Industrial Base and Workforce Development for Skilled Trades

Uh, discussing all of this is the day to choose. Thanks everybody.

Well, thank you, George, Congressman Whiteside, for your uh kind introduction, and with that the committee will come to order. Today the subcommittee will conduct a field hearing on the defense industrial base and workforce development for skilled trades. I want to thank my colleagues, Congressman Case, Congressman Valadao, for making the trip to Santa Clarita, California. I also want to thank Doctor Reyes and the College of the Canyons for hosting this field hearing on topics that are central to your vision and mission, and critical to the defense industrial base. Today we'll exchange ideas with three witnesses representing government industry and academia over two panels. The witnesses for the first panel are, Mister Eric Tuning, Executive Vice President, Maritime Systems, and Corporate Strategy, Huntington Ingalls Industries, and Doctor Michael Reed, President of the Pennsylvania College of Technology. Thank you for supporting the defense industrial base and workforce development and skilled trades. As you are keenly aware, the foundational aspects of our industrial base are often taken for granted. We assume that critical manufacturing inputs such as m- minerals, sub-tier suppliers, skilled labor will always be available. This assumption is false. We must deeply understand what investments are needed to protect and strengthen the industrial base and this requires input from a cross-section of stakeholders which is why we are here today. Over the last several years, appropriation bills have supported significant investments for workforce development for skilled trades, largely for ship building. Accordingly to an analysis conducted by McKenzie, published in January of twenty-six, between two hundred and two hundred and fifty thousand, maritime workers specializing in welding, assembly, fabrication, and front-line management are needed in the next decade. It's worth noting shipbuilding is one of the many industries with a significant demand signal for welding and fabrication. And obviously that's shared by the aerospace industry also, which is significant here in Southern California. According to the American Welding Society, approximately twenty percent of the welding force are approaching retirement, are in two thousand twenty fi and two thousand twenty five, they're estimated to need at least three hundred and twenty thousand new welders by two thousand twenty nine. These estimates are prior to the data center boom, which requires heavily on welders and fabrication. Workforce development or sk of skilled trades is no small matter. Proficiency in skilled trades requires hand-on laboratory work with industrial machinery. These machines cost millions of dollars and their industrial power Draw requires significant energy load capacity. Additionally, masterly talent is required to teach the next generation and retain professionals into these skilled trades. Recruiting mastery talent requires resources. The the all-in cost to develop a skilled trades workforce is significant, and this assumes academic institutions have access to power, infrastructure, and not to mention, an ability to expand and to meet current demand. Even when resources is provided and infrastructure exists, skilled trades viewed as a valu or skilled uh uh viewed uh uh viewed as a valuable career. As conveyed in the same twenty-six McKinsey report, a multi-generation stigma on skilled trades remains pervasive, which in my view undoubtedly decreases the number of people considering a career in skilled trades. We must work together to eliminate stigma on skilled trades. Decades of innovation have resulted in manufacturing technology and industrial careers that are not nearly as difficult, dangerous, and dirty as years past. I commend the Department of War for partnering with Mike Rowe Works Foundation and the National Labor Exchange to launch the Build Freedom campaign. The mission statement is to build the workforce that builds and defends America. I look forward to learning how Congress can support this effort. In two thousand twenty four the subcommittee held a field proceeding on innovation. Today the subcommittee is holding a field hearing on Industrial Base and workforce development for skilled trades. Field proceedings and hearings are reserved for only the highest priorities. As chairman supporting and promoting innovation and the foundation of the Industrial Base, these are my top priorities. I would like now like to turn to Mister Case for his opening comments.

Thank you very much, Chair, and aloha to all of you. Uh thank you, Chair, and our witnesses for this opportunity for us all to c address critical infrastructure-based workforce challenges that are in turn critical to the defense industrial base that is required for our national defense over the next generation I express greetings and appreciation from my ranking member Betty McCollum uh for whom I am filling in today, and a special thanks to our colleague George Whitesides. in whose district we are, and who is himself a leader on defense and especially on strengthening our defense industrial base. We all know that our defense industrial base has eroded significantly over the past generation, plus adversely affecting our advanced manufacturing and repair and maintenance capacity across several integral areas, including supply chains, access to critical minerals, and especially our trade workforce. What we are focused on here is not how we got here, but where we must go over the next decades to overcome the challenge. Our specific focus in this hearing is on our industrial workforce and how to develop and implement thoughtful sustainable solutions to recruit, train and retain skilled workers not just now but over the next generation. In doing so, we must realistically assess our challenges, including a shortage of welders, electricians, pipefitters and other skilled trades, seventy-six million baby boomers, retiring, as the chair noted, a too prevalent bias against careers in the trades and difficulty in recruiting international talent from our allies and partners. We must also factor in changes in industrial production over that same generation that will significantly alter our projections and assumptions as to workforce needs such as AI and robotics, maximized leverage of expertise and funding across government and the private sector. We appreciate this administration's building on previous administration's efforts to develop our nation's defense industrial-based workforce. And on this defense appropriation subcommittee, we are especially interested in specific programs, funding and other efforts inside and through the Department of Defense that will amplify our efforts. As part of that, these are a couple of issues that I hope we focus on here today. First, we need a better understanding of the current administration's strategy for workforce development, generally and especially through the very promising Build Freedom campaign, specifically what is the ultimate target, what metrics will you utilize to track our progress, and what will it cost? Much of our effort is through the Industrial Basin Analysis Sustainment or IBAS program which also is producing results. The fis fiscal year twenty twenty seven IBAS request for workforce programs is about a hundred and sixty million in discretionary funding and close to two point three billion in mandatory funding. It would help us to understand how, if provided, these funds will help the administration meet our goals and over what time period, and, most directly, how would your efforts be impacted if the proposed three hundred and fifty billion additional reconciliation package is not enacted. Are there other existing programs that address our needs, and are they properly identified and funded? What are the known gaps in our current approach, and what ex what unexpected challenges have we faced along the way? Finally, we need to better understand how these programs tie into other programs within the department or across other departments and agencies. For example, many current Department of Labor programs serve to enhance community colleges such as this and other workforce training programs. How are we working with them to avoid overlap? I think we all realize we can also not solve this problem through spending alone. We would like to understand from our witnesses, especially in our first panel, how we can help find, develop and meet our workforce needs by working directly with primary schools. Regarding the administration's proposal to quote " deploy a national K through twelve curriculum aligned with defense industrial-based skills", we need to understand which groups and business partnerships will inform this curriculum. Will it be accredited? How many educational institutions are we hoping to reach? What will it cost? We would also like our witnesses to address how to retain trained workers, since training and recruitment is only half the challenge. Further, we'd like to discuss the buildfreedom.us website's representation, that these defense industrial jobs are quote " AI proof six figure jobs", because hands-on trades are harder to automate. This characterization seems to overlook the major leaps forward in robotics which are made possible by AI and machine learning, and we encourage our young people to train as we encourage our young people to train for trade jobs, We must realistically assess whether the jobs we are all investing in are those that we will actually need over our generation. And ultimately, all of these challenges will require multi-generation investment, so we need to continue this work in earnest. I offer Pearl Harbor Naval Shipyard in my own district and other efforts in Hawaii, as examples of how the defense industrial workforce of today and tomorrow can be trained, recruited and retained. Our shipyard's success in these areas, with close to seven thousand high-quality Maintaining and repairing some of the most complicated and sophisticated equipment in our military has been sustained by investment over generations in the workforce the shipyards apprentice program which reaches initially down into the middle schools draws thousands of applicants each year and is is secured jobs for multiple generations within the same family. Additionally, with IBAS and other assistance from the department, Honolulu Community College offers advanced manufacturing courses and capacity to meet defense industrial base requirements in the Indo-Pacific, the heart of our nation's pri priority theater. This and other efforts are facilitated by a very close coordination with our Pacific command with direct involvement from Admiral Poparo and especially through its regional sustainment framework. Across our nation we see many opportunities and many challenges in rebuilding our defense industrial base.

I want to thank Chairman Calvert,

Thank you.

Mister Case, and the subcommittee for a hearing on this critical national security issue. As a lifelong farmer,

Thank you, gentlemen. Uh, just uh, wanna make a comment, Mister Mike Rowe, who's a host of the Dirty Jobs in the way I heard it, and CEO of the Mike Rowe uh, works foundation and an unwavering leader and subject matter expert on these topics, was invited to participate in this hearing, but unfortunately was unable to attend. Mister Rowe has sent a video statement for inclusion and without objection, his video statement will be included in the record and without objection, we will now play his statement.

Hello friends. My name's Mike Rowe and I am delighted to be here with you today virtually to offer a very brief testimony at this field hearing for the Industrial Basin workforce development. First of all, to Chairman Calvert and Ranking Member McCollum, apologies for my casual attire and non-traditional surroundings. Circumstances beyond my control have brought me to Northern Wyoming, of all places. It's a long story. I would much prefer to be there with you in person, however, because this issue really is near and dear to me and has been. For the last two decades. Some of you might remember a TV show called Dirty Jobs. It's still on the air. The best thing to come out of that show was a foundation called MicroWorks, which I launched on Labor Day back in two thousand eight. My intent, nineteen years ago, was to launch a kind of PR campaign for a couple million really good jobs that were open in our country. that did not require a four year degree. Electricians, steamfitters, pipefitters, mechanics, welders, plumbers, CNC operators, HVAC technicians, shipbuilders, there's a long list of really good jobs that employers were struggling to fill. So, I did what I could to make a more persuasive case for those jobs and over time, we morphed into a scholarship program and today I'm delighted to tell you that we've awarded nearly to thirty five hundred men and women to help them get the training they need to fill these jobs. Anyway, fifteen years ago, when things started to get going, I went to Congress to pitch an idea for a large national effort to reinvigorate the skilled trades on a national level. I really thought it was important that our country do that because the skills gap was wide and it was getting wider. And today, fifteen years later, it's wider than it's ever been. It's real. Don't let anyone tell you the skills gap isn't real. There are millions of jobs open right now, four hundred thousand of which exist in the defense industrial base. These are the people who build our submarines and our warships and our planes and so many other essential items. And I Don't believe I'm overstating it when I tell you that the people you're going to hear from today are here to ring the metaphorical alarm bell. If I had an actual alarm bell, I would ring it right now because not a week goes by that I don't hear from the CEO of some Fortune five hundred company or the leader of some consequential industry, or a governor, or any number of elected officials who are starting to understand just how serious the issue is. We have a ten to twelve trillion dollar infrastructure that needs to be built out in the next decade. We don't have the workers to do it. In the private sector, that's making people's heads explode. But in the Pentagon, it's a matter of national security. We simply must reinvigorate the skilled trades, and we need to do it yesterday. I'm so happy to tell you that Mike Kadnazi is on the case, the honorable Mike Kadnazi. You'll be hearing from him today. He was the guy who just six months ago reached out to me fifteen years after I testified before Congress to say, OK, let's talk about what this campaign might look like. What it looks like is an initiative called BuildFreedom.us. He'll tell you more about it But you can go to the website any time, and you can see for yourself just how much opportunity exists today, and how important it is that we close the skills gap. That's my message in a nutshell. Again, I'm sorry I'm not delivering it in person, but from a Motel six. Anyhow, that's the way it is. Thanks again. Good luck with the hearing.

Thank you, Mike. It looks like a nice Motel six.

Hello, friends.

Uh, uh, we thank uh, Mister Rowe for contributing to this hearing. Gentlemen, your full written testimony will be entered into the record. Please provide a summary of your statements. Uh, we're going to start with you, Mister Tuning. Uh, we uh, happy to give you recognize your time for your opening comments.

