American Enterprise Institute


Mackenzie Eaglen: Good morning, everyone. Welcome to the American Enterprise Institute. It's nice to see you all here in the auditorium and those of us -- those joining us live online for our livestreaming. My name is Mackenzie Eaglen. I'm a resident fellow here at AEI for many years, where I've worked with great Americans like Secretary McCarthy. It's a pleasure to host him. I'm thrilled to have him here this morning. I under-caffeinated specifically to keep calm just for his benefit, but I hear he's pretty high energy. So we're going to have a little fun this morning. The Honorable Ryan McCarthy, I know he needs no introduction. You're here because you know exactly who he is. But quickly, let me just give you the refresher.He's a man who lets no grass grow beneath his feet, as I quickly learned this morning. He's been secretary of the Army since November -- excuse me, since September and before that was undersecretary for two years, so a great vantage point from which we can talk about a lot of priorities this morning. He's a veteran of the Army's 75th Ranger Regiment, and he has a blend of experience on Capitol Hill and defense industry and even in finance. He served in the Army between 1997 and 2002, deploying to Afghanistan. He holds a bachelor of arts in history from VMI and an MBA from the University of Maryland. In his time leading the Army in both of his jobs, the secretary has been busy identifying the big six modernization priorities well-known -- I think you've done a great job, where we all know what they are. Realigning investments toward them, and the famous or infamous process dubbed Night Court and helping stand up the Army's future command in Austin, Texas. So the secretary is going to give brief opening remarks, after which he and I will just chat and then we will welcome you to join that conversation. And if you're joining us online, or I guess even if you're here, if you want -- if you think your question might not get answered or you want me to consider it, I have the iPad up here. And we'll be also accepting questions via Twitter. Just use the #UncleSamAEI. And I'll try and include it and your name and question for the secretary. And so without any further ado, Mr. Secretary, thanks.

Ryan McCarthy: Thank you, Mackenzie. I love this room. This is great.

Mackenzie Eaglen: Thanks.

Ryan McCarthy: But thank you for inviting me today and having this opportunity. The Army's really relied heavily on the think tank community to help us think through a lot of these challenges. This is an amazing time for the Army in the form of transformation. So, appreciate this opportunity. I'll try to limit my remarks so that we can have more of a discussion with all of you that came today. So thanks for coming. You know, we talk about a lot of the things that we're doing to try to transform the force, but with 180,000 people deployed in 140 countries, readiness will always remain our number-one priority. We've been very fortunate from the '18--'19 budget deal to have the funding we needed to help focus our efforts against that. We had roughly two Brigade Combat Teams at the highest levels of readiness two years ago; today we're north of 25.
And that is as much funding as it is the focus and energy of people like Mark Milley and Jim McConville and Sir Major Tony Grinston, because the focus and energy against our training plans was large -- the leader-driven aspect of that was truly remarkable. Because whether you're talking to those senior folks or a battalion commander or in the 1st Infantry Division in Kansas, they all sounded the same. They all knew exactly what they had to work against. So the focus and energy on the fundamentals, but you got to have funding. So we're working very hard in this '20--'21 budget deal, and we need to close it as soon as possible.

But readiness has been a very key focus for us. It will always be number one when you have troops deployed, in particular in combat operations. So, we are 60 percent of combatant commanders requirements worldwide, so over half of our balance sheet is focused on people and training. And so, more to follow on that, which you'll see over the course of this next year, is a focus on strategic readiness and what makes the difference. Emergency deployment readiness exercises for brigade-size elements to Europe, East Asia. Defender Series, what we're going to do is send CONUS base divisions to go train in Europe and Asia to work on dynamic types of deployment all around those areas of operation and train with our coalition partners. So a lot of effort with that. So that's really bringing us to the master's degree level on readiness outside of the individual and collective training we do and squad- and platoon-size elements to larger echelons like that of a brigade and division.

We've been in the midst of a major transformation in the force and our modernization enterprise over the course of two fiscal cycles, two POM cycles, if you will, of a five-year budget plan. We've moved north of $40 billion against our ambition and 31 signature systems that we are developing across six modernization priorities. So a lot of effort and energy in developing these systems. So over the course of this 18 months that's in front of us, these prototypes are landing, and we're going to see whether or not they work. And if they do, it's kind of a good problem to have. The good thing is -- is we can bring them into the force. The challenge is you gotta pay for them. So the more of the night court kind of experiences you've heard where we had to reshape our balance sheet to finance our ambition. We've restructured against the problem creating a four-star command army, futures command, six investment, six plus two investment priorities. We have synthetic training and also position navigation and timing, which complement those six investment priorities. But when 80 percent of the S&T is against the investment priorities, and over half of procurement, we're trying to put our money where our mouth is. We're trying to signal to OSD and Congress and industry: This is where we're trying to take the Army. And we need your help.

And we've seen that industry has vastly increased its investments north of where they had been three years ago, well north of 2 percent, against their revenue. So exciting times from that standpoint, but we have to maintain that commitment and that trust with all those stakeholders that I mentioned before. So this FY '21 budget that we're going to send across through here shortly, we're going to start building the '22. That focus and energy will be the discipline against what we've set out. So a lot of it is what we're trying to do with Gen. McConville and I described as finish what we started. And so a lot of energy will be against those two priorities.

But one of the things you're going to hear Gen. McConville and I talk a lot about is people. People are our most precious resource. We're a people organization. And the challenges that we've had with people -- sexual assault numbers continued to rise over the last several years, suicide. They're things that are tearing away the fabric of our institution. And the only
way that we can think of doing it better is just being better teammates, building cohesive teams.
Gen. McConville and I eat together all the time when we're doing -- when we get a chance we'll work out together. We try to send a message to the system. Teammates look each other in the face. Teammates invest in each other, getting soldiers back into the chow hall to eat together. This generation is different than the ones that we grew up -- with the way we grew up. But some of those simple fundamentals of investing time in each other will help you improve and help you understand who you're dealing with. So when they have challenges, you're there for them.

