Closing Bell - Manifest Space: Space Security with Air Force Secretary Frank Kendall 12/8/23

Episode Date: December 8, 2023

With geopolitical tensions strained, Morgan Brennan sits down with Air Force Secretary Frank Kendall from the Reagan National Defense Forum to discuss AI on the battlefield, the race to secure space & more.

Last Friday, South Korea launched into space its first domestically built spy satellite. Lifting off from California's Vandenberg Space Force base, it came less than two weeks after North Korea put its first military spy satellite into orbit as well. Unlike the South Korean launch, though, North Korea's mission drew immediate rebukes from Washington, Seoul, and others since it violated U.N. Security Council resolutions. Any North Korean launch using ballistic technology is viewed by the intergovernmental organization as a cover for testing missile capabilities. I asked U.S. Air Force Secretary Frank Kendall about the recent developments and how he would assess the threat posed by North Korea amid a heightened geopolitical backdrop. I do think it's very concerning that North Korea has acquired nuclear weapons. I think that that is a risk we have to manage.

Their ability to put some capabilities in space, I don't find them all that threatening, quite honestly. From the annual Reagan National Defense Forum, Secretary Kendall joined me for a wide-ranging interview to discuss AI on the battlefield, the issue that he is, quote, literally losing sleep over, and the race to secure space. I'm Morgan Brennan, and this is Manifest Space. You just got off stage. You just did a panel that was focused on AI and autonomy. Your message?

We are embedding AI in a range of products. It's basically a set of technologies that are the next generation, if you will, of software-based capabilities and computer-based capabilities. So we are embracing it, and we're dealing with a lot of questions about how to embed it into our systems, get it fueled as quickly as possible and take maximum advantage of it to get operational superiority over what is now

primarily our pacing challenge, the China, which I've been worried about you know since I came back into government and for a long time now. So how so how quickly can that happen when we talk about some of these new capabilities and what does that look like in terms of the ethics and the rules of the road associated? I've spoken to folks in the defense industry and within the DOD that say, listen, AI is never going to be directly, it'll be involved, but it'll never be, there will always be a human involved in the kill chain, I should say. There will always be a human involved. The question is the degree of direct connection to the decision-making process. And I think our key question here is to figure out how, as we apply these technologies,

we are still able to hold human beings accountable for their performance. We've had autonomous seekers on missiles, on weapons systems for a long time, on munitions. My Hawk air defense system in the 70s had an automatic mode I could have turned on. But what we need to do at the end of the day is ensure that people are responsible and accountable for the performance of the systems. And it gets more complicated with artificial intelligence and software-based decision making because the person who is operating the system may not be the person who's actually responsible for the performance of the system. So we have to think that through.

But there's no question that we're going to be compliant with the laws of armed conflict, and we're going to ensure that our systems are reliable and perform consistent with our values and our ethics. I realize it's a classified program, but NGAD, to the extent that you can share an update on this next generation fighter jet and I think just as importantly the CCA aspect of it that everyone keeps talking about which is these loyal wingmen and autonomous aircraft capabilities. The next generation air dominance platform is the if you will the next generation of manned or crewed tactical aircraft but that that family of systems the aircraft. But that family of systems, the next generation air dominance family of systems, also includes the uncrewed collaborative combat aircraft.

And an individual crewed platform would have two to five, say, uncrewed wingmen that it would control as a formation and would use them tactically to get advantage over whatever tactical situation it had to deal with. Also in the mix are a new suite of weapons that are coming along for air-to-air and air-to-surface, connectivity to off-board capabilities that are integrated in and provide better situation awareness to that formation, and an even larger force would include multiples of these. So it's really a transformational next generation set of capabilities. The platform itself and the CCAs are, we've started contract work on that. The next generation air dominance platform was started in the Obama administration. I started that program and early X-Plane

prototypes that we did were successful at demonstrating the technologies we're interested in and we're moving on now, We're trying to move on to the next phase of that. An awful lot of what we're doing, all of this and many other things, depends upon getting an FY24 budget from the Congress. So my overarching concern right now, among all others, is getting those resources so we can get on with programs, some of which we identified the need for as much as two years ago. I do want to get into that a little more specifically, but first one more question on this. How quickly can you field these capabilities?

