 OK, is this working? Can you hear me? Good. Please, sir. Well, thanks, everybody, for coming. I'm really delighted to have you here. My name is John Hamry. And I'll apologize if I sound a little dopey today. I landed at 2 in the morning having flown back from Taiwan. And I promised I'd be here to be with the secretary. So he's going to sound brilliant. I'm going to sound stupid, but that's normal. But at least today I have an excuse. We're really very happy to have Secretary Ray Mabus with us today. And I would say thank you for coming. He has so many titles. Governor, Ambassador, Secretary, CEO, which just before we get started, which do you prefer? Just a plain simple excellence he'll do. Just your excellency. OK, your excellency. I'm really delighted to have you here. And of course, everybody here in this room wants to hear you say things you can't talk about, which is the new budget. And I suspect I'd like everybody here to be somewhat respectful of this awkward situation the secretary's in. There's some things he just can't talk about today. And you'll just have to understand that that's part of the business. But he is going to give us insights into his thinking and his advocacy that helped shape this budget. And so Mr. Secretary, I thought maybe you would start by saying is you're trying to guide the Navy thinking about the fundamentals. It's not just today's Navy. It's the Navy we have in 30 years. What guides you? What's guiding you for this framing? The one thing that the Navy uniquely. And when I say Navy, I mean Navy Marine Corps team, two services, one mission. But the thing that Navy uniquely brings to our country is presence. Presence is the purpose. It's what we do. It's what we're about. Not just being in the right place in the right time, but the right place all the time. And in the defense strategic guidance that the president came out with in 2012, if you look at that, focus on the Western Pacific, focus on the Arabian Gulf, and focus on partnership buildings, on partnership building, that is a maritime strategy. That is a strategy that requires a great Navy, requires a great Marine Corps. And so that overall all idea of presence and the ability to give our leaders options in times of crisis, and in times, peacetime and wartime. So that's the big, big idea. Underneath that, the way I've organized it has been in order to get presence, you need to look at four things. People, make sure we've got and retain very high quality sailors and Marines and civilians. Platforms, because quantity becomes a quality of all its own at some point. Power, because the way we get and use fuel can either be a military advantage or a military vulnerability, and forth is partnerships. Building those partnerships around the world, because no matter how big, no matter how good we are, we cannot do these things alone. And we need partners, and they need to have the capability to act together with us to meet whatever eventuality there is out there. Secretary, I heard that abundantly in Asia. I've set a conference that involved representatives from all of Southeast Asia, and everyone talks about the importance of America's presence in region. And of course, when they talk about that, they talk about the Navy. How do you feel about the, because you've traveled extensively in this, which is an important part of your mission, how do you feel about our capacity to partner with them, both our ability with our budget to be able to meet their expectations, and then honestly, their capacity to be a partner with us in these missions? Well, I think in the first half of that equation, it's important for them to know that we are going to be there, that the shift to the Pacific is very real, both in terms of numbers of ships and aircraft, but also in terms of our most modern platforms are going there, that the exercises that we do, that the engagement that we do, we are going to be there. Those big gray hulls are going to be on the horizon. In the second part, many of these nations have great capability and great capacity and the ability to grow. And a good example is every time North Korea starts, rather than Sabres, you've got South Korean ships with Aegis capability, you've got Japanese ships with Aegis capability, and you've got our ships with Aegis capability already there, already very interoperable. And for other nations, and I'll just talk about the Pacific now, but for other nations in that region, the sharing of maritime domain awareness, who's in your waters? What are they up to? And the fusion of that information that comes from a lot of different sources, we can help put together the pieces that already exist there, but you have to have that constant, never-ending communication and collaboration. There's a saying that you can surge equipment, you can surge people, but what you cannot surge is trust. And that you have to have those relationships, you have to have that interoperability, you have to have that familiarity with each other before the day that a crisis, regardless of what kind of crisis that is, arrives. Big