So trying to focus on the simple things, we're trying to do that by exhibiting the right behaviors and building cohesive teams. But also is investing in people. We're investing in IT systems. We're changing the evaluation processes of how we pick talent to lead in our formations. Because it's as much about an individual knowing who they are and what are the best way for them to reach their potential. But also to get the right people in the right jobs, have the right chemistry so the institution performs better.
Gen. McConville is very passionate about this. He's bringing a lot of these things to bear. As I speak with battalion commanders' assessments and brigade commanders' assessments, we have a one-star board that's underway. So we're going to see a lot of changes in people well before Christmas.
So it's exciting times for the Army. We're trying to continue to meet national demands but transform ourselves at the same time. Very challenging, exciting, but we have an extraordinary set of leaders that are driving that. And it's great to be here.

Mackenzie Eaglen: Thanks. Thanks for those remarks. That was terrific scene setter. I guess we should talk about the first most pressing issue. And no, it's not Lieutenant Colonel Vindman, but it's actually today as the first day of funding and the next CR through December 20. And he talked about needing to wrap up their budget as soon as possible. The Senate majority leader has indicated this is one of his top priorities, and I believe it's because of his sympathy for the Defense Department and the unique arm that continuing resolutions cause on duty in particular. We feel like they can get there. How have your conversations been going? And are you preparing for the worst?
Ryan McCarthy: We always prepare for the worst in the Pentagon. I'm half facetious there of the -- though, so first off with what a continuing resolution does to the Department of Defense. From a readiness standpoint, we had to notify our commands over about a month -- 45 days ago to reduce your investment or expenditures in operation and maintenance by 2 percent. So you started turning the knob down on training from an individual to a collective. It has an impact across the system, so you're immediately starting to decline. We're going to have to probably do that again here right before Christmas. So the buying power of a battalion, of brigade commander is declining, less repetitions, less spare parts, less everything. And coupled with the reduction of repetitions, which time is the variable here, you don't get back.

Mackenzie Eaglen: Right.

Ryan McCarthy: So even if you get the money at Christmas, you just lost 90 days where you weren't out at 100 percent. And in our business, you got to get every repetition you can before you get on an airplane and go do the nation's business. So, for us, that's why we run across the river a lot.
So from readiness standpoint, we're very concerned. We need to get that turned back on as quickly as possible. Modernization, there's about $3.5 billion in buying power that's frozen. We have about 79 new programs, another 37 production line increases, production increases up to programs that we want to turn this on as quickly as possible. Because like I mentioned before, 31 signature systems, a lot of these are prototypes and capabilities, we want to get on hand. We want to test as quickly as possible and start buying [inaudible] to field our formations. So readiness and modernization, the impact's already felt. And the thing we always talk about as well, it's parts, it's jobs, it's time for our people. That's one that bothers me the most. And the one I'm most concerned about and getting that back, you can't get it back. You got to make the most of every day.
So we've been talking a great deal, Gen. McConville and I, Gen. Martin, Jim McPherson, our leadership team has been going across the river all the time. The good thing is -- is I think they're very close on the NDAA, which will be a great step forward. And if this one will probably be a continuing resolution to Christmas, we'll afford enough time with that framework in place to knock out a deal. So if there's some wood in here, I can touch it.

Mackenzie Eaglen: Not much.

Ryan McCarthy: But, we're going to be -- I mean, we're going to go to the Army-Navy game, obviously. That's a command performance; we will be there. But we're going to be constantly going back and forth to try to get this done. The Defense Department has a responsibility to play because of the size and scale of our budget and in the scheme of the president's budget. So we will be there to explain, articulate, and help negotiate the best outcome we can.
Mackenzie Eaglen: Well, since you're here, we can say, "Go Army," and the other secretaries are not. Maybe that's one person to come on over.
Let's continue on the modernization. But I want to look backwards just briefly.

Ryan McCarthy: Sure.

Mackenzie Eaglen: So the night court process was effective basically, where you, Secretary Esper, and the uniform leadership basically went line by line through the Army budget. Decided, you focus a lot on legacy, you focused mostly on equipment, but also business processes and other reforms in the so-called back office. And you reinvested, you took money from a lot of legacy capabilities and tried to put it towards, as you referenced already, 80 percent S&T and buying the future more quickly. And buying it now and buying it in the future year's defense plan, in the five-year window that you're programming under and trying to make change happen.
So, your old boss is now the secretary of defense. He's now applying that same model across -- well, he's starting with the Fourth Estate at the Defense Department, meaning mostly defense agencies, but he will then move towards services, as I've been told. So what are your lessons learned for night court and, I mean, in this sense politically, mostly, but any lesson? Capitol Hill seemed to have been mostly responsive. I think you also played the game -- not the game, I think you --

Ryan McCarthy: Freudian slip, Mackenzie --

Mackenzie Eaglen: It is slightly Freudian. Having worked on the Hill, both of us, you understand what I mean, yeah, you were very politically savvy in how you presented the request. You kept options open. The things that were most I think consequential to members of Congress like the Chinook and other production lines, there were options where they have a year or two or three in some cases to decide what they want to do, and you put the burden on them. How has Congress reacted to the total process -- you know, all that money? And do you feel good about that? Is that a good model going forward?

Ryan McCarthy: So if they were to slap the table today on the budget the way the bills are marked, we would go 185 for 186. That's like Michael Jordan's free throw percentage. I feel pretty good about that. But I think a lot of that was because of the hard work.

