Closing Bell - Manifest Space: Between a Rock and a Hard Space with former Boeing Defense, Space & Security CEO Leanne Caret 4/4/23

Episode Date: April 4, 2023

As Virgin Orbit files for Chapter 11 bankruptcy, Morgan dives into the complexities of the space race with former Boeing Defense, Space & Security CEO Leanne Caret. Now an advisor for the company and board member at Raytheon & John Deere, they discuss labor challenges, NASA's Artemis lunar program, Boeing Starliner, autonomous farming, and more. For more Manifest Space, listen and follow here: https://link.chtbl.com/manifestspace

Virgin Orbit filing for Chapter 11 bankruptcy protection after a fail to secure a new funding lifeline. The satellite launch company founded by Sir Richard Branson suffered a cash crunch, exacerbated by an unsuccessful launch earlier this year. Quote, we believe that the cutting edge launch technology that this team has created will have wide appeal to buyers as we continue the process to sell the company, said CEO Dan Hart in a press release. Virgin Orbit, spun off of sister company Galactic in 2017, went public via a SPAC in December of 2021, touting a number of high-profile investors, including Boeing. It's something I asked Leanne Corrett about, the former CEO of Boeing Defense Space and Security, just recently. They had a vision and they were continuing to focus on having it. And those dedicated, brilliant engineers at Virgin Orbit, they're going to be highly sought after. There are going to be people clamoring today trying to pick those folks up.

And there's still room in the investment space. This is a hard business, but I do think today in society, there is not as much appreciation for the complexities of going to space. I am not certain if the mandate that came out in the 1960s was the mandate that came out here in the 2020s, that everyone in the public would rally behind it quite as much, because it isn't at any cost. It isn't at any option. We want to do things safely. We want to do them efficiently. Corrette is a self-proclaimed space baby, having worked 30 years at Boeing before taking on an advisor role at the aerospace giant and joining the boards of Raytheon Technologies and John Deere. In this wide-ranging episode, we discuss everything from Corrette's efforts to recruit

more women into the industry, to the Artemis Lunar Program, to those Starliner delays, even autonomous farming. I'm Morgan Brennan, and this is Manifest Space. Leanne, it's so great to have you on Manifest Space. Thank you for joining me. Thank you for inviting me, and congratulations on starting the podcast on top of all of the other efforts you have ongoing. And I have to say, I can try, I was trying to remember

the last time Morgan, you and I connected was either when we were at the space symposium in Colorado Springs or up in Everett, Washington at a rollout. I couldn't remember exactly what it was, but I'm a big fan. Well, the feeling is mutual. And your state, so you're no longer the CEO of Boeing Defense Space and Security, but you are still advising the company. You've taken on some board roles. I guess talk to me about what's keeping you busy these days.

Well, this is such a fun time, most importantly, because I'm getting to focus on those things that I really enjoy. I really like doing. So, you know, I kind of put it into three pillars. The first pillar really is centered around business relevance. You know, where can I advise? And so that's where my work with Deere and Company and with Raytheon Technologies, as well as with Blackstone, where I get to work with some of their smaller companies that they have ownership stakes in, has been really helpful. And then I have a phase that's really about inspiring future generations. And so that's where I'm spending my time really focusing on leadership and making certain that I'm available as a resource. So

with universities, whether it's teaching or speaking, different things like that. And then finally, paying it forward. And so I have a couple of efforts. And I know you want to talk a little bit about STEM and women in the workforce. But there are some specific organizations I've joined that I just think are absolutely fantastic. Let's start there. There's a lot I want to get to you on. And certainly even above and beyond space, we can have a very long conversation. We're going to keep it more targeted there for now. Let's talk a little bit about those efforts around women in the workforce and STEM and specifically how we bring up those numbers and your efforts to do that. Well, so let's start with facts, because so many times this conversation gets into a whole realm where people aren't speaking with facts and data. And I know you love facts. So in 1990, think about this. Here in the U.S., women comprised 9 percent of the engineering workforce and 24 percent of the computer science workforce.

So fast forward that 30 years to 2020. So we're talking pretty much my career. In engineering, women went from 9% to 15%. And in computer science, from 24% to 26%. So absolutely progress has been made. But you and I also both know that there's this thing called critical mass. And this is really about not being the only in the room. And you have to have critical mass to not be the only, which means we need to tip well above 30%. And so we need to start early in schooling. We need to start and we need to continue to have conversations about how hard it is to be a leader in this day and age.

