Aerospace Eyes Trump 2.0
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Welcome to aviation weeks check six podcast coming to this week from the aviation week air space and defense ema conference in beverly hills, california. I'm john and sama at a toilet director joined today by Michael bruno, our top business sector. And we have a special guess with us, doctor evaluate fark s exactly of director of the macana institute at arizona state university and doctor fark s nights just on stage here at the event.

But IT was chat m house rules. We couldn't record IT. So we got that to fargus on check six to cheer of our listeners.

What he told all the attendees here, beverly hills, dr. Farkas, we opened with the one of the people that was on stage today, said in relation to the recent us. Presentin elections, I don't think the country understands what I just did. What did you just do?

Well, first, let me say thank you, joe and Michael, for having me on the podcast. This is my first time. Maybe I won't be my last time. ah.

What did the country justice? Will they elected a president who put forward basically an isolationist and a protectionist foreign policy agenda? What do I mean by that? He said, that is amErica first.

We are not interested in fighting for ukraine. We want to make peace, and we want to make IT overnight. Implication being that piece is more important than the type of peace. In addition to that, he talked about tariff s, which is protectionist, and we'll have implications for the american people in terms of the economic situation domestically, meaning Prices will go up if he does what he has said that he will do. So the implications for americans are that amErica will not play such a large role on the international stage, that we will seed some power to autocratic states like russia in china, except in the area of terrifying. So I think that IT IT is a very different kind of foreign policy than the one we see traditionally from republican and democratic presidents.

And to be clear, I know you're giving an observation on what sort of a clinical what IT is that the election will go to as a ramification or or the type of foreign policy that we've just elected. Um at the conference, we started to get down into what does this mean for the air space and defense industry in particular. In you had mentioned I think there was a question there about what kind of prospects does the U.

S. Defense industry phase. And I thought you gave a kind of a surprising answer. I'll ask the question again, what do you think it's going to happen with the us. Defense industry under second term of president term?

I think the U. S. Defense industry will continue to do well even if things goes south, meaning somehow we're not able to keep lad mir putin in the box ticals speaking, meaning he continues to wage war against ukraine, launches new wars against other countries, potentially even against nato.

If china takes taiwan. These are really bad scenarios. But even in those really bad scenarios, the defense industry will do well, obviously, because we will need to provide weapons to partners and allies, and possibly will get involved ourselves. The other scenario is one where we continue to deter russia from the worst case scenario, deter china from the worst case scenario, but we still need weapons in order to deter. So I think for the defense industry, because of all the global turmoil and uncertainty, because of the standoff between autographs and democracies, we are in a situation where we need a strong defense in order to Frankly, back american diplomacy, back our economic marcial interest and hopefully, you know, to bring the weight back to the world dorter that we established after world war two.

So a quick follow up on the commercial side of things. In commercial era space, there's this this old well known rule within the industry about how basically you can tie commercial passenger traffic, the number of people who get on an an airline or to travel to see their grandparents or something over the holidays, you can directly tie that back to GDP.

And obviously, over the past couple of decades, GDP have been rising around the world in thus, aircraft passenger traffic was rising. But that sounds like what you're saying. If there are economic ramifications for what's coming that could possibly affect what happens on the commercial aerospace set. Because if if the economies aren't going so well, you're not going to have as many people buying aircraft or airline or tickets.

Yes, that's true. And there's a lot of geostrategic turmoil. So everything from like, you know a spirit airlines being shot, buy some gangs and hate to the reality that you can fly in and out of ukraine, all of those things have ramifications for commercial flight.

And then I would to IT something that we haven't really heard that many people talk about climate change. And you know the turbulence, literal turbulence that you experience in an aircraft. Now it's become dangerous. We don't right now have a way to predict this new turbulence. Um so I think that's also a danger, especially as climate change and the impacts of climate change continue to multiply in increase.

We are barely toward the third anniversary of russian invasion of ukraine and february with the anniversary. And one of the topics here at the event was what's onna happen in ukraine now with a change in U. S. Administration, what do you see the rain vacations are for ukraine?

Well, first of all, president trump has said that he wants to bring an end to the war, and everybody wants to bring in to the war. The question is how what kind of peace for the ukrainians is really important that this be a just piece. I think they're willing to make some compromises, if they have to, on territory, if they can get a real security guarantee.

That would mean either a bilateral U. S. Guarantee, military guarantee or nado membership. The other part of this is that the ukrainians will need to feel like the russian government is somehow being held accountable for all the human rights abuses that they have experienced at the hands of of the russian military and the russian government, meaning the torture, the rape, the abduction of children and set a, because if there's no just end to the war, there could be continued turmoil inside ukraine. And politically, they could end up winning the war, if you will, but losing the piece, meaning losing their democracy. And I think that would be very sad outcome when that the united states not want them to to experience.