And what those numbers mean, my apologies, 93 truncated buys 93 terminations. But to the points that Mackenzie was making, the terminations were over time. And the reason why is we still need these capabilities in our formations for years to come. And you want to be able to work with the manufacturers that are doing business with you to make those adjustments. Many of them are competing for the new opportunities.

So from a business leader's perspective, you're still getting a couple of years of orders. You're competing for new business. They can make adjustments with their production lines and their tooling and other things of that nature so that they can adjust, hit it in stride. We just don't want to, sorry, you know, close the plant. We need them.
You know, so from that standpoint, there was the -- allow them the plan and the opportunity because the cuts are across a FDIP. Some of it was impacted in the immediate term of the '20 or the '21. But a lot of the funding needs to be back-end loaded. Because if we're successful in these next 18 months, these prototypes deliver, you're going to need a lot of money to start bringing tranches dozens, hundreds of these widgets into the formations by that time frame. That helps industry adjust. It helps Congress manage expectations. It allows us the time to see if this stuff's going to work. And then collectively, we come together and we make an adjustment downstream.

So we've learned a lot from -- I learned a lot from the Gates experience when I worked for him over 10 years ago. And you know, Dr. Espers' experience in industry, his knowledge of Capitol Hill. We didn't want -- you know, it was a huge shock to people. We didn't want it to be a shock wave, you know. So we needed the support of all of the stakeholders that we described before. And we worked very hard to communicate with industry leaders in OSD and then work with Congress to communicate our intent.
And one of the greatest things that I think that we did as a service is we published a modernization strategy and then we put the money against that stuff. So we're not going to,
you know, curveball somebody who may -- you know, like, if a corporation makes investments instead of dividends to their shareholders that they can justify it. Here's a document they gave to Congress, here's the testimony they gave to Congress, here's what they did at the AEI event, right. The consistency has to be there, or they're not going to go along with you. And we need industry to invest, and we need Congress to support it.

Mackenzie Eaglen: Well done. That's a wonderful campaign plan, if you will. It's impressive, and I know and I think the secretary of defense will be approaching it the same way, and if -- the term was flood the zone. And actually, it's well then how you were able to shift what is very hard to do, which are entrenched interests, but for a better cause I guess you could say. So quickly I want to expand since those of us who aren't following it every day you mentioned that the six plus two. Can you talk a little more about the plus two?

Ryan McCarthy: Sure. Long-range precision fires, next-generation combat vehicle, future vertical lift, the network, integrated air missile defense, soldier lethality, the key priority is the weapon systems. But there's a position navigation timing and synthetic training environment. Those are the plus two. The synthetic training environment can be applicable to a long-range precision fires artillery crew, to a helicopter pilot, to an armored vehicle and a network if you're running a communication system, integrated air missile defense or even a soldier who's going through a door to clear a room. All of those scenario-based training on synthetic training can be applicable to all of them.
So that's why it wasn't a stand-alone priority because it's going to have to support all of them. From a perspective of position navigation and timing, the Army is heavily investing in low Earth orbit satellite architecture. And in order for us to maximize our long-range precision fires portfolio or our missile defense portfolio and to cue, you know, assault, reconnaissance helicopters, whatever the shooter capability is going to be, you're going to need a satellite architecture that can find stuff and move information quickly. And it'll be resilient, much more resilient than other potentials capability.

So we're working very closely with commercial industry as well as the National Reconnaissance Organization and others to build as many partnerships as we can. Because the goal for us is that they have satellite capability down to the brigade command level, or brigade commander to be able to own and task a satellite system to work in their battle space, where historically you have to have national asset support special operations at much higher echelons and our formations.

Mackenzie Eaglen: I had one Army general tell me LEO, low Earth orbit satellite, are it -- it's the future, it's -- actually we're talking like a hub-and-spoke or sun-and-planets kind of thing. It's the sun, and everything else is going to kind of work around that. And it's that important to the future. Would you agree?

Ryan McCarthy: If you think about how do you maximize our entire modernization effort? Largely it'll be cloud architecture to move the data and satellites. So it's probably why you've heard Gen. McConville and I talk so much about it over the last two years, which normally most Army leadership probably would not talk about satellites, as much as we have. Because we recognize that we need to have a resilient satellite architecture. But also in order to maximize our long-range fires portfolio, we're going to be able to fire munitions exponentially further than we ever had previously.
How are you going to find it? How are you going to find targets? How are you going to cue it from a command-and-control perspective? We've got to have this capability. And we put a lot of money against that effort. We're working very closely with leaders in the commercial satellite industry, but there's going to be a lot of things we're going to have to figure out about working with commercial entities.
So it's very new for the department. Over this next year to 18 months, this is one of the key prototypes that we'll be testing at a combat training center. So that will put it down at a lower echelon, and they're going to be able to work with this capability, never been done before. We're very excited about that.

Mackenzie Eaglen: I don't want to diminish the importance of the cloud, either which of course we all know is in the news with our new neighbors, HQ to Amazon here in town. But talk about the Army and the cloud and its role in thinking about the future battlefield and the importance to you and maybe if it's different or separate in any way from the other contract.

Ryan McCarthy: Well, we're just getting started. We put about north of $700 million across the FDIP. And that's largely to inventory all of our data, get the software development support so that we can get all of the data across the Army under the right standards and formats and then to make that transition or migration to a cloud architecture. So a lot of this is infrastructure build over the next 24 months and what provider we use will -- you know, as we proceed will -- we'll ultimately select someone but what cloud architecture will do for us. So much of combat is speed of decision-making. And if you can have a machine crunch the data and pass it to from a sensor node, found bad guy, you can use an artillery piece, you can use an armed reconnaissance helicopter, whatever the weapon system of choice is to be able to cue it in a second. Today it takes minutes. In a firefight, that is eternity. So it's for us to be able to have a machine help us crunch the information, pass it, target acquired.
Now, we'll have a human in the loop. But that's something that policymakers will face in the years to come. Will China and Russia behave the same way? And I think it's the sort of thing Henry Kissinger wrote a great piece on this about maybe a year or two ago about just philosophically for American ideals. How will we be able to embrace this? America is not ready for this. And it's start having these conversations to educate ourselves about what it's going to mean because the system can crunch the data and give you an answer very quickly, but it doesn't have context. So only a human being can bring the context to a decision. And that's where as we proceed and this technology gets more and more mature, and it gets fed into a weapon system. Those are very challenging times ahead of us.