How are our behaviors? What do we need to do? What do we need to learn to develop and grow? But most importantly, we need to have support networks to help folks continue to broaden and excel because it's not for a lack of talent. The talent is out there. What we want to do is be able to bring and lift more

throughout the entire value chain of talent. The talent is out there. What we want to do is be able to bring and lift more throughout the entire value chain from technicians all the way to scientists and astronauts. How quickly can that, I mean you just laid out the progress that's already happened, but it's taken many years for that progress to actually manifest. So how quickly can that accelerate? I've actually joined a organization, and you know these ladies. Patti Sellers and Nina Easton have formed an organization called Journey. But it's really about bringing together a really amazing group of diverse women, they call them fellows, and giving them access to 34 what they call champions who are

true leaders in industry. So if you're thinking about early education, getting into elementary schools in third grade is where you can make some of the most significant impacts about what young women want to do with their lives, what they think is the art of the possible. Why third grade? I think for third grade is when norms and behaviors start getting established in their mind. Now there's scientific research that says a whole bunch of other things, I'm certain. But think about what your role was like in third grade. Here's what my experience was in third grade. This is very personal. I was in school in the Seattle, Washington area,

because, you know, our family had moved there. And I was really good at math and science. And I was really bad at English. And my third grade teacher called my parents in and said, I was developmentally challenged, and they needed to think about doing something different with me. Because the norms for us at that time were that girls should be good in English and liberal arts types efforts. Math and science wasn't where we were thinking. Now, this was in the 1970s and we've made tremendous progress.

But imagine what if my parents had accepted that as I had a problem versus my mom and dad saying, hey, she loves math and science. That's great. We'll help her with the English. But let's go double down on the math and science. Wow. And your parents were in the aerospace sector and they were STEM focused. So a gift to be able to have parents like that who heard what the teacher had to say and said no you know what we're gonna we're gonna approach this a little bit differently than what you're saying right and we had the resources you know I call myself a space baby you've heard me say that before because you know my mom and dad actually met uh there um on the Saturn V program just

outside New Orleans um at the Michoud factory. And I'll never forget being able as, you know, we were working on Artemis and the space launch system. I remember calling my mom saying, oh my gosh, I am standing in the same building you were standing on, standing in when you were here working for the company and working on that program. That, that just was so a full circle for me and really very meaningful. What did you think of Artemis 1 to see that launch successfully happen and NASA to

come out just recently and say that there was no issues with the mission, everything seems to be above board and a green light essentially to start moving forward on the next one. I don't know if you felt the same way I did. But what I felt was that Artemis One captured the world's imagination. And it's what is so great about the space domain. You know, we talk about sea, land, air. Space has a special place in everyone's heart because it isn't something we can physically touch. And we saw the world's reaction to Artemis One and we saw the amazing success. And so hats off to NASA. Oh my goodness, that is just an amazing organization that is focused on doing business the right way and making certain that they understand the challenges because space is hard. And then all of the industry partners from the large OEMs all the way through the supply

chain, everyone had something to do with it. And I think that it has continued to create this excitement and this opportunity for, we are only limited by our imaginations. So I am extremely proud, thankful that I had a time period of my life that I was associated with it. And hugely, just huge congratulations to that entire NASA industry team. It's just fabulous. From a business standpoint, the Artemis program, it feels like a case study in the combination of old and new. And what I mean by that is the contracting models, the way that work is getting done. So with SLS Rocket and with the Orion capsule that Lockheed makes, it's a more historical method of contracting out and NASA owning the hardware. But then you have other elements of the program that are more public-private partnership

where NASA is going to be contracting out for the services of those companies' owned hardware. Just want to get your thoughts on these different business models. Also because Boeing has Starliner, which was one of those with Commercial Crew, one of those programs where that new public-private partnership model really came into being. Absolutely. Well, I think, you know, when we think about not just contracting, but the art of the possible here, how we look to the future, I kind of bucket into the three ways, Morgan.

First, industry is responding in multiple ways to develop capability. This is an area of opportunity where you have government funding, where you have large corporate participation, and in some cases funded R&D. You also have a lot of private equity or venture capital involved. And so it's one of those domains that everyone is finding a way to come together. And I think that's really critical because as we look to the future, commercial space access is changing the way that we live. And so everybody can see themselves having a part of it. And what we're starting to see at large is that folks every day in their lives, whether it's because of their access to different apps on

different devices or whatnot, recognize that space has played a really big role in it. And so opening it up so that you can have all that investment, having those technology gains, having that ability for innovation, it just broadens access and capability. And then finally, and this actually, I think, goes to your point, is that the way that we look at space going forward is actually increasing the ability for creating partnerships and new technology advancements in ways that traditionally hadn't been done before. And so I tend to view things always as an and versus an or. I don't like to create false choices. When you can bring together the government, the world government, when you can bring together

large corporate investments and opportunities, and when you can bring together private equity, that's a rich combination of opportunity, which will help us accelerate the technology that's being developed. I realize you're retired from this role at Boeing. And so I'm not asking you to necessarily comment on the operations as they're going on at the company now. But just the fact that NASA and Boeing have come out and announced another slip in the schedule for Starliner. We're a couple of years overdue now. Is it frustrating as someone who was involved in that for a period of time in the past to see that it still hasn't carried humans? I'm not going to comment on the current efforts. What I'll share with you is I'm incredibly honored to have spent time on the program.