changes in Asia with standing up Darwin operations. Would you just describe a little bit of that? I know that this is a major focus for you. From the Navy perspective, we're going to move from about 55% of our total fleet being in the Pacific to 60% by the end of this decade. And as I said, our most modern platforms are going there. From the marine standpoint, we're going to have this rotational presence of marines in Darwin. Australia started out with a company size about 200 marines. This year, it's going up to more than 1,000 marines, a battalion size. And it will end up a MAGTAS size of more or less 2,500 marines with supporting assets. But it's not just to train with the Australians, although that's an important element of it. But it's also for engagement in that part of the world, engagement bilaterally, multilaterally throughout, throughout that incredibly crucial part of the world with so many maritime choke points, so many potential areas of instability that we can, going back to the original thing, partner on. And finally, we're using our ships differently now. More forward deployed. You're going to see more of our ships forward deployed for longer periods of time. A good example is the four littoral combat ships that will be going to Singapore. We don't have any there. Right now, we've already done our first one. The freedom was there on an eight month deployment. But by 2016, we will have four littoral combat ships on extended deployment. They're not going to be home ported in Singapore. But looking to the other side of the world, I was in Rota, Spain two weeks ago when the first guided missile destroyer, ballistic missile defense destroyer, arrived in Rota. We're putting four of those home ported permanently in Rota. Now, each ship that we have forward deployed, according to the CNO, takes a place of about four ships home ported here in the United States because of transit time, because of maintenance, because of things like that. And so we can get a larger presence with the same number of ships. Although I do think it's important that we continue to grow our fleet. And I think that what the Secretary of Defense said on Monday in his statement pointed out that the Navy will continue to grow just in numbers and in types of ships that we do have that we can forward deploy. To the extent that we can within the ground rules, could you amplify on this? I know I hear many times friends in other countries will ask, you're facing tough budgets here. Are you really going to be able to sustain this? You must confront this all the time when you travel. How do you talk about this? Because we do know we have tighter budgets coming. Well, the number that I give that I'm very happy with, the four years before I became Secretary of the United States Navy put 19 ships under contract. That was not enough to stop the slide in the size of our fleet. It was not enough to protect our industrial base. In the first four years, I have been Secretary, we put 60 ships under contract. So we are growing the fleet. And under our current plan, we're going to get back to 300 ships by the end of this decade. Now we've done that, there hadn't been any magic to it. But I do tell our friends, our allies, people around the world about this. But I think it's also important to make that point here, to make that point to the American people and to as how we look at our defense and at our defense strategy. The way we've done it is by some very basic business things, putting competition in, doing firm fixed price contracts, doing multi-year procurements, keeping stable designs, building what we know how to build, not trying to force immature technology on the platform. Being transparent about what we're going to build so that industry can make the investments, industry can do the training that they need to do. Now if we do those things, what we expect from industry and what we've been getting from industry is that every ship or aircraft of the same type that we haven't changed the design, that we haven't changed the technology dramatically, ought to cost less than the preceding one. So I'll give you one very quick example. The DDG-51, one of the great warships in the world today. Now we have two shipyards that build it, Bath and Main, Pascagoula, Mississippi. We're building two a year. So these shipyards took that as basically an allocation and we weren't getting the prices that we needed to get to be able to afford the number of ships. So two years ago we bid out three instead of two and we said the low bid will get the third ship and in addition, the difference in the high bid and the low bid, that Delta will come out of the high bid's profit. One shipyard won pretty decisively. Last year as part of a multi-year buy we put out a nine ship solicitation with an option for a 10 and said the low bid will get firmly five ships, the high bid will get four. And once again, the difference in the high bid and the low bid will come out of the high bidder's profit. The other shipyard won decisively. So putting that sort of competition in