Mackenzie Eaglen: I've had multiple senior defense leaders, uniformed and civilian, over the last several months, as we talk about all of the same challenges you're discussing. Lament, you know, the degradation of the other tools of American statecraft and power, not just, you know, diplomacy or sanctions or any foreign aid or whatever. But in this case, information operation, something that basically we used to do a lot of. And now -- on one hand you understand it with the Internet of Things and just the internet in general, how hard -- you know, things like Voice of America and broadcasting commando solo over Afghanistan, you know, a radio with a bullhorn basically. Those seem so antiquated. But it seemed to me now we almost do nothing.
And I'm worried -- you know, thinking in terms of the national defense strategy and long-term competition with China and Russia, China, in particular, you know, you often hear
senior leaders talk about their whole of society, whole of everything China response. They do this, not just in one segment of one piece of a government agency, but across the nation, private industry, "private" loose term, and in many other ways. How are we doing on information operations as a US government more broadly, and is this something you're thinking about or worried about as you look at the NDS?

Ryan McCarthy: Absolutely. To give you the best example of where we're really executing that capability with precision, in Afghanistan the one thing that I've noticed in working this problem set literally since October of 2001, in a variety of different jobs. This is the first time that I've been to Afghanistan where I've seen such energy and effort behind information operations. And we have an organization within the Special Operations folks that are implementing this capability. Because where have we been losing against the Taliban? It's at the street level. That they've shown the ability to execute the rule of law, whether you like it or not, they can perform the service.

Mackenzie Eaglen: Right.

Ryan McCarthy: And if the Afghan government can't, what's your alternative? That's why the Taliban was winning on the street. One of the things they're doing now, very effectively -- and you see the reduction of attacks by the Taliban from this -- is that the Afghan government working with their partners -- us and some of the NATO folks are still there -- is that we're able to show at the street level that the Afghan government can provide services, fix electricity, provide security. But they're winning in the cognitive space. It's amazing, you know, when you went there in the invasion 18 years ago from right now, they didn't have any electricity. Now, it looks like some American cities at night, right? They got street lights, and I mean, it's amazing. And they're getting iPhones and they're getting telephones and they are on the internet.
And the Taliban is trying to beat us there, by showing, "Hey, we're better at this," because they're trying to see who's going to run the country, who's going to win ultimately. What we've been able to do recently is show the Afghans can respond from a security standpoint, or services, and is starting to build more confidence in the people. Now, is that in any position to leave anytime in the near future? Probably not. But we can look at what are the ways in which you can reduce the size of your footprint and bring the Afghans up. Winning in the cognitive domain is incredibly important. We're looking at some organizational adjustments within the Army, investments for information operations. Because that's really -- what when Secretary Mattis published the NDS, that's where great-power competition is.
Win ideas against competitors, it's not being kinetic worldwide. So that's everything from advise and assist, but it's also in the information space to be able to communicate our values as a country and what we bring to the world. So we do have to do better on that front. We're making the investments there. We're going to make some organizational changes within the Army associated with that. So, much more effort to come. But we've learned a great deal at the street level in Afghanistan, and we've adjusted.
Mackenzie Eaglen: If we could stick with the national defense strategy for a moment. So in your opening remarks, you talked about the Army, you know, 180,000 soldiers currently deployed, and that you're 60 percent of combatant commander requirements. That's a big job. Talk about the tension between meeting those daily requirements, the wolf closest to the sled, you know, the tyranny of the now versus this pivot to competition, and how you're reconciling that.

Ryan McCarthy: Yeah. I don't get a lot of sleep.

Mackenzie Eaglen: It's why they pay you the big bucks, right?

Ryan McCarthy: It's incredibly hard. And I think that why you saw the activities that we took over the last two years in particular, of why we had to make such hard choices within just the research and development and acquisition portfolios. Because this was fixed. We could not adjust. So making some very hard choices with truncated buys and terminations but also a lot of risk in our future and making some of these choices. Until national demand goes down, we're not going to be able to adjust or do many things different than what we've done for the last two night courts.

But what Secretary Esper is trying to drive consistently is looking at NDS implementation and choices. So he brings literally all the leadership, COCOMs up on the screens and service secretaries and chiefs every Monday. We work on this stuff, and it's bringing the risk back to our level and looking at choices.
And where do we compete globally? What types of capabilities do we need in certain places where you have real-world combat operations underway? What are the capabilities they need? And how are we doing against the objectives for that foreign policy problem set? So a lot of choices are on the table, and he's getting ready to make some hard decisions.

Mackenzie Eaglen: Let me just pin you down a little bit here. So is it possible? It's not in the Defense Department's DNA to say no, right? Your can-do, who are kind of organization, you'll find a way to duct tape whatever the solution is together and execute. It's one of the reasons why I think Congress it's hard for members who don't sit on defense committees to understand why CRs are so hard, right? Because instead of parking aircraft in a hangar, you figure out a way to still fly. It's just reduced and it's stretched and etc. But you figure it out, and everyone thinks you always figure it out.
Is there some responsibility on the most senior leaders like yourself to start to find ways to say no or to better talk about the risk? If we keep doing everything the way we've always done it, we will not deliver on the defense strategy as you think we've told you we will.

