LATIKA M BOURKE: Pete Hegseth vows to overhaul the way the Pentagon acquires weapons for ‘war fighters’

US President Donald Trump recently claimed AUKUS was about defending Taiwan.

Sitting beside Australian Prime Minister Anthony Albanese, he added that nuclear submarines would ultimately not be needed as Chinese President Xi Jinping could be deterred.

Mr Trump believes his personal relationship with Mr Xi will deter the Chinese leader from his stated goal of taking control of the democratically-ruled island, with force if necessary.

But Mr Trump has been misguided before on the power of his personal relationships to influence bad actors, such as Russia’s President Vladimir Putin.

Mr Trump has repeatedly stated that he thought the Russia-Ukraine war would be the “easiest” of all the world’s conflicts to solve, because of his personal relationship with Mr Putin.

One year after Mr Trump’s political resurrection, he frequently bemoans the 7000 lives being chewed up every week on the frontline in eastern Ukraine.

A notable speech by Mr Trump’s Secretary of War, Pete Hegseth, suggests reservations about the President’s ability to ensure Mr Xi does not move on Taiwan, are also alive in the Pentagon.

The former Fox News presenter repeatedly stumbled through his overly-long 70-minute “Arsenal of Freedom” speech, which was filled with so much jargon, he noted his former television colleagues would be rolling their eyes, but those in front of him understood what he was talking about.

Mr Hegseth’s audience included defence industry executives, military officers and congressional staff members. They heard the Secretary of War’s most substantial speech to date.

“This is a 1939 moment, or hopefully a 1981 moment,” he said.

A moment of mounting urgency, enemies gather, threats grow, you feel it, I feel it.

“If we are going to prevent and avoid war, which is what we all want, we must prepare now.

“We are not building for peacetime.

“We are pivoting the Pentagon and our industrial base to a wartime footing. Building for victory should our adversaries FAFO.”

FAFO is slang for “F..k Around and Find Out”. He did not name which adversaries or if one posed a greater threat than another.

What followed was a call to arms. And unlike his fat-shaming speech to US Generals, the tone was encouraging and stressed a “team effort at the Pentagon” and “not a hostile takeover.”

He told defence executives that they were the United States’ Obi-Wan Kenobi – “You’re our only hope” – but that the Pentagon’s system of buying, making and producing weapons was “dead.”

“President Trump did not send us here to nibble at the edges. He sent us here to fix it,” he said.

He unveiled a plan to overhaul the way the US acquires weapons for its “war fighters.”

This included longer and bigger contracts for proven systems and a commercial-first approach with a willingness to buy weapons that were ready now, even if only 85 per cent capable.

He said the Pentagon would only buy from suppliers who could surge production and deliver at speed and at volume, and promised that regulations would be eased to reduce “excessive” testing, oversight and studies and risk-taking prioritised.

“We mean to increase acquisition risk to decrease operational risk,” he said.

“Taken together, we will rebuild the defence industrial base into a new Arsenal of Freedom.”

But the sting, or stick, was his warning to industry to put its money on the table and invest in itself, its facilities and workforces, as he railed against monopolies and complacency in the sector.

“If they don’t, we are prepared to fully employ and leverage the many authorities provided to the president which ensure that the department can secure from industry anything and everything that is required to fight and win our nation’s wars,” he said.

“We appreciate your need to make a good margin and a profit as capitalists, but you must invest in yourselves rather than saddling taxpayers with every cost.

“For those who come along with us, this will be a great growth opportunity, and you will benefit.

“To industry not willing to assume risk in order to work with the military, we may have to wish you well in your future endeavours, which would probably be outside the Pentagon.

“We’re going to make defence contracting competitive again.”

Crucially, Mr Hegseth linked his plan to turbo-charge weapons production to bolstering alliances, although he also bragged of the cash the sales of new weapons would reap for the US, noting: “We are capitalists, after all.”

“Burden sharing has been a key pillar of President Trump’s and the Department of War’s agenda. And to accomplish this, our allies and partners must be armed with the best and most interoperable weapons systems in the world,” he said.

“Believe me, I hear about this on every foreign trip. And every conversation I have with every President, Prime Minister, and Minister of Defence is, ‘What is wrong with your foreign military sales? We ordered it in 2014; it’s 2025 and it’s scheduled to deliver in 2032.’ And I sit there going, ‘I don’t know, what the hell?’ We didn’t break it, but we’re going to fix it,” he said.

Mr Hegseth is one of Mr Trump’s most controversial cabinet picks and is a seemingly permanently embattled figure.