concentrates the mind. Is that what was behind Secretary Hagel's thinking when he challenged you to do even more than one shipyard? Well, I was very pleased that he put that in because I do think we're doing a great job in terms of that, in terms of being, driving a very tough bargain. The way I put it is my father was probably the cheapest human that has ever lived on the face of this earth. He'd long laughter out here, right? We all have fathers though. He thought it was a real compliment to be called a cheapskate. I am his son. I wanna drive very, very hard bargains for the American people. And I think in virtually every ship class we have driven down the price, we have accelerated the schedule and the quality has stayed there. I mean, you're talking about the Virginia class, you're talking about the DDG 51, you're talking about the littoral combat ship, you're talking about the amphibious ships that we have coming in. The other thing that we are doing that was part of Secretary Hagel's thinking, part of Secretary Hagel's mention of that is one of the easiest things to do is look at platforms. One of the hardest things to do is look at services, at service contracts. We're spending $40 billion a year in Navy and Marine Corps on service contracts. And tracking that from the dollar that's appropriated to the dollar that's spent is pretty difficult. But we're getting a handle on that. And we think we can say, look, I'll go a lot further than that, we know we can save significant amounts of money just by setting up things like contract courts, which require, there's a more formal name for it, but it requires contracting officers to come in every year and justify the contracts that they have. Why do we have that contract? And I'm talking about everything from very high end IT, things like that, down to mowing the grass. Why do we have the contract? Has it been rebid lately? Is it the best price we can get? Is it needed anymore? And that was one of the things that we have been talking about internally, that we have been pushing internally, is that not only are these platforms, which are the most visible and sort of the easiest to pinpoint, we've got to look at, there's a lot of other money flowing through. Pentagon and particularly flowing, in my case, flowing through the Navy Marine Corps that we have got to make sure that we spend every dollar well. You need to do that all the time, but particularly in this budget. Secretary, a lot of our friends here are in the contracting community. And of course, their argument is, oh, there we go, we have to push it around. Their argument frequently is, we can save money, but you have to discipline requirements. You've got to help work with us so we can be partners. How do you respond to that? They're right. We've got to discipline requirements. And I'll go back to platforms for a minute. There've been a couple of ships, ship types that we've built the ship while we're designing the ship. That's really not a good way to build a ship. It's not a good way to do much of anything. And so we have, and that was what I was talking about. The design and a platform needs to be stable. The technology needs to be mature. If you get some new G-Wiz technology, put it on the next block. Put it on the next group that you buy. Don't try to force them and change the requirements. And the same thing in service contracts. Be very clear about what it is and don't change it all the time. Don't sort of walk the requirements out because it's not cost efficient for one thing, but it's also not fair to our industry partners to change the requirement in the middle and say, do it for the same price. Secretary, you've championed broadening the energy base for the Navy. How is that going? And again, how do you manage that? Well, first it's going very well. I said, answer the first question that it's fuel and energy is a military vulnerability, particularly the way we're doing it today. I'm very glad that America is producing more oil and gas, but even if we produce all that we can use, there are two pretty overriding factors. Number one, oil and gas are global commodities and the price is set globally. So you get some instability somewhere. You get somebody threatening to close a straight somewhere. You get anything. When the Syrian crisis started, the price of oil went up $10 a barrel. Now, Syria is not a major producer, but it's this security premium that traders place on oil, regardless of where it's coming from. Every time the price of oil goes up a dollar a barrel, it costs the Navy and Marine Corps $30 million in additional fuel costs. In 11 and 12, I was presented with, Navy was presented with an additional, unbudgeted $2 billion in fuel costs. Well, there are not many places to go get that sort of money. You can take it out of operations. So you steam less, you fly less, you train less. Or if the bill gets too big, you take it out of platforms. I just don't think either one of those is a good idea. So what we're looking for is a more stably priced, domestically produced source of fuel. For sea