Strengthening Australia's Weapons Sustainment Ecosystem | All About the Base

When acquiring new defense equipment, sustainment is often an afterthought, something to be sorted out once the major procurement decisions have been made. But in a protracted large-scale combat operation, particularly in the Indo-Pacific, logistics and sustainment cannot be secondary concerns. In fact, they can be the difference between a force that can fight and a force that cannot. Our team at the Center for the Industrial Base has been working on a project examining this exact issue. Specifically, we were looking at how Australia can strengthen its industrial base to support the maintenance and sustainment of domestic and international weapon systems. We explore what measures the Australian Department of Defense can pursue to enhance its national preparedness and resilience in the face of a major conflict. And how Australian defense priorities, including industrial resilience and equipment readiness, contribute to that preparedness. As part of this efforts, we identified four case studies: the new offshore patrol vessel, the Bushmaster Protected Mobility Vehicle, the P-8A Poseidon, and the Guided Guided Weapons and Explosive Ordnance Enterprise, or GUIOE. These were selected to evaluate evaluate a range of approaches to reduce supply chain risk across newer and older equipment, and for products built in Australia and those imported from other countries. Today, I'm very honored to be joined by Mr. Jed Royal, who served as a career member of the Senior Executive Service in the Department of Defense, and was the former Principal Deputy Assistant Secretary of Defense for Indo-Pacific Security Affairs. In that role, he oversaw IPS's extensive portfolio spanning from China and Taiwan and Mongolia, East Asia, and South and Southeast Asia. Jed and I will now dig into what the Indo-Pacific resilience looks like and how Australia can contribute to the joint fight. I'm your host Jerry McGinn and welcome back to another episode of All About the Base. >> [music] >> Jed, thanks for joining us and thanks for all your service in the Department of Defense. It's great to have you on the show. >> Thanks so much for having me, Jerry. It's a real pleasure to be here. I'm a big fan of what you and CSIS are doing, including through the All About the Base podcast. Excellent content. It's an honor to be here with you. >> Great. Well, great to have you. Let's dive right into it then. What measures, you know, you've really worked these issues for for decades now. What measures can the United States and its Indo-Pacific allies, allies, particularly Australia, pursue to enhance national preparedness and resilience in the face of Indo-Pacific contingency? >> Yeah, I think when we're talking national preparedness and resilience, we're really talking about everything. So, if you'll indulge me for just a second, I'd like to start a little bit macro and then work down just a bit. I want to give us credit for a lot of great things that are happening in the Indo-Pacific region right now. I think the exercise program is a nice exemplar of the kinds of work that's that's going on. You look at RIMPAC, think about Keen Edge and Keen Sword with Japan, down to Balikatan with the Philippines, Super Garuda Shield with Indonesia, and of course Talisman Sabre with Australia. Each of these exercises are becoming more realistic, more demanding, and we're seeing more countries come and contribute with a greater amount of assets in those exercises. So, I'm really pleased to see that we're able to continue to drive forward with more advanced and more sophisticated exercises that are happening throughout the region. It's going to pay off, certainly with respect to interoperability, but certainly also uh competencies for our military our military providers. Obviously, we need to do more. We haven't done enough. Let's go with defense spending in the first case. There's no doubt in my mind that we all need to be spending more on defense to raise the overall level of capability that we have. Innovation has been a huge topic that you have driven here at CSIS. There's a lot of innovators out there. Most of them are not in government. We need to create the right kind of private and public partnerships that allow innovation in the the private sector to really come forward into the public sector as well and support our military. I would also highlight operational modernization. It's been a big topic for the United States for a long time as we've thought about how to make sure C5ISR in particular can be better connecting all of the different domains that are so consequential to both deterrence and defense. So, those are a few key areas that I I think are really important. But, turning to today's topic on sustainment in particular, I I think it's really important for us to realize that when we talk about military and defense capabilities, we we're not just talking about a platform or a weapon system. Sustainment is as much a piece and a part of that capability as anything else. And so, we have to start with sustainment mindset as we think about fielding all of these different assets that we're that we're procuring. We need to