Um, Chairman Calvert and members of the subcommittee, thank you. Thank you for this opportunity to testify about America's defense industrial base and skilled workforce. This is the fourth time I've offered testimony to the US House of Representatives on defense industrial base issues. And I appreciate this subcommittee's unique importance to keeping our war fighters armed and ready in their freedom forge working full blast. I serve as the executive leadership team on HII, America's sea power company. The mission of HII is to deliver the world's most powerful ships in all domain solutions, in service of the nation, creating the advantage for our customers to protect peace and freedom around the world. Our ability to execute this mission is only possible by a dedicated, skilled workforce of forty-five thousand employees. My HIA colleagues represent a remarkable mix of skills. Everything from high school apprentices in maritime trades, like pipe fitting and welding, To master ship builders, with over forty years of ship building experience. To PHDs in cutting edge scientific fields, driving state of the art advances in manufacturing, artificial intelligence, and autonomous systems. Each of our three divisions, Newport News Ship Building, Ingalls Ship Building, Emission Technologies, fulfills a critical role in the generation of sea power and the integration of all domain capabilities. While our three divisions have unique needs for their respective workforces, the importance of workforce development and the continued recovery of the maritime industrial base remain paramount in the execution of our mission. HII has been building and modernizing warships since Teddy Roosevelt's great white fleet first established the United States as a global maritime power. In our hundred and forty year history, we have seen the ebbs and flow of US shipbuilding. The post-COVID-nineteen era had been particularly hard for US heavy industry, shipbuilders included. And while challenges still remain, we are confident in the American shipbuilding renaissance currently underway. Today, with a sense of urgency, we are using our hard-earned experience to accelerate throughput in our shipyards. and revitalize American shipbuilding. In twenty twenty five, throughput in our shipyards increased by fourteen percent year over year. And with approximately forty ships at Ingalls and at Newport News in active construction or modernization, our focus in twenty twenty six is clear. We must build on this momentum and continue delivering ships at greater pace to the US Navy. We are targeting a fifteen year percent, a fifteen percent year over year throughput increase in twenty twenty six. Our throughput acceleration strategy consists of three parts. First, we are hiring, teaching, and retaining a twenty-first century workforce through wage increases, a network of vocational schools, in-yard education, world-renowned HII apprenticeship programs, and quality of life investments for our shipbuilders. Our shipbuilding workforce has endured in spite of the double-digit attrition driven largely by the inflationary impacts of the post-COVID-nineteen economy. Thanks to support from the Congress and the US Navy, earlier this year, Engel's ship shipbuilding entered into a new collective bargaining agreement with Union leadership at the shipyard. The contract provides an immediate base wage increase of at least eighteen percent for Union-represented shipbuilders. And projected total wage growth of between thirty-five to forty-seven percent over the life of this agreement, marking the single largest wage increase in the history of English shipbuilding. At Newport News, collective bargain agreements were extended with our unions in twenty-twenty-five, providing steelworkers, for example, an average base wage increase of twenty percent, with projected total wage growth at thirty-one percent over the life of this extension. Collectively, these investments reflect a commitment to maintaining a highly skilled workforce by providing competitive wages and a standard of living commensurate with the critical demands placed on our nation's shipbuilding industrial base. Second, we're building new shipbuilding infrastructure with approximately six hundred million dollars in capital investments planned for twenty twenty-six alone. An example of our deployment of new manufacturing technologies is our high yield production robotics or hyper program. which leverages a network of emerging industrial technology companies like Path Robotics and Grey Matter Robotics to rapidly accelerate our use of physical AI in shipbuilding. Earlier this month, we announced an historic contract worth up to nine hundred million dollars with our hyper-partners, where we would guarantee production agreements should their technologies meet Navy certifications and demonstrate improvement on cost and schedule, to Navy programs. Third, We are expanding the maritime industrial base by growing our supply chain and implementing a distributed ship building strategy. We plan to outsource over two million hours of work in twenty twenty six, a hundred and seventy eight percent increase from twenty twenty four. We have partnered with twenty three smaller shipyards and manufacturing centers to build components and large structure for integration within our shipyards. Not only does this approach increase our throughput, but it also creates jobs in communities across the country. This strong demand signal gives small and medium sized businesses improved confidence to invest in their own capacity and workforce, cont- contributing to shipbuilding industrial base revitalization. In conclusion, I'd like to share an example of the American shipbuilding renaissance in action. Last year we acquired the assets of W International in Charleston, South Carolina. The business was underutilized and employed several hundred welders, most of whom were trained at the local community college, Trident Technical College. In W we saw a vision for a flexible advanced manufacturing campus that would uplift the submarine industrial base. In partnership with the Navy, we invested to modernize the facility. In partnership with the state of South Carolina, as well as the IBASS program, within the Department of War's Industrial Base Policy Office, we expanded the local training programs to grow not only more welders, but also a broader set of maritime trades like electricians and pipefitters. Today, we are on a path to grow our Charleston workforce to a thousand shipbuilders by the end of this year. And there's more room to grow. A powerful example of what we can do when industry, the federal government, and state governments work together to revitalize America's maritime dominance. I want to thank the US Navy, Congress, and this subcommittee, For its support, we look forward to continuing to work together to strengthen America.

Thank you. Thank you, uh, Mr. Tuning. I now recognize Doctor Reed for your remarks. Doctor?

Chairman Calvert, Mister Case, and Valadio, and distinguished members of the House Appropriation Defense Subcommittee, thank you for the opportunity to address you today regarding the critical importance of workforce development and skilled trades education to America's defense industrial base. I'm Michael Reed, President of Pennsylvania College of Technology in Williamsport, Pennsylvania. Penn College educates and trains approximately ten thousand students and incumbent workers annually through degree, certificate, apprenticeship, dual enrollment, and short-term training programs. For more than one hundred thirteen years, we've adapted quickly to industry needs by preparing a highly skilled workforce through a hands-on industry-driven education model. Our story began with returning World War One veterans learning new skills to re-enter the workforce. Penn College is a nationally recognized applied technology institution and special mission affiliate of the Pennsylvania State University. This collaborative partnership is closely aligned with Penn State's land-grant mission. Together, Penn State and Penn College create a powerful combination of research, innovation, and workforce development. Penn College graduates enter careers in advanced manufacturing, welding, automation, aviation, heavy equipment, electrical, construction, information technologies, transportation, and other essentials and other essential to America's economy, international security. Just as importantly, they develop durable skills, including problem solving, adaptability, communication, collaboration, and confidence. Employers consistently tell us, we produce the workforce that knows how to figure things out when challenges arise. Today, I urge the subcommittee to recognize workforce education, particularly investments in skilled trades as a strategic imperative for our national defense. Twenty million American worker work in skilled trades, yet we're not producing enough talent to meet demand. Today, there are roughly three jobs open for every skilled trade graduate, creating a workforce gap of more than one million workers. As nearly one quarter of the skilled trade workers approach retirement, this challenge will only grow. America possesses the most advanced military systems in the world. But those systems ultimately depend on skilled workers who build, maintain, troubleshoot, and deploy them. At a time when our Department of War is calling for greater manufacturing cap capacity and defense readiness, we simply are not producing the technical talent at a rate required to meet demand. Aircraft, submarines, and naval ships, armored vehicles, and weapon systems cannot exist without welders, machinists, electricians, automation specialists, mechanics, and countless others highly trained technicians. In Pennsylvania alone, the defense workforce now includes approximately one hundred ninety thousand employees across nearly nine thousand companies. More than two hundred eighty-eight thousand defense-related parts are sourced in Pennsylvania. These numbers highlight the importance of maintaining a strong pipeline of skilled workers. I'd like to highlight four key points with you today. First, workforce demand continues to outpace supply. Manufacturers throughout the defense supply chain consistently report difficulty filling positions requiring technical skills and indust and industry credentials. At Penn College, employers regularly recruit recruit our students before graduation and tell us they could hire significantly more graduates if they were available. Penn College graduates achieve a ninety-eight percent placement rate, and according to the US Department of Education's College Scorecard, our graduates now earn thirty-six percent more than the national average for all college graduates. To be clear, the challenge is not job availability. its talent availability. Second, education industry partnerships are essential. Addressing workforce shortages requires strong partnerships between educators and employers. At Penn College, more than four thousand employers shape curriculum and training experiences. Industry supported equipment helps power our hundred fifty plus labs, and last year alone we implemented more than two hundred curriculum updates to keep pace with industry needs. As Congress considers investments to strengthen the defense workforce, I strongly encourage support for institutions and programs with demonstrated success and capacity for growth. Strategic investments in proven programs, equipment, faculty, and employer partnerships can rapidly increase the number of skilled workers available to bolster the defense industry base. One example is Penn College graduate Ken Healy, who's now the Executive Vice President, Director of Engineering at PMF, which is precision metal forming industries. a Pennsylvania manufacturer that supplies critical components to the aerospace and defense industries. Today, Ken hires C- Penn College graduates and interns to help to help meet the workforce needs of his growing business. His story of rapid growth and superior production capabilities demonstrates the power of workforce education and the importance of maintaining a strong pipeline of skilled talent. Third, the talent pipeline challenge is growing. While workforce demand continues to rise, the number of traditional college-age students is shrinking. Pennsylvania is projected to experience a seventeen percent decline in high school graduates between twenty-twenty-three and twenty-forty-one a trend occurring across much of our country. To meet this challenge, we must expand technical career pathways, strengthen career and technical education programs, support apprenticeships, and increase awareness of the opportunities available in the skilled trades. These are good paying jobs with a bright future. These are jobs that are also less likely to be re replaced or reshaped by artificial intelligent intelligence. Fourth, workforce re-skilling and support for displaced mark workers must remain a priority. Meeting workforce needs will require more than attracting the next generation of workers. We must also create pathways for adults seeking new careers and displaced workers affected by technological and economic change. At Penn College, we have seen how short-term training programs, apprenticeships, and industry-recognized credentials can help individuals transition quickly into high-demand well-paid careers, and contribute to our workforce. Flexible financial aid and support for short-term training programs can significantly expand the talent pipeline, while helping individuals achieve economic mobility and long-term stability. In conclusion, America's military strength depends on America's workforce strength. The defense industrial base cannot grow, innovate, or meet national security demands without the tech the technically trained people. Investments in workforce education, technical training, apprenticeships, scholarships, re-skilling programs, and skilled trades development should be viewed not simply as an educational expenditure, but as a strategic investment in national security. To address workforce challenges at the speed required to meet national security demands, we must build upon what already works. invest in existing facilities, programs, equipment, and partnerships that are already producing strong workforce outcomes, and and are positioned to succeed. When Penn College invests in expanding capacity, our programs do grow. The college also traditionally maintains wait lists for programs that align most closely with the defense industry workforce needs, that are positioned for expansion. On behalf of the Pennsylvania College of Technology and our many industry partners, I thank the subcommittee for its leadership and attention to this issue. I respectfully

Thank you, uh, Doctor Reed. Uh, since the advisory notice of this hearing, my staff's received requests from stakeholders to submit statements of support. Uh, without objection, statements from the following organizations will be included in the record. The Associati Associated Builders and Contractors, uh and the Riverside Community College District. Um f first I'm gonna uh start uh with questions. Uh, Mister Case, Mister Valada and I are going to uh probably go through a couple of rounds here. We'll we'll first uh designate seven minutes and then f for each person and then we'll uh see how many rounds we can get through. We'll go through about two fifteen on this panel, then we'll go to the second panel. So I'll recognize myself for the first seven minutes. Uh we uh went on a tour here at the College of the Canyons and uh one of the things that struck me uh you know in my prior life I developed uh Industrial Parks and things like that at uh over the years and uh it looked like a small Industrial Park uh going through some of the uh requirements that it takes to build uh these these uh these various uh you know, labs. And I know that is extremely expensive. Uh, can you give a feeling of the infrastructure that is required by these uh technical schools to do this and how much more it costs? It must be significantly more than a typical college classroom.

Yeah, certainly. Uh, welcome.

Go ahead, Doctor.

You know, it it is, it's it costs a great deal more to deliver effective applied technology education than traditional education models. As similarly as we walk through the tours you can see the level I I'm gonna speak mostly for from the Penn College perspective, which is a lot of similarities between the campus we're we're on today. Um, when we first think when I first think about infrastructure, I I wanna first look at it as what is that baseline of what's needed to produce highly effective applied technologies. We're sitting on five hundred fifteen acres at Penn College, uh with a hundred fifty plus labs that are already built out, over four thousand ind industry partners, and a highly effectively trained um team. When we think about operations, of what that costs to build out, even just to update and stay current with today's technologies, and we look at just the rapid advancements within uh within the applied technologies and the engineering technologies, our operation costs uh range usually around just to keep things operational about a hundred fifty million dollars a year to build. We could expand, uh but it would take significant investment within those key libraries to build out that infrastructure. I was asked once if we had to rebuild Penn College at a different location from start, what would it be, and it would I mean it would be a ten-digit uh figure to try to build that out, based on the acreage, the labs, the equipment, to build something out of that extensive. And um so when we think about what would it cost for them, the the technologies, it's one is you have to have the financial investment to build, two you have to have the land, the power, the the energy to and you also have to have the the ability to staff it and to build out the the partnerships. uh that are necessary. So it's it is a when I look at our general ed courses in comparison to what our technical courses are students spending a tremendous amount of time working with their hands in the labs, uh to build out those labs it's significantly probably eight nine tenfold to build out that space. And then two, to deliver even on a daily basis it's about four or five times more expensive to deliver those prob just based on the commodities that are go through the energy and the Steve and the uh the staffing numbers that are in that space.

That's right.

I understand that. I'm curious, Doctor, um it obviously the demand for skilled workers are very high. We've we've had this discussion. Um but uh to and you have a supply problem and obviously when you have that, uh ob obviously that uh there's gonna be significant uh demand. Um do the students uh your students uh how how many offers do they get before they even graduate?

I you know, it's

And and then if after they graduate, can you give us a a sense of the salary range for these recent?

Sure. Uh, first, yeah, our students, especially with in the in the programs that we're talking about are are extremely high demand. Um, many students are looking at multiple offers well before graduation. Most of our graduates, whether it's in a certificate, associate degree, or bachelor degree, they they have offers that they're already exploring before their graduation of this of this year. Those those usually emerge during the fall semester. Um, we have a ninety-eight percent placement rate of our graduates. And as mentioned even in testimony, look at the at the um at at the livable wage, um we're we're thirty-six percent higher than the national average of a of a of a US college graduate right now. So what does that land as a as a starting salary? That's usually a between starting salary between sixty-five and seventy thousand, uh with a lot of room for growth. And then there's also the advancement, because we you know the technical skills are so important, but I also wanna point out the durable skills are equally as important for someone who's willing to adapt quickly to learn.

So it's accurate to say that uh virtually all of your students are hired, and they're hired at a thirty five percent plus higher salary range than a four year college. Eighty percent.

Correct. Yes. And we have and we do have four year degrees too, so yes,

You have, yes, but you

we we have a we cover the whole range, so

Right.

But that looks at in the way the US Department of Education, they pulled together graduates of all programs. So that would be I think that includes certificates and bachelor degrees if I if I uh understand the Department of Education scorecard system correctly. But yeah, they do very well.

Amazing. Uh, Mister Case.

Thank you, Mister Chair. Um, Mister Tuning, um, let me just ask you a really basic question. If there's so much uh demand then why isn't the market kind of taking care of the problem? Why aren't we seeing um um you know a you just renegotiated a tremendous new contract with your workers. Does that lead to um um a kind of a cascading effect of of of greater um you know, interest in the program, greater retention, um greater interest on your part in investing in training programs and apprenticeship programs? I guess where I'm going with my question is there's kind of three ways we can approach this. admitted uh challenge, we can we ca I'm talking about we the government. Uh one way is to let the market take care of it. One way is to compl come in with complete subsidies from government, trading, training right across the board just we're gonna solve this problem for you. And another way is kind of the hybrid that we're pursuing. But I am asking the question, if there's so much demand, um will there be an adjustment under which we actually will see Well I mean that's a pretty compelling figure. If you have thirty four percent more coming out of these programs than an average four year degree, that's that's your testimony, right?

Right.

Then why wouldn't we see more people going in to the trades to start with?

Thirty six.

Uh and so I guess what I'm trying to figure out in my head is I don't wanna overreact and throw money where it's not necessary because that will be an adjustment in the market anyway.