We intend to have operational capabilities in production and hopefully fielded for the uncrewed private combat aircraft by the end of the five-year plan in reasonable quantities. The platform itself may not be able to move quite that fast and a lot of this is classified of course I can't say much about the details. Some of the associated systems like the munitions for example an advanced air to air weapon will come on before that so we're trying to get everything we can. My general guidance to my acquisition people as they put programs together is to get meaningful military capability into the hands of operators

as quickly as possible. So where necessary to reduce risk, we'll do experimentation and prototyping, but I'm much more interested in getting production capability and a production line flowing and real quantities out as quickly as I can. Speaking of classified programs, the B-21 bomber. Yes. Recent maiden flight. Yes. How do you feel about the flight? And I guess there had been an expectation, at least among the investment community, that we would see low-rate production begin to kick off behind a successful flight. Is that happening? Bill LaPlante, who's here, is the Department of Defense Acquisition Executive now. My former role and I, when he was with the Air Force, put that program together, basically structured it. And it's gratifying to see it executing basically on schedule.

But I always caveat any comment about a program with the fact that there is risk in development and things you don't anticipate do happen. So it's encouraging that they made first flight pretty close to on schedule. They've got a lot more flight testing to do. They have a lot more integration to do. But at this point in time, you know, I'm satisfied with the progress and hoping it continues. We're going to do a reasonable amount of flight testing before we make a major commitment to production. I've seen us make the

mistake of assuming too much concurrency in the past. The F-35 was a classic example of that. And I don't want to have that kind of, I don't want to take that kind of excessive risk. So I think we can get a reasonable amount of data to support our decisions, and then we can move forward from there. It won't be long. Okay. There's these, you know, big ticket, very sophisticated, long lead programs that require a lot of development and a lot of new technologies and capabilities. The flip side of that is there are, case in point here at the forum, I mean, there are a lot of tech startups that are taking the initiative to develop their own products and capabilities and technologies, anticipating a need for them in the marketplace as well. What does that mean from an Air Force standpoint in terms of how you think about working with startups, working with new companies, and bringing more capability online more quickly in

a more creative way? We definitely need to do that. I think we need to be more thoughtful in some cases about the path by which that happens. I worked when I was out of government with startups. I love their creativity. I love the technical talent that they bring to the table and the entrepreneurial spirit, if you will. And we can get a lot of good out of that. What we need to do for those firms is help them find a way to bring those ideas, bring that technology into products. In many cases, they're not developing what is an end product in itself.

We buy integrated weapons systems. There are other technologies that can be brought in, as upgrades to communications and battle management systems, for example. So I think that the place where we have fallen short, there are two things that are necessary. One is to make sure we have a path that they can get into a field of capability that is accessible to them. And the other is the resources. One of the things that I think people miss is that my biggest problem right now, and I think in general my counterpart's problem, is not lack of awareness

or access to technology or to innovation. It's the resources that convert it into real products. It's very cheap to do early stage R&D on a product. It's relatively cheap to do an experimental prototype. It gets much more expensive to do a production prototype and a building quantity. And unfortunately, we just don't have the resources to do everything we want to do. Right now in the Department of the Air Force, for both the Air Force and Space Force, I have a long list of things I would like to be able to buy. So I don't have a shortage of things I can spend money on to bring technology in. It's the money that I have the shortage of, quite frankly.

Which brings us back to the continuing resolution and the fact that we don't have a fiscal 2024 budget in place or a policy bill for that matter. How detrimental is that to your efforts and to modernization of the service? It is utterly devastating. I am actually literally losing sleep because of my concerns about the 24 budget and the political process right now. Now, we get great support from the four committees in the Congress that oversee the Defense Department, and in my case, the Department of the Air Force, whether it's the appropriations or authorizers. And it's on both sides of the aisle. The vast majority of those members understand the importance of national security. They understand the threat, and I've worked hard to make sure that they do understand the threat.

And they know what we need to do, and they are supportive of it. But when you get into the larger political context and larger political dynamic, it's much harder to see us getting to where we need to be. So I'm hopeful that the Congress will do what it needs to do. I'm disappointed that it's taking them so long to do it. But I think there's fairly significant risk this year that we will end up in a default situation which moves us backwards. It doesn't just hold us in place, it moves us backwards. And the threats that we have, China in particular, is moving forward as quickly as it can to field the capability to defeat the United States. It is quite clear from the intelligence that they are building a military that is designed to be able to defeat the United States. It is quite clear from the intelligence that they are building a military

that is designed to be able to defeat the United States. We cannot stand still, and we certainly can't go backwards. Are we falling behind in certain aspects? We're not moving as fast as we need to be. It raises a key question. You've got two hot wars. We're not directly involved, but we're helping to aid or supply or support Israel, Ukraine. We have restocking that needs to happen in terms of our own stockpiles and weapons systems and munitions stateside too.

