The Insider

Leon Panetta, sworn in as the 23rd defense secretary at 8:45 this morning, pledged in a statement that he will protect the readiness and superiority of U.S. armed forces even as the Pentagon's budget is pared back.

“Even as the United States addresses fiscal challenges at home, there will be no hollow force on my watch,” Panetta said in a message to the Defense Department published soon after he took the helm.

As Secretary of Defense, I will do whatever is necessary to protect America and to meet the needs of the men and women who serve in harm's way, and the families who support them.  Even as the United States addresses fiscal challenges at home, there will be no hollow force on my watch.  That will require us all to be disciplined in how we manage taxpayer resources.  Throughout my career in public service -- as a member of Congress, Director of the Office of Management and Budget, White House Chief of Staff, and, until yesterday, Director of the Central Intelligence Agency -- I have focused on achieving that balance.  I will continue that approach at the Pentagon.  We must preserve the excellence and superiority of our military while looking for ways to identify savings.  While tough budget choices will need to be made, I do not believe in the false choice between fiscal discipline and a strong national defense.  We will all work together to achieve both.

Among Panetta's near-term challenges is continuing the Comprehensive Defense Review launched this spring by his predecessor, Robert Gates, to identify options for how to cut nearly $400 billion from planned national security spending over the next dozen years.

The new defense secretary, who until yesterday was the director of the CIA, plans to travel around the world to meet with troops and commanders.

As your leader, I will ensure that our nation continues to have the best-trained, best-equipped, and strongest military in the world – a force prepared to confront the challenges that face us.  As CIA Director, I saw first-hand the tremendous capabilities of our military, and I was always impressed by the professionalism and patriotism of the men and women of the Armed Forces.

Our nation is at war.  We must prevail against our enemies.  We will persist in our efforts to disrupt, dismantle, and ultimately defeat Al Qaeda.  The successful operation that killed Osama Bin Laden -- a mission that showcased American military strength and precision -- is a major step toward that goal.  As we begin the transition in Afghanistan, we must remain committed to working closely with our Afghan and international partners to ensure that it never again becomes a safe haven for Al Qaeda and its militant allies.  As we continue our transition out of Iraq, we must cement a strategic relationship with the Iraqi government, one based not solely on our military footprint there but on a real and lasting partnership.  It is in America's interests to help Iraq realize its potential to become a stable democracy in a vitally important region in the world, and to reinforce that responsibility for the future security of Iraq must belong to the Iraqis themselves.

Lockheed Martin just announced plans to lay off around 1,500 workers from its aeronautics business unit.

According to the statement:

Lockheed Martin currently has about 28,000 employees at its principal Aeronautics sites in Texas, Georgia and California and at six smaller locations in as many states. Reductions may occur across the enterprise, with the greatest impacts occurring at the larger sites. An organizational assessment will determine how to trim the organization with a target reduction of approximately 1,500 employees.

Ralph D. Heath, executive vice president, Lockheed Martin Aeronautics, said, "Bold and responsible action is necessary to meet customer expectations and reduce our costs. We are realigning the organization to be more efficient and agile, and a reduction in force will enable us to meet the requirements of our changing business environment."

Lockheed Martin will offer eligible salaried employees an opportunity for a voluntary layoff to minimize the number of involuntary layoffs. We will use a disciplined process to review every organization and position, considering all factors rather than making arbitrary reductions. We expect the greatest impact to be on employees in higher-level labor grades. Employees eligible for voluntary layoffs will be notified in August. An involuntary reduction in force begins in mid-September.

Today's layoffs announcement comes on the heels of the company declaring two weeks ago that it would lay off 1,200 workers from its space systems unit.

The National Guard Association of the United States is touting unprecedented levels of support in the Senate for its long-running goal of a seat for the Guard director on the Joint Chiefs of Staff. In a statement issued this morning, NGAUS says thirty senators "now sponsor legislation that would give the National Guard a voice in final resource decisions at the Pentagon."

Sen. Patrick Leahy, D-Vt., and Sen. Lindsey Graham, R-S.C., introduced the National Guard Empowerment and State-National Defense Integration Act of 2011, S. 1025, in late May. Twenty-eight senators have since signed on as co-sponsors.

The bill includes a provision to give the Guard’s senior officer a seat on the Joint Chiefs of Staff.

The House approved a similar provision last month, meaning it now only needs Senate approval to be sent to the president, who committed to a Guard “seat at the table” in his 2008 campaign booklet, The Blueprint for America: Barack Obama’s Plan for America.

“Thirty and counting,” said retired Maj. Gen. Gus L. Hargett Jr., the president of the National Guard Association of the United States (NGAUS). “This legislation has real momentum because a growing number of lawmakers recognize that the Guard will be increasingly important to the nation’s defense and security, yet still goes largely unrepresented atop the Pentagon.”

A formal role in final resource decisions is part of an ongoing effort by many on Capitol Hill and NGAUS that three years ago elevated the chief of the National Guard Bureau at the Pentagon from a three- to a four-star general.

The NGB chief is now invited to participate in some discussions with the Joint Chiefs. However, he does not have a vote in final decisions. Nor does he have the ability to nominate Guard officers for positions that require Senate confirmation.