Yes sir, I think over time the labor supply will increase to market demand. Um but let me maybe address your question through our lens. As I think about the workforce challenge, it really comes down to jointly attacking four different elements. So the first element for us is how do we find folks that wanna work in a trade? And as we've talked about, um up until recently kind of the culture of the United States has been to get a good job you have to go to a four year college, right? And I think changing that perception is something that's gonna require industry academia and the government to work together on. We do our part. We engage actually at the elementary school level, to addition to middle schools and high schools, about telling folks, hey, going to get a maritime trade, working with us leads to a great life, right? Um, that culture, and I'll give you a good example, folks who come to our apprentice school, we recruit them outta high school, we pay for their time at the apprentice school, that's a two hundred and seventy thousand dollar investment per student by us, They get a multi-year apprenticeship, there's no college debt, and they come out making eighty thousand dollars or more a year. Right? That's a great value proposition, and that should help us over time expand the pool of the maritime trades. The second piece is in that in that in that trade, in in that sort of link is, how do we convince them to work for us? Right? So, if we all agree we need to increase how we think about the the the trades, how do we then as a as an individual employer tell someone, hey, come work with me specifically? The most important thing about My company is our mission, right? We build the most powerful ships for the US Navy. That's gonna get people excited, right? If you believe in the mission, then the second thing we have to do is we have to deliver a a livable wage. And as we talked about in my written testimony, um, up until recently, uh, we had trouble with wages because of the nature of the shipbuilding contracts, right? Although like unlike other industries, we have one customer, most of our contracts were struck as firm fixed price contracts pre-COVID. And when you saw a thirty percent increase in manufacturing, those contracts weren't able to keep pace. Now with support from this committee and and um and the Navy, we're able to get those contracts adjusted and we're able to increase wages, and that's helped uh retain retain and attract people into the workforce. Um the the second element within that is the geographic concentration of shipbuilding trades, right? Uh shipbuilding trades tend to be concentrated in certain geographic areas of the country. So what you find is, employers ch- sort of working to try and get um the same types of trades within that area. So that's led to our work around the distributed chip building plan, where in instances where we can't get the workforce, we'll go ahead and take the work to where the workers are. Uh the third element to touch on is training, and we've talked about that in partnerships like uh with our technical community colleges as well as our our own programs. Um we spend about a hundred and twenty million dollars per year our own training programs within within the company.

How much? Hundred and twenty?

Hundred and twenty million. Um and then even if you

Do you invest in the actual um schools that like I'm I'm talking about a

We we do.

direct investment um in in the you know we saw we saw incredible um capacity here,

Yep.

College of the Canyons today,

Sure.

with the needs for an upgrade uh to provide. Is that do you invest in the schools themselves, a direct investment in upgrading their training abilities.

Yes sir, so we we've got think about our investments along a couple different line lens, so one would be uh in our own facilities, second would be partnerships we have with the eighty different techn um community colleges and technical schools that work with across the country, where it's not just an investment in potential infrastructure, but it's providing the curriculum, it's providing the teachers, it's working to help uplift those pipelines that we need to make our operations work.

Okay. Um, do you um You're right, we did fund you tremendously in the post-COVID time to keep

Mm-hmm.

those uh those incredibly important production lines going, a part of which went to um to to employment, to maintaining your p your employment base. Um With the with the increase in your well, first of all, I think we you have a you have a better demand signal from us. I hope I hope you would agree with that. Mm-hmm.

Yeah. Mm.

Yep. Is that something that has to continue or c are you back to a sustainable level where you can actually uh uh continue to fund your the workforce at the levels you need at the increased salaries that you provided over time?

Yeah, no, I understand. But Yeah, so so so as the b as the pre-COVID contracts roll off, and then we establish new contracts with the Navy for the post-COVID economics, the those contracts reflect sort of the the realities of what it takes to hire and train a workforce today.

Mr. Valdes.

Thank you, Chairman. Doctor Reed, one of the challenges we hear about across the skill trades is the workforce's aging. Many of the professionals with the highest level of expertise have spent decades developing those skills and those are exactly the type of experienced individuals we want helping train the next generation. Is it possible to recruit the talent needed to serve as faculty? And what are the challen are some of the challenges you face in getting someone who has spent a career in the field to make a transition in the cha uh teaching?

Yeah. Thank you. It you know first, I I can't thank our team enough that the dedication and the ex and the skills and expertise of our faculty and staff is is truly extraordinary. And when we look at the applied technologies and the trades and the experiences that they have in industry and how important those experiences are um to to make sure that we're delivering the best programs possible are are just so incredibly important. I uh i so much of it depends on on the program and the areas. Uh some of our programs, particularly in the engineering technology, uh are more complex and more difficult. What we typically see is um somebody working in industry for an extended period of time maybe at a point in life where they wanna give back or build out we talk about, I I really like what you talked about, purpose, and you see if you get to build the next generation that's gonna keep that's gonna be the backbone of our country. You're gonna see you're gonna you can build that that next the next level of tomorrow makers to to drive our to drive our our country forward. So we do get it it is complex, it is difficult, Some programs are more more challenging than other. But, you know, where where that a again where you kind of put on that infrastructure point is so critical is with having four thousand industry partners that help supply our labs, which help drive our curriculum changes, which lead as advisory boards for all of our committees, oftentimes we can we can recruit our our faculty and staff through those programs too. So having that entire ecosystem of growth is is really important.

So how many of your faculty are also working full-time in the trade they teach? And what are they typically balancing between their work in the field and the classroom?

Yeah. So, most of our faculty have worked full-time in industry before, and many of them, while they're I mean, they're they're teaching a lot of heavy. We're we're not a research institution, we're a teaching institution, so our faculty would be teaching anywhere on average between fifty and tw fifteen and twenty uh credit hours. And uh on approximately we have about three hours of lab for every hour of lecture, so our faculty are with our students a great deal. uh within the space. What a lot of our our particularly our our trades experts will do, they will be teaching full-time during the year, but they may be providing consultation with other companies, or during the summers or during the break areas they're spending a lot of time working closely in industry of balancing to stay to stay current within their industry space but also uh kind of maximizing their calendar to to both contribute in the industry space and to to build s the student the the the workforce of tomorrow.

I mean it sounds like it essentially would be two full-time jobs.

Yeah.

Are there ways to make it easier for experienced tradespeople to teach part-time while continuing to work in the field?

I I think it's Is there is there strategies? Yeah, I think there's always incentives that can be that can be made. I think first and foremost of y y we talk we we continually talk about what is our purpose, what is our mission, how do we build, and and oftentimes that is a a lot to build. The other is most of us are wired to wanna help and there's there's opportunity to to help build. I think um creating other unique incentives for for industry partners to share their expertise, I think there's always opportunity there to to get on the radar.

I imagine compensation is one of those, I mean even one of the uh the professors today mentioned that a lot of the

Most certainly.

students were graduating making more money than the per for us or themselves,

Yeah.

and so to take a part-time job, taking less. But what else outside of compensation do you think it could be?

Y you know one is within uh I'm just gonna speak on our ecosystem within itself. Um you you're coming in with our our faculty, we have two hundred seventy full-time faculty on our campus, and you have a two hundred seventy experts that you're gonna be working with and learning with and engaging with every day to try to set the next, the next level. So there's incentive to be able to grow and learn and develop within that space. Uh there's also some some pretty nice benefit incentives too for uh dependents can can also uh obtain this ap applied technology education, at at low or low cost uh within that space. So there's there's incentives to help the family to kinda grow. Um we and we have to make sure we keep our salaries competitive too, to be able to attract in the best talent to build our next generation.

Oh that's fair. Um is there a particular change, whether related to funding, credentialing, partnership uh partnerships with industry or any or something else that would make it easier to bring experienced tradespeople to the classroom?

I I think it's a yes and. I think it's I think there's not a a one fa I think it's gonna have to be a m a a a multi-prong approach. We have to continually work with our industry partners to show, to create those partnerships where we can build those relationships, show the value within the space. We have to be able to compensate our professionals at a level that's competitive. And um, I I think through that process, we'll we'll be able to continually sustain.

So, it was mentioned uh earlier during the tour that sometimes the s the trans transition from the daily graduate to getting the job Um, sometimes you need folks with more experience and companies wanna hire folks with more experience. But, Mister Tuebing, you mentioned earlier that you're taking folks and you've got you're investing yourself. Is that the norm in the industry?

I'm sorry, you know, I can't speak to the way all industries operate. I know just given the importance of maritime trades and like I said, some of the s programs we've established, like our apprentice school's been around since nineteen nineteen. So I think we've had the recognition We've often think of ourselves as a workforce development company, that we're w we've got to invest to make sure those trade skills are there in place. Now, we're obviously operating at a scale, you know, with thirty eight thousand chip builders that maybe small, medium enterprises couldn't, and so they're probably more dependent on on external sources. Um, that said, uh, the partnerships we have with the local community colleges uh across the country are an important feeder for us as well.

Yeah, that's one of the things I hear from parents in my district. most often is kids graduate, they've got a degree in a in a field that makes the most sense, but getting that first job, getting that experience under their belt is always the biggest hurdle. And it sounds like you figure that out with your in your own company, but we need to do that across more boards um more broadly and more industries. And uh I guess question for either one of you in the last twenty seconds, if if you wanna try to address a better way for us to handle that.

You know, I I think I I can what's been effective for us is setting up internships with companies p particularly our local companies um while students are in, are taking their coursework so they can get that that relevant experience. Uh we also have job fairs which which allow students to get even summer internship work or paid paid experience within this field and that gives them, that gives them that experience before they earn their certificates and degrees.

I think we'll be able to come back and when I get a s when we get the second round So I appreciate it, now you hold back.

Great, thank you.

Thanks.

Um, it was interesting in the testimony, obviously it costs significantly more to build these classrooms than it is a typical classroom where you have desks and a partic a particular professor teaching a class. Uh, and it takes more teachers per student, I would presume, because you're working uh with equipment and difficult uh pot potentially, you know, safety issues that have to be adhered to and the rest. Um another issue, when I was uh a young person a long time ago um and was going to high school, uh we had a metal shop and uh we had a wood shop, uh learn how to use a wood, you know learn how to use tools, various other vocational as they used to call it back in the day. Uh those all went away. All went away and um and of course in a lot of schools too, I mean I I remember we had calculus in high school when I was going to high school and physics and all that, all that went away. Uh in a lot of schools, not not everywhere, it's sometimes it's geographical in nature. But that's gotta be a challenge in itself and then I think also culturally, um parents and grandparents wanted to see their children go to college and get a f a four year degree, which is, you know, which which is noble and that's great, but uh sometimes they were uh people are pushed into degrees where it's difficult to obtain a job after they get that four year degree. And uh I guess there may be uh sometimes a a certain stigma attached, as I mentioned in my testimony, uh well not uh you don't have a degree, a four year degree. Whereas the students that you have uh they get a paycheck, and a significant paycheck. And uh and a job, and they don't have stu they don't have debt. All of those positive things. Can you kind of uh how do we get that out to pe uh young people today, that this is an honorable profession, it's well paid, and you don't have the the costs uh uh and I don't uh and and I would hope that the stigma issue is

I I think for both of you, I think.

Yeah, I'm for both of you, I think.

Do you wanna start?

I'm good.

I I think we're making progress. We have a lot of work to do, but we're making progress. Um, when we think about who influences, uh what influences students' decisions, classroom teachers, parents, grandparents, those are the those are the three the three big ones. We're dealing with a generation of parents right now that they're their parents may have lost their jobs to offshoring. We're dealing with grandparents who maybe worked in the in the manufacturing space when maybe it wasn't as um it wasn't like it is today with with the space and they wanna see. So I think there's work that we have to educate those key influencers of what's in that space and also exposure as you mentioned, the we used to within the middle schools and high schools had a lot more access to the applied technologies and the hands-on. And there's there's less of that in in some respect. We're starting to see more of that come back into particularly the high school areas. But that's where like institutions like us and and others that are similar, we ha we have to do everything we can to get parents on our campus, students on our campus, to get in with our industry partners to walk through the labs and the factories and the spaces to see what these jobs look like of today and tomorrow, and to show tho those pathways within. I I do wanna point out is that our students do They still earn degrees, whether it's an Associate of Applied Science or a Bachelor of of Science within that space and um there is cost associated with there and they and one of those barriers sometimes is the cost of tuition and I think there's there's opportunities a lot of our industry partners have have stepped up to provide scholarship or sponsorship within that space we couldn't do what we do without the industry partners but I think there's still an a lot of opportunity to help as we reduce that stigma within that space but also to show how do we make it affordable for

And I I think ultimately the the proof will be in the pudding, right, so as we've established these pipelines, students go through those pipelines, they see the quality of life they have through the economic benefits, the training, they go back, they tell their friends, it scales over time. I I think t- uh what we see is, you know, the people in our programs are excited about it and they go and they tell their friends and they come and

Mr. Case.

Yeah, doc uh doc actually this is both for both of you doc, Dr. Reid I'll start with you. So I made I made a comment in my opening statement just wondering out loud um how we anticipate the job needs of the future, like ten years from now. So let's just say that we're going into the high schools, we all agree we need to we need to try to reach uh people young in their careers to track them.

Mm-hmm.

And we talked earlier today about uh you know getting in in the eighth, ninth grade levels, maybe even earlier in some cases.

Sure.

So you're you're then uh trying to uh um you know interest um a fourteen year old, uh in a in a career that um uh they would commence uh working um and at with experience at twenty four, right? A fourteen year old, two, three, four years, a couple of years of of apprenticeship, they're they're into the full on skilled trades at twenty four. But you're you're interesting them in that ten years before they go into the job. And is that job gonna be there then? Um how how do you try to anticipate this? Um I you know, I I think back to um you know, uh you know, robotic surgery. You know, it's twenty years ago, I I don't think you would have necessarily tracked somebody in a rob robotic surgery, and yet today it's totally normal.

Mm-hmm.

Um and and you know, for that matter, consider that ironically the the the the college degree that that we're talking about here, a lot of those jobs are the most in danger because of AI.

Mm-hmm.

And so How do you how do you shoot into the, you know, shoot at a moving target ten ten fifteen years out? How do you actually how do you work that into your curriculum? Or for the for your for y for your cases how do you how do you track that into your your your workforce um investment? Um and and how does that relate to government assistance? Is it flexible enough to to anticipate that? Uh uh let me start with you, please.