And joe, I would just stand that not to bring you back too harshly to simple business prospects. But the the ukraine war has a direct impact to the bottom of a lot of large defense primes. R, T, X, for example, making missile S, L, three hairs technologies.

These companies have been the beneficiaries of supplemental spending and and a big increase in the U. S. Military budget, simply to fund what happening in the ukraine. Warn, obviously, if peace were to break out overnight, matter whether people like IT or not or what they thought about that piece, if IT actually occurred, it'll be a direct impact to what the industry feels right away.

maybe. But can I just say something to that? I mean, if peace does break out, you'll still need deterrence and you'll still need to make sure that we have sufficient weapons. First of all, we have to restock here in the united states. We also have the problem in the middle.

We have talked about that yet that we did on the stage show and and then and then the ukraine um themselves, they'll want to make sure they have more ammunitions and then we'll be, you know, opportunities for joint manufacturer in ukraine. So I think for the defense industry, even if there's a piece overnight, they'll still, as they say, a tale. So about to go .

to another change over presidential administration, is the united states safer than that was when president biden took office or more it's more vulnerable.

But it's not because necessarily because of anything the president did or didn't do. Although I would argue we could have been firmer with a lad mir putin, many times during president biden administration, we could have tried to deter russia from doing the full frontal invasion in february twenty twenty two. You know, there are a lot of things we could have done, could have obviously done the afghans withdraw in in a different form and fashion.

So we telegraphed, unfortunately, kind of a lack of political will, and we weren't risk taking enough, I would say. But that's not why we're in danger. We're in danger because these autocracies were already chAllenging us before a president biden came into office.

Russia has decided that this international order doesn't suit russia's interest and fladda. Putin wants to recreate an empire and go back to the sphere of influence, you know, pre world war two international order, doggy, dog. And china, Frankly, wants to emphasize borders and let countries do what they want internally, so ignore human rights.

And all of this we were gna have to deal with whether IT was president biden or, you know, if you'd had a second trumpet administration. We are just in a very volatile time right now because of these autocrats working together to chAllenge democracies. And Frankly, also because of technological changes, because of climate change, because of economic um you know turbulence and .

and you said the us. Is under an unprecedented tack from russia and china in terms of spying and and sabotage that sort of thing. Can you elaborate for others?

Yeah I mean, I don't think we face this even during the cold war, this level of intrusion. We have international actors, russians, putting box on our water facilities, on our electrical plants, nuclear plants. We have chinese cyber attacks and cyber spying.

We have the iranians going in and through social media spreading disinformation. And of course, all those countries are doing that in in addition to north korea, north korea's ransome ware attacks. And then russia has launched these sabotage Operations now, thus far, not in the united states, but one of them apparently was plan.

So there was a, there was an attack using explosives and aircraft, commercial and or cargo. It's unclear because the intelligence has not been made public clearly, and I think you guys should call for IT as members of the media, but the idea was to use these aircraft in flying out of germany, and that would be a trial run for maybe doing this in the united states. This is incredibly risky behavior.

We have not seen such risky behavior since we were actually in a global war. I don't think um coming from russia, russia already, unfortunately, the kremlin believes that we're already at war and so they're taking these actions. They're also testing us. And if we don't stand up to them, if we don't deter them from actually taking the next step, we're going to be in an even greater danger.

It's very interesting to me that IT seems over the past ten years, under different administrations, there has been this growing trend of international CoOperation among, obviously not just like western military, but more importantly, under their industries. And we talk a little bit at this conference here about oculus, for example, the. United states, the kingdom in the australian deal that's been worked out in, in recent years.

They're certainly a lot of work going on with nato allies, and we're seeing more of companies partnering and doing joint ventures and things like that. What do you think is the the trend going forward, maybe five years? Do you see more of that sort of international industrial CoOperation? Or do you think that trend goes in a different direction or reverses?

I I actually see IT continuing, especially if ukraine remains at war, but the united states is not supporting ukraine military, then our allies will want to purchase from the united states. Maybe do some co production we already have. I think you mention ri metal working in ukraine, also in the U S A.

Clearly B A E is in ukraine and also in the U S. We have um in texas um now i'm going to forget which company was making municipal using turkish workers. So there are really interesting things. The south koreans, of course, are very actively providing us and the polls with stocks to backfill as we and the polls provide to the ukraine ans so I think there's a lot of opportunity there. Um at the mccain institute, we work very closely with the swedes and full disclosure sob and they are also really interested in working with us and then also supplementing us with, let's say, grip and fighters at at a helping ukraine and and there is a place for these smaller military companies. And I think we should be we we shouldn't try to edge out the europeans as they complain that we have tried to do in the past .

couple hours before we were on stage. Retired general john epos de used to be the same calm commander foot from the us. We were allowed quote, but he gave me information to quote on this.