be able to do that forward as well and make sure that we haven't just retained all of that sustainment capacity in the United States in CONUS. And here, I believe that Australia can play a really key part for that. Ukraine is really the the country that's showing us the value of forward repair. And we need to make sure that we continue to learn that lesson and array the Indo-Pacific region in a manner that allows our forces to be sustained and our allies and partners as well. Maybe I could just touch on civil preparedness. Uh often when we talk about military, we we kind of stop there and forget the civilian resilience side of all of this. I was recently in Taiwan as they kicked off their major national uh defense exercise called Han Kuang. Um I was really pleased to see how they coupled that military exercise with a civilian resilience exercise as well. They called it urban resilience. Among other things, they actually degraded the mo- mobile network uh and forced uh the Taiwan population to think about what other options were available to them, Wi-Fi or otherwise. Uh and so these are the kinds of uh exercises that need to come alongside our military exercises. We need to test the the seams between military activity, civilian activity, and how responsibilities are handed off one to the other uh in any different kind of uh scenario. So I was really encouraged with all of that. The fact is the US-Australia relationship is deep. Uh it's going to be able to respond to all of these issues over time uh so long as we follow that uh uh assured path forward with increased defense spending and more regular dialogue to make sure we understand the roles and responsibilities in that relationship. >> Okay. Uh a lot of great points there on exercises and operational readiness and um and great perspective. Uh particularly I want to pull a little bit on the public-private partnerships point that you brought out and um the the fact of the matter is is that uh the Australian industrial base, like the vast majority of the US industrial base, is private sector, right? So cooperating between private companies and publicly traded companies and uh the Australian government, that's the heart of the industrial base. So what how can Australia strengthen their industrial base for the maintenance and sustainment, some of the things you outlined, um um, you know, to ensure they're well positioned to contribute to the joint fight. >> I want to give Australia credit for two important things. Just this year they announced their advanced capabilities investment fund, a $500 million public matching fund to draw in innovators and venture capital into Australia. I think that's going to really pay off handsomely for Australia. They're still working through some of the details of exactly how they're going to set it up, who the trustee and the trust manager will be for that fund, but these are the kinds of incentives that we need to see sovereign governments bring forward for private industry to come couple that innovative mindset with with a public investments. I think another thing that Australia did really well is they've now established their sovereign defense priorities. This is a list of priorities that Australia put together that said these are the most important to us going forward. As I read through that I was very pleased to see that they have put sustainment really at the top of the list, both air and maritime also land. And so this is going to be really important for Australia to make sure that they are holding themselves accountable to having the sustainment capacity. Now there's not enough in Australia for Australia to really have the value proposition to do all of this just for Australian systems. They really need to be thinking regional hub mindset. And you mentioned a few things in your intro where they are already doing that. We need to see more of Australia operating like a regional hub with their key partners. What would this include? It would include certainly working with local entities, municipalities, mayors, thinking about those central points of operation, ingress, egress, developing academic relationships and industrial workforce relationships as well to create those centers for the kind of sustainment that we're looking for here. A several years ago in a Talisman Sabre exercise uh the US brought in some M1A2s uh to Australia to to operate. A couple of them actually came off the transport vessel uh not working properly. The US said, "Okay, put them back on the transport vessel, take them back to the United States, and we'll repair them uh when we can get around to it." And Australia said, "Hang on a second, we have a facility in Brisbane, let us see what we can do there." So, those M1A2s were trained down to Brisbane, and they were back in the exercise before the end of the exercise. To me, this is a great uh example of the kind of things we ought to be doing. My recommendation is actually that in exercises, the United States and others in the region bring broken stuff onto the exercise so that we can test the workforce uh capacities, the regulatory environment, contracting capacity. Those aren't normal parts of the exercises that we're undertaking right now