Y you know, first, is I I think we always have to go with our students a bit eyes wide open, as careers are gonna change. industries are gonna change, there's gonna be disruptions within the technologies. And we we try to listen very closely to our industry partners. Again, ev we have over four thousand industry partners, every program is required to have an industry advisory board, not to solve yesterday's problems but to solve tomorrow's problems,

Are you taking your leads from industry is i are you they're telling you what they,

and to Yeah, ab absolutely.

you need,

Most certainly.

what they need.

Yeah, we've we made over two hundred changes to our curriculum last year based on that just ongoing continual feedback and it's how we that's how we teach and we hire industry experts to deliver to deliver these programs. But i again I I still think we we look at what data, what information is available to inform students as they wanna it's always about putting the student the most competitive position for long-term success and when we look at where are the job growths happening, what's projected over the next five or ten years, there's so much within the within the infrastructure, defense, the manufacturing space in our country just based on those needs, and whether AI has massive advancements or not within the current area, those needs are still going to be there. So if people wanna wage on a safer bet, it's likely that y when when our when your air conditioning goes out in your home, you're still gonna be calling a technician regardless of what AI is available. Mm-hmm. When a bridge needs to be inspected and built, it's gonna be the that workforce that goes out when you're doing the the inspections within the space. And that's so I think that's gonna be key is that while there's always gonna be evolution disruptions in how to maximize opportunities, that core foundation of our defense, that core foundation of our infrastructure of our country is is going to be there.

Okay. I'm sorry, Mister Tuning, let me let me I'm gonna go back to him just 'cause I'm running out of time for for another question. Um, we've been talking here mostly about really large complex um, you know, the most advanced machines of defense here, aircraft carriers, submarines, fighter fighter jets, et cetera. Um And so we've been talking about that workforce, but we've got all kinds of stuff that we need in the defense industrial base. We talked earlier today about munitions, which is our really our number one priority here right now.

Right.

Um and we've got a whole range of other stuff going on in defense from very small scale parts being provided to somebody else to mid-scale to larger scale, everywhere in between, all kinds of stuff, all kinds of trades, all c manner of uh of of needs there. Does does does your does your program and the and the support that that you get for your program, do you have enough flexibility to adjust to all of those various needs? Is that a d industry demand like hey I need I need more munitions uh you know small munitions, uh technicians or whatever.

The short answer is yes, we try to develop our programs that have a wide range of of making sure that students have the skills and expertise. And when when I think about like let's just look at uh at the manufacturing and the manufacturing engineering and automated manufacturing, and the amount of subcontracting that happens within some of these smaller manufacturing space to keep our military and those parts maybe the small components. making sure students understand the various techni technologies from a five axis machine to uh uh to working with uh electron uh electronic discharge machines to make sure that they're able to build those high tolerance pieces and when they're being hired by these companies, that company may not be solely one hundred percent military contracting, they might be contracting out with a a l a significant amount of of different partners but they're gonna be they're gonna be well equipped to take on some of the more complex assignments with the tightest tolerances

Okay. Um, shooting at the dark, shooting into the future what you need and how to train to it, what what do you how do you know how your jobs are,

Yeah.

what your jobs are gonna be in ten or fifteen years?

So I think I think there's there's there's two important elements to that. One is the tight linkage between industry and academia, as Doctor Reed mentioned, and then in our case also with the Navy, because the Navy will put a requirement around uh the tech warrant holders around what kind of manufacturing process can go on a US Navy warship and so The that that three-legged stool of us all working together is an important element of it. And then I think the second piece is it manufacturing um innovation, the innovation around how we actually do the processes is so critical. And I think that linkage also helps inform that, because it it's it's it's not like the future will evolve de novo, it's gonna evolve based on how our relationship evolves, how w feedback from the Navy, and all that goes into how we train the workforce. Okay. Thank you. Mr. Baudel.

Thank you. Um I know we finished off and we're cut off. I don't know if you'd wanna add something to that last question I asked, or I can just go on to my next question.

I I I B go ahead.

I appreciate that. Alright, so we'll start off. Um I was one of the shop kids in school. So I took all my welding classes, did all the different things, backed one of the trailers I built as a sophomore in high school we still use on the farm pretty regularly today. Um But today, now as a member of Congress, going around the district, I mean I I've had situations where I like uh one day I went to a graduation for continuation school and talked to a bunch of the kids after graduation. Couple of them mentioned they were going to do some welding programs. And the way they made it sound, the way they said it to me was almost like they were settling and not proud of what they were doing and and I I reminded them like there are lots of amazing opportunities, but that doesn't mean You have to be embarrassed, but there's a lot of money, there's a lot of resource, a lot of opportunity. But how do we get rid of that stigma? That's one of the things that I struggle with the most, and are we getting enough kids? I I I've got some of the schools in my district that are actually investing in some of the shop classes. I mean McFarland's got this amazing McFarland, California just north of here, uh has spent a bunch of money on their shop. They've done an amazing job there, but there's a lot that are starting to pull back. They're getting less students engaged. I mean what are you guys seeing on that front? Are we doing enough to get kids interested in this, proud of this, and wanting to step into these roles.

I w we all I think it's something we need to continue to work on for sure, right? I think we we we all acknowledge that culturally um we've had a de facto industrial policy that has promoted people to go to college and we need to adjust that to get folks actively working in the trades um and and I think what we where we have seen success is through dedicated efforts by the government, both federal, state, and local industry and the local um local educational um resources all providing the same messaging back and getting people excited about what it is. I mean it it and to be honest, it should sell itself.

I agree. I I think we're making progress. When we look at even just the amount of applications that are coming in, the amount of people touring campus, I think that message is slowly getting out. We gotta continually stay pervasive uh pervasive on on that messaging. We talked about how that population is going down, however we have increased enrollment over thirteen percent over the for over the past four years. So we're starting to pull more students into those into these uh such important areas. And I think it i it's a societal problem that we gotta keep hammering because it that student who put their head down when you were talking with them, that's because he got he or she got feedback on that space of i it to f to feel that way because it was if they're feeling less than, they've had an experience from what they've had with the other adults in that area and How do we keep educating particularly the influencers of these of this next generation?

No, and that's the issue that um I struggle with, because even when I take staff or or friends or even colleagues to my family's farm, I drive around and I show them and I point things that I had built, uh welding, uh pouring concrete, whatever I did, and it's something I take pride in, and it's something that I'm like very proud of. My staff I think makes fun of me behind my back because I like to point those things out, but it's something that I think there's an art behind. And when you see some of these folks who obviously do things that are um that you see on the internet the creativity behind some of the designs and some of the products that are being built it attracts folks in that direction but into the industrial side where obviously it's a much larger operation you're not gonna have an influencer inside of one of your ship building yards. maybe should, but trying to bring some positive attention to those types of roles. I mean what can we do more, what are we doing wrong, and what are we missing here?

I I think think some of this may ca may Congress may come just down to time, right, and I think the and an an important element of that is the success associated with programs like what Doctor Reed and I are talking about. People will see the benefits of it, they'll get excited about it, they'll see the new trucks driving around as a result of the of th of the wages and the opportunities associated with it. And absurd to your earlier point, uh people will vote with their feet. I mean eventually the people will vote with their feet cuz they'll see where the opportunity is.

Do you feel like we're doing a good enough job of getting the information out on the opportunities out there for wages and and lifestyle, and all those different uh positives of these roles?

I think I think we're trying, but I think more work needs to be done, given the challenges we've talked about here.

Are we doing enough to get into some of the uh middle schools?

I know for where we are locally, that's a focus area for us. I can't speak to all the areas that are

Yeah. I I think it's uh similarly in some areas, yes. I think these are areas that are that are yielding a result, and we have to perhaps even amplify it even more to get that message out to make sure we hit that tipping point where people see. You know, there was there was something that was said that that Eric said earlier was when we revisit again. When we think about the trades and the applied technologies and we think about what we're talking about today with with our with with our national defense, Like what an opportunity to serve in a unique way, how to how to lift our nation. And I think there's an opportunity there that we could be pushing that message even harder to say one is there's well-paying jobs and two our national security, you could be part of the solution to our long-term national security needs.

Is there room for every student that wants to go to a class to to learn these trades? Or we turn anything away?

Uh there are students being turned away because we we don't have the lab space to

Okay.

handle all the applications that are coming in particularly within some of those targeted areas and I can speak on Pennsylvania too we have seen a shift of more students going into the high school uh technical areas and some of those programs are now getting wait-listed so some of that marketing is getting out, and we gotta figure out where those bottlenecks are. And when we do know where they are, how do we strategically pull together like that three-legged stool to say okay, If we have a wait-list in this program, and we know we have a ninety-eight percent placement rate, and we know our our nation needs it, how do we invest in these areas so that we can continually accelerate and grow?

I think you mentioned earlier that there was almost three job offers for every student.

Correct.

And so there's obviously a bottleneck there. And if there's not enough room for every person that wants to get into these programs,

Yep.

I mean we do need to make some changes there.

Yeah. Yeah. And it's and where that comes from, and and that's why again with my testimony is I think it's I I strongly encourage to look at opportunities to invest in this space. for those that do have the opportunity to amplify and expand, to invest in the long-term security.

Well, the tour we saw today, they're making a huge investment. We just need to see more of that across the country.

For sure.

Alright, thank you and I yield back.

Thank you gentlemen. Um, you know a point it's an interesting conversation, I uh you know I come from the business uh world, and uh some of the best people I've ever worked with uh started at one profession and continued to work through that profession as they got additional You we have so many uh opportunities now to go to night school, now on online, and still get their four year degree. When I was in the restaurant business, small chain of uh you know, uh cooks became chefs and chefs became managers and managers became eventually owners of their own restaurants. And I would have presumed that uh or assumed that the same thing applies if you're a great welder and you're going to night school, you learn how to do other things and Uh you may be an executive at Huntington Ingalls someday, and you're probably a better executive because you understand what's going on in the shipyard uh from day to day and you can see uh the complexities of the industry, from a from that light. And uh so uh I think that uh we we can help hopefully change the stigma to say hey, this is just uh uh not only does it pay good money and you come out of this with a smaller debt, potentially. But you can continue your education and if you wanna move on to uh an executive position at Huntington Ingalls there's I'm sure that you guys love to bring people up from those positions in the into management so uh it's just as we did in the restaurant business so we thank you the both of you for your uh your testimony and uh we're going to uh recess for uh fifteen minutes and then we'll start it up again thank you.

Thank you.

Yep. Okay, this is pretty much the same thing. Here we go. Yeah, actually this is pretty much the same. I don't know. Awesome. Okay, cool. Okay. Yeah, that's pretty good. That's pretty good. Oh, here, nice. If everybody could have their seats, we're gonna be resuming the hearing in about Uh one minute, thank you. Uh today the subcommittee is conducting a field hearing on defense, industrial base and workforce development for skilled trades. In our first panel we heard from the witnesses per- representing industry and academia. In our second panel we'll exchange ideas with the government. The Honorable Mike Condon-Onze, Assistant Secretary of War, for the Industrial Base Policy. In fiscal year two thousand twenty-six I worked with colleagues on both the Defense Authorization and Appropriations Committee to establish and fund a new effort called the Civil Reserve Manufacturing Network, or CRAMIN for short. It exists to address the qualification and certification barriers that prevent commercial manufacturers or new defense manufacturers from serving as critically needed second and alternative sources in our supply chain. CRAMIN was aggressively pursued by Congress, knowing the nation must be able to leverage the national industrial base in addition to the defense industrial base. Now the department must advance the civil reserve manufacturing network to maximize American manufacturing. I'm keenly aware of the difficulty of this task, and equally aware of the upside of breaking through the barriers and constraints related to certification and qualification. Additional manufacturing capability and capacity, which is what Kramen will provide, will not be successful unless we also address our workforce challenges. As previously noted on panel one, over the last several years, appropriation bills have supported significant investment for workforce development for skilled trades, largely for ship building. But we have other uh industries obviously out here in the aerospace industry. According to the analysis conducted by McKinsey, published in January two thousand twenty six, Between two hundred thousand and two hundred and fifty thousand maritime workers, specialized in welding, assembly, fabrication, front-line management are needed in the next decade. It's worth noting again, shipbuilding is one of the many industries with a significant demand signal for welding and fabrication but I would say the same thing about the aerospace industry, here in Southern California. According the American Welding Society, approximately twenty percent of the welding force are approaching retirement and in two thousand twenty five they estimate the need for three hundred and twenty thousand new welders by two thousand twenty nine. These estimates are prior to the data center boom or sometime people now call the compute center boom, which relies heavily on welders and fabrication. Last but certainly not least is the access to critical minerals. Critical minerals are foundational to the entire by providing raw materials to sub-tier suppliers, which manufacture components and increasingly employ the most skilled trade professionals, as compared to the original equipment manufacturers often referred to as primes. We were reminded in April two thousand twenty five of the vulnerability and and fragility of our supply chain when China imposed export restrictions and licensing requirements on critical min minerals and permanent uh magnets. The administration has prioritized investments in critical minerals, permanent magnets, and energy infrastructure, leveraging authorities in the Defense Production Act of nineteen fifty, and the expertise of investment professionals in the Office of Strategic Capital. Understanding the uh credibility of both the Defense Production Act and the Office of Strategic Capital, we worked very hard in fiscal year twenty-six to return Defense Production Act funds to no-year funds and did the same for the Office of Strategic Capital. I would now like to turn to my friend, Mister Case, for his o opening comments.

Thank you, thank you so much, Mister Chair. I I said quite a bit in my opening statement and uh I certainly look forward to secretary's uh testimony along these lines. I think um you know we've heard from both industry and the education uh community and and I think the the the key question we obviously have is are we on the track now from a federal perspective and that has um several ingredients to it. Uh so some of this stuff that we're gonna get into now is a little bit more in the weeds, about okay what are we actually doing. Uh you have some very innovative and and as I said promising and productive programs going um how do we improve on them um how do we fund them because they're on kind of short term funding streams and so that's one thing on my mind in in terms of the next uh chapter of our of our hearing here is how do we how do we keep this uh nascent momentum going and is it is gonna continue to gonna c continue to produce but that's that's really all I have to say for now, Mister Chair, and we'll just get into it.