S. 1025 would enable the NGB chief to sit with the heads of the Army, Navy, Air Force and Marines — none of whom have ever served in the Guard — and give the Guard, for the first time, representation in final deliberations on staffing and resources.

All of the living former NGB chiefs, who were not allowed to support a Guard seat at the table while they served at the Pentagon, have endorsed the legislation.

The Senate Armed Services Committee this morning was able to establish a quorum and voted to approve 1,603 pending military nominations in the Army, Navy, Air Force, and Marine Corps. According to a committee statement, those approved include:

General James D. Thurman, USA for reappointment to the grade of general and to be Commander, United Nations Command/Combined Forces Command/United States Forces Korea;

Vice Admiral William H. McRaven, USN to be admiral and Commander, United States Special Operations Command; and

Lieutenant General John R. Allen, USMC to be general and Commander, International Security Assistance Force/Commander, United States Forces, Afghanistan.

The votes were voice votes, with all nominees en bloc.  All nominations were immediately reported to the floor following the Committee's action.

The Senate last night passed a resolution co-sponsored by Sens. Jim Inhofe (R-OK) and Jim Webb (D-VA) deploring China's harassment of ships in the South China Sea and calling for a peaceful, multilateral resolution to maritime territorial disputes in Southeast Asia. According to a statement from Inhofe's office:

On June 9, three Chinese maritime security vessels ran into and disabled the cables of a Vietnamese exploration ship, the Viking 2, in an area within 200 miles of Vietnam’s continental shelf and recognized under international law to be within Vietnam's Exclusive Economic Zone. This followed similar incidents on May 26 near Vietnam and in March near the Philippines, as well as incidents at sea last year in the Senkaku Islands, which are under the legal administration of Japan.  Following international condemnation of the June 9 incident, China deployed its largest maritime security ship to the South China Sea. Several other countries in the region have also deployed military vessels to the area.

"Over the past twelve months, China has been carrying out calculated acts of naval harassment in the South China Sea," Inhofe said. "Seeing this negative trend which threatens the freedom of navigation as well as the national security interests of the United States and its allies in the region, we introduced this Senate resolution.  China needs a clear message that their continued harassment will no longer be tolerated. I am pleased that the U.S. Senate sent that clear message in a unified manner. It lets Communist China know they must halt their aggressive behavior and return to the pledge made in 2002 to resolve this dispute peacefully."

"A growing number of nations around the South China Sea are now voicing serious concerns about China's pattern of intimidation. These nations include Vietnam and the Philippines, as well as countries such as Singapore that do not have a stake in the territorial disputes," said Webb. "This is a significant development toward fostering a multilateral approach to resolve these territorial disputes in a peaceful manner, respecting the sovereignty of all claimants."

"The United States has a clear strategic interest in facilitating such a multilateral approach, ensuring open access to international waters and air space, and promoting adherence to international law," said Webb.

The resolution passed by the Senate:

(1) reaffirms the strong support of the United States for the peaceful resolution of maritime territorial disputes in the South China Sea, and pledges continued efforts to facilitate a multilateral, peaceful process to resolve these disputes;

(2) deplores the use of force by naval and maritime security vessels from China in the South China Sea;

(3) calls on all parties to the territorial dispute to refrain from threatening force or using force to assert territorial claims; and

(4) supports the continuation of operations by the United States Armed Forces in support of freedom of navigation rights in international waters and air space in the South China Sea.

Inside the Pentagon reported earlier this month of the Defense Department's growing interest in China's military capabilities, despite growing economic ties:

While defense officials publicly insist that the military's new AirSea Battle concept, a study meant to reshape the way the U.S. military fights future wars, is not focused on China, one Navy team is quietly contradicting their claims. The group, called the China Integration Team, is hard at work applying the lessons of the study to a potential conflict with China, say sources familiar with the effort.

Portions of the AirSea Battle concept are classified, and high levels of sensitivity surround the study's connection with China. For both reasons, those who were willing to discuss the study asked to remain anonymous.

According to one source familiar with the effort, the China Integration Team is undertaking exactly what its name suggests -- applying the lessons of the concept specifically "at the China threat."

When asked to confirm the team's existence and mission, the Navy had little to say.

"With respect to an office being stood up to support AirSea Battle or China, I have nothing for you at this time," said Navy spokesman Lt. Cmdr. Justin Cole.

But an internal bulletin from the Navy's strategy and policy shop confirms the China Integration Team's existence and its connection with AirSea Battle.

"With the completion of ASB Spiral One development," the bulletin states, referring to the first draft of the study, "ASB responsibilities are shifting from N513," the strategy office that handled the first stage of the study, "to N3/N5 China Integration Team (CIT)."