going and aircraft, that's something like biofuels. And we demonstrated biofuels at RIMPAC of the Pacific in 2012. Every single type of aircraft that flew off the limits flew on a 50-50 blend of biofuel and aviation gasoline. And all the surface combatants that were around them were steaming on a 50-50 blend of marine diesel and biofuel. The big news was there was no news. We bought the biofuels, put it in the normal logistics chain, took it out, refueled at sea in the air. Following a presidential directive, we've been working with the Department of Agriculture and the Department of Energy to come up with a nationwide biofuel industry. We have contracts today under the Defense Production Act. That by 2016, with four biofuel companies assuming that all of them make it through this process, they're contracted to provide us with about 163 million gallons a year at a good bit less than $4 a gallon, which is very competitive with oil and gas. And it's also domestically produced. It comes from all four of them have different feedstocks. I don't really care where it comes from. But it has a bunch of advantages, not the least of which is it gives our farmers a new income stream for sure basis. It's any kind of technology from solar to wind to geothermal to hydrothermal to fuel cells that can use different kind of fuel to power them. So our goal, and I'm confident we're gonna reach it, is that by 2020, at least half of all naval energy that flowed out of shore will come from non-fossil fuel sources. We've got six years to do that. And I think we're on track to get there. Secretary, I know again we're ahead of the budget, but Secretary Hagel did release early this week outlines some controversy about cost reductions or not cost reductions, but lowering the cost profile for people costs. That of course hits everyone. You have 900,000 people in your command. I mean, what do you say to them about striking this balance between honoring our commitment to them, but then also honoring our commitment to the people to have the equipment we need in 30 years? It's trade-off of people and resources and equipment. I mean, how do you speak to your command about that? I've lost track of the number of all hands, calls I've done around the world. I know I'm north of 500, but somewhere up there. In fact, I think I've just about met every sailor and marine that we have. I've sure tried to. In the way that the questions that I get are about uncertainty, what's gonna happen in this year after year after year of uncertainty? The way I respond, number one, is we ought to have some certainty here, but number two, we have got to get control of our personnel cost, or to your point, we're gonna begin to take the tools out of the hands of our soldiers, sailors, airmen, marine coast guards that they need, but also the other way to save money on personnel is to get rid of personnel. So it comes down to, and I do think it has to be absolutely fair. You've got to be fair to the people who defend us and who protect us. And I think that, particularly over the last 10 years with the rise of military compensation growing up 40% more than comfortable civilian sector, that we are being fair. And what we're talking about, I think it's important to note, is not cutting, but it's slowing the growth. And it's slowing the growth in some things like healthcare for retirees, for working-age retirees who work for companies that can give them that do offer healthcare. I think it is fair to look at that instead of saying, we're gonna keep on this march, we're gonna keep watching those cost rise, and we're gonna begin to make decisions about not modernizing for the people who are, the best way I've heard it said, we should never send our folks into a fair fight. We should always send, we're going to fight. We should have the advantage whether technologically or whether it doesn't matter how. We should have the advantage. The final thing is the sailors and marines that I know. And as I said, I don't think there are very many of them that join for the money. Now it's an important part. And it's important that we keep the fake. But to make this all about money, and to make it all about them and money, I think degrades the patriotism and the sense of sacrifice and the sense of service that they bring to us. Secretary, you were a remarkably successful governor. You know politics, you know what it's like to sell tough deals. Do you think you can sell this deal this year on the spotter? Well, I think, well, number one, if we can sell it on the merits, yes. I think that it's something we have to look at. It's not, and we have to make the case for it. Because it's not something that is vague and ephemeral and down the road somehow. It's today. Most choices are gonna have to start being made today because for every dollar that you do not get in compensation savings, and again, slowing the growth, it's a dollar you're gonna have to find somewhere else. There's just not the unlimited money that defense got used to a decade ago. And so, we are at the trade off now. And I do