Ryan McCarthy: First thing we're doing more of is we're actually meeting with members that are not on the committees of jurisdiction. I had breakfast with two senators that are not on the committees of jurisdiction this morning. And it brings a much greater appreciation for the challenges that we face.
So we have a responsibility to do that with senators or in local communities. They get out and articulate how hard it is to be in this business. It's kind of that -- it's kind of the tension between America's responsibilities in the world. And that almost a form of American exceptionalism to just the hard realities of being $23 trillion in debt, and we got to do something about this. But we make these recommendations about -- and then ultimately, it's a national objective. We're going to do this in Africa or South America that you can make those choices. With the NDS comes that hard reality, but ultimately those decisions will be made in the Oval Office.

Mackenzie Eaglen: Thank you. All right, so I want to close out our Q&A on your favorite topic, people. So let's talk about those great men and women who serve, but also their families. Also, Army civilians who I know are essential to the work, to executing all of the things that we've talked about.
So there's a new ad campaign, "What's your warrior?" Can you talk a little bit about that and what you're trying to achieve with that?

Ryan McCarthy: Yes. We kind of came to that realization the hard way over the last -- we missed in 2018.

Mackenzie Eaglen: You missed your recruiting target.

Ryan McCarthy: We missed our recruiting target for the active force by 6,500 people. That was a big miss. And we kind of huddled up and realized we need to make some pretty big changes, and at the end of the 2018 cycle, we had a commercial: warriors wanted.
Now, I was in the Ranger Regiment. I'm a middle-aged man and Milley's in Special Forces and McConville is an aviator, attack aviator, Esper was in the infantry. And it comes on ESPN at 9:30 at night, and we all call each other and we're like, "That was awesome." Fast roping into a target and flashbangs, and then we realize four middle-aged men watching ESPN at 9:30 at night are the ones watching this commercial. Realize like we're not looking so good are we? And the campaign didn't work.
So we went back, and we changed advertising first. We reorganized our marketing organization. We focused on 22 cities in the country. We didn't rely on that certain kind of hook from the Carolinas, the Texas, where we do very well in recruiting because of this position of our installations. And we've got home-field advantage.
So we realized we needed a much more comprehensive look at the country. Why? Because we wanted to improve with women. We wanted to improve with minorities. We wanted to have a comprehensive cohort of men and women that represent everybody in the country. And with that you kind of had to be like a college football coach. We were out visiting cities and talking to mayors and superintendents of schools to get that civic leader support. I visited eight cities in the last 14 months. And you know, it was the hard push to help those folks down at the local battalions. But to energize the system, and with those opportunities to talk, we talked to mayors, you're talking why we need so much money, and what are the things that we do, so it was connecting with the country.
And it helped us. Now the "What's your warrior?" is -- and if you've seen the commercials, it's much more representative of this generation. And it almost looks like a cart -- like a video game. And then the end of that field, when they're all kind of standing in the field looks like an "Avengers" movie, right?
But it shows those men and women -- there's about 150 different operational specialties in the Army. You can do a lot more than just fast roping into targets. And they're scientists. They're cyber experts. They're lawyers, doctors. So we wanted to show them there's vast opportunity for you to reach your potential. We had like 100 million hits within the first week on YouTube. So I'm told that's pretty good so the, you know.
So we're excited about it. But so much of the expertise of marketing is you hit a pair of eyeballs, you got to hit them again, like five or six times before you can get a young man or woman to come through the door and have a conversation. So it's got to be unrelenting, but we're bringing sophistication, geofencing. So when I'm on my iPhone and I'm looking for a pair of running shoes and I don't buy the shoes, every time I turn my phone on, Nike, Nike, Nike, and I finally get, "Enough, give them to me," and I'm like, you know, and you buy them finally, right?

Mackenzie Eaglen: Right.

Ryan McCarthy: So, we're using techniques like that. And it's showing improvement because we can't do the 1980s brick-and-mortar salesman knocking on doors with a trunk full of samples. We need sophistication to compete, especially with 3.6 percent unemployment. So we're getting -- we're bringing more sophistication. We're changing the way we're doing things, and we're trying to improve.

Mackenzie Eaglen: I really -- I did not know and I'm glad to hear about your focus on the cities, your outreach to civic leaders in particular. Well done. What's the response been from mayors? Is it, you know, "We need more of the Army with Homeland Defense. Like what are you doing to help with the wildfires?" Or is it just, "No, we understand what big Army is doing in the world?"

Ryan McCarthy: I always tell this story when people ask me about it. There is so much goodwill in the country. But people are just busy. When I was being vetted for the undersecretary job, I was living in a suburb of Dallas. And the FBI talked to like everybody in my neighborhood. And so I would come home at 9:00, there would be grand marquees all over the neighborhood and guys with short haircuts and dark suits are talking to my neighbors. And within a couple days, there's an American flag in front of every house in the neighborhood, and they throw us a barbecue. They're like, "Good luck," you know. And there's tremendous goodwill, but people are busy. And if you don't have a Fort Bragg down the street, you're just -- it's not that they don't care. It's they got to get to work. They got to pick up their kids. They got soccer practice. And they blink, and it's 9:00 at night.
So we had to get out and engage. The mayors are all incredibly supportive. And they want the young kids in their area to be able to reach their potential. And if they can't afford to go to college or they want to find a job, there's an opportunity to serve in this institution, get credentialed access to tuition, and to be able to have some technical expertise on the other side with three-, four-year horizon. Those are great citizens to bring back to your cities. So they've been incredibly supportive.
I was in Denver about two weeks ago, and it's Mayor Hancock and then Mayor Turner in Houston, and it's just Mayor Lightfoot in Chicago. They're incredibly supportive of us. And they want to help us.