He said, quote, I think is inevitable that the space domain becomes military ized in the next several years. That's really scary. Just as we're getting this new space economy dependent on thousands of lower torbin satellites, we we could have a real scary situation up there.

Yeah, joe, I actually think that it's already militarized and we need to just slow IT down because, uh, we don't even know as as civilians without access to the intelligence exactly what's going on there, which is a problem. Frankly, I think that the defense and airspace community should be more informed by our government about the dangers of risks. The russians apparently are doing something with nuclear capability in space.

We know that because chairman might turn the chair of the house intelligence committee, let the world know um I didn't reveal information, but he sort of warned us about IT and that is really a great concern. The chinese, of course, are trying to keep up in space as well. And most of the analysts that I read, you have to believe them because they're following more closely than I am.

They say that they are on almost on par with us in terms of their capabilities. The north koreans also are getting more technology from the russians and also trying to improve their own capability. They now have an ability to take a satellite down in asset capability. So unfortunately, space has become also militzer and more dangerous.

And you said today something that was really a bit disconcerting. You're worried about a world, world three. What does world, world three look like and why are you so worried?

I'm worried about IT because we have these countries working together, you know, call them the access of evil, or whatever you want to call them, but russia, china, north korea on, they're working together to counter the democracies of the world. And what they want is, again, to go back to a system where the biggest countries could, could dominate, and they want to be the ones dominating. They want to make the united states weak.

In the case of that puttin, the way that would lead us to world war three would be if he were to take these sabotage trial runs and actually conduct some kind of Operation against the naturally, then we have to make a decision as an alliance. Are we going to defend that ally or not? If we don't, we're still going to have to deal with vladimir putin because let's say he takes over that that nado country because it's a former soviet country of politics state or poland he've somehow threatens poland and and gets involved their military if although the polls are getting pretty strong now and there, they're very much aware of this danger.

But if nato as an alliance doesn't react, then I think we'll have to, and that would mean world worthy because of all these other countries. If we don't respond right away, i'm afraid will have to respond at some point because lam putin, as I said, views us as the only country that can stop. And he'll continue weakening us domestic cally, through social media, through corruption campaigns, through all these bots and spying and all these things that he's been doing, including maybe sabot.

So it's really dangerous. If we don't stop, let him a putin, Frankly, now, and it's cheapest and easiest to stop in a ukraine and and one of the thing that he is watching that and president SHE, if later ropin gets away with what he wants in ukraine, he will be in bolden to try to seize taiwan and if he again seizes taiwan, then china's a big bully in asia. And our asian allies es are in danger.

And we also have commitments, military commitments to them, to defend them. And if we don't defend them again, china then will come after us. So the allies, on the one hand, they could be the reason why we would go to war, but on the other hand, there also a strength there. There, there are a reason why we're stronger because they help us fight against about guys and hold the line.

I am going to try to end this on a positive note um that not change retorted often worries people, but you're at least cautiously optimistic on a couple of his early pics for administration .

tells what yes I am so he picked um cena. Marco rubio, you know senor rubio is an internationalist. He he's somebody who believes in standing up for democrats.

He's actually advocated quite strongly over the years for venezia as people and their democratic opposition. He's been engaged in in foreign policy now for over a decade. He is a professional .

for secretary state.

He would be the candidate for secretary state. That's right. And then Michael walls, whose a congressman uh has a former special Operator, knows the military, knows how the world works, has been quite strong on china.

He's also a solid professional so clearly present truth them as loyal to him. That's fine. Um what in my mind is important is that their experts and they then they know what they're getting into and they understand the world.

At the very end of our conference today, the room was set up buzz by the news. The president elect trump said he intends denominate pete hegseth, who is a fox news host and former army national guard officer, to be his defense secretary. Boy, that's that's interesting.

Yeah, I think most people said, who is that? And then fox news host doesn't sound like a qualification to be secretary defense. And having served as a resort or a national, maybe was a reserved in my national guard member deployed to iraq and afghanistan is good experience.

But really running the pentagon, being secretary of defense, first of all, you have in the building alone thousands of people, and it's a very complex Operation. You have to know how IT Operates, the sort of a secret code be in, in order to get your way in, in order to assert your power. You have to know what that code is, if you will.

It's just really understanding the procedures and how the biocon acy works, the relationship between the uniforms, the armed services personnel and the civilians in the building. And then of course, he would be in charge of you know thousands of americans deployed all over the world, civilians and military. So it's it's a complex undertaking and require someone with a lot of experience and Franklin and bureaucratic and management experience so and policy experience. So um it's an interesting choice, to say the least.

okay. Darter far is thank you for sharing your views with us twice today. Michael bruno, thanks for joining us as well.

Unfortunately, we are out of time. That is a rap for this week's check six podcast. A special thank you to our podcast editor in london, guy fernie, to our listeners. Thank you for your time and join scam next week for another texts.