understand the politics of things. I understand trying to sell hard choices, but at some point, you've got to step up to those hard choices or the choices you will begin making are even more untappable. Yep, very fair. I mean, this isn't a slow pitch question. This is T-ball. Okay, I was gonna let you just whack this one on the park, but, and it concerns the modernization of our nuclear forces. You're looking at some pretty steep bills coming for a trident modernization, trident replacement. And overwhelmingly, our nuclear deterrent now is with the Navy. We've got some trade offs. Are you able to afford this modernization program? Well, the two parts of the modernization program. The first part is the Ohio class replacement. Submarines that carry those nuclear weapons are gonna begin to reach the end of their service life. And we literally can't send any for profit. And so, we are doing the research and developing the design today for that Ohio class replacement. And we have to start buying in quantity about 2019 to get the subs that we're going to need. We have to have the common missile compartment designed and ready to go, even earlier than that, because the British are using the same missile compartment and they have to have it before we do. Their submarines are ahead of ours in terms of retirement, in terms of rebuilding. And I think this is a debate that between now and 2019, which is now inside the five-year defense plan, or it will be in 15, that we need to have, because if we build these, and we will build these, not if we're gonna build them, but if the money to build those comes out of Navy shipbuilding, comes out of pure Navy, it will take at least half every year of all our shipbuilding dollars. It will devastate the rest of Navy shipbuilding. And I'm talking in the late 2020s, 2030s now, it will devastate submarine building in terms of the attack submarines, but surface ship, every kind of ship that we build. And I think that we need to have a debate, this is a national mission. This, as you said, a lot of it is beginning to be on the shoulders of Navy. Which is, we have the most survivable part of the triad. It's a crucial capability that we have. We've got to make sure that we have it, but it is a national mission and to degrade the rest of Navy missions to meet that. I think that is a debate, not only in Congress, but also with the American people. How should that be paid for? I think that's exactly right. This is a national debate we have to have. We know we have to have a reliable deterrent. It's now overwhelmingly going to be on the back of the Navy, your resources aren't going to be able to accept that without compromising our forward presence capacity over time. So it's a debate we have to have. I'm glad you're doing that. And we are driving the price of that Ohio-class replacement down. We've taken almost $2 billion per boat out already just by using commonalities with the Virginia-class attack submarine with doing some innovative things with this, but there's a limit to how far we can go. Sure. Friends, I'm going to turn to you for questions. In my stupor, I forgot to say thank you to our very good friends at Rolls Royce who make it possible for us to bring this to all of you. And Steve Plummer's here, I just want to say thanks. Let's open up. If there are questions that people want to offer, we'll start right down here with you. But I reserve the right to change questions if they're too narrow. So you go ahead ahead. Hi, John. Hi, Mr. Baubers. I'm Jennifer, correspondant of Virginia Media Group, one of TV Network in China. And my question is going to be, US Navy ready to deploy the laser weapon for the first time this year. So do you think the development of laser weapons will be against the CCW eventually? We are deploying our first laser weapon very soon. And we are well into development of laser weapons. At some point, it becomes almost impossible to hit a bullet with a bullet and you have to change technologies. And this is one of those very promising technologies that we think you're gonna see a lot more of. Sydney? Microphone please, can we get you a microphone? We want everyone to hear you. I'm really plenty loud enough for most people, sir, but thank you, Sydney Friedberg, BreakingDefense.com. Mr. Secretary, I among others have heard you spend a lot of time and energy over the past year plus saying littoral combat ship is a real warship, it is survivable for what it needs to do. And now we have the secretary signing off on something that says, well, maybe it's not. Maybe it was survivable enough for a different world, but especially with the pivot to Asia and a higher tech set of threats. And my apologies to the young lady from China. The LCS isn't adequate for that part of the world. So what's your take on this change of course and how does the Navy adjust to it? Well, I think it's very important to look at exactly what the Secretary of Defense said, which is keep building LCS that we're building today through this five year defense plan. Take a pause in contract negotiations