We signed these agreements called PaYS, Partnership for Youth Success. So what it does is if a kid joins the Army, in three, four years, they want to hang them up, they're guaranteed a job interview -- not a job, a job interview -- with two organizations under an umbrella agreement with the City of Chicago, the City of Denver, and they get excited about that. And the police department loves it because they'll get 20,000 applicants for 800 jobs, and they
push a lot of people away. So those police departments say, "Hey, take a look at these folks." And if we have the opportunity to hire them, we can send a product back there wasn't a right guy -- you know, man or woman who was in a rifle platoon for four years, did a tour in Afghanistan, it'd be great to have those folks on the police force. So for example, so we've been -- the more and more we engage, it's been tremendous yield and benefit for recruiting but also for folks just to understand the challenges we face. And they're extremely supportive.

Mackenzie Eaglen: And lastly, just tell me in your roughly three years at the top doing this job, tell me your most inspirational story or moment or someone that you met that helps you get out of bed every morning.

Ryan McCarthy: Your kid's going to hold my --

Mackenzie Eaglen: We'll come back to that.

Ryan McCarthy: I might choke up, but -- I won't tell the name of the family but about a year ago was a Green Beret who was killed in Afghanistan. And I'm going to have to say it slow so I don't choke up, but Gen. Milley and I and Sir Major Dailey did the DT the night sector as was traveling in the -- walk into this parlor where you meet the families before you head out to the flight line. And the parents are from a small town, and they looked me in the face, they said, "I know you're busy. Thank you for being here." The extraordinary humility of soldiers and their families and the commitment and the sacrifice. You know, you didn't feel like you deserve to be the boss when you talk to these folks and, you know, that fuels your resolve to do these things. And so when you get to be around people like that.
So that's the one -- I have a picture of that family in my office at home. And I look at it every night. And when I'm doing my homework, so those sorts of things, the quiet things that no one else will see. And there was no band or parade. It was the most horrible event of their life. And they were still incredibly humble and grateful that their son served in our formations. And if that doesn't get you excited to be a part of that, then nothing will.

Mackenzie Eaglen: It's such an honor to serve. All right, we're going to open it up to you guys and to our online --

Ryan McCarthy: Hopefully something lighter than that. You guys are killing me.

Mackenzie Eaglen: Thank you for sharing. We will start with some questions right here. We'll try to keep our questions in the form of questions.

Q: Thank you for a fascinating talk. I'm retired Foreign Service. I'm also retired Army. But I wanted to focus on the title of this event, which included lots of robots in the title, and I wanted to particularly ask about the new strategy that we have and the possibility of high-intensity conflict with Russia or China. Do we have the industrial base to manufacture lots of let's say unmanned tanks or whatever kinds of robot platforms we might be using? Are you comfortable about the state of the industrial base in this country for that type of surge production?

Ryan McCarthy: No, I'm not. I think that it would require the Defense Production Act for us to order Ford Motor Company to make tanks very similar to what you saw in the World
War II era. We have some outstanding American companies that can produce very unique and in some cases exquisite capabilities. But the scale that you're talking about would require some dramatic utilization of authorities that would be similar to what we saw in the World War II time frame.
I would tell you the capability is there, that you could train the trainer you could get people there, but it would require very similar -- there's a great book written about what it took, "Freedom's Forge." And you read about how they did that, and basically, you know, Roosevelt had to look at ways in which to try to start priming the pump. And the whole land lease and these things with the Brits and sending ships was to try to start energizing those muscles. But it took the war and those authorities from Congress to go turn to the American industrial base and order them to do something else.
Mackenzie Eaglen: What about, Mr. Secretary, in a smaller scale? Are you comfortable with what the Army wants to do with AI and robotics in the industry currently?
Ryan McCarthy: So we're very excited about -- the Chinese and the Russians are investing against this. But they're trying to -- in particular the Chinese, they gotta send all their kids here because we've got all the brainpower, all the innovation's in America. And the communist system doesn't incentivize you to innovate.
The good thing is is their whole philosophy and way of life will inhibit their success. They're going to have to muscle their way through it and steal from us, which they do. So I think that when you -- from that standpoint, the brain matters here. If we focus and have, you know, more of an almost Manhattan Project--like focus at the national level, I think you'll be able to see us move faster and at scale.
The Army has a relationship with Carnegie Mellon University for artificial intelligence task force, which is -- there and probably I would say Berkeley are the two fastest-moving institutions in the country where all the thought leaders are and companies are kind of mushrooming outside the campus. Both places is where we selected Carnegie Mellon to be our hub. And we've have a directed spoke like efforts through Army Futures Command in the University of Texas at Austin. We have a robotics lab, Texas A&M, we're doing some testing. We have relationship at Cal Berkeley. We're looking hard at expanding MIT and others.
So our artificial intelligence efforts are picking up, but we have to get cloud architecture. The cloud architecture truly maximizes the artificial intelligence--like capabilities because it's all about the speed of the move -- the format of the data and the speed in which you can move it. And then you can make the controls and the choices. Do you want to push it down to the tactical edge because you have to? And how fast you can move something from the tactical edge to a higher-level echelon to make a much more larger-scale decision.
So, we have made the cloud a priority. We put a lot of money against it. We're getting a lot of help from the private sector. But cloud has to happen to maximize AI. There's a lot of energy in AI. And everybody's going to conferences, and they're reading books and talking about it. But if you talk to the people in the financial industry, who basically did it first, you know, the online trading with writing in an algorithm that helps you make a decision whether or not to buy a barrel of oil or not. That's from cloud architecture.
So we have to put that in place and then those AI-type algorithms that we'll put into long-range fires and everything else that'll be maximized. And then all of the investments are tied together. So we're pressing hard there. You'll probably see more of that, Army leaders talking about the cloud, and less so on AI, because you got to put the horse in front of the cart in order to pull it.

