Thank you for inviting me to speak with you today. It s always. a pleasure to take the time to talk with community leaders, to

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1 Secretary of the Navy Ray Mabus The Commercial Club of Chicago Chicago, IL 25 October 2016 Thank you for inviting me to speak with you today. It s always a pleasure to take the time to talk with community leaders, to talk to you about the hard work your Sailors and Marines are doing all over the world. The City of Chicago and the United States Navy have a historically strong connection and I m not just talking about the world-famous Navy Pier. The Navy has woven itself into the fabric of this region - we re your neighbors, your customers and your friends. Every enlisted Sailor goes through initial training just a few miles up the road at Great Lakes those Sailors and their families leave this city with an appreciation for its dynamic nature, great food, generous hospitality, and wonderful people. And that affection is returned by the City of Chicago. 1

2 With programs like your own Veterans Employment Initiative, Chicago s and the Commercial Club s dedication to the military and the Department of the Navy is very much appreciated. Thank you for everything you do. I don t know if anyone has noticed, but there is an election going on. This election will bring a new administration, so I think that now is a very appropriate time to take measure of what we in the current administration have accomplished in our Navy and Marine Corps institutions founded on tradition, continuity and legacy, but also on change and adaptability. 2

3 To quote a former CNO, Our Navy has both a tradition and a future, and we look with pride and confidence in both directions. So that is what I m going to do today give you the State of the Navy to demonstrate how the actions we ve taken over the past seven and a half years will ensure that the future of our Navy and Marine Corps will be as bright as its storied past. In his poem, The Laws of the Navy, British Admiral Ronald Hopwood wrote, On the strength of one link in the cable, dependeth the might of the chain. Who knows when thou mayest be tested, so live that thou barest the strain. 3

4 And we ve been tested. Among the challenges, when I came into office, we had a shrinking fleet in a shrinking economy; we had our hands tied by sequestration, which continues to hang around and limit our ability to plan; oil dependency and volatility threatened operations and training and it was costing us lives; and bad laws and an antiquated personnel system limited our ability to attract and keep America s most talented young people. All of this happened during rising threats, a far more complicated world and an ever-increasing demand for naval forces. And yet, I am confident that when history looks back at our tenure, it will find not only that we bore the strain, but that we fixed the cable, and set the course for the addition of many strong links in the years and decades ahead. 4

5 Each of you has a handout that lists a small selection of the many achievements we ve made across a range of priorities and they are all important and meaningful. But today, I m going to focus on three of these priorities: shipbuilding, energy and people. There s a saying that: Eighty percent of success is showing up. Since I ve shown up longer than any Secretary of the Navy following World War I seven and a half years now I guess I could claim some success just on longevity. But that shouldn t be the standard, and is not the standard, for me or for our Navy and Marine Corps the standard has to be and is much, much higher. 5

6 We ve never just shown up. From when John Paul Jones defeated the British in their own backyard in 1779, to when U.S. Marines planted our flag atop Mt. Suribachi in 1945, to when President Kennedy s naval quarantine of Cuba averted nuclear war in 1962, to when President Obama relied on carrier-based naval aviation as his only strike option against ISIS for 54 days in 2015, the U.S. Navy and Marine Corps, uniquely and without lapse, have provided presence around the globe, around the clock. And to take this one step farther, not don t just show up we re already there. 6

7 That unrivaled advantage on, above, beneath, and from the sea ensures stability, reassures allies, deters adversaries, and gives our nation s leaders options in times of crisis. I call the Navy and Marine Corps America s away team. We are the away team because never get a home game, and we don t want a home game. Sailors and Marines, equally in times of peace and war, are not just in the right place at the right time, but in the right place all the time. There is no next best thing to being there. In every case, from high-end combat to irregular warfare to humanitarian assistance and disaster relief, our naval assets get there faster, we stay on station longer, we bring what we need with us, and, because our ships are sovereign U.S. territory, we don t have to ask any other country s permission to get the job done. 7

8 To get that presence, we have to have grey hulls on the horizon. Quantity has a quality all its own. To say that a Navy is too focused on building ships is to admit an ignorance of its purpose. We are the Navy. We need ships, and we need enough ships to accomplish every mission we re assigned. So I made shipbuilding one of my top priorities, and we ve dramatically reversed the decline in our fleet. On September 11 th 2001 the Navy had 316 ships. Seven years later, by 2008, despite one of the greatest military build-ups in history, we were down to 278. During that seven years, only 41 ships were contracted not enough to keep the fleet from shrinking and not enough to keep our shipyards going. 8