The technology is phenomenal. The team is amazing. And I know that we very much value our partnership with NASA. And so rather than looking at it through a lens of what is or what isn't, I think it's more important to look at, again, to the future in terms of this is going to continue to create capability that is desired, that is needed. It's going to create optionality and it's going to create access. And so when we think about how access to space is going to benefit the world, I really like to think back to, and I've told you this before, Morgan, you know, my view of what the future in space is going to look like was in a cartoon called The Jetsons. I believe before the

day I die, I'm going to see spaceways, not just highways. I think commercial tourism is going to actually be occurring. And I believe it's going to be at a price point where it's not only for people with incredible wealth. It is going to allow us to change how we think about the world as we know it today. And it's going to expand all of our thinking. And so I remain very optimistic about space. I'm very proud of anyone who's in the business, because I'll say

it again, space is extremely hard. There is not margin for error. And as a society, we don't have a lot of tolerance for error. And so we need to make certain that these are always with the headset of no fail missions. Yeah. And you bring up a key point, and that is the fact that as we have seen the cost of capital increase, we did see this huge proliferation of so-called new space companies and pure play space companies, many of them actually going public in the last couple of years as well. And now it seems like there's a bit of a correction or consolidation in the market too. Are we at a key point in terms of winners and losers and who moves forward and what that means in terms of that pace of innovation? I don't know that we're, it's necessarily what I would call, I for certain would not frame it up as winners or losers. What I do believe is that there is starting to become recognition that the time to market tends to be longer from a development perspective due to the technology that is required to achieve some of these visions. And that in some cases, it's needing more capital, more time and more capital to go make that happen. And so the ideas aren't going away. The ideas aren't being shortchanged.

Rather, it's where else can we find partnerships, alliances, cooperation around the world in different forms? And the other thing that is still shockingly true, and it really inspires me, is the talent isn't going anywhere. There is amazing talent, Morgan. So all of these individuals are these great people that have these visions that are actually making it happen every day. They're living with the highs and lows of things going well and maybe not going so well in any given day. That talent's available,

and other companies are going to want to take them on and they're going to want to make them part of the solution and then they're going to bring their ideas with it and so we're going to continue to see this uh to see this building block occur i am curious though what you think of virgin orbit for example which boeing had been an investor in through horizon x which has since been spun off to private equity. Virgin Orbit is an innovative, groundbreaking company. And I've had the honor and privilege of working with both Sir Richard Branson as well as Dan Hart. And, you know, when Dan yesterday shared and they made it public that, you know, he had one of the toughest all-employee meetings he has ever had in his entire career.

And Dan's done some really hard jobs. They had a vision and they were continuing to focus on having it. And those dedicated, brilliant engineers at Virgin Orbit, they're gonna be highly sought after. There are gonna be people clamoring today trying to pick those folks up. And there's still room in the investment space. There's still room in the world for this type of

thinking and it's needed. But we are going to have ups and downs and it's going to be at different scales. But I think what we can't forget is the amazing talent, both from a leadership perspective and every day in the trenches working to realize that this is a hard business. And Maureen, I always come back to that, and I know that might strike you as rather odd, but I do think today in society, there is not as much appreciation for the complexities of going to space. I am not certain if the mandate that came out in the 1960s was the mandate that came out here in the 2020s, that everyone in the public would rally behind it quite as much because it isn't at any cost. It isn't at any option.

