00:00Thank you, Chairman. I now recognize the Vice Chairman of the full committee, Mr. Huizinga, for five minutes.
00:04Thank you, Mr. Chairman. You're going to hear a central theme on this.
00:07I leaned over to Chairman Davidson when he finished, and I said that's virtually exactly what I had written down as my question.
00:16I was just going to use slightly less pejorative language when it comes to central planning.
00:22But I think that's a lot of the question, concern, feedback that I think not just from colleagues but from taxpayers that we hear,
00:33which is why are we making these investments into an industry that isn't needed?
00:38Well, you can't predict war, right?
00:42Well, you can't predict mass war or something, a conflict like what was happening in Russia and Ukraine.
00:49And I want, you know, Mr. Faxson, you did a phenomenal job explaining it from your perspective on what was sort of the ramp up and the need.
01:00Mr. Fallon, I'd like you to maybe expand on that or give us your take as well.
01:05I mean, you talked about perceived risk, that really this is sort of, in a way, the government funding might be that bell cow, as some might say, right?
01:16Others are going to follow that.
01:18They're going to view that as a lead.
01:22Oftentimes, though, when we are doing our appropriations, we want to see, you know, end of fiscal year production.
01:29We have a much different timeline than you might have.
01:33And I'm really curious, do you believe that the programs that we have, one, allow you to build the capacity for not just an immediate but for long term?
01:43How do we maintain that?
01:45Two, do you have the flexibility to innovate and explore within those programs?
01:52And, you know, one of the sort of the central themes of a truly free market is, you know, the ability to fail and learn from that failure.
02:04We don't like that when we're sending taxpayer dollars.
02:06We don't want to see failures, but are there enough places where you can take lessons learned and apply it so that we do have a stabilized production base?
02:16Yeah, thank you for that question.
02:19It's a great question.
02:21I'll start with the last piece first in terms of the ability to fail.
02:24I think when you use DPA Title III dollars to support development, then it allows the government to partner with industry as they're developing the product, as we're understanding what are the risks and challenges that it takes to bring that product into full production.
02:38And then we can we can kind of navigate that together as we learn and come up with, you know, solutions to solve problems that invariably come up through the through the development phase.
02:47So I think DPA allows us to partner in that phase versus if we were doing it on our own dollars, we'd be trying to figure it out on our own.
02:54And sometimes the government can have solutions or resources they can bring to bear to also help in those situations.
03:00Let me interrupt you super quick on that.
03:01I mean, this is called the Defense Production Act.
03:05So I think that makes a lot of sense to people when it's defense related.
03:09Are we focused enough with the DPA right now?
03:12Is it really into that defense mode or have we wandered away from that from that core objective?
03:21Yeah.
03:21So my personal experience is primarily with DPA for defense.
03:24So I can't comment necessarily on the percentage of funding that they make outside of defense.
03:29I would say that my experience so far is that it is focused on the priorities of the administration of the DoD.
03:36So in our case, like we're working on these critical munitions that I think we've heard talked about as a priority from from the other folks in their earlier testimony.
03:45So I feel like it is focused in areas that are important.
03:48I think it could be improved.
03:50I'm sure it could.
03:51What I would say is in terms of, you know, does the funding support ramping up to actually support the rates?
03:58What happens if volume changes?
04:00How fast can you change?
04:01I would say one of the advantages of additive is it can ramp up very quickly.
04:05It doesn't require like big mega foundries in order to scale it up.
04:09You're basically buying things that look like inkjet printers, right?
04:13They're bigger.
04:14They're more industrial, but they look kind of like that.
04:16In terms of timing, in 15 months, so in 15 months, we can double production.
04:22So right now we have the ability to make about 2,000 engines a year.
04:26In 15 months, we'll ramp that up to be close to 5,000.
04:30And then another 15 months after that, we could be ready to support close to 10,000, which is what we've been given by the DoD as a target.
04:38So, again, you compare that to 100 years of manufacturing things conventionally, and we can make 2,000 a year, right?
04:45So it's really promising, I think, what it can offer.
04:48The other advantage of additive is it's easy to distribute.
04:51What that means is once you have a design and once you've kind of validated how to manufacture it, there's 3D printers all over the world, right?
04:59So in a time where you need a surge, we can take the design.
05:03We could export it to a DoD facility or another industrial facility, and they could make the design from our design just by putting it in their printer.
05:12It's a pretty automated process.
05:13You don't need a lot of specialized labor to do that.
05:15So it's pretty easily scalable.
05:18And the other big advantage is, you know, a lot of conventional manufacturing requires very bespoke, expensive, long-lead tooling, right, in order to make a part.
05:27The 3D printer doesn't care what it's printing.
05:29It can print keychains one day and print gen engines the next day.
05:32It doesn't care, right?
05:33It doesn't have a memory.
05:34It's not targeted for anything specifically.
05:36The other advantage of that is as priorities for the DoD change, we can change what that capacity is being used for, right?
05:42So Beehive has picked this mission because this is a big priority for the DoD, and we think it's probably the area where additive manufacturing is most fertile.
05:51But as priorities change, the capacity could change with the priorities to support what's being needed.
06:01Yep.
06:01Yep.
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