9 I ve been in office over seven years now, so it s an absolute comparison. In the seven years since 2009, we ve contracted for 86 ships, and we ve done so while increasing aircraft purchases by 35% - all with a smaller top line. Our efforts, with the strong support of Congress, guarantee that just with the ships under contract today we will get to 300 ships by 2019 and our currently assessed need of 308 ships by It takes a long time to build a fleet. It takes a long time to reverse the consequences of a shrinking fleet. But, by implementing basic business practices like firm, fixed-price contracts, multi-year buys and stable requirements, we increased the numbers while driving down costs on virtually every class of ship. 9

10 For example, the average construction cost of our Littoral Combat Ship has decreased by nearly 50 percent relative to those hulls contracted prior to While the costs have gone down, the capabilities have gone up. We are upgrading the design to significantly increase LCS lethality and survivability, and because of their enhanced counter-surface and countersubmarine capabilities, contributing to Strike Group operations, we are re-designating future ships as frigates. 10

11 The Arleigh Burke Class Destroyer (DDG 51) program is another one of the Navy s most successful shipbuilding programs. Sixty-two of these ships are currently operating in the fleet. Today, we are in the fourth year of a multi-year procurement, and thanks to competition and also thanks to the hard work and the talent at our shipyards, the DDG 51 competitive multiyear contract is saving more than $2 billion over its predecessors. We ve enjoyed similar success with our submarines. In April 2014, we awarded the largest contract in Navy history, $18 billion to build 10 Virginia-class attack submarines. These submarines normally cost $2 billion apiece. This is doing math in public, but we paid for 9 and we got 10. It s like having one of those punch cards: buy nine, get your 10th sub free. 11

12 Finally, we ve expanded unmanned systems in all domains and put increased focus on these systems by establishing a Deputy Assistant Secretary of the Navy for unmanned and an office of unmanned warfare systems on the Navy staff, N99, designed specifically to coordinate all unmanned programs. As both our manned and unmanned platforms join the fleet, we are equipping them with the most advanced technologies like laser weapons and soon, electromagnetic railguns. We ve protected research and development and science and technology so that we will continue to have our technological edge. I don t ever want to send Sailors and Marines into a fair fight. Our efforts to rebuild the fleet have benefited more than just our Navy and Marine Corps. From Marinette, Wisconsin to Mobile, Alabama and from Bath Maine, to San Diego, California - American workers build, maintain and repair our platforms. 12

13 Tens of thousands of skilled laborers are employed by our public shipyards. Four-hundred thousand U.S. jobs are directly or indirectly supported by the maritime industry, and 41 million jobs are linked to international seaborne trade. For every job created in shipbuilding, almost 3 other jobs are created in other parts of the economy, and since 2009, we ve created 8,000 new jobs in our shipyards these are American manufacturing jobs with an average salary of more $75 thousand. The overall impact is so great that the shipbuilding industry produced more than $25 billion in labor income and more than $37 billion in GDP in

14 And those ships are needed more than ever before - they protect the sea lanes across the globe. And through these sea lanes, 90% of world trade, or $9 trillion of goods, travel annually, sustaining the global economy. These are facts. As Casey Stengel used to say, You can look it up. The fact is that our focus on shipbuilding has undeniably produced substantial and tangible results for our Navy and Marine Corps, for American industry and American workers, creating jobs across the Nation. It has advanced both our own economy and the global economy and contributed to international security in ways that benefit every American. 14

15 Increasing the fleet size, however, is only part of the equation. We have to have our ships in the right place at the right time, all the time, to provide presence. And the way we do that with is by the energy we use. In 2009, oil had reached $140 a barrel, forcing us to prioritize overseas operations at the expense of training here at home. Worst of all, we were losing a Marine in every 50 fuel convoys in Afghanistan, way too high a price to pay. 15

16 Although the cost per barrel of oil has eased, the price of oil, over time, is going in only one direction, and that is up. As recently as the past few days, OPEC announced new negotiations on supply restrictions to get prices back up. And while the final outcome remains unknown, for the first time, Russia has shown a willingness to cooperate. Speaking of Russia, you only have to look at what Russia did to Ukraine and in Crimea to see how energy can be used as a weapon. That is why I took action to re-establish the Department of the Navy as a world leader in energy innovation and it was to make us better warfighters. Our Navy and Marine Corps have always been on the cutting edge of energy innovation. 16