Thank you. Thank you gentlemen. Mister Valadao.

Thank you Mister Chair, uh appreciate uh the Honorable Kadindasi, I'm struggling with the name and I'd struggle even more with the title, because we've got such a long title, but uh I did listen to you on the podcast with Mike Rowe and uh I enjoyed listening to you there and I'm enjo looking forward to this conversation. I think you bring a lot of common sense to a very important issue that we're dealing with. So appreciate the chair uh bringing this committee together for this specific hearing and I yield back.

Thank you. Uh, honorable Condonanzi, uh your full res testimony will be entered into the record. Please provide a summary of your st uh statements and uh and we recognize you for your opening statement.

Chairman Calvert, distinguished members of the committee. It is an honor to appear before you today to discuss the health of America's defense industrial base, and more specifically, the men and women of that industrial base. I want to thank this committee for the treating the skilled trades with the seriousness they deserve. Let me be clear about the threats we face. For the first time in a long time, the primary threat comes from a competitor who can outbuild us, and many of the most important weapons of modern war. We must meet that challenge by rebuilding the dib. We need to restore America's critical minerals independence, scale production of key munitions, gain full visibility in defense supply chains, and ensure the industrial base is ready to mobilize in the event of conflict. This undertaking requires patience, bipartisan commitment, and willingness to invest in something greater than any of us here today, future generations of Americans. There are no overnight solutions. Prior generations met the challenge, but at no small cost. And the cost grows each day we delay our response. That is my job now, to make sure we have the industrial base to meet that challenge again. My focus here today is on the skilled tradespeople we need to rebuild and scale the dib. The engineers, the pipefitters, the welders, and those who make the world's finest weapons for our warfighters. Decades of government policy and societal pressure have driven millions of talented young Americans towards degrees which haven't delivered the benefits they were promised and have left defense manufacturers with few skilled workers waiting in the wings. There are as many as four hundred thousand unfilled skilled trade jobs in the DIB today, and that number could grow to two point five million by twenty thirty five. The efforts my organization manages are made possible by the men and women of our DIB, whom I call the wizards behind the warriors. Strengthening and expanding our workforce, especially in skilled trades, is both our greatest obstacle and our greatest opportunity to ensure our nation's security. We need to reach Americans in their living rooms and classrooms, break the stigma of blue-collar work, and drive a massive influx of passionate, capable people into these programs. That's why the department launched the Build Freedom initiative this July. Build Freedom will act as a national hiring, training, and awareness campaign to drive America's resurgence in defense manufacturing. Build Freedom aligns more than seventy industrial-based analysis and sustainment, or IBAS, workforce projects under one campaign, ensuring that federally funded workforce opportunities reach the Americans they were designed to serve. We've rolled out Build Freedom in three states, with plans to expand the program nationwide. This national awareness will drive individuals to our new BuildFreedom.US website a one-stop shop where their interests can be converted into scholarships, training, credentials, and job opportunities. I was proud to launch Build Freedom with Mike Rowe and the Mike Rowe Works Foundation, with an initial ten million dollar grant that will fund more than nine thousand scholarships. Our goal with Build Freedom is to send a clear, compelling message to the American public. There are hundreds of thousands of good-paying, IA-proof jobs available today in the Dib and in other skilled trades. These jobs will allow young men and women to serve their country, build something worthwhile, and enjoy a better quality of life for them and their families. The department is taking aggressive action across our workforce portfolios. These programs range across all fifty states and down to the K through twelve level, where last year we reached over eight hundred thousand students wondering about what path to take after graduation. In fiscal year twenty twenty six alone, my office invested three hundred and forty million dollars into workforce programs. Our training programs produced over twenty twenty thousand skilled tradespeople and technical workers for the Dib in the past year. To highlight a few examples, the New England Submarine Shipbuilding Partnership as a part of SINETIA, has trained nearly eleven thousand total students in skilled trade jobs to support the submarine industry. SINETIA can train up to four thousand students per year, is building towards six thousand five hundred students per year. The Talent Pipeline program provides hiring and onboarding and retention support for over six hundred small to mid-sized dib suppliers around the country. Our office is expanding this program to support sectors through the broader dib. There is also a larger ecosystem of service, department, interagency, and local workforce programs. The Office of the Undersecretary of War for Personnel and Readiness recently established the Patri- Patriot Pipeline initiative, which provides transition pathways, including the transition to skilled trades for veterans and their spouses. The Department of Labor recently announced a hundred and sixty-two million dollars to expand registered apprenticeships, including forty million dollars for apprenticeships in shipbuilding and the DIB. The Department of War and Department of Labor have partnered to allow d- active duty service members who log on the job training hours to earn a Department of Labor issued certificate of completion of apprenticeship. The skilled trades have been in decline in this country for too long. If we are able to deter client conflict, we have no other option other than to overcome these obstacles and invest heavily in the men and women of America. Rebuilding the arsenal of freedom is a crucial opportunity to bring back good paying jobs to communities, devastated by factory closures and outsourcing. Under this administration, we are scaling the workforce that will secure this nation for decades to come. The Build Freedom campaign brings new energy and focus to the department's commitment to secure the workforce of the future. The enthusiasm and support we have seen for this initiative has been remarkable. We expect these initiatives to deliver measurable on the ground results nationwide, from Hawaii to Virginia, from the Gulf Coast to Michigan. and everything in between. This is a fight we can and will win. Thank you for everything this committee does to resource these key programs. I look forward to working with you to maintain this momentum and ensure our workforce and Industrial Base can meet this moment. Thank you.

Thank you, Mister Secretary, uh, thank you for that opening statement. I just r- for those who who are not uh informed about acronyms around here, the Dib means the Defense Industrial Base, so

Thank you.

um I just uh, cuz I get sometimes caught up on that too. Uh, Mister Secretary, uh, your your team's leading the way uh in the Civil Reserve Manufacturing Network off uh effort as I previously mentioned. And that's a means to maximize American manufacturing. And as you know, we didn't get here overnight. We thirty years ago um we went down this path of uh managed decline and the and we thought the the wars were over, we defeated the Soviet Union. Uh, at that time we didn't perceive any real adversary. So we went down a path to um basically um um eliminate about fifty percent of our military capability. We probably did a little bit more than that actually. Uh went from about over a little over six percent of GDP to less than three percent of GDP in the national security expenditures Europe even did more. Uh they uh went down to significantly less than that to the point As I pointed out earlier today, the Great Britain has fifteen operable ships in their entire United States Navy. I don't wanna pick on Great Britain, that that's a kind of reflective of Europe right now. It's uh sort of that's why they're going through this process to re-look at their defense budgets and to re-energize their c military capability. But along the way, as you know, we exported our supply chain and uh our industrial base uh elsewhere. primarily to China. And so we woke up especially during the COVID period and found that our manufacturing capability is not what it needs to be, especially for our defense industrial base, and uh which you're obviously extremely aware of. Uh and we're aware of the certification and qualification constraints. I'd like you to share what you've learned about those constraints and what your team is doing to work through these various challenges uh and to get back uh manufacturing into the United States.

Thank you, Mr. Chairman. Uh certification and qualification issues are at the core of what is uh holding back the expansion of the defense industrial base. We have a series of requirements, oftentimes which have been established in the Cold War or shortly thereafter, which are based on a a rosy set of assumptions regarding our availability and access to materials and also the decision making things like shelf stable life for a weapon, since sometimes it'd be thirty years, which drives a set of requirements that are very distinctive, expensive, and hard to meet. Um, we need to go ahead and update those requirements for the future, and there's sort of five key tools that we're focused on to improve that. One, we need to go ahead and rebuild the technical engineering and scientific workforce that actually drives the decision making that underpins the qualification of weapons. Two, we need additional um test equipment at every level to allow us to go through and do the kind of testing necessary to validate changes in weapons systems that will allow us to accelerate. Three, we need a substantially increased range in operational test budget to go ahead and allow us to deploy and fire weapons at a rate that allows us to uh rapidly advance and qualify new providers and new capabilities at every level we need to go ahead and improve our digital infrastructure and data and then five we need to go ahead and update all of the standards and modules and doctrine that underpin how we operate the CNQ enterprise collectively we're working on things like reducing the certification and qualification time line for second source rocket motors by fifty percent. This is a major aggressive target and something that is an example of a focus area within munitions that the department is untaking the Industrial Based Policy team is taking the lead.

You brought up ranges. I I you know I wou I know we have challenges across the board but uh we have to you know, we're on a we seem to continue to operate on a peacetime um operation. I I'll just pick one range out, White Sands. They operate I think nine to five, Monday through Friday, and take weekends off. And um I I hear from a number of folks that are trying to uh test uh their capabilities and to get uh move as quickly as possible um to uh to move their various products um Do you c you share that concern about the range space and how we can use that more efficiently and uh get get things out quicker?

Mr. Chairman, I'm not familiar with the particular issue of white sands, in general I think we are underutilized and underinvested in our range capabilities in the past. They need additional instrumentation. We need more ranges to meet new requirements such as for unmanned undersea vessels, and for UASs. We also need to update statutory requirements. I think uh Andrew O'Neill, CEO of Palmer Lucky has been pretty public on his concerns about rules regarding uh FAA rules regarding the destruction of aircrafts in the US can constrain UAS testing in a way that seems inappropriate when you're actually just um working on to specifically test your ability to destroy UAS's. Um so there's a lot of constraints and we need to modernize the entire range and test infrastructure to meet the needs at the moment.

You mentioned modernization. Um uh we discussed, I'm not gonna pick on any one particular company, but uh the the various companies that have been in the defense industry for some time that have not put reinvested money back into their industrial capability. And their production uh lines are f are literally from the past. And so the cost uh and their capability to build on scale is is not where it needs to be. And uh you mentioned we have some challenges on munitions. Uh what can we do uh to um uh to enhance our defense capabilities by or to and to push these production numbers up? What are we doing to to do then?

Mr. Chairman, as you I think you're well aware, the Secretary of War and the Deputy Secretary of War have been aggressively pursuing uh moving the department to a war-fied footing since the beginning of the administration we've engaged in a series of initiatives you're familiar with uh the Business Operators for National Defense Initiative, the Wartime Production Unit, and our focus on making sure that industry is investing in its production capacity at the shop floor. This is uh uh an a matter of great importance to everyone involved within the acquisition and research and enge and and engineering enterprises. Our office alone will uh push over two billion dollars into munition supply chains within uh fiscal year twenty-six, and to the end of this year. So, this is major priorities for us. We're focused on industry and incentivizing them through the multi-year framework agreements, the MIPS, uh and we're excited to have those funded going forward. We think that sort of demand signal is gonna be critically important for the future. We also think it's gonna incentivize them to solve many of their manufacturing problems, by virtue of the fact they'll be able to invest in things like workforce technology, automation, uh and supply chains, which they need to be much more robust to meet the scaling targets of the moment. It's an all hands effort within the department to focus on these critical areas.

Thank you, uh Mr. Case.

Thank you, Mister Secretary, and um thank thanks for your service, uh I know you've you have other alternatives and you chose this one and um, really appreciate your turning too, I I don't think you were even one year into the job, right?

This one, yes sir.

Okay, please don't lose your perspective. That's one year. is a dangerous time. Um I I'm I'm just gonna give you an open question. Um you you heard the testimony of the uh the discussion that we had in the first panel with uh Mister Tuning and Doctor Reed um you know one from kind of the the trade uh training side and one from industry was there anything in there that you you had a kind of a you wanted to comment on or that you thought was particularly relevant from the perspective of what you're focusing on?

I think it's very critical to under to for everyone to recognize how much effort is already underway by industry and by academia to to start closing the gaps. Neither uh Mister Tuning talked about HII's program started in in nineteen nineteen. Um the Pennsylvania Technical College uh uh College of Technology uh is a college that's been around for a long time working these issues. Uh College of the Canyon's been working these issues at scale for a long time. And so there are multiple efforts underway. I think it also dimensionalizes the scale of the challenge we face. Um so Mike Rowe in our work on Build Freedom talks about that for every five skilled tradespeople that retires two are entering the workforce. So we need to not only double the amount of current capacity, we need to more than double it, and that's just to keep pace with current trends. Presuming we ramp up with the industrial base, we re-industrialize across the board as we start to separate from our number one strategic competitor, we'll we'll anticipate that we have additional demand that we'll have to close for the workforce.

And you know, we were we were talking to two of the uh major players here, course one of the largest uh defense contractors in our country um and then one of the one of the best um you know technical uh training uh programs in our whole country um and it I guess it begs the question how broad is that effort I mean we talked we talked in the first uh panel about um how we're not just building the big stuff we're building the small stuff and the really small stuff and the medium stuff and it's all across the country and do we have even the capacity in that area I mean our our company's focused as uh HII is on on their own internal apprenticeship workforce training programs do they need more help I mean that's a big company, they can do it themselves uh but not all companies can um and then h how much

Sure.

uh you know um capacity do we have in the schools themselves to be able to produce uh the the programs and the people that we need is that an area that we need to focus on as well, provide more far more incentive I I think about the small medium and small sized companies who could just get lost in defense industrial base, sometimes I have them in my district.

So Congressman it's a terrific point, I think we are likely to see the primes, the major aerospace and defense companies, more or less sort out their problems over time, it won't be easy and it won't necessarily be cheap, but they have the resources, the infrastructure and the incentive to pull in the the resources and the people necessary to meet those requirements. Resources and interest will flow to them, you'll meet with them, you'll support them. But even if they meet their requirements, we're not likely to see their second and third tier suppliers, to your point, be able to go ahead and scale at the same rate. They won't have the same access to capital, they'll have challenges with people moving from particularly smaller towns and companies up to the bigger companies and towns, that that natural draw of talent will occur. Therefore we need to double down our investments in the second and third tier of the supply chain, which is where we focus, and why we have seventy programs across the countries to make sure we're not focused only on the major fleet concentration areas or the development areas like Norfolk or Dallas or um uh Los Angeles. We need programs all across the company, we need them in the Gulf Coast, we've gotta get co programs in Mississippi and Arkansas and in the Northwest and the Northeast to make sure that we're radically addressing all of the problems, and that's part of the excitement of the Build Freedom campaign is it provides us a galvanizing force to unify not just our programs, but also our affiliate programs that we work with in the companies, the programs that we talk to and touch every day. Um to make sure that we're all aligning efforts in the most coherent way for the greatest impact to meet just the problem that you've laid out.