past that and take a look at some of the things you mentioned, survivability, lethality, concept of operations of the ship and other things, cost of the Navy. A replacement, how soon a replacement could be done. We are just beginning to operationally test the littoral combat ship. And we started now in 14 doing that. The Secretary has given us a direction, which frankly we welcome. And we have done with every type of naval ship before, which is see if there are any gaps and see if it's going to be adequate. And one of the things he specifically called out was a modified LCS or the next flight of LCS. But if that doesn't work, we ought to look at different options, a different design. How long would that take? How much would it cost? What would it do to that presence argument? Other types of things. There may be designs already out there, although I know some, not the Secretary, but some have recommended, well, look at foreign designs. Well, number one, I don't think any foreign design is up to our standards. And number two, I'm pretty sure that the Navy and Congress doesn't want to put Americans out of work doing that. So I am, my position on LCS and the CNO's position on LCS has remained stable. But if you look at every other ship type, if you look at our DDG-51s, when we were at about this point, we did some pretty extensive testing and we started building the next flight. We are now about to start building the fourth flight of the DDG-51s. The flight three, which is the fourth flight, which is a little confusing, but is a very different ship from flight one. The same thing with the Virginia attack submarines. The subs that we're building today are about the third flight from the ones that we started building. So we have this year with a decision coming in the 16 budget on LCS. And I frankly think that this is, I take this as pretty good news, we have to have a small surface combatant. And what the secretary said was, we have to have a small surface combatant. It has to have the capability and we have to have it for presence. And if LCS can meet that bill, do it and modify it in the ways that it needs to if it can't figure out something else. Terry? Okay, we have a microphone, Terry, if you could use that. You and I are former ship drivers. And we share a common university, which is pretty common, I have to say. But I wish to, as a member of the Harvard military unit, I wish to thank you for what you did to bring the Ivy League back into what might be called the rest of the country with ROTC a few years ago. But now I will ask politically. That's good enough. No, no, no. I'm a former amphib officer. And I keep seeing all these wonderful words about 11 aircraft carriers. And I think, gee, I don't do the math very well. Don't we have 23? Just a question. The short answer is yes. Thank you. With the big deck amphibs. We're just commissioned the next big deck amphib, the America, who joined the fleet this summer. And the capability that those bring us is simply astounding, particularly with the V-22 Osprey and then in the future with the F-35B, the Stovall version. If I could loop back just for a second about your first comment. I was at Harvard right after ROTC was asked to leave. And following only West Point and Annapolis, Harvard has the most medallional recipients in America, in university in America. And now we have ROTC back at Harvard, at Yale, at Columbia, at Princeton. And I think it is very important that the military that defends America reflects America. And reflects all of America. And I was very happy that we were able to do that, not just at those four places, but making sure that the military and the 1%, or fewer than 1% of America that serves in uniform does not get detached or distanced from the 99% that they protect. Yes, ma'am? Thank you so much. Wishijiao from China Center Television. I have two questions, military exercise. And we know that the United States and South Korea just began joint military exercise. And what we saw on 27th, North Korea launched a four shot range missiles into C. How do you evaluate the situation there and what kind of message do you think North Korea is sending to buy this action? And another kind of military exercise is taken by Russia. So within the Ukraine crisis as we know there. So this morning we saw Yanukovych hold a press conference. So what kind of role will the United States Navy in this kind of crisis? Let me take the last question off the table. I don't think it's fair to ask the Secretary that question. President of the United States will talk about that. Okay? The exercises that we do with allies, friends around the world, but particularly an ally like South Korea, they are scheduled, they are announced, and we are very transparent about it. And it's part of the thing I talked about at the presence and it's part of the thing I talked about the engagement. We're gonna be there. We're gonna be there all the time. So this is not a provocation because we do it all the time. This is, we're not escalating a crisis because we're there all the time. And