Mackenzie Eaglen: Thank you. We'll go right here and then over here.

Q: Hi, Jen Judson with Defense News. I'm also going to ask a robotics question. It's my understanding that the request for proposals that came out for the robotic combat vehicles, both light and medium, strongly suggests that the companies developing platforms for that work with a particular company that's supplying an autonomy package to the system. Is that a sign that the market isn't there in terms of autonomy packages that have been certified at this point or meet the standards of the Army? Is there only one company that does that? You know, what's the reason for promoting this one autonomy package as part of the RFP for those two RCVs?

Ryan McCarthy: Well, you know, I'll talk more broadly than just specific to the RFP. But we've got to test these technologies on a surrogate vehicle in order to see conceptually, are we going the right path? So we'll take a weapon system we've had in the formation for a long time, like a Bradley, but we'll put these technologies on the vehicle in order to test them.
If you were to look at, like Uber, I mean, you know, they have a hard time doing this on a grid in Los Angeles. We want to put it on an armored vehicle and ride through the European countryside to fight the Russians at night under night vision, with people -- you know, I mean. So we have to do a lot of testing over the next 18 to 24 months or so in order to ensure that we have the right technologies, and then we can get that RCV forward. But our folks have been talking a lot to the companies that have been doing this. So it's: Can you bring those commercial technologies and then work with an armored vehicle manufacturer? This is really hard stuff.

Mackenzie Eaglen: Okay.

Q: Hi, I'm Dan Katz, US Senate. What role do you see the Army having or playing in a theoretical conflict with China and East Asia?

Ryan McCarthy: So a lot of what -- we're competing against China everywhere. So it's interesting, you know, the immediate reaction when we see the discussion about how are you competing. They immediately assume we're going to go into the first and second island chain and line up across them like a football game.
We're competing in Africa, in South America. They're trying to get 5G into Europe. So when you see the One Belt One Road, it's way more than East Asia. And why Secretary Esper was really smart to bring all the leadership together. How do we make choices if we're to compete against them worldwide? Do you just start stacking capability in the island chains and working relationships with Vietnam, Thailand, and others? You probably need to do some of that more advise and assist, more foreign military sales, more intel sharing, so you can strengthen those partnerships.

But the things that would -- you know, for me is that looking at those European partners, we got to continue to strengthen and protect them. Because if they can get the belt all the way to Europe and dilute our relationships, that's where we've been the strongest, the NATO partnership for over 70 years. So we're working very hard with them on a variety of different things like the Defender Series exercise, and we have over 40,000 troops in Europe there in the spring. We brought many of our partners, the UK and the Australians, and put LNOs in Army Futures Command. So we're looking very hard at how we can invest together in interoperability of our weapon systems along with the training that I mentioned before.

So what I would tell you as you advise your member of Congress that it's looking at the whole chessboard. We obviously got to do well. Half of the world's GDP goes to the South China Sea every day. We're going to have to play there. But there are other places that we have to make choices. And that's where the real chess match begins.

Mackenzie Eaglen: Let me ask a question from online. So you talked about your teammate approach with the chief and trying to broadcast, you know, how to improve unit cohesiveness, friendships, and relationships to also bring up, to tackle some challenges that you're confronting in the Army. Does this have implications? I know the chief has talked a lot about changes to the Army promotion system, particularly with an emphasis on the officer corps, but I think there's more to come. So you know, you talk about eating in the chow hall together and how -- and this is a different era, a lot of people live outside the post gates, a lot of people don't have to go to the PX because Amazon brings what they need to the door, etc. So just sort of in -- does this mean that there are potential -- you know, this concept of teammates and building relationships and the way we all live now, do you want to see changes to the Army's promotion system? You know, could it possibly mean that soldiers would stay with a unit longer throughout their career, other kinds of things like that?

Ryan McCarthy: The chief is very motivated to find a way to stabilize tours, greater continuity at installation so that you're not moving a lot. It's very hard on families. It's hard to build that continuity on a team and improve and have the right chemistry takes a while to build, and then once you get it, PCS orders. So we're going to publish some policies by the end of the year that will allow that flexibility for soldiers to manage their careers not be punished by it, but to still be able to have five or six years at Fort Bragg instead of two.
And we know that'll help families. It'll help units reduce the volume of moves every summer. I mean, moving is so hard, and we've done it. I've done it so many times. The McConvilles are moving again because he's on McNair. He's moving across to Fort Myer now that he's a chief, and he sent me a text message last night all this stuff in the back of a moving -- he's a chief driving as you all across the river. And you know, he's like, "I've done this 30 times. It drives me nuts," you know. And I laughed and, you know, realized that -- because, you know, the vice has a house, the chief has a -- that is how hard it is, even if you've done it 15, 20 times.
So we're going to try to work -- we're going to make sure that we can reduce that. But still make sure that these folks are staying competitive, and then they have the opportunity to get promoted.

Mackenzie Eaglen: I think that will be well received. Tony. There's a microphone, hang on.

Q: Hi, Tony Capaccio with Bloomberg News. Your most controversial modernization program proposal was to see it retiring or truncating CH-47F by -- you said both appropriations committees were very skeptical. They asked for more analysis. The UAE has signaled an intent to buy 10 more. Is the Army going to go back in the '21 budget and push the truncated proposal again? And do you think the FMS sale to the UAE will blunt some of the opposition that Boeing and its lawmakers have mobilized?

Ryan McCarthy: So you know, we learned a lot from that experience. That's why that was my 185 for 186. You --

Mackenzie Eaglen: Tony may have meant that.

Ryan McCarthy: Although Tony identified the one --

Mackenzie Eaglen: He knows it well.