17 We led the transition from sail to coal, coal to oil, and pioneered nuclear power for propulsion. In that tradition, it was clear that we had to lead the transition to alternatives in order to maintain our edge. First and foremost, we ve done this to be better at our jobs to be better warfighters but, we cannot ignore the impacts of climate change. As new routes open in the Artic, as sea levels rise, as storms increase in intensity, the Navy and Marine Corps are the first responders and our responsibilities increase. We need to also lead in the response to climate change. 17

18 So in 2009, I set a number of very specific, pretty ambitious energy goals, the most ambitious of which was to have at least half of naval energy both ashore and afloat come from nonfossil fueled sources by President Obama reiterated the shore part of that goal in his 2012 State of the Union Address saying that Navy would get 50%, or 1 GW of power, from alternatives by So how are we doing? We surpassed our goal ashore last year five years early. Today, at our shore installations, we get more than 1.2 GWs of energy out of our total 2GW requirement, from alternative sources. 18

19 Since we own a half million acres of land and 117,000 buildings our accomplishments ashore are important but we are the Navy so I m happy to say that we are on pace to meet our goals at sea and in the air too. In just seven years, we envisioned, tested and deployed the Great Green Fleet, a Strike Group steaming entirely on blended biofuels and nuclear power. Our biofuels are drop-in fuels, meaning we don t change a thing in our engines; they don t take away land from food production; and they are cost-competitive with traditional fuels. Other countries are already following suit, and other industries are following suit. In August, during our Rim of the Pacific Exercise, nine other nations were refueled by blended biofuels and regular fuels. 19

20 In June, I was in the Med on a U.S. destroyer taking Italian biofuel from an Italian oiler with an Italian frigate on the other side of the oiler, also taking biofuel. The geo-strategic example I use is that in Singapore, there is an oil refinery owned by the Chinese, and right down the road there is a biofuel refinery owned by the Finns. I don t want to depend on China for our fuel in the western Pacific. I want to have an option, a choice. Biofuels make us more flexible, more agile. The private sector understands this too. Jet Blue just signed a 10-year contract for biofuels and United, Alaska, Virgin, UPS, and FedEx are all flying at least part of the time on biofuels. 20

21 There were those who criticized us for the price we paid for a small test amount of biofuel we purchased in 2012 for our first demonstration. But these same folks were strangely silent after we bought operational quantities this year as part of a regular fuel purchase for less than $2.14 per gallon, a price that is absolutely competitive with that of traditional fuel. Biofuels aren t the only alternatives we have pursued and our pursuits aren t exclusive to the Navy. The Marines who most of you wouldn t necessarily think of as ardent environmentalists have led the way in other alternatives like kinetic knee-braces. When they march or walk, which Marines tend to do, the movement in their legs translates to energy, which they use to power their radios and GPSs. 21

22 In parallel with these efforts, we have pursued efficiencies changing the whole culture of energy consumption in the Navy and Marine Corps. At the recommendation of a Navy Chief, we are retrofitting ships with LED lights as they come through the yards. Just by changing the lightbulbs, we save 20 thousand gallons of fuel per year per destroyer. We ve also invested in technologies like hybrid-electric drives that enable ships like our big deck amphib, USS Makin Island, to not only increase on-station time by a third (44 days), but to bring home about half of her fuel budget. 22

23 Those combined efforts in alternatives and efficiencies have produced what some considered unimaginable results when we started. Ashore, we ve achieved $90 million in savings, $60 million in energy upgrades and 22 million tons of abated CO2, and along with our work at sea, our energy initiatives as a whole have contributed to a reduction in oil use by 15% in the Navy and 60% in the Marine Corps. To be fair, part of that drop for the Marines is because we re largely out of two land wars, but that is clearly not the only reason. As impressive as these statistics are, and I think they are pretty impressive, it isn t the statistics that matter, but rather, how these statistics influence our ability to provide that presence. 23

24 These efforts have made our SEAL teams stealthier, as they approach net-zero with power and water consumption; our Marines more agile, since just by using rollable solar blankets, they ve shed 700 pounds of batteries per company that they don t have to hump and they don t have to re-supply; our ships less vulnerable, due to decreased replenishment requirements, and our bases more resilient in the face of attacks on our power grids. These are the real impacts. They give our Navy and Marine Corps operational flexibility, they make us better warfighters and they give the United States a strategic advantage. 24

25 Finally, having the right number and type of ships, and the means to have them wherever they are needed, whenever they are needed, still falls short if you don t have Sailors and Marines who can offer the diverse perspectives required to solve today s complex problems - perspective and diverse being the important words. From one perspective, it is critically important to honor the people and traditions that have sustained America s Navy and Marine Corps for 241 years. One of my great privileges and responsibilities is to name Navy ships. That is why I ve named ships after 9 Medal of Honor Recipients and 2 recipients of the Navy Cross individuals who fought, and in many cases died, in sacrifice for American values. 25