I think particularly in a volatile region and North Korea has shown that it is that. That these sorts of exercises, these sorts of making sure that we are interoperable, making sure that we know what, how we and our allies work together. There is no substitute for things like that. But again, we are completely transparent about this. We announced them. We announced them a lot of times, a long time in advance. And so the notion that somehow we're escalating, somehow we're provoking, there's nothing to that. Yes, sir? Third rollback. Hi, Shin Shioji from NHK Japanese TV. I have a question about the former sale of the USS Ronald Reagan who were in Japan in 2011. They, the appropriations bill of fiscal 14 gave $300 million for research money for those sales who claimed they got cancer after that. Can you explain to us how the agreement with Congress came about? The, as you pointed out, Ronald Reagan and her strike group sailing across the Pacific when the tsunami hit Japan, Ronald Reagan was turned very quickly, went and began to deliver humanitarian assistance to sass to relief. We were very, very vigilant about how much radiation, exposure there was to the ship's crew, to our helicopter pilots, and to all our people that were going in there. We sent ships up from amphibious ships from Southern Japan to this as well. And I was there about three weeks later and one of the briefings that I got was how we were measuring any exposure and how diligent and vigilant we were being about that. This is one of those things that to make absolutely certain that, and we have no indications that there was excessive radiation of any kind during Operation Tomodachi. This is just to add another layer of caution to make sure that there's nothing there. Up in the back. I'm Secretary Mike McCarthy, Defense Daily. I want to get back to the truncated LCS program. And I understand that the contracts you currently have for shipbuilding will probably get you to that 300 number by 2019, as you've said. But by truncating the program and having to come up with a new ship after LCS, do you expect to be able to sustain that 300 ship fleet number in the next decade once you've reached it? To answer your last question, yes. Second is you misstated what happened. You said truncating that ship and coming up with a new one. That is one of the options. That is not the only option. One option that the Secretary very clearly laid out is taking the LCS and modifying it. So, but yes, in any eventuality, we're gonna stay in the 300 ship range. Well, part of the look over the next year is if we went to a different design, if we went to a different type ship, how long would that take? And what would it cost? Because we've driven the cost of LCS down dramatically. The 10th LCS of each variant will be coming off the line under this block by from one from Austin and Mobile, one from Marionette, Wisconsin. The whole will cost about $350 million. That's down dramatically from the first two which cost upwards of $750 million. The first two research ships, the test ships, that freedom and independence that were built several years ago. So, we have driven that cost down by competition. We made the two yards compete against each other. And so, cost would also be a factor because in order to get that 300 ship navy in order to get all the types of ships we need, we've got to keep the cost very much in control. Otto? Careful, he lost question. Crewman, I think. Oh, I, I, I, I'm very well aware. Otto Kreuz was C-Power Magazine. Two for, one, we constantly hear rumors that the navy is soft on the C, on the Charlie version of the F-35 that, you know, if they had their druthers, they would continue buying hornets rather than that. You'd like to speak to that. And the other question I have is on the Darwin, deployment buildup. Are we gonna, do you intend to put ships or aircraft down there so that that marine detachment is down there, can, can move around on its own? I'll take those in reverse order, if you don't mind. We're gonna have a fifth amphibious ready group in the Pacific by 2018. Partly to meet that demand, but partly also to, as part of the shift to the Pacific. The marines, as marines do, are also looking at a lot of different operating concepts for lift, for moving marines around the Pacific. We're building 10 high speed vessels that can move a lot of people at 40 knots and a lot of equipment around a place like the Pacific. We're building two MLPs, mobile landing platforms. In fact, both of them are already, one is in the fleet, one is about to join the fleet. And then we're building two more, a float forward staging basis, which are MLPs, mobile landing platforms with a flight deck on it. These are gonna be, and there's, we're looking at another one for a total of five of these. These give you a lot of different options of how you move marines, how you stage, how you resupply. So it's, yeah, we're gonna have more amphibious ships, more amphibious lift for not just the marines in Darwin, but the marines in the Pacific. But we're also looking at a lot