in the region, but we ought to do that. We'll learn a lot about the availability of the sustainment network that we have in the region if we bring some broken stuff into these exercises and try to fix them uh during the course of those exercises. Australia can do a lot to drive interoperability and standardization in the region as well. NATO standard needs to be the Indo-Pacific standard. It's not quite yet in most cases, uh but I think Australia can bring a lot to that work. I would just say finally here that because of Australia's geographic location, it's at a strategic depth that means it should not probably be doing all of the light maintenance, repair, and overhaul. We really need to think about doing heavier MRO in Australia given the strategic depth that they occupy uh in the Southern Hemisphere. >> A great answer. Uh real details. I particularly like that example around the the Australian repair of the M1A1 M1A2s. That's pretty fascinating. Now, one of your signature accomplishments in the department was the stand-up and um fully kind of operational capabilities of the partnership for Indo-Pacific Industrial Resilience or Piper. Um now, um how do Can you talk to us a little bit about Piper? How's it going? Um and where do you see its role in the future uh in the Pacific and particularly since we're talking about sustainment uh in the sustainment realm? >> Yeah, you bet. When I was in government serving as the Principal Deputy Assistant Secretary for Indo-Pacific Security Affairs, uh I I came to realize there is a bit of an imbalance. I worked in the policy organization. It was our responsibility to make sure that we were establishing the right kinds of relationships with all of our allies and partners in the region. Uh as we did that, we actually did a lot of great work and advanced the strength of those relationships over time, but I noticed that uh because there was not the same level of urgency in the industrial relationships, we weren't really able to take as much advantage of uh those strategic and intents and motivations that we had. Um and so I thought it was important for us to think, how can we work to establish um a more substantial industrial relationship to complement the policy and strategic frameworks that we were developing over time. Uh secondly, I heard a lot both from industry and from our uh military operators that they wanted to see more industrial capacity and more activity in the region forward. If you can imagine uh an adversary looking into the region, it's one thing to see an interoperable set of airplanes or or maritime vessels, it's an entirely different thing to see an interoperable industrial base distributed in the region that is supporting those forces as they as they move around the theater. Uh for those two reasons, we looked for a solution and Piper was the idea that we came up with. It wasn't actually my idea. We started a collective discussion in December of uh 2023, multinational discussion, and about 7 months later we arrived at a multinational solution that was called Piper. The idea behind Piper is to try to create all of the government-to-government approvals to incentivize industry to be able to work more collaborative collaboratively with within the Indo-Pacific region. Just by way of numbers, the Indo-Pacific region minus China is about 23% of GDP, but only about 5% of global defense production. That's a significant imbalance right there. And I think Piper has a real chance to draw the Indo-Pacific region into a greater role supplying the the world's friendly global defense needs. So, Piper is the idea behind that to try to to make it move forward and to reduce some of the vulnerabilities we have. Four different work streams in Piper. There's a policy and optimization group that's meant to streamline the policy approaches within the consortium. Then we have working groups on production, sustainment, and supply chain resilience as well. I just want to call out Australia. They have been really helpful in co-chairing both the production and the supply chain resilience work streams under Piper showing a lot of leadership through that through that consortium. >> Great. Now, in addition to Piper, there are a couple other kind of frameworks at play in this area. There's AUKUS or the Australian, UK, and United States cooperative agreement. And then there's the regional sustainment framework or RSF. Can you talk a little bit about how those are feeding into these kind of issues? >> Absolutely. AUKUS is doing a great deal of heavy lifting in the policy realm right now. That's both pillar one, which is the nuclear submarine nuclear powered submarine pillar, and and pillar two, which is new and emerging technology pillar. Uh here we have explored extensively with the UK and with Australia on how to think about reducing the barriers of entry for the kind of collaboration that we just talked about. Um we've done >> Let me interrupt you for a second. One of the things I really love about AUKUS is instead of kind of theoretical discussions or bilateral multilateral discussions about issues that are sort of theoretical, it's around a specific program, right? So they're looking at what do we need to do to to