Yeah, I mean, eh, as you talked I was I was recalling our colleague on on the subcommittee, Miss Capter, uh who comes from Ohio, and her her point as she drives home all the time it uh is is the um is the devastation of of the industrial base in that part of the country. Um Do you do you consciously go out there and try and find uh companies and and um you know efforts in those parts of the country as well where um ev even if even if industry is not there is there is there is there a way to re-spark um re-spark that in those areas as well I suppose by by giving that technical assistance I mean you don't have the large defense contractors in those areas but you certainly have cap uh still industrial training industrial capacity people needing jobs uh far more than other parts of the country, is that a conscious effort to spread it around and

Absolutely Congressman, so I'm I'm lucky in this job um as the Assistant Secretary for Industrial Based Policy, that I inherited the Office of Small Business Programs. We've actually rebranded that the Industrial Based Growth Team, 'cause the goal is not just small business, it's also new entrants of any size. So think the Andrews of the world, we want all those companies to be part of the dib without losing focus on small businesses. As part of that office we have a series of tools and capabilities to include the apex accelerators which Congress has robustly fund in the past which is ninety-six separate programs in three hundred plus locations, which are almost always tied into a local university or local economic development authority that allows us on the ground capabilities. Last year I think we talked to twenty-six thousand firms that generate over sixty-five billion dollars worth of diff carbon of war contracts. Um it's an incredible tool to actually get beyond the major you know industrial hubs to connect with companies that are in places that you wouldn't normally be able to get to so it's leverage for us to identify those companies. We also recently launched Links connect dot IO, which is our online platform connecting all new entrants and so if you go to links connect dot IO, companies can sign up, we're encouraging all of our apex partners to use that as our galvanizing platform, and we're gonna use that data set to drive additional um connectivity, and we'll link those into Build Freedom, or we'll link them into our needs that we're getting from industry as they come to us and say we're having a problem finding a casting company, we'll be able to go ahead and use those tools over time to directly connect companies and sort of matchmake and provide some liquidity to that market.

Okay, I will tell Miss Capter I I did her job for her today. She I'm she I probably made some points with her. I'll defer into my next round.

Well speaking of Miss Capter,

Thank you.

um and and Ohio, uh Anduril, as you mentioned, i they're building a significant plant in a previous manufacturing facility right outside of Columbus, Ohio. And they're gonna employ several thousand people there, so she should be happy. So you know about it.

I don't think that's her district though, so she's not gonna be on that.

Mister Valadao.

Thank you, Chairman. Secretary Caden Cadenizzi, uh what are the most significant work uh workforce constraints facing the defense industrial base today? And where are these shortages having the biggest impact?

So Congressman, I'm I'm not sure that there's one particular thing you could point to. I'm sure if I talked to uh Mr. Tuning from HIA, he'd talk to particular skills for naval quality, um welders at the YARG. I'm sure if I went to Dallas I'd find constraints uh in the aerospace sector. Um I'm sure if it went down to Palmdale here there's concerns locally about their ability to to build the most classified and advanced um ware aircraft weapons in the world so I think it's all of the above sort of problem that stems from engineers and scientists to work in the aerospace and defense industry,

Mm.

down to welders, pipefitters, machinists, you name it. The scale of the gap on the on the skilled trade sides is where we're so particularly concerned. Again I think that um market economics will sort out the engineering and scientific issues. As we start to re-industrialize, demand goes up, they'll be some of the first people brought into design weapons and the capabilities of the future. The the two point five million dollar gap to twenty thirty is sort of our our current projection a projection of the gaps in the defense industrial base. As you look forward and you think about additional demand, uh you think about additional conflict, um uh other tensions that may rise, that is a sort of a baseline assumption and potentially the floor for the need within the DIB so that could be substantially more hence that's our focus is on the overall number.

So you kinda hit my second question, but where are the shortages most concerning for you?

So I think uh oddly you know the the Chairman in his opening statement mentioned minerals. This is something we're increasingly concerned about. Last year we received five billion dollars through the One Big Beautiful Bill for America Act to invest directly into critical minerals. Um you mentioned the MP Materials deal and the the issues we've done there with uh rare earths. Um we've done a series of deals in that regard in investments. But part of the challenge in ramping up mines is that is that there's just not as much of a robust mining workforce from from the mine all the way through to production and refining through to recycling. It's a major challenge and one that we've actually added in as part of our workforce commitments this year is mining 'cause I think it's at the base of every supply chain and you can have dreams of cal of um scaling up production of weapons but if you don't have germanium gallium and yttrium it's gonna be very very difficult for you to meet that requirement.

Alright. Are there specific regions in the country or parts of the defense industrial base where the workforce are more severe.

I think yes, uh so we can see places like New England which have ramped up substantially. They've gone through a cycle uh if you went to Maine, they went through a cycle of difficulty with the yards there. With regards to ship building there are challenges in uh Connecticut with uh eastern Connecticut around electric boat and the ramp up the submarine fleet. Uh they're seeing things and challenges in Newport News around uh the the increases in uh the number of ships that they need and the workforce retirements post-COVID. at HII. So those are some of the big places, however I do think there are pockets that are likely to see additional strain. Um Arkansas, we had the rapid increase of the munitions capabilities there, the number of companies moving in is gonna go ahead and start to pressure them, and that's a place we're really excited about, finding opportunities to connect and grow. The Gulf Coast, we've well known that um there's a series of yards along the Gulf Coast that all share the same workforce and compete on them, and as we increase uh the demand there and invest further, we're likely to see additional pressure. And then the California marketplace given um just sort of the the the prices for love for where to live um the the mix of capabilities um and sort of the uh the additional requirements to survive here and operate a business make it incredibly difficult we recognize it's something that we're working on. We're partnered with Workshop for Warriors down in San Diego as part of our commitment to making sure that San Diego's getting part of the workforce that it needs.

So um obviously we're here at this campus and we received a tour today. There's a ton of industry. nearby and it makes it very convenient for a lot of the companies to come and spend time and help make sure that this educational institution is doing a great job of serving their needs I'm about two hours from here my district, the board of my district's probably an hour from here um a lot of the focus of of my local schools I mean they're trying to diversify obviously, I mean you've got some robotics in some of the programs, I've got some uh coding, uh they call it gaming to get the kids more engaged but it's more focused towards coding. Um but getting folks in communities like mine, where we can start to get more kids interested in some of these trades, how do we do that without the industry being in those regions? How do we attract those kids and maybe even work with those educational institutions so that we can help train for some of those programs in those job opportunities here and hopefully create the the workforce that would encourage more investment in regions like mine the Central Valley?

It's great. The Industrial Based Analysis and System and Workforce programs predate Build Freedom by a decade. There's been a at the f at the focus and the core of these growth programs is a desire, need, and recognition of the requirement to connect with students in elementary school, middle school, and high school, and just expose them not to the dib per se, but to the uh the essential elements of working uh within the skilled trades. So for example we have the mirror program and the ace programs are part of our commitments in K through twelve. We'll go into a school and melt chocolate to go ahead and talk about forging, right? So we'll literally go ahead and do uh with chocolate things around casting. Um so those are really interesting, you know, capabilities that allow us to go ahead and connect with kids, get them excited. Our approach is that if you don't get kids excited in elementary and middle school about the trades, by the time that they graduate high school, they're not actually interested or they've they're significantly more challenged. And if your next generation of submarine builders is in middle school today, for ten years from now, so we've gotta get them excited in the moment. We also need to go ahead and talk to their parents, um and the parents are oftentimes have gone to college, um sometimes they're the first one in their generation or their family to go to college, so they're very excited about that, and the idea of their kid going to the trades needs to be something that they consider, we need to help the parents understand that this is a a a great alternative for their children for the future. And we also need to talk to the grandparents. The grandparents oftentimes worked in the trades, and were excited to get their kid into college. And now you're asking that grandparent to look at their grandkid and say, they're going back to the trades. And so we often talk about, you know, um, you know, Jenny was the first person in her family to to go to college, um, that maybe it's Billy's the first kid in his family to return to the trades. We've gotta sort of thinking differently about that communications model. That's at the heart of what Build Freedom is trying to do from a messaging standpoint, and why it's so critical that we partner with Mike Rowe, who brings arguably the number one brand in sort of messaging and storytelling around this challenge to the country.

Alright, and I've got some more questions for the next round, so thank you and I yield back.

Um, thank you, I'm gonna spend a little more time on the critical minerals part of this conversation. Um, I I remember when virtually all the critical minerals uh that you referred to were mined uh and processed and re and refined here in the United States. And after uh You know, in the early nineties we started pushing it offshore. It's a dirty bu it was a dirty business, mining's a tough business. Uh, you know, the environmental movement, uh, you know, a lot of that was it just pushed it offshore. And now, uh, China controls over ninety percent of all critical minerals, as I understand. Is that correct?

Of rare earths. There are different portions of it,

Of rare earths.

but in almost every case, China is also the leading partner uh from a production standpoint, the leading provider from a production standpoint.

And one of the one of the minerals that of of of critical importance is magnets. Magnets are in everything. And uh we we are now taking an equity position. I, you know, as a as a as a conser I kid uh kid my colleagues as a a conservative republican, I never thought uh I would see the day that the United States government would take a equity position in in companies, uh but uh we're in a hurry. And a lot of these companies uh I would uh assume uh didn't have the capability or the uh uh to go to the financial markets and borrow the the capital or to to have a pricing mechanism that can uh determine whether or not that's gonna be a profitable business to be in. I and I understand that. And so we'll just take the magnet industry as as one that that we'll look at. Uh so we we created that market mechanism. in effect, and and uh and some equity and the ability to use the office strategic capital, for instance to obtain capital to uh to get those industries going. Now we've we've done that with magnets in a couple of instances. What are we doing with some of these other materials that uh like gallium you mentioned, I think bauxite, a b a number of them, what are we doing uh to attract those industries back into the United States?

Mister Chairman, it's a it's a terrific point and one that was uh you summarized it well. We made a lot of decisions about a rosy set of outcomes that were just in time, supply chain driven, that have resulted in critical dependence on our number one strategic competitor for a huge number of uh critical minerals, and a whole bunch of other industry partners across the world as well. So we've spent an incredible amount of time in the department to go ahead and understand where we think our number one dependencies are. We've identified twenty plus minerals that were at the top of our our priority list, and we're systematically mapping out our dependence on those minerals, while also mapping local and regional and uh international supply chains. We're then making decisions, hard decisions about where to invest the money that we have, both from the Industrial Based Analysis and Sustainment Fund, the Defense Production Act, and in partnership with the Office of Strategic Capital, and our inter-agency partners at the Export-Import Bank and Development Finance Corporation. We are harmonizing those in, oh and Department of Energy as well. We're harmonizing those investments to make sure that we can maximize the impact of that over time. And we're working structurally wherever we can. Sometimes we're able to work left to right from production at the mine level, through to production and refining. Other times we have to go ahead and work in an opportunistic way. A plan comes up, you've seen that with some of the investments we've made around um, a talco um in Louisiana, which is the last aluminum provider in the country. Um, we decided that was a critical national security capability that needed to be maintained. So there's nothing but hard trade-offs there. Um people have robust debates about whether we should have invested here or there. I I'm I'm we're wide open to all of them, be given the demands, but we need to start converting and closing some of these gaps. And that has been the focus of our team, is to work incredibly tactically with an analytic mind-set and I am blessed with a super talented minerals team. We work with the National Defense Stockpile team at the Defense Logistics Agency as well, collectively in in partnership with our inter-agency. colleagues, we've been able to go ahead and move lots of money out into critical minerals issues, and we're anticipating more of that over the next year.

Yeah, um. When you when we think of critical minerals or rare earths, you know, we we we think of these uh relatively de minimis products, but have every uh very important in in order to make things work. But how about things like uh uranium? Uh we used to pru during World War Two obviously we were in a hurry, we we've we knew where the uranium was and we went out and got it, but uh we didn't do a very good job of it at the time, we're still paying the price for it. Uh but we have a significant amount of uranium, United States, uh and now we're we c the biggest suppliers of uranium are Russia and and Canada. Uh and uh so we're somewhat dependent uh on one uh an ally, we're having a little difficulty with right now, but I I'm sure we'll get it resolved, uh and one unnecessary. And so uh how do we solve this? You're uh because I I see a a transformation going on, maybe it's just me, but I think there's a much more acceptance, especially with small modular nuclear reactors that have obviously a a military potential uh military capability, but also in the uh in the economy uh f uh throughout the United States. What are we doing about uranium?

Um Chairman Calvert, uranium is one of the few minerals that's not giving me a headache because we punted that over the Department of Energy where they have the lead, and so we're working off their plan. But your general position on access to minerals I think is a is a fair one, and one that we understand is that a lot of times we don't have enough domestic capacity. One of the things that I am pleased to to mention is that when we put out an RFP, or a re request for proposals from industry, on almost any mineral, we find a robust number of domestic companies and suppliers. The biggest challenge they have is getting access to capital, because every time American minerals companies start to scale, they're undercut by Markham Thill's practices of our number one strategic competitor. And so what we're looking to do is leverage the tools that have been put in place, by the administration, tariffs, et cetera, in partnership with Project Vault and other um uh agreements, there's the preferential trade zones, to go ahead and make sure that we're adequately providing the transparent pricing mechanisms which you mentioned, that are the mechanism by which any company's gonna be able to determine whether or not they're operating effectively and then capital can make decisions about investment. So part of our hope here is that our investments will catalyze additional commercial investment from the private sector, family offices, et cetera, to make those companies grow and scale to meet our needs for the future.