26 From another perspective it is equally important to honor American values themselves. Our founding fathers set out to form a more perfect union, acknowledging the American experiment that challenges us to live up to the principles established in the Declaration of Independence and our Constitution. That is why, in accordance with the longstanding naval tradition of establishing new naming conventions for new classes of ships, and for naming naval support ships for civilians, I have also named 8 ships in honor of civil rights and human rights heroes people like Medgar Evers, Cesar Chavez, John Louis, Harvey Milk, Earl Warren, Lucy Stone and Sojourner Truth Americans who also fought and in some cases who also died pursuing our most sacred values of justice, equality and freedom. 26

27 One of those ships I named recently, the USNS Robert F. Kennedy at the John F. Kennedy Library in Boston, I was reminded of a George Bernard Shaw quote that Robert Kennedy often used, There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not? When I became Secretary of the Navy in 2009, there were a lot of things I encountered that begged the question "why not? At that time, openly gay Americans were not allowed to serve in the military. Why not? In the Navy, women were not permitted to serve aboard submarines, or in riverine squadrons or in the Navy SEALS. Why not? In the Marines, women were not accepted in ground combat roles. Why not? On the campuses of Harvard, Princeton, Columbia and Yale, NROTC had not been present for decades. Why not? 27

28 In every case as is always the case with such questions there was no good answer. So I strongly supported the repeal of don t ask, don t tell, and I led the implementation of open service in the Navy and Marine Corps. I also, in 2010, opened service on submarines and in riverine squadrons to women, I called for an increase in female mids at the Naval Academy, and I advocated for opening all combat specialties to women across the Navy and the Marine Corps, which happened this past January. 28

29 Working with the presidents of Harvard, Yale, Princeton, and Columbia we brought Naval ROTC back to their campuses. At the same time, we established Naval ROTC units at Rutgers and Arizona State, our country s two the most diverse campuses in our country. We are doing this not to have diversity for diversity s sake. But because a diverse force is a stronger force. It s a dangerous thing for a military force to become too predictable. A predictable force is a defeatable force. Every time we ve opened the services, every time from the time the desegregated the military in the late 40 s to opening up ground combat this year every time, we ve become stronger. 29

30 It is also dangerous when there is too wide a gap between the protected and those doing the protecting. Our pursuit of diversity in thinking, diversity in experience, and diversity in background gives us strength and guarantees our Navy and Marine Corps are both reflective and representative of the nation we defend. But, as we have opened up opportunities for everyone to serve, in no case are we lowering standards. Lowering standards is unacceptable unacceptable under the law, unacceptable to me, and unacceptable to every military leader because it would endanger not only the safety of Sailors and Marines, but the security of our nation. But while there is no good argument to lower standards, there is also no good argument to bar anyone who has met those standards from serving alongside his or her fellow Sailors and Marines in every clime and place. 30

31 If a person qualifies in every way for service, how can we possibly say that they cannot share in the honor of defending this country because of the shape of their skin, the color their skin of their skin or because of who they love? We can t. We shouldn t. And now, we don t. The experience that brought this home for me: I ve been to Afghanistan twelve times. On one of those trips I went through Manaus, Kurdistan where we had a big base. Everybody coming into or out of Afghanistan usually transited through there. And I spoke to about 800 Sailors and Marines about half coming in and half going home. After the all hands call, a First Class Petty Officer came up to me and said, I just want to thank you and everyone who was involved in repealing Don t Ask Don t Tell. He said, I ve been in the Navy for twelve years. 31

32 He had just finished his third combat tour in Afghanistan and Iraq. Three combat tours and yet his biggest fear was that he was going to be found out as gay and made to leave the service. How wrong is that? How wrong? Recruiting a diverse force must be followed by retaining, developing and advancing that force. So we implemented the most sweeping reforms to personnel policies since Admiral Elmo Zumwalt, my CNO and the namesake of America s newest Commissioned Destroyer, transformed our Navy in the late 60 s and early 70 s. 32

33 Seven years ago we were losing too many people, especially women, because we weren t doing all we could to uphold a healthy working environment, Sailors and Marines often had to choose between service and family, rigid career paths stifled professional development, time in service was the primary determinant of advancement, and our op-tempo was very high and very unpredictable. So we ve taken deliberate steps under my 21st Century Sailor and Marine Initiative to foster a professional, supportive and inclusive workplace. We are absolutely committed, from the deckplates to senior leadership, to combating the crime of sexual assault, which is why I created the only Secretariat-level Sexual Assault Prevention and Response Officer, who reports directly to me. 33