to build these submarines and maintain them in Australia. And that's led to export control reform, and you know, changes in law and changes in policy. So it's it's really fascinating to to to watch this in action. >> I totally agree with you. It's driving a new conversation on how we think about collaboration with industrial activity. In that regard, I would say that one of the most useful tools for AUKUS is the congressional reporting requirements. And there it really drives an internal conversation within the department and across the interagency to make sure that as we respond to Congress on the work that we're doing, that we have done as much as we possibly can to make AUKUS as successful as possible. It is indeed part of part of the law here in the United States. >> Great. >> On pillar two, I would just say we're breaking down some interesting barriers there as well. At Shangri-La, it was announced that there is going to be a new signature project under pillar two of AUKUS, and that will be UUV payloads. Really interesting project, one that I investigated when I was in government, and I see that it has just a tremendous amount of potential going forward. We talked about regional sustainment framework a little bit as well. I was really pleased to work with my friend Lisa Smith in the department when she originally stood up the regional sustainment framework. I'm a big fan of it. It's already paying off, particularly for naval capability in the region. But what's most important when we think about RSF is that right now we have the opportunity in peace time or competition phase to set and enable the industrial capacity throughout the entire theater. Regional sustainment framework can give us that opportunity to to do it right now so that we're not trying to create that network, create those hubs at the point of conflict. At that point it's going to be much more difficult for us. So, RSF is the way that we can drive that sustainability capability forward when we have the time and capacity to do it. I would just also add that there's other initiatives in the region as well. Think information sharing agreements, JCSMIA's and JCSOA's. We've got reciprocal defense procurement agreements as well, acquisition and cross servicing agreements. I say all that to just simply round out the idea the government has actually done quite a lot already to try to create the relationships that we need to have with these allies and partners in the region. I think that there's a lot of infrastructure, government-to-government infrastructure that has been created here. Now it's time to figure out how to unlock all of that potential through the public private partnerships. >> One of the areas [clears throat] that you briefly touched on, you know, is how do we get more things forward and one of the ways to do that is preposition parts, you know, subsystems and alike and also in theater. You know, how how do you think US and Australia could like find some some way forward there? >> You bet. First of all, when we think about prepositioning I think we need to think two things. One is distribution. Not everything can be concentrated at the most convenient places. Quite frankly, that's too easy of a target. So, we need a more distributed prepositioning warehousing program going forward. I think about the movement and the exercising of the prepositioning as well. There's a new initiative called the Indo-Pacific Logistics Network. This is the idea that we can use capacity spare capacity right now on heavy lift aircraft to be able to move logistics around the theater. I think it's a great initiative from the US and others to be able to test how we can use a distributed sustainment network. The second I would say is hardening. Where we need to have assets forward and that may be exposed there we need to really focus on hardening. It's not enough to just put it in a warehouse. We have to make sure that it can be resilient and usable when necessary. So here I would think about Australia again as the place where we'd want to do heavier MRO >> Mhm. >> because it is just frankly out of range of a lot of the of the missiles that China has. It will be in a position to actually be able to do more sustainment of the heavier assets. For lighter assets, I think we should be thinking about pushing those forward in more austere environments. If you can imagine a convoy could actually, you know, a road mobile convoy could actually do a lot to sustain a fleet of drones in a range of different kinds of locations. We need to be thinking about that kind of mobility and when we think about the distribution as well. >> Mhm. What does that leave you then in terms of what do you think are some of the the near term low-hanging fruit so to speak in in in this space and what are some of the challenges for for for harder longer term problems? >> Yeah, I'll kind of go rapid fire here. I think near term I'm sincerely hoping that Australia will be a significant provider of missiles and missile sustainment. They're well down the road with the guided weapons explosive ordnance enterprise. They're putting a lot of energy and thought behind that. I wish it had moved forward a little bit faster and in part that