Ryan McCarthy: Tony identified the one very succinctly, the -- so the Congress wanted to make sure they understood the aviation portfolio strategy. And what we tried to do -- and I take all the responsibility here. Secretary Esper made me the point man to communicate this to the Congress. And that we had to find a way to create some trade space. You're bringing on two platforms in this decade or next decade. It's going to be expensive if you're good. And that's really hard. You had to find a way to create some trade space. The 47, we have 10 percent off. We have 10 percent more than we need. They're the youngest platform in the whole portfolio. So if you had to take risks somewhere, where would you go? Right there, undoubtedly. And you have enough time to see what the replacement will be or how the formations will change by bringing in these two new systems. The CAB structure will change over the next decade. So you can take the risk by doing this.
Now, when we explain this to the members, you know, we feel confident because the industry partners that are -- they're investing $4 to $1 on the lift platform. And I can't remember the exact ratio, but they're investing more dollars to our -- you know, on the arm reconnaissance as well. Industry is motivated. These assets are flying. We're not buying in PowerPoint. I'm actually going to see them fly. I mean, they're flying, but I can't get out of the city. But I'll see them after the first of the year. And I've seen videos. They're flying. But so that's exciting for us. This is a golden opportunity for us. We have to capture this.
Now, we have conviction behind our effort. And we're working very hard. I went to the UAE and met with them last September. We're working with the UK as well, on a procurement of 47s. We're looking very closely for the Afghans. That is years of orders to keep that supply chain warm. We have every equity there because our Special Operations platforms are still gonna be the G model 47, same production line. So we know that that is going to be a robust set of orders for years to come. But we're going to have to do what we have to do to have the portfolio financed to bring two new systems on.

Mackenzie Eaglen: It's right here.

Q: Thank you, Mr. Secretary. My name is Mikhael Smits. I'm at FDD Center on Military and Political Power. And I have a question about public support for what the Army does and whether modernization is going to have any effect on it.
I flew back from Egypt last week with a number of folks who'd finished tours with the MFO in the Sinai. They told me they had all the support they needed from the Army through and through, but their biggest downer was the fact that it seems like the public back home in the States had no idea they were there, what they were doing there, why they were there. I wonder if that's something you're concerned about in the long term and whether modernization and the increased sort of automation is going to have an effect on the need for public support for what you do around the world.

Ryan McCarthy: Public support is -- it makes you successful in this profession. You have to have the will of the American people behind you in the US Army. It's as important as ammunition and body armor. We have to have the American people behind us because that's where the support from Congress will come. If the people believe in us, that's why our brand is so important and why we care so much about the way we're perceived and our values, men and women that serve in our formations. So it's something -- it's why we went out to the American cities and tried to convince them, we can take on your sons and daughters, and we can help them mature as individuals and reach their potential.
We have a responsibility as leaders in the Department of Defense to communicate to the American public why the mission on the Sinai is so important. That's a 40-year commitment. They try to keep the peace in one of the toughest neighborhoods on earth. And so we will stay true to that. But it's -- I point the thumb, I gotta do a better job.

Mackenzie Eaglen: I'll take the last question right here.

Q: Hi, Matt Beinart, Defense Daily. So just a quick CR question. We kind of heard before the initial CR was in place that, you know, the Army could kind of weather the storm, minimize the impact under a short-term CR. You know, knowing historically that that was likely gonna happen, you pushed the big kind of, you know, decisions and increases later in the year. So was that the case? Have you kind of been able to weather the storm so far? And what's kind of been the short-term impact, kind of up until this point, you know, knowing that another CR is coming at least for another month or so?

Ryan McCarthy: So we don't know how long the next one's going to be. We think from what our friends and contacts are telling us, but we think it's going to be 'til December. You know, the cumulative impact, we're going to lose three months of the year. And you know, when you're trying to communicate to an organization of over a million people, it's like you're trying to crank this thing up. And once you get it moving, how do you get that boulder over the hill? If you stop or you kind of pump fake, you lose momentum.
So to get everybody spun back up again if we get a deal in the end of December, you know, we start reducing the dial slowly. But by December, January, we're going to start cranking it harder. It won't be just a 2 percent reduction. It could be more. And then the heart -- and, you know, so that's just on a readiness standpoint. And then you get fewer repetitions on the range and fewer repetitions of platoon live fires, everything.
And then from a modernization standpoint, if you're a company doing business with the Department of Defense and you go an entire quarter without buying product from them or less, what are they going to do? They got to face quarterly earnings call. How are you going
to adjust, CEO? And those companies are -- you know, they're not small either, 100,000, 200,000 employees.
So it's that -- it's when these massive organizations have these -- you know, the kind of the knee-jerk stop in the process, they lose momentum. And I keep getting back to the variable that's most important to us is time: time for our people to prepare and to mentally prepare for this.
So we're concerned from readiness, modernization standpoint, when we see what the CR ultimately falls out the length of time. We will try to make the adjustment, but if it goes any further than Christmas, the numbers will start going up on the impacts. And then you'll have day-for-day slips. You'll have time you won't get back for training events, you will lose training events. It has a catastrophic effect over time.
And one of the things I've said for years is that when you have six, seven, eight years of continuing resolutions in a row, you end up breeding a generation of officers that don't know what an appropriations bill looks like. And they don't know what a full training plan looks like. So it's like you're breeding mediocrity in the system. Why would we do that?

Mackenzie Eaglen: Well said. I don't know if the secretary has a reading list. But I'm going to talk out AEI former colleague, Arthur Herman, he referenced "Freedom's Forge" thanks for --

Ryan McCarthy: It's a great book.

Mackenzie Eaglen: Thanks for putting that out there. You do not disappoint. You've been a wonderful guest.
We're going to thank the secretary, but please, remain in your seats as he departs. And let's all cheer for him together. Thank you, sir.

Ryan McCarthy: Great weather outside. Thanks for coming.