During a visit to the National Robotics Engineering Center at Carnegie Mellon University on Friday, President Obama touted the promise of big savings to the national pocketbook from designing defense systems faster and for less money. Exhibit A, he said: Local Motors, a small Arizona company that under a DAPRA contract procured the Experimental Crowd-derived Combat Support Vehicle (XC2V), the first ever crowd-sourced, militarily relevant vehicle design. After checking out the vehicle prototype, which was in Pittsburgh, the president said:

We just took a look at it.  Not only could this change the way the government uses your tax dollars -- because think about it, instead of having a 10-year lead time to develop a piece of equipment with all kinds of changing specs and a moving target, if we were able to collapse the pace at which that manufacturing takes place, that could save taxpayers billions of dollars.  But it also could get products out to theater faster, which could save lives more quickly, and could then be used to transfer into the private sector more rapidly, which means we could get better products and services that we can sell and export around the world.  So it’s good for American companies.  It’s good for American jobs.  It’s good for taxpayers.  And it may save some lives in places like Afghanistan for our soldiers.

Through this program, DARPA looked beyond the traditional domestic defense industry for “innovative ideas for a vehicle body designed to accomplish the critical mission tasks of combat resupply and medical evacuation,” according to the agency. Local Motors was one of more than 150 bidders with designs deemed credible, and delivered its concept vehicle -- which includes a vehicle body and shell -- in less than 14 weeks.

Deputy Defense Secretary William Lynn, in remarks earlier in the day at the same event, said the design approach of the DARPA program could break the prevailing -- and unsustainable -- paradigm of military acquisition efforts, which have considerably less nimble development phases.

Before Eli Whitney had success in with the Cotton Gin, he went to Congress with a proposal to build muskets with interchangeable parts. It was 1801.  He was fairly dramatic in his presentation. Congress, then as now, is pretty skeptical of new ideas.  But Eli had a fairly dramatic way of demonstrating his. He took 10 muskets to Congress.  He disassembled them.  He threw all the parts in a pile.  And then he reassembled them, with different parts constituting each new musket-something that had never before been done. Congress was impressed.  Eventually, the Department of the Army issued a contract for 10,000 new muskets to be built using this method.  It was one of the first widespread uses standardized parts, and it contributed enormously to the advance of in manufacturing in the United States.

Fast-forward a couple hundred years to Norm Augustine, the former CEO of Lockheed Martin.  Norm wrote a book that is well known in defense circles called "Augustine's Laws." One of his laws was that he charted the increase in cost in high-performance jets and tactical aircraft against the increase in the defense budget.  When he plotted these two lines -- and it would not be that different now -- they crossed in 2054.  And what that meant was that in 2054 we would have to spend the entire defense budget to buy one airplane. He observed that that we could work this out.  The Navy would get it for three days a week, the Air Force for three says, and the Marines would have it on Sundays.

Obviously, this kind of rise in manufacturing costs is not sustainable.  But costs have continued to rise at roughly the rate Augustine predicted.  The cost increase in high-performance jets and other advanced equipment has been going up in a linear faction.  And part of the reason, a strong part of it, is the length of time it takes to design and approve them.  The time horizon of design and development is increasing at a similar pace. . . .

DARPA has focused on an advanced manufacturing effort that uses integrated circuits manufacturing as a model for open design and configurable foundries.  And that will lead you to the ability to crowd-source your design, greatly diversifying the sources of your design and the east with which it can be manufactured.  Altogether, we think this can significantly speed up the manufacturing timeline-on the order of dividing it by a factor of five.  That is to say we could do it five times as fast, which could yield enormous cost savings. . . .

This pilot [the XC2V] has the ability to undo Augustine's law and yield advances in manufacturing equivalent to what Eli Whitney ushered in during the early 19th century.  This is indeed the prize for us, for warfighters, and for taxpayers.

Earlier this month, Inside the Pentagon reported on a Defense Department study about the Arctic. That assessment identified gaps in the military's Arctic capabilities that could be costly to fix, but stopped short of urging significant investment in high-tech solutions amid a major effort by the White House and the Defense Department to slash security spending over the next decade. Further:

"What we did do was look across the mission sets and identify where we think there are gaps," a defense official said, noting the gaps have to do with "not-very-glamorous" but "really foundational" capabilities like "awareness and communication" that can be "quite costly to invest in, in a really robust kind of way."

DOD will "need to make investments" in these areas "in the coming decade," the official said. But the study's executive summary avoids making investment recommendations to fix DOD's capability gaps and the Coast Guard's shortfall in icebreaking capability.

"Given the many competing demands on DOD's resources in the current fiscal environment, the department believes that further evaluation of operating environment is required before entertaining significant investments in infrastructure or capabilities," the summary states.

The Pentagon is in the midst of developing a strategy for implementing President Obama's call to cut security spending by $400 billion by fiscal year 2023. Defense Secretary Robert Gates has said this effort must determine which military missions can be cut without incurring too much risk.

"The Arctic is warming on average twice as fast as the rest of the planet, resulting in increased human activity in the region," the report summary states.

The Arctic is not a "military-lead arena," the defense official said when noting the State Department helped the Pentagon's policy shop prepare the DOD report to Congress on Arctic operations and the Northwest Passage. But the official balked at the notion of eliminating DOD Arctic missions, arguing the capability to operate in the region is vital for defending U.S. territory.

At the time, all we had to share was the report's executive summary.

Now, however, we have the full report.