of other different concepts of operations to move marines in different ways. Last thing I'll say about that, my favorite answer that Commandant Jim Amos has ever given, I think, at a hearing was somebody asked him, a member of Congress asked him how many amphibious ships he wanted. He said, want, I don't know, 50, 100. He said, but let me tell you, if there's someplace marines need to go. He said, you remember that Italian cruise ship that ran aground, tumped over? He said, we'll dewater her, get her upright, fix her up, put marines on her and take them there. We will get the marines there. Very short answer to you. The sea version was always gonna be the last version. We were, Navy was always last in the queue and we have always made our plans for that. Our timetable for our first operational squadron is still about the same. There may be, you change procurement numbers or things like that, but we haven't changed our initial operating capability I would say for the first squadron. Tony? Tony Capasio with Bloomberg News. There is one carrier in the Gulf region apparently right now. Mr. Secretary, do you envision keeping only one carrier battle group in the Persian Gulf for the foreseeable future? And second, on LCS, what was your reaction to Hegel's decision? It's not every day you get a memo from the secretary saying I have considerable reservations about whether this program is good for the Navy for the next few decades. And it seemed to come out of the blue given that the program had political support on the hill and most of the concerns up to this point was about the mission modules. The question about the carrier, the steady state has been one carrier for a long time. There was about a year and a half, two year period there where we went to two. That was the exception, not the steady state. We're going to an optimized fleet response plan to make sure that we deploy our carriers on a sort of pretty certain schedule so that we give sailors and their families a notion so that we can make sure that we're gonna do the maintenance, make sure we're gonna do the training. And we're laying that in starting very soon in terms of when we deploy, how we deploy and it's to meet these global force management issues that about where we put carriers and for how long they remain there. I was fine with the LCS memo, as I said, we are just beginning testing and there have the thing that made me pretty comfortable with it was this is basically the notion for every single ship type we've ever had coming from different ways. I mean, you look back, the DDG 51, GAO issued a scathing report on it, saying, you need to slow this down, you need to quit for a while until you can, because it just doesn't do anything. And as I said, you grow these things, you mature these things. And if the LCS cannot do, and I think it's also important to know, cannot do what it is required to do, then we should look at something else, but you should look at it in the context and he put it in memo cost, schedule and you know, so how long would it take to get to the fleet? It takes about a decade to get a design done and into the fleet. Also talked about driving acquisition cost down, which we have done and which we're doing and as I said, virtually every ship play. So, I mean, overall I was, yeah, I'm very comfortable with this decision. And I think that to the extent, you know, I'll pick on your profession here for a second. That, you know, and looking back, it's not just LCS that this has happened to you, but you know, you read about LCS now and it's the controversial LCS with its cost overruns. What cost overruns? We have driven this cost down dramatically. So I think that putting a lot of these things to bed or not, I mean, if we can't put them to bed, if we can't put them to rest, then we should be looking at something else. And the mission modules are pretty much exactly where we thought they would be at this point in development. The acting deputy secretary, Christine Fox, talked about the importance of spiral development. This week, I think, talked about how spiral development is one of the best ways you can do these things. The countermind package that we have for LCS is already better than our mind countermeasure warships. Other capabilities are also better than what we have out there in the fleet today. So we are exactly where we need to be. And as I said, spiral development is one of the ways that I talked about, don't push technology before it's ready, but when it is ready, have a way and whether it's LCS or any other ship, it ought to be modular so that you don't have to build a whole new ship to do it. It shouldn't be that hardwired into it. You should be able to drop things in and take them out. I have some very anxious staff officers back here who are saying the time is done. We should all be very grateful that someone of your talent, Mr. Secretary, has been willing to serve in so many ways for this country. You're doing a splendid job for the Navy, for the country. Would you all, with your applause, please say thank you. Thank you.