00:00:03
[Music]
00:00:15
I'm the Chief Operating Officer of Eads
00:00:17
North
00:00:18
America in uh Washington DC we' got
00:00:22
about a billion six in
00:00:25
revenues and uh we
00:00:28
essentially in charge of North America
00:00:30
was selling helicopters to the Army and
00:00:33
uh competing with Boeing for the tanker
00:00:37
program which what's probably what most
00:00:38
people are aware of right now although
00:00:41
we're doing we're selling about $400
00:00:43
Million worth of helicopters to the Army
00:00:46
sell Coast Guard nearly all of their
00:00:49
helicopters and and all of a transport
00:00:52
aircraft were probably the largest
00:00:53
supplier to the uh Department of
00:00:56
Homeland
00:00:58
Security and we just uh we're providing
00:01:01
a radar for the Navy's new
00:01:05
uh
00:01:07
uh major ship things like that major
00:01:11
basically what we are trying to do is uh
00:01:15
bring really good products from Europe
00:01:18
here to the United States and build them
00:01:20
in the United States to provide
00:01:21
competition and provide a a pathway to
00:01:28
Europe
00:01:37
my talk is sort of based on my
00:01:39
background uh you don't know this but I
00:01:42
I spent 32 years in the
00:01:44
military and uh and then I went to and I
00:01:49
form went to work for defense companies
00:01:52
and then I went back in the defense
00:01:54
department as political pointy and I was
00:01:56
the number two guy buying things for the
00:01:58
defense department and it was in number
00:02:01
two guy in charge
00:02:02
acquisition then I went out and formed
00:02:04
my own company and advised all the major
00:02:08
defense
00:02:10
companies and then I went to Iraq uh and
00:02:13
I was uh the the Minister of Finance for
00:02:18
Iraq and also for the United States in
00:02:21
Iraq for Bremer and I was the director
00:02:23
of management budget in
00:02:25
Iraq and I was also a minister of
00:02:28
planning
00:02:30
and I was really and I was there for the
00:02:32
first five months and I came back and I
00:02:35
was really disappointed because I had
00:02:38
good 's working for me and good Brits
00:02:40
and good Spaniards and good Italians and
00:02:43
good
00:02:44
polls and the
00:02:47
Americans were bright
00:02:50
people but they were not helpful to
00:02:53
me why was that because most of them had
00:02:57
never been out of the United States
00:03:00
and most of them did not understand any
00:03:03
culture other than that from their home
00:03:06
county in
00:03:08
Iowa and most of them did not understand
00:03:12
they had never they didn't they' lived
00:03:14
in Kansas all their lives and they had
00:03:16
not ever feared Iowa invading them and
00:03:20
that brings up a a
00:03:24
culture that makes you not understand
00:03:26
the rest of the
00:03:28
world and so I decided that if the
00:03:31
United States is going
00:03:34
to lead the
00:03:36
world then we need to involve
00:03:39
business and I'd been the military and I
00:03:42
knew how strong and how good our
00:03:44
military is and I knew how good military
00:03:47
to military con uh contacts are because
00:03:51
they are good and I'd been an admiral
00:03:53
and all that so I had been involved in
00:03:55
doing
00:03:56
it and I had been a political point so I
00:04:01
knew how good political Pointes are but
00:04:05
they're limited because there only a
00:04:06
limited number of them but what's not
00:04:09
involved in this business is business is
00:04:13
not
00:04:14
involved
00:04:16
adequately and the thing about business
00:04:18
is once you have
00:04:20
business
00:04:22
involved between
00:04:24
countries is that path a contract a a
00:04:28
conversation
00:04:30
the fact that money is going and you're
00:04:32
both interested in making a product and
00:04:35
keeping people
00:04:37
employed means there's an
00:04:40
Avenue for continued discussion even
00:04:44
when the countries find a reason not to
00:04:47
talk to each other even when the
00:04:49
governments
00:04:52
do and I believe that if which I I
00:04:56
happen to believe the challenge for the
00:04:57
next several hundred years
00:05:01
is to maintain
00:05:03
peace I actually believe that because
00:05:06
I've lived
00:05:09
this uh my children did not see me most
00:05:13
of the time because I spent most of the
00:05:15
time under Seas away from my children
00:05:18
when they were grown up and if you think
00:05:20
about if you were my age there
00:05:23
essentially six generations of people
00:05:25
either have died or spent a lot of time
00:05:27
away from their families trying to
00:05:29
protect us from Nazism and
00:05:34
stalinism so what are you going to do
00:05:36
for the next 400 years because the only
00:05:38
people who have maintained peace in this
00:05:40
world for 100 years since the birth of
00:05:45
Christ were a bunch of people like warm
00:05:47
beer and mashed Peas I mean and those
00:05:50