is the US Australia relationship and trying to discern what the off-take arrangements would look like for that enterprise. >> They're doing also starting co-production efforts there as well. >> indeed. Yes. So, you've got Port Wakefield in South Australia. That's where the new guided missile missile multiple launch rocket system Gimlers is being produced. That's the first actual production line for Gimlers outside of Camden, Arkansas. And they seem to be doing a good job. In Williamtown, New South Wales, you have the Joint Strike Missile and the Naval Strike Missile production lines that are being stood up. And in Orchard Hills, New South Wales, they're working on air-to-air and surface-to-air missiles and sustainment there. Those are great activities, great projects that are underway. Over time, Australia needs to be really producing and sustaining these weapons in much larger numbers over time and supplying to our friends throughout the region. Longer term, there's some real structural challenges for Australia that they need to work through. First and foremost is workforce. Uh Australia just has not been able to develop enough labor to be able to do all of the things it wants to do with a very ambitious industrial approach. >> [snorts] >> Secondly, and one that I know has occupied a lot of attention here in Washington lately, is defense spending. Australia's recent white paper and their defense budget announcement looked like it was a good increase, but quite frankly, there's a lot more to be done here, and we're going to need to see Australia coming up with with more Australian dollars to support this work. Military recruiting is another traditional area where Australia has struggled to really fill out their ranks. So, they're going to have to think through how they incentivize incentivize that. And then just making Australia more business friendly across the board. In one sense, there's biological requirements for exercises as the United States and others come in. That's very onerous. We have to find a solution to the biological problem that we have. But when it comes to industry, we need to make sure that Australia is putting forward plenty of capital to help incentivize infrastructure build out. That's roads, bridges, and factories to to attract the most innovative >> [snorts] >> US and other companies that are that want to do business in Australia. >> This has been a really kind of wide-ranging and in-depth conversation on these issues, Jed. Thanks very much for all your insights, but if you had to leave kind of one one point for US and Australian policy makers, what would that what would one take one takeaway would that be? >> Sure. I'll start I'll finish where I started, which is that sustainment has to be a part of the capability. Whenever we think capability development, procurement, and acquisition, we need to be thinking sustainment in the very first case. I think that's a critical message for anybody who wants to build or sell products or to establish a forward posture for military operators. For policy makers in particular, I would encourage them to really look hard at the barriers to entry. This is one of the challenges we found with all of those initiatives that I announced. It's just difficult to be able to get past the regulatory environment. So, the more we can do in Washington to sanitize what has been difficult regulatory environment, and I would definitely call out our Indo-Pacific friends as well. We all need to do better to reduce those barriers to entry and get the collaboration going. And to industry leaders, I would say governments done a pretty significant amount of work over the last 5-7 years or so to create the kind of relationships with these countries that are very usable. It can be difficult to understand how to set up business overseas and how to use all of the comparative advantages that the Indo-Pacific region offers, but the more you can do that, the stronger our industrial base will be, the stronger our military relationships will be, and the greater amount of deterrence we have over time. >> Great. Jed, thanks so much for your time. >> Thanks so much. >> Industrial mobilization and national resilience will remain an ongoing priority as the United States and its allies work to prepare for large-scale combat operations. Central to that preparedness is the ability for US allies to sustain their own systems and to help sustain ours. As a practical matter, it is far easier to repair equipment in theater than to transport it across the Pacific. Assuming repairs can be feasibly done closer to the fight. Moreover, Australia's participation in the joint fight fight will be pivotal to ensuring that allied forces can project power and sustain it across the Indo-Pacific. Resilience requires the capacity to withstand, fight through, and quickly recover from disruption caused by military and non-military threats. And a reliance on the external supply and the threat of contested logistics jeopardize Australian and allied readiness. Addressing these challenges now before a crisis arises is a real strategic imperative. Thanks again for watching and we'll see you next time. And remember, it's all about the base. >> [music]