But his diagnosis of the Pentagon’s problems is hardly ideological. He began and closed his speech, citing Donald Rumsfeld making the same complaints two decades ago.

Nor is his recommended prescription isolated. 24 hours prior, the NATO Secretary General Mark Rutte had a similar message for Europe’s arms companies.

Speaking at the NATO Industry Forum in Bucharest, Romania, he called on defence industry leaders to prioritise producing arms in quantity, creatively and cooperatively, including with non-NATO allies Australia, Japan, South Korea and New Zealand.

He, too, called on defence companies to take risks by starting manufacturing before signing on the dotted line.

“Dangerous times call for bold action and this demands a degree of risk tolerance from all of us,” Mr Rutte said.

“You heard the President. You know the decisions we took in the Hague, the political will is there, the money is there, the demand is there, and our security depends on it.

“So as you’re business leaders, perhaps we can make a deal.

“On my end, I will continue to do all I can to urge governments to walk the talk and sign the contracts, and I promise we will do all we can from NATO to expedite procurement and keep supporting innovation.”

These signals to defence contractors are extremely positive as is Mr Hegseth’s ambition to detonate the legacy system of defence procurement in favour of a Silicon Valley-style start-up approach, the type being deployed in Ukraine.

But the proof will be in the proverbial pudding, given that overruns in defence procurement, especially in the US, are legendary.

“I believed from the very beginning of this Administration that DOGE should have focussed on military procurement system, probably blown it up and started over, because the military, industrial, congressional complex, as Senator McCain used to pejoratively term it,” former CIA Director and retired US General David Petraeus told the Latika Takes podcast on the sidelines of the recent Warsaw Security Forum in Poland.

“In each of these elements, there are vested interests in legacy systems.

“We have to break that, we’ve got to be much more rapid in what we are doing.”

Anduril’s Ghost Shark shows the future of defence innovation

One company that is already carrying out the desired Hegseth model of build now and bank on a customer later is Anduril, the winner of the Australian contract to produce the underwater drone Ghost Shark.

Mr Petraeus said Anduril has built manufacturing capacity before securing a government contract.

“That is revolutionary as are many of the features of how they operate,” he said.

“And we need more of those to compete with the so-called defence primes which have gone down to a very small number with much less competition than we used to have when we were spending during the Cold War period,” he said.

In 2022, Anduril stumped up $75 million to match the Australian Government’s $75 million funding to build three prototype underwater unmanned submarines.

The company delivered them ahead of schedule, which the Gsaid gave them the confidence to sign in September a $1.7 billion contract to produce a fleet of drones.

As Anduril noted, this rapid creation and production cycle meant three years between prototype and fleet.

“Beyond what Ghost Shark will do to protect Australian seas, the program opens the door for other nations to follow suit — such as the United States and its allies — in deploying autonomous seapower at relevant scale with unprecedented affordability, against a relevant timeframe, and through clear operational concepts,” the company said in a statement.

It also noted that a key to its success was embedding Navy teams alongside their own during the process.

But as Mr Petraueus himself noted, Ghost Shark will not replace the need for AUKUS. And the US Navy’s sluggish production rates remain the greatest threat to Australia’s ambitious plan to acquire nuclear-powered submarines from the United States and then, in conjunction with the United Kingdom.

The US is currently producing nuclear submarines, the type that will be sold to Australia from early next decade under the AUKUS deal, at a rate of 1.2 a year.

“The only way we’ll ever make good on the AUKUS agreement is that we get to the 2.3 (build rate),” the Chief of Naval Operations, Admiral Daryl Caudle, told USNI News in August.

Last month, Mr Trump, at his meeting with Mr Albanese, said AUKUS was “full steam ahead,” silencing critics in his Administration, such as the Pentagon Under Secretary Elbridge Colby.

But despite the positive political signals, there is not yet any indication, publicly at least, of whether production can be lifted to rates where the President of the day will sign off on selling Australia the submarines.

It is one thing to kickstart smaller, innovative, AI-based companies and another entirely to overhaul a legacy production line responsible for one of the world’s most exquisite capabilities.

Matching Mr Hegseth’s own penchant for profanity, Shyam Sankar, the boss of the defence data and software company Palantir said the speech had a rousing effect.

“I wanted to yell ‘fuck yeah’ more than once,” he said in a post on X.

“The Heretics and Heroes inside and outside govt left fired up. As did the forges that will rebuild the Arsenal of Freedom.”