the only people who've done
00:05:52
it and if we're going to do it we need
00:05:54
to involve everybody and it turns out
00:05:56
the people that are not involved right
00:05:57
now are business people
00:06:01
so how so how do you do it now and so I
00:06:03
went looking for a company that was
00:06:05
doing an
00:06:06
Eads and my belief is the only company
00:06:11
that's truly doing that in the United
00:06:14
States they're doing it by essentially
00:06:18
instead of and there are other companies
00:06:21
that are different models but what
00:06:22
they're trying to do is in they are uh
00:06:26
trying to take really good products that
00:06:29
where the IP is in is maintained in
00:06:32
Europe and come over to the United
00:06:34
States and say we'll bring this over and
00:06:36
we'll compete and then we'll build the
00:06:39
product in the United States and we'll
00:06:40
compete in the United States now as you
00:06:43
know without
00:06:45
competition you have nothing I know
00:06:48
because I was in the in the military and
00:06:51
also in as was a uh political point and
00:06:55
I did not understand it is the thumb
00:06:59
accomp competition that keeps things
00:07:00
fair and keeps things
00:07:03
from uh keeps Innovation going without
00:07:07
that you have nothing it is only
00:07:09
competition government cannot do to
00:07:13
decide
00:07:15
on uh program selection without
00:07:18
competition right now Eads and boing are
00:07:22
involved in a in a very high-profile
00:07:24
competition for a air
00:07:27
tanker no matter who wins the Air Force
00:07:30
will have won because the price of that
00:07:33
tanker will have been
00:07:35
reduced six60 to100 million per plane
00:07:41
that they never would have gotten
00:07:42
without it and Innovation will have been
00:07:45
fueled competition fuels Innovation now
00:07:50
industry left her own devices will never
00:07:53
tell people that our customers that
00:07:55
because we we'd like to
00:07:58
have so Source things and we will invent
00:08:02
all sorts of arguments to tell you that
00:08:05
to tell our customers that why it's best
00:08:07
for them and in each
00:08:10
cases uh that's not the most honest
00:08:15
approach it's not in the best interest
00:08:17
of our customers
00:08:19
competition capitalism and
00:08:21
competition really works for the
00:08:24
customers I think you frequent
00:08:26
infrequently find the particip
00:08:30
actually promoting
00:08:32
that it's not in your best interest if
00:08:34
you have the contract once you get the
00:08:36
contract that's not in your best
00:08:37
interest your best interest is to bring
00:08:40
your second rate or third rate guys on
00:08:43
and have them do that contract and take
00:08:46
your first rate guys on to stealing a
00:08:47
contract from somebody else right I mean
00:08:50
that's what we
00:08:55
do and unfortunately in the the defense
00:08:59
industry frequently our customers don't
00:09:01
realize
00:09:03
that so it's important that we do that
00:09:07
and we need to understand it and I think
00:09:09
it's important and I think that the
00:09:11
competition that brings without
00:09:13
competition you don't have Innovation
00:09:15
ever
00:09:16
since uh we reduced the number of
00:09:19
companies in the uh after the Last
00:09:22
Supper we do not have enough competition
00:09:25
I was really pleased to see Ash Carter's
00:09:27
speech uh two days ago in which he said
00:09:30
he was not going to allow the top tier
00:09:33
of defense companies to consolidate I
00:09:35
thought that was a brilliant
00:09:37
stroke and I absolutely agree with him
00:09:40
and and and if he went down to paragraph
00:09:42
seven of that he talked about the fact
00:09:44
that he looks forward to International
00:09:47
companies coming in because he he talked
00:09:49
about the importance of competition I
00:09:52
thought he had it exactly right and I
00:09:54
thought it was uh I thought it was
00:09:55
really well
00:09:58
done
00:10:00
Innovation happens it is as standing how
00:10:04
conservative and risk approach companies
00:10:06
are as they get larger and how you have
00:10:11
to ensure that you reach down and make
00:10:14
sure that you
00:10:16
[Music]
00:10:19
use the innovation of the smaller
00:10:21
companies and the and the brilliant
00:10:27
people this is not a a problem for us
00:10:30
because we're not big enough to do this
00:10:32
in other words we are a large company
00:10:35
we're actually the largest Aerospace
00:10:36
company in the world and in fact we we
00:10:40
buy more and Export more Aerospace
00:10:43
products from the United States than
00:10:44
anyone I don't know why you realize it's
00:10:46
$1
00:10:47
billion
00:10:49
but in the United States we're not we're
00:10:53
only less than2 billion doll right now
00:10:57
so we're not large enough that I have
00:11:00
this problem in other words I can reach
00:11:02
out and touch all the