Yeah we almost we must uh ha uh have an a uh some kind of uh process in order to guarantee a price uh because the the Chinese uh subsidized their their rare earth industry and and they undercut their comp you know the competitors say in United States where they make it economically impossible to produce a product at a any product or any profit at all. So uh that's that's the situation we found ourselves in. Magnus, I suspect that's the case in just virtually all of these things, that we have to rebuild that industry. So it's a challenge and I Appreciate your taking it on. Mister Case.

Thank you. Um, s secretary, let me let me just uh try to get into the weeds and some of the appropriation stuff. Um So we have this huge problem, and we've got various federal programs to try to contribute to the solution to the problem. First of all, is it fair to assume that that we're in agreement that um the IBAS or IBAS rather Industrial Based in Anal Anal Anal analysis sustainment program, that's that's where we've got most of our eggs in this basket right now?

Yes, it's completely funded out of the Industrial

Okay.

Based Analysis and Sustainment program.

Okay. Um, and

I mean from the from the Department of War sample.

Correct, but and that's part of the question. So, let me let me just ask you this part of the question, so are there any other programs that we should particul particularly be paying a lot of attention to in an a any of the other federal agencies? I I I mentioned in my opening statement Department of Labor and you talked about partnerships with the Department of Labor. And they do do apprenticeships, they're just not totally s focused on the defense industrial base, right. So um IBAS is where the action is right now. Okay. So I'm just kind of looking at the um appropriations that we've sent out there. We went hundred and forty six hundred and forty seven million in an FY twenty five. In FY twenty six we went three hundred and forty eight million um of which three twenty eight was mandatory. And then your FY twenty seven uh request is two point seven five billion of which two point five eight mandatory. So that's a huge ramp in a in a very short period of time, which I don't necessarily object to. Um the need is there, we obviously have to do it. Um I think first of all just just so that I can under kind of get myself up to date, Um have you basically allocated now all of your FY twenty six mandatory? 'Cause my figure is only up through May and it showed about a seventy five million dollar or so balance.

W for the workforce programs?

Yes, I I've asked.

Congressman, yes, we're we're essentially uh completely executed and uh obligated on the workforce programs,

Okay. Alright.

from my knowledge.

So that's all that's all obligated or or d designated I should say.

I Yes.

Okay. Um is there any particular reason why you're putting so much in mandatory? Is that your

Congressman, uh it's a fair question. Uh we proposed a budget, there were decisions made above our level to go ahead and reallocate based on the best interests of the the department and negotiations with OMB and others and the numbers wound up where they are I don't have a strong uh answer as to why the balance f is that particular number but that's what we were given.

Okay. Well it b yeah, I mean it begs the question. You're spending three hundred and fifty million in FY twenty six. You wanna ramp that up almost ten times in FY twenty seven, but you're totally backloaded on the mandatory side, and we haven't we hav the the there's no guarantee that you're gonna get mandatory funding. So what's what's the contingency plan if you don't get the mandatory funding and and assuming we actually do pass an FY twenty seven bill, Uh on the discretionary side at a hundred and sixty seven million, that's a that's a fifty percent cut in IBAS. What's what's the what's the uh kind of contingency plan on that?

Congressman, I think this is a program that is a major priority for the department. Um our goal then would p our decision then would probably be to go ahead and deprioritize other aspects of the IBAS portfolio. So we work across eight sectors, workforce, chemical, strategic and critical,

Okay.

materials. microelectronics, batteries, we would probably take additional risk in one or two of those other sectors to move and fund build freedom at least to the level that it is this year so we didn't regress. The you mentioned uh the the aspirational the goal for a much sub more substantial budget for next year. We're only doing three states this year, right? And so what our goal would be is to rapidly increase the number of states and also the number of programs we could support um we had discussions today about the growth of the capabilities here at the College of the Canyons. There's several large initiatives that we'd like to undertake to support major regional initiatives with partners that I think would be successful that these funds would allow us to go ahead and tackle those um out of and in partnership with the Build Freedom program so it would grow the brand grow our expanse um and grow the connectivity we can do nationwide.

Okay, so um just just okay, so basically what you're saying is you're gonna you're gonna keep the workforce program going, you have to keep it going, you have to keep the momentum, whether you get the

Build Freedom is a top three for me. Uh

Okay. Okay. And and turning to build freedom for a second, I mean going back to some of the questions I had in my opening statement, do you have an ultimate target that you're trying to get to in build freedom, and what time frame do you have a kind of a stabilized annual spend that you're that you'd be aiming at in build freedom as such a huge task to fill an immediate shortage of four hundred?

Two point five million dollars.

Yeah exactly over over time. I mean that seems to be something that would have to be continued for a long time at a substantial expense.

Yes. So um thank you for the question Congressman. W we've built a fitted pla we're in the process of building a future years defense program plan um that I think is gonna reflect a reasonable lay down on what we expect the program would need over the longer term as part of this uh workforce plan for the future. Obviously the prospects to build a budget that reflected recon spending, offered a surge of funds that we could take advantage of, or potentially a surge of additional funding, the stable, fit-it-based plan will reflect what we think is a more uh long-term baseline, although to your point, there there is a huge delta relative to the demand going forward. We think we could put a huge amount of capital to work um on these programs with our partners locally and really start to go ahead and move the needle, on this problem for the future. So um I we should come back and brief the committee on this plan, at some future time, I'm happy to go ahead and do that.

Does does the does the f does the does that approach the fight up uh mid midterm I think you would probably say right? Um does that anticipate that that actually that money moves around a little bit? In other words, you spend some money on your three areas but they become s kind of self-sustaining at some point, because they get locked in as a as a uh um you know a habit, a um does industry take over a little bit more, do the community college get no? get to know how to do it better and then you kinda move on?

Uh yes so that is our goal is essentially to go ahead and start projects, get them up and running, demonstrate the impact of those progress those projects and transition them to some partner. So for example in Danville, Virginia the ATDM program which provides a sixteen week apprenticeship welding courses for essentially the maritime trades but the defense industry base broadly, and is a major feeder into HII. Um that program we've funded since the beginning to the tune of twenty eight million dollars a year, I think is what the request is next year. Um our goal is with the Navy we'll go ahead and take over funding for that in twenty twenty eight and so we're gonna go ha- we've demonstrated the impact the La Navy likes the program industry likes the program we're hopeful that they'll go ahead and pick that up and that'll be a smooth transition um so that is our goal in most places is to find local transition partners who wanna carry on the good work that we started but we bring a level of expertise regarding um uh investment in how to do this and understanding of uh how to build

Okay. And then I'll defer to the next. You cool? Um I I would love to uh go back to something that I talked about at the beginning, which is a little bit more localized um but I th I hope makes a point here. Um Hawaii, uh of course we've got Pearl Arbanet shipyard, we've got Honolulu Community College, doing workforce development uh but I think one of the key ingredients there is the personal directed attention of Paycom uh to what's going on because they have very specific needs. And you know they're into um you know as we as we know um certain kinds of manufacturing, certain kinds of specialization that that that forward their plan uh deployable um you know. abilities to to deploy forward. Um and and I it seems to me that that's a little bit of the secret sauce too, is that you have a military that's personally engaged and and localized in in a way, right? So that the the demand signal is not necessarily the department writ large, it is the Paycom, it is that's what's going on, and they're training that workforce for that purpose and you're structuring your your your your your investments on the workforce to their needs. Is that um something that is common elsewhere in the country? Cuz it does seem to me to be uh something that is particularly relevant and particularly valuable, and it it kicks everybody into a certain frame of mind. Uh because uh the the the the challenge and the opportunity is far more special ties to what the need is in that theater.

That's a it's a terrific point, Congressman. Uh I think the discussion between uh uh Miss Doctor Reed and Mister Tuning highlighted the importance of the connective tissue between industry and academia. Similarly with us, we feel our workforce programs are best structured as directly tied to the local needs of the community. So we don't tend to have like massive curricula that looks the same across every program it's definitely localized and tailored and you're correct um the, the interest of Admiral Paparo definitely um accelerates production of people's work and time uh within uh the Pacific Theatre. And so we've invested in the Forge which is our expeditionary manufacturing capability to support the twenty-fifth ID in its requirements to support theatre requirements there. Um so we're invested on Schofield Barracks. And not only in the building and in the machine tools, we actually are paying for the team that goes in and actually helps uh train soldiers and marines and sailors to use the tools. So it's essentially a workforce program within the forge. And then we've also paid for Honolulu Community College to go ha or funded, I should say, uh Honolulu Community College with the machine tools, the curriculum, and the trainer, Jake, who we moved in from the mainland, he's having a good time in Hawaii I think. Um um training locals on these uh new capabilities, a program uh has not existed in Hawaii to my understanding since the nineteen seventy. So we're really thrilled wherever we can do it and we're looking for those transition partners on island to take over responsibility for the long haul.

Yes, we love him and if you're watching, please stay in Hawaii, we we we wanna keep you going. Okay, I yield back.

Thank you. Mr. Baldea.

Thank you. There are a lot of pressures on the supply chain right now, from shortages in skilled labor to natural disasters and other inex unexpected disruptions. Can you walk us through how you monitor the supply chain and identify potential vulnerabilities before they become bigger problems? And once you identify a supply chain issue, what tools do you have to respond quickly to help address it?

Thank you Congressman. The it's a it's a tremendous challenge given the number of companies. I think if you looked at um CIO reported they thought there was a hundred and ten thousand companies that needed to be CMMC certified as b sort of a the baseline for, for what we're doing. So there's luckily there's a robust marketplace of tools that we have access to. We have terrific agencies like the Defense Contract Management Agency, which literally visits eighteen thousand factories a year, manages three hundred and fifty thousand contracts. So we have a tremendous number of uh of tools who are uh th- that we're able to take advantage of. The biggest opportunity we have is to synthesize that into a more coherent integrated view. Um so we're excited to partner with all of our colleagues across the services on better ways to take advantage of it. I think we have actually a fair amount of insight into things. I'm not sure we have necessarily taken advantage of the insight to date and actually acted in advance of challenges. So part of what our office has put in place is project fail-safe, which is our initiative to go ahead and actually go ahead and start looking uh left of problems and having a robust playbook to deal with problems. So we're monitoring and managing uh the disruption down at GKN and Garden Grove, which disrupted transparency's production for commercial and military aircraft. We're running the response for that and demonstrating the playbook that we've put in place across a number of issues um, Alloy Surfaces uh company in Pennsylvania, which made pyroforic flares. We're restarting that in partnership with the Army, the Navy, and the Air Force. So there is a series of things that we can do and part of what I think IBP can do for the future is emphasize a culture of action on these things which is to actually not just wait for more further fidelity that's always better but to take action the problems you see at the supply chain today and that's the, the focus that we're putting on is to move out.

How early are you typically able to identify a supply chain problem? And are you generally getting ahead of these vulnerabilities? Or are we still too often responding once they become uh once they begin affecting production?

Uh it's it's a great question. The the challenge I think is that we are not nearly as far ahead of the curve as we need to be. We need a more coherent set of tools and heuristics to understand what is a problematic supplier, who's the biggest problem, where in the supply chain should it be? I think programs and companies know about a lot of problems and don't necessarily have the resources um or uh the time to take action. Um we need to go ahead and do a better job of sharing information across the department to find and get resources such as uh IBAS resources to a company that needs uh we've actually bought a diesel generator for a company that was getting cut off from its electrical supply we got a phone call randomly to do that we got that diesel generator in the company they were able to continue operating that's a great example of something that's um, kind of ridiculous, but is absolutely vital to avoiding problems. And we're ready to do that, uh, up and down the supply chain.

When you identify a vulnerability, what determines whether the department can act immediately versus needing additional funding or an authority from Congress?

This is something I think is a- at the core of what we're asking for for the future is, uh, the Defense Production Act funds being zero year funds provide a unique capability and tool for us to have a pot of money that's available to deal with these unexpected crises. So we're not having to immediately turn around and um harvest from other programs that should come at the expense of other initiatives or to come back to the Congress, to ask for money those things. So that's a tremendous tool from a resource standpoint. Many of these problems are scaled problems. They're not cheap and they're not gonna go away overnight. They require investment, particularly for factories or capabilities that are from legacy um tool sets. So we're trying to take factories and capabilities that were designed in the seventies, eighties, and nineties and solve the problem. And you don't wanna wind that up. the way it was in the eighties, you wanna migrate that f- technology forward and make sure you're operating at twenty twenty-ish kind of time frame. And so that's the opportunity for us to do that.

And I know you mentioned the eighteen thousand inspections, but how closely you're working with the industry to understand where the vulnerabilities exist further down the f- the supply chain, particularly among smaller suppliers and subcontractors. I mean, is that included in those eighteen thousand or is there a bigger universe that we need to be worried about?

I think there's a broader universe. So the eighteen thousand is solid and I think there's plenty of problems there for us to work on um going forward. But as you get down to tier four and tier five in the supply chain, you start to run into companies that are oftentimes multi-industrials. They're selling capabilities that are cots, they're commercial part uh far part twelve, kind of like you know parts if we were to buy them directly. Um wha- what we need to do is actually drive uh our our primes and our product owners to take more responsibility. And I think that's something that we're trying to drive in through these executive orders we've put out on supply chains the initiatives that the deputies put out is for the primes to take more responsibility and act aggressively on their supply chains to increase the manufacturing rate for the weapon systems that we need. We think that could be done in a way that benefits everyone where the primes can maintain profitability. We want them to be profitable. We also want our weapons on time and I think that's a fair trade.

How do you oft uh how do you balance addressing an immediate supply chain disruption with making longer term investments that prevent the same vulnerability from occurring again?

To me I think that's the core of the ch- one of the challenges that we've had in the past is, a failure to effectively take existing uh manufacturing lines and make them um, more producible from an engineering uh standpoint. So we talked behind at lunch regarding demand signal and oftentimes industry complains about demand signal and we recognize that, there's no reason to have a factory cited for a thousand units a year if the DOW is gonna buy a hundred, perfectly reasonable. Um. The issue is that over the past ten, twenty, thirty, sometimes forty years, almost no effort has gone into increasing the manufacturability of that weapon on a year-to-year basis. So there's no way to ramp that production. It only scales linearly. If I have one plant in order to make two or a hundred of those,

Mm-hmm.

