of interconnection both you know, both economic and cultural

(55:14):
and geopolitical, I think is a really healthy thing. It
comes down to ultimately, it's about how do how do
we bring in that kind of you know, the world
classic industment and the people who know how to make
a make a living in this business. How do we
get them to be able to make a living in that.

Speaker 3 (55:28):
Business here in the United States?

Speaker 2 (55:30):
And and then you know, it's incumbent on the US
government figure out how do we support them and make
that a good business decision for them.

Speaker 4 (55:35):
Yeah, honor, I really want to thank you for coming
on and joining us today. That your article and other
ones like it, I hope have are waking a sleeping
giant in the in the US industrial shipbuilding industry and
the other aspects of our our strategic need for this
kind of uh lead growth and commercial shipping growth. Before

(55:56):
we let you go, is there anything you're working on
now that we can look forward to reading in the
next few days or weeks.

Speaker 3 (56:02):
Yep.

Speaker 2 (56:03):
Continuing to write on the on this and other subjects,
and so we're remating fully engaged in this and then
and at the same time, you know, standing up with
this new advisory practice of the Merchant Strategy guard SO
which is a.

Speaker 3 (56:14):
Lot of fun.

Speaker 1 (56:14):
Well, Hunter, really great talking to you again. Wish you
the best success and looking forward to talking to you again.

Speaker 2 (56:20):
I look forward to it. Thank you so much, sal
and and an Eagle one night.

Speaker 1 (56:24):
And thank you very much everybody for joining us for
another edition of mid Rats. Until next time, I hope
you have a great Navy day.

Speaker 3 (56:30):
Cheers,

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