34 We ve increased protections for Sailors and Marines suffering from Traumatic Brain Injury and PTSD and other mental health conditions. Too many times they were administratively discharged for some bad act and the bad act took precedence over whether they had PTSD or TBI. As a result, they got bad paperwork. We reversed that. We are going to test these Sailors and Marines, and if we find they had a condition that contributed to the bad act, they may still get discharged, but they will have access to VA care and other benefits they earned. We are also addressing the tragedy of suicide both in the service and with our veterans. Taking a bigger view on health, we ve revamped physical assessments, making them more realistically aligned with the jobs we do, and we have promoted healthier lifestyles through better nutrition and a culture of fitness. 34

35 Part of taking care of Sailors and Marines is making it easier for them to take care of themselves and their families, so we ve made career paths more flexible. One example, which has been dramatically expanded, is the Career Intermission Program a program that allows Sailors and Marines to take up to three years off to raise a child or care for an ailing family member or for many other reasons. When they return, they owe us 2 years for every year they were gone, but their careers aren t penalized, but rather, they compete with others who are similarly qualified and experienced. 35

36 For others, we ve extended child care availability by two-hours on both ends of the work day at all Navy and Marine Corps facilities, and we now provide 24-hour care at three fleet concentration areas. I also tripled paid maternity leave from 6 to 18 weeks, although DoD later reduced all services to 12 weeks, and I expanded co-location policies to provide more stability to dual-military couples. Increased stability and career path predictability enables Sailors and Marines to pursue the types of professional development opportunities we need to drive innovation. 36

37 Athenian General, Thucydides, is attributed for having said, A nation that draws too broad a distinction between it's scholars and it's warriors will have it's thinking done by cowards, and it's fighting done by fools. To guarantee we don t suffer that fate, we added 30 graduate school slots through our Fleet Scholars Education Program and we are sending high-performing Sailors on SECNAV Industry Tours to great American companies like FedEx and Amazon. There, they learn private sector best practices that can be applied when they return, and as representatives of our Navy and Marine Corps, they help bridge the growing civil-military divide. 37

38 To tap into that innovative culture and to revitalize the creativity inherent in our Navy and Marine Corps, we established Task Force Innovation, an initiative focused on drawing good ideas from deckplate Sailors and field Marines through our online crowdsourcing platform and then funding and rapidly moving those ideas throughout the fleet. And we are better able to recognize those who contribute because we have removed zone stamps from officer promotion boards and our Commanding Officers are now empowered to meritoriously promote up to 5% of their Sailors and Marines. And if they don t use their whole 5%, another CO can. All of this is aimed at one thing attracting, developing, retaining, and advancing the most talented Sailors and Marines America has to offer and getting them out to lead at sea and overseas where we need them most. 38

39 So my time is coming to an end. I am taking the opportunity to visit our shipbuilding facilities and Fleet concentration areas I ve already been to Groton, Norfolk, San Diego, Washington state, and Wisconsin. I was just up the road at Naval Station Great Lakes visiting with the future the strength - of our Navy its people. I ll soon travel to Mayport, Florida and continue on overseas. This is to see the people who have done the work, made the changes, built the ships to give them a BZ, a well done. 39

40 I do this and I will depart in a few months, knowing that this Administration has taken the necessary steps to assure that our Navy has never been stronger. We are getting the right number of the right kind of platforms to meet our mission; our disciplined and deliberate use of energy has made us better warfighters; we represent the greatest people America has to offer, the absolute best in the world; and we continue to provide presence - around the globe, around the clock. A foreign head of Navy once told me that the difference between Soldiers and Sailors is that Soldiers, by necessity, focus on boundaries and obstacles. They are constantly looking down at the ground. Sailors, on the other hand, look out. They look to the open sea and see no boundaries. Sailors look to the horizon and see only possibilities. 40

41 So looking to the horizon, looking ahead, I am confident that the policies we ve enacted, the decisions we ve made and the priorities we ve set guarantee that our Navy and our Marine Corps will remain the greatest expeditionary fighting force the world has ever known for as far into the future as the eye can see. That is the strength of our link in the cable, and it will bear any strain that tests it. From the Navy, Semper Fortis, Always Courageous. And from the Marine Corps, Semper Fidelis, Always Faithful. Thank you. 41

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