I need a separate identical plant. Otherwise I have to engage in what is a very complicated long-term, all the issues we talked about for certification and qualification. We need to incentivize certification and qualification on a week-to-week year-to-year basis. The companies should probably retain some additional profit margin, uh, for every point of margin they put into certification and qualification. We'd love to see some compromise on that front, where we can incentivize them to spend more time and effort on their own, to help improve the producibility of the products.

I think you brought up an excellent point, and we talked about it at lunch, is sometimes these uh these companies are building based off of our activities in in a conflict or a war somewhere and to expect us to be producing as if we were always at war is is asking too much, but when we need 'em we need 'em. So, thank you.

Uh, thank you, you you brought up we brought up the Defense Production Act of nineteen fifty, uh, and thank God we passed the continuing resolution this last week, 'cause it was gonna expire and uh we uh uh it's it's

Thank you.

nearly lapsed a couple of times in the last couple of years, and I think we're gonna need it more rather than less in the future, and so uh Y you uh don't you think we ought to get back to uh this production act to know your funds, where we're not we don't have that sword hanging over our neck?

Yes, Chairman Calvert, it's incredibly important that we reauthorize the defense production act easing out even as it is today because we use that six eight hundred thousand times a year for the D pass authorities under DPA title one. The supply chain would not function without DPA title one authorities, nearly as effectively and it's not super effective at the moment as you noted. Um as it does today. That's incredibly important. We also have robust authorities in DPA title three, which are abet executed through our office, and DPA title seven authorities for voluntary agreements, which we've just launched one, uh we're gonna have one in place here shortly on kinetics, munitions, to allow us to work with industry in a more aggressive way, and the National Defense Executive Reserve as well. These are incredible tools for industrial mobilization, for allowing us to connect with industry and to work harder. So I'm I I'd just please reauthorize it as it is, There's obviously alternatives there to make it better. We'd love to see stronger tools to compel industry to take action on problems that we want people often sorta say they're gonna DPA a factory or a or a problem, and there's not that robust set of authorities, many of those lapsed after the Cold War, so we'd love to see some of those authorities brought forward and we've proposed in partnership with the White House and the inter-agency, some of those changes to the Congress.

Good. I I'll work with you to make sure that happens. You b you brought up real quickly uh the problem we had in Garden Grove uh that the fire we had um I d you know at the first I I didn't really was aware of the company, and what they did, then I found out later that what they were the I don't know if a few or on only company that made the base component that went into the canopies for the F thirty five, isn't that uh is that correct?

Not the only one, but they do certainly uh play a critical role uh in that uh supply chain.

But So now we have a supply problem in that?

It's not the best, sir. Yes.

That's what I've heard, yeah. So um

We're working our way through it.

I just

GCAN's been an incredible partner, along with our our colleagues in industry that purchase the transparencies. Uh the State of California, the EPA have been incredible partners, um it's truly been an an exercise in collaboration at every level, and we're seeing remarkable um progress on our return to production, and every way for that company and for um the supply chain producers that that need their those capabilities.

Okay. Uh solid rocket motors. uh obvious I've heard more about solid rocket motors in the last couple of years than I have in the thirty four years I've been in Congress and I've mostly been in in the defense side of things and uh obviously y you engaged yourselves into a very interesting uh investment with L three Harris to develop solid rocket motors. I've heard from a number of folks uh of over that investment. I understand why it was done. Uh very similar to why you did uh things on on the rare earth side of it things and other uh industries that we're doing. Maybe can you explain why we're concerned about solid rocket motors and the supply and uh how we're going to move forward to uh to get the get what we need here in the future.

Solid rocket motors are indicative of a long-standing challenge within the munition supply chain that is too many sole source components So we have a a major um bottleneck in the one dominant provider which was originally Aerojet Rocketdyne and then uh the additional provider on Northrop Grumman uh which was ATK back in the day um we also have a smaller European provider NAMO those are the three kind of dominant providers five years ago and they dominated the space we've seen a series of entrants into the market we now have probably twelve or thirteen companies that wanna make solid rocket motors for the department of war across a number of um a number of weapons platforms, the fifty plus rocket motors that we track. The opportunity is for us to go ahead and have a much more resilient rocket motor industrial base, but we've gotta start now. That's why the certification qualification improvements process is incredibly important because even if we streamline the process dramatically if I start today on weapons platforms, it's still likely to be two, three years before second uh sources are in place. So for us, we're investing substantially in uh not just the primes, the current providers, um, over at the core, L three Harris, Northrop Grumman. We're also working on providing additional investments for all the new providers that are there. We recognize that those companies are often private equity backed, or venture capital funded, um, privately held in some cases, that their attention span in this problem is likely limited. We need to make sure that they're up, running, qualified, and a reliable partner for the department, with a reasonable amount of business for them, going forward. So our team is engaged in uh, building a capacity study on rocket motors that we're gonna use to sort of balance across all the different motor demands to say I need a c- a couple of first primary providers I need some secondary providers that are dedicated, and then I also need some flexible capacity using the most cutting edge techniques to allow me to have flexibilities if any uh lines are disrupted. So we're we're thrilled at the opportunity to work on that for the department.

All these uh industries in which we're taking equity positions. Uh h how long do you see the the United States government doing that? Are you gonna are we going to just get get these companies rolling, get their get their market share, and then try to exit our equity position as rapidly as possible? Where where do you think we're gonna go with these transactions?

Mister Chairman, the the department's position is that we're we're not there for the long ti the long haul. Our goal is to go ahead and first of all um secure access to the capabilities and catalyze additional investment into the target areas. We wanna make sure that we're giving strong signals to industry that we're investing in these places uh and these uh sectors, and we wanna make sure that we're we're positioning the companies to succeed over the long haul. So we think this is a better tool for doing that's the department's position using the authorities under IBAS, DPA, um, OSC, et cetera, as they've been determined. But the goal is to go ahead and exit exit those positions within a reasonable period of time. There's no strict um uh date target as of yet, or in any particular deal. Um but there are plans to go ahead and exit each of these within a reasonable period of time.

The one that was I thought was most intriguing, I don't know if you were involved in it or not, was Intel. Um why

Predated predated me, Chairman.

They predated you? I cuz I'm gonna I always wanted to ask the question, why did we take an equity position in Intel Corporation?

I can't speak to the details of that or the MP material deal. They were both predated me, Mr. Chairman.

That's that's fair. Mister Case.

We haven't really talked a whole bunch about retention and and and all of this. Um we've talked about getting people into the pipeline early and piping them in. Um and I was intrigued by your your comments uh on on focus on vet veterans and their spouses. So I just wanted to kinda get into that. Um are there are there different um approaches for people that are coming in mid-career, making a shift, or for that matter vets coming out of out of the military and tracking into the skilled trades? Is that is that uh an area of kind of specific focus.

Sure. The um the department's taken an active interest in uh the Veterans Pipeline the secretary's made um if you look at his barracks uh housing task force uh enlisted folks uh their quality of life is a major priority that extends to their decision to transition out and their families. The Patriot Pipeline is an USW personnel and readiness uh initiative to go ahead and target specifically veterans and their and their families or spouses and identifying pathways into other careers of which skilled trades is one, and we're we're partnered with them uh on build freedom. So it's a tremendous opportunity for us to go ahead and do more with an existing workforce as an affinity for national security. They care about the department, they care about the country, they're likely inclined in some ways to go to defense companies that share a similar mission and passion. More broadly the retention issue is something that we think is um critically important. I think uh Mister Tuning talked about the hundreds and something million dollars that they've spent on quality of life initiatives at HII to improve the workforce's um experience and I think that's something that they've spent

Do you do you fund um um mil- pe- people coming out of the military, eh do you fund those out of IBAS, those programs? Do you do any programs that are specific to taking folks exiting the military and you want to track them into the skilled trade?

We do have several those, Workshop for Warriors in San Diego is our largest one I think. I'd have to check and validate. Um but that's a program that's dedicated to people coming out of the military, and teaching them trade so that they go ahead and find careers on the outside. Most of our other programs have a certain number of veterans that come through them, um ATDM et cetera. They're they're they leave the military, they want the certification, they go through a program, and they transition into um a civilian career. So there's more of a smattering, there's not that many programs. I'd have to come back and tell you and get a get you a number on which specific programs are completely focused on veteran transition.

Okay. Um I think that's it, Mr. Chair. I think I think I've exhausted myself for now.

Mister mister Bell, yeah?

I'll be brief as well. Um To achieve drone dominance and other DOD weapon systems priorities, the United Sta States will need to substantially uh will need substantially more energetics production than it has today. Much of the capacity remains concentrated in a small number of legacy facilities. What can the DOW do to d diversify and distribute energetics production across the country, bring more innovative manufacturers into the defense industrial base and engage a broader skilled workforce before demand becomes acute?

This is a tremendously important issue, uh Congressman. We actually, we have a team that does energetics

Mm-hmm.

uh congressionally funded uh it's actually a DAFA called the Joint Energetics uh Transition Office whose job is chartered to go ahead, it's co um we're the the the the head, we're partnered with R and E as the deputy, is to identify projects which can be done and funded to actually accelerate what has been uh historically under-invested in portion of the enterprise, which is energetics. There's a series of initiatives underway to increase production across uh precursor chemicals uh a lot of energetic materials. We're looking to go ahead and put additional money, that's part of what we would focus on next year is within the JETO program, there's a request for I believe a billion dollars of projects next year, um to go ahead and fund those. Um that's the kind of capability like to bring the scale of the problem we see. Um if we don't get that funding we'll likely do some series of smaller initiatives part of our overall kinetics portfolio with an IBAS, but to make sure that we're touching those problems. That's critically important, we agree.

Alright. Well, I've got no more questions, so I appreciate the opportunity and I yield back. Thank you.

Thank you. Um, since we're here in California, I'll I'll ask I'll be I'll be somewhat and ask couple of localized questions. At the uh at at the end of World War Two, uh had a brief discussion about this. Most ships in the United States were built right here in California. Uh and uh up in the Bay Area, Stockton, that was where they built a Liberty ship a day. Uh and Mary Island obviously w prior to nineteen ninety two was I think uh perhaps the largest naval shipyard uh in the United States. And for a number of reasons uh we we pulled that industrial base uh outside of California. Um we've we still maintain a significant aerospace industry advantage in the country uh in especially in the El Segundo Manhattan Beach area. Um and uh we had a gentleman here from Huntington Ingalls earlier who probably should have asked him the question, but Uh, d you p you know, I know a lot of the money we're gonna be putting is ship building operations. Do you see uh a move to because just because of our geo geography, you know, where we're at, to put any uh industrial capability in spite of our difficulties of doing business in California uh i on the West Coast? Not just California, maybe Washington State, you know, so

Jeremy Calvert, um I think I'd have to defer you uh to the to the Navy, OM OMB and the White House with regards to specific plans. More broadly, um California is a robust part of the maritime shipbuilding industrial base uh in supply um components capabilities. There are things that we can go ahead and I think Mr. Chuney would be described as as things that we can get on a truck that we can ship across the country are most likely the the most valuable parts of that enterprise today. Um there are discussions that have occurred in the past in public regarding opportunities to go ahead and increase uh West Coast ship building, we have major ship builders at like NASCO down in uh San Diego, that are providing capabilities for the department at scale, um and continue to and are reliable partners. We will likely continue to see those investments made here, there's interest in increasing and expanding the capability of the uh Puget Sound Naval Sh uh the public naval shipyard for the future, that's gonna continue to be a priority for us to make sure those capability there as with um Pearl Harbor uh uh shipyard as well uh in Hawaii. That it's a major topic and an opportunity for the department to explore uh for the future.

Okay. Thank you. And I wanna thank you for your uh your testimony. Uh we appreciate uh your coming out uh to visit with us. Uh before I conclude I wanna thank you and I wanna thank uh our witnesses and I also want to uh again thank Mister Rowe for sending a video statement of his tireless advocacy for over twenty years for the Industrial Base and the skilled trades. And once again many thanks to the College of the Canyons. for hosting this field hearing. I look forward to working with you, all of you, to strengthen our industrial base and advance the workforce development for skilled trades. And uh, Mister Secretary, I look forward to having you uh at at pro potentially a hearing in uh Washington DC to discuss some other issues that uh I think is extremely important that uh we potentially can't get into here. But uh I would uh would love that opportunity.

Thank you, Mister Chairman.

And uh at this time I recognize uh Mister Case for any closing remarks.

Oh, Mr. Secretary, thank you so much again for your for your time today and and for your for your efforts in the department to to bring about reform. Uh, we all uh think we um definitely understand that we need it.

Mm.

I think for today for for me uh today was about highlighting the problem, first of all. I think that's uh still unfortunately a a j a problem and a challenge that uh that that most people don't sufficiently appreciate and they don't appreciate, the consequences. of not solving it um over the midterm and the long short term, midterm, long term. So um you know uh that's been a valuable uh part of this uh hearing. I think the second part for me has been uh more about um partnership uh between um educational institutions like College of the Canyons and Doctor Reed's uh institution uh certainly industry and government. I don't think we're I don't think anyone of those uh people can pull this off. It's gotta be everybody. And I think third is just solid uh government programs and the IBAS seems to be um a very solid government program uh but the challenge there um and we spoke about a little bit is to, is to sustain it over time uh because if we just kinda throw a bit of money at it for a couple of years and then go away um then it's gonna fade and we're gonna be where we are today so um a lot of work uh in front of us to actually solve this challenge but I think we can if we if we sustain it over time, and we have to. Uh because the consequences uh an a defense industrial base that erodes even more at the time that we need it the most. Um um uh my ranking member uh Miss McCollum actually did a h did a hearing on this in October of twenty twenty one.

Mm.

Uh and it'd be interesting to go back and and uh read the that that hearing and and and see what they were talking about and I've I've heard about it I haven't actually read it but many of the challenges were there um the solutions were there and we didn't um we didn't um, you know, we advanced a

Thank you and I also wanna thank Mister Tuning and uh Doctor

Mm.

Reid for their testimony in answering our questions.

Mm. Mm.

Uh Again, thank you, and uh this concludes today's hearing. Thank you. Subcommittee stands adjourned.

And you know what would be really