00:11:04
people and I don't have the problem of
00:11:07
being risk
00:11:09
adverse people would tell you that's not
00:11:12
my problem I think it would
00:11:14
fine and and so that in my opinion that
00:11:19
doesn't tend to come until you get to
00:11:20
about the 10 billion do level and so
00:11:25
that's not our problem yet and I don't
00:11:27
have to address that
00:11:32
if you look at defense spending in the
00:11:35
last since
00:11:40
1943 defense spending in the United
00:11:43
States is about the
00:11:45
same adjusted for inflation actually
00:11:48
1943 1952 since the invention of nuclear
00:11:52
weapons if you look at it and it goes up
00:11:55
and down depending on Wars and depending
00:11:57
on how we feel and it's not as a percent
00:12:00
of GDP but it's uh it's a percent of
00:12:05
dollars and a temp and you look at all
00:12:07
the countries in the world and whether
00:12:09
or not they have enemies right next to
00:12:11
each other and how they feel about
00:12:13
things and I actually had when I was in
00:12:15
the government I had a bunch of guys do
00:12:17
this and look at it since 1300 and for
00:12:21
all the compan countries in the world
00:12:24
and it's really sort of interesting
00:12:25
because you want to see how countries
00:12:27
react and how they feel about
00:12:29
and all countries are act about the Same
00:12:31
by the way it's really funny but the US
00:12:34
population feels sort of comfortable
00:12:37
with the level of defense
00:12:43
spending in this case it's pretty
00:12:46
significant it's a significant amount
00:12:49
and the amount that the United States
00:12:51
popul feels comfortable
00:12:53
spending happens to be
00:12:56
about equivalent to what the rest of the
00:12:58
world spends
00:13:05
defense that for countries in the U for
00:13:09
companies in the US involved in defense
00:13:12
ought to
00:13:13
be a fertile field for us to
00:13:18
find
00:13:20
uh products to sell to our
00:13:26
customers if we are innovative ative and
00:13:31
are providing
00:13:32
value do I don't know you read this what
00:13:36
secretary Carter said because I really
00:13:37
believe this strongly it's not the
00:13:40
purpose of the United States should not
00:13:41
be the purpose of the United States and
00:13:43
and and secretary car said this to make
00:13:45
a profit on our
00:13:47
allies because our allies have to have
00:13:50
their own
00:13:51
industries
00:13:53
make uh be
00:13:55
robust so that their political uh
00:13:59
parties support them so that they remain
00:14:02
allies and may remain interested in
00:14:04
having their own defense Industries or
00:14:06
else we lose them and we lose their
00:14:10
cultural
00:14:12
support for when we go someplace or we
00:14:14
end up like we did in
00:14:16
Iraq well we get over
00:14:19
there and we do not have support of some
00:14:22
of the key cultural communities that
00:14:26
understand the Middle
00:14:28
East
00:14:29
and it works out just the way it worked
00:14:31
out I think we have to work together I
00:14:34
think we have to buy things from other
00:14:37
countries when their products are better
00:14:41
and I think we have to sell things when
00:14:43
our products are better but I do not
00:14:45
think that we want to crush the rest of
00:14:47
the world nor do I think the US makes
00:14:50
the best products in many
00:14:53
cases and I think that's a fact when I'm
00:14:57
in Iraq when I was in Iraq
00:14:59
I was lying underneath the desk making a
00:15:03
phone call I was called by the Pentagon
00:15:06
I'm being under
00:15:07
mortifier Pentagon called me to get me
00:15:10
to call a company in Belgium to get them
00:15:13
to make breast plates for the armored
00:15:17
that would stop an armored bullet
00:15:18
because the company in the US couldn't
00:15:20
make good enough breastplates right and
00:15:23
I also need to call Congress to get them
00:15:25
to wave them buy American ax they' buy
00:15:27
the breastplates so could put on his
00:15:29
soldiers
00:15:33
now I thought this was sort of odd that
00:15:35
I'm getting shot at and there's nobody
00:15:37
in the Pentagon that knows who the right
00:15:38
guy to call in Congress to get him to
00:15:40
wave this to buy the breastplate but
00:15:43
since I didn't have one I thought might
00:15:45
as well go ahead and do
00:15:47
this that's crazy right you understand
00:15:50
what I'm saying there ought to be more
00:15:52
than me that knows how to make the
00:15:54
system work and knows it's a guy in
00:15:57
Belgium that makes better breast blad
00:16:00
than anybody in the United States
00:16:02
Belgium has always been known for doing
00:16:04
this better it happens to be well
00:16:07
known there a country that makes better
00:16:10
ammo this there are
00:16:15
various United States does not
00:16:19
have that does not have the repository
00:16:22
of
00:16:24
genius and we know
00:16:27
this