We want to do things safely. We want to do them efficiently, but we also have as a society, some need for instant gratification. And as you know, covering this market for as long as you have, there is some real technology here that's being developed real time. It brings the geopolitical aspect to all of this into focus, too, because it's not just about the commercial market or even just the domestic civil space market, but there's a military element to this as well and a national security element. And this idea of U.S. dominance being maintained in the space domain, even as we do see the likes of China throw a lot of investment into it as well. Well, I think you bring up a really good point um here as well because we spend a lot of time talking about the technology um and without the technology you know

we're not going to have all these great um new adventures and everything but as you know there's been generations historical events that have occurred that help come up with the operating norms for sea, land, even air. And I think that on the parallel path, now this is my personal opinion, is that on the parallel path to developing these key technologies, there needs to be the same time and effort and focus spent on rules of engagements and operating norms and understanding what are the penalties when those aren't followed. I think that's going to have an outsized, my personal opinion is that that will have an outsized impact on the technology itself. But I think you bring up a really good point in terms of we need to think about it both ways. You're on the board of Raytheon. Raytheon has been very active and successful in some of the contract awards for things like hypersonics, missile tracking

satellites, et cetera, sort of this next phase of military-related space or national security-related space. I just want to get your thoughts on how that area is changing and evolving and what that means, especially in light of some of the stuff we've seen go on in Ukraine with Russia in the past year. Well, I'm not going to speak to any current Raytheon business efforts. What I will say is it's a tremendous company that I am extremely honored that Greg Hayes asked me to join on the board. And that similar to our conversation around space, there is R&D efforts and technology being developed every day. And it's leveraging that full portfolio. And I think, Morgan, you know, as well as anyone, that the A&D marketplace is actually,

you know, it's quite small. There's a lot of technology. There's a lot of partnerships and alliances that occur across. And so keeping the customer in the center of everything that we do, I am proud to be associated with, you know, from a historical perspective with my career, but also with both Raytheon as well as Deere and Company, which is another great technology company.

The customer is at the center of the universe. And I think that's really important. I'm glad you brought up Deere again, because it's one of those names that actually ends up sometimes in some of the more space-focused ETFs because of things like precision agriculture and the work it's doing with satellites and some of that space-based data. I am absolutely thrilled. When John May asked me to join DEAR, you know, I've spent most of my life, you know, growing up in Kansas. And so what I shared with him was two things. Again, you know, being able to be there in35s or B52s, you name it, taking off over a field of hay or corn.

And it is actually, for me, it is actually extremely personal that I'm able to bring some of my operational background, some of my experience in terms of that technology set that allows them to leverage me in terms of how they're continuing to change the face of deer. And deer is, I think, one of the best technology secrets in the world out there. They are, I had the honor of watching, you know, some of the automated planting and see and spray technology. It just, it's just absolutely mind boggling at times what the ability to do is, but you're not going to do that to your point without the access to space. And so being able to bring that all together is just a win-win. This sounds like a future Manifest Space episode dedicated to this topic. Oh, we should do that because I think you would surprise a whole bunch of folks with this topic.

Yeah. I mean, it's really fascinating. I do want to get your thoughts. We're coming towards the end of this conversation. We do want to get your thoughts on ULA because there are the reports out there that maybe that company is on the sale block too. You know, I'm again, I'm not, you know, and I'm going to give you credit for trying. You've tried. I'm trying. I knew you would. I'm not going to comment, obviously. Here's what I would say again. I am just so honored that I've had an opportunity to see what I have seen in, you know, the first stage of my career. And I think what I hope everyone takes away from this conversation, again, is three things. One, industry writ large is responding in multiple ways to develop capability. And because of the access that commercial space provides and the benefit it provides, I mean, companies and industries are coming together to change the way we live.

And then that's allowing for partnerships and alliances to occur that are absolutely phenomenal. And I think we should all just be really, I know I am really humbled and honored that the people who are the professionals in this space are just world class. And the talent is amazing. And so what I want to do is I want to see more talent. I want to see more diverse talent. I want to see inclusivity at all levels. And I actually want us all to be able to see ourselves in whatever position we ultimately want to be in. On that note, any parting words of wisdom or advice you would give to some of that up and coming prospective talent? Okay, I'm going to make you stay on for just a second longer, because I do think this is important. I, over the course of my career, feel that there are four things that help in leadership, and they're, again, they're not false choices, so it's not an or, these are all ands, and it's grit, gumption, grace, and gratitude. Roll up your sleeves, be willing to do the hard job, but at the same time, believe in yourself, and you know, that imposter syndrome that every one of us suffers at some point,

mine looks like the great gazoo from the Flintstones, flick it off your shoulders, and take the hard job, because you can, and space is a great area to do that in, but also have grace, because you know, life is going to throw some curveballs, it's not all going to go as planned, we're all going to have failures, and I have found that this world could use a whole bunch of grace, not only for others, but for ourselves. And then finally, gratitude. And that's where I'll end, Morgan, with you is thank you so much for the opportunity to spend a little time. It was wonderful reconnecting and I look forward to talking again. That does it for this episode of Manifest Space. Make sure you never miss a launch by searching Manifest Space wherever you get your podcasts. I'm Morgan Brennan.