And then to your point, having to plan for the future and counter that pacing threat. How do you balance all of it? The U.S. has a lot of capacity, a lot of capabilities. Build a plant who's here, has been working very hard to increase our production capacity, particularly for the high-demand things that are being used in Ukraine. We've had great success with that. We've been at war for almost two years now. Ukraine has been at war for almost two years.

And over that period of time, we've responded to that need, I think, pretty effectively. We do have the resources to support both Israel and Ukraine, but we do need, of course, resources to replenish stocks that we're using for that purpose. So we do need supplementals in both cases, right? And we've asked for that money, and hopefully the Congress will act on it. At the same time as we're doing that, we also need to move forward with the modernization things that I talked about earlier. So I guess if we just did a trip around the world, I'd like to get your insights and analysis on what we are seeing, starting with Israel. It's not my area.

I'm not the foreign policy person. Secretary Austin's here, will speak later. I know he's going to address all of these things. An observation from my perspective is that the administration, and I give Secretary Austin, Secretary Blinken, National Security Advisor, and the President enormous credit for this. They have done a masterful job of managing an incredibly difficult situation with Israel. The outrage in Israel over the horrors of what Hamas did to the Israelis is very understandable, but so is the need to act with some restraint

and obey the laws of armed conflict. And I think that what the administration has accomplished in working with Israel and other partners in the region to try to influence Hamas in their behavior and to try to see this conflict progress in a way which has the best chance possible of getting to a better outcome at the end of the day. I'm really impressed, frankly, watching this, I'm not directly involved in it, with how well we have done so far. I don't want to jinx anything because there's a long way to go and a lot of risk, but it's

an incredibly difficult thing to do from a foreign affairs, international relations perspective. The signals we have sent with the military about our resolve and our commitment to Israel in particular and its security and the list of things that we've described as priorities including that the Palestinian solution to two-state and so on, these are the right things and I think they're having the right impact so far but we have a long way to go. Ukraine? We need to continue the support for ukraine ukraine is uh fighting very valiantly to resist russia they've done a remarkable job but they need our support and the the message we need to send uh to russia and to china is that aggression will not be

rewarded and uh i'm afraid russia is prepared to be somewhat patient in this. We have to be enduring. We have to continue our support to Ukraine. And that approach by Russia cannot be allowed to work. I do want to get your thoughts on North Korea as well. A recent spy satellite launch reports that the country is vowing to launch more spacecraft. How would you characterize that risk? I don't put it extremely high. I do think it's

very concerning that North Korea has acquired nuclear weapons. I think that that is a risk we have to manage. Their ability to put some capabilities in space, I don't find them all that threatening, quite honestly. One important point here, I think, is that our strategy calls to Boris to keep our focus on China as the pacing challenge. And I heard Secretary Austin speak this morning, he'll speak later today, about the fact that we are not taking our eye off of that as the dominant concern that we have from a national security perspective, That China is the strategic competitor we have to worry about the most. We're going to keep our focus on that. But again, the U.S. has a lot of capability.

We can support Ukraine. We can work with Israel to try to help them get through this period. And we can do the other things we need to do, including deal with North Korea, while we remain focused as our highest priority on China's basic challenge. That's exactly what we need to do. Final question for you, and that is space, the critical infrastructure and resiliency, securing space. How does that process continue, especially as you have been creative in terms of how you're working with commercial space companies, for example?

We are. There's enormous opportunity from the point of view of the Space Force to use commercial technologies and to use commercial services in support of national security, and we're exploring all of that. The work that the Space Development Agency has done to field proliferated low-Earth orbit architectures relies very directly on commercial capabilities for larger scale and much more affordable spacecraft. The number of companies that I've talked to are providing services from space and the processing of data collected from space that can be enormously valuable for national security.

And we need to find creative ways to work with those companies. We also need at the same time to be acquiring the resilient military capabilities that we need that would be subject to potential attack by our facing challenges, which are both in this case predominantly China, but also potentially Russia. So we've got to manage that. And again, we need the resources to move forward and modernize. The short analogy that I give about the Space Force is that we're essentially a nation that had a merchant marine and woke up one day and realized it needed a Navy. We've got to build that Navy. That's not going to be free. So the biggest increase in budget in the Defense Department across the different services is

for the Space Force. Space Force is looking for about a 15% increase in 24. And again, if we don't get that money, we're not going to be moving forward at the pace we need to be. Secretary Kendall, thank you so much. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm