You turning in from around the world. I am the Senior Vice President of Research Programs at the simpson center. It is my great pleasure to welcome you all here today for a very special event. The Stimson Center is a Foreign Policy think tank founded in 1989 in washington dc. We promote and pursue International Security and shared prosperity through applied research and independent analysis, global engagement, and policy innovation. 2024 is the 35th anniversary of the Stimson Center and we are marking this occasion with a year of global exploration together with some of the greatest Foreign Policy and International Security minds today. We are delighted to have as part of the Anniversary Series a special guest and friend to distant plants and are the Stimson Center, the honorable carlos. Org. He has heard many posts in his career as our board chair will outline in the introduction with more than two decades of naval service, secretary del toro has been a commander, a corporate founder, president , and a ceo. Somehow, amid all this, secretary del toro managed to serve on the stimson board of directors joining stimson in 2019. With his guidance and counsel do Stimson Center honed our Strategic Focus and approach in valuable new ways, in building our strategic supporter base as we took on some of the most complex challenges of our time. In 2021 he was shamelessly poached from stimsons board for the role of the 78th secretary of the navy. Though we grudgingly did let him go, its our pleasure to welcome secretary del toro to stimson and it is a pleasure to have you with us today marking our 35th anniversary. I will admit, the u. S. Navy does have only the 35th anniversary of the Stimson Center, no small feat for a think tank in washington. The u. S. Navy is marking its 250th here next year. I dont know what the traditional gift for a 250th anniversary is. I believe it is called a semicon centennial. We can look that up. I will put it on your list. You have our greatest craze and praise and respect, secretary, as you stand at the helm of an institution steeped in deep tradition and legacy that is constantly exploring how it cani develop and evolve to meet the changes of tomorrow. The honorable del toro will be joined by the Stimson Center board chair stu sadako it to explore the future of u. S. Maritime power for global security, and in addition to her role as a stimsons board chair she serves as the cadmus executive vice chair for Public Sector strategy, responsible for overseeing the development and execution of the cadmus Public SectorGrowth Strategy in the u. S. And globally. Previously she was president and ceo of Nathan Associates prior to its acquisition by cadmus and before that she was president of texture tech and a Senior Vice President at fcic and if you spend about 10 years at a booth m Booz Allen Hamilton promoting crosscultural markets. I know you are eager to hear the conversation ahead. Its my pleasure to introduce our special guest the honorable carlos toto, the 78 secretary of the u. S. Navy in conversation with board chair sue sadako it. Thank you, rachel, and ralph welcome everyone here today. To say it is a pleasure would be an understatement. As rachel said, i had the pleasure to serve on the stimson board with the secretary. Its wonderful to have him back here again with us. Needless to say, the Stimson Center was just one stop on his way to do so much for the country and world. And i want to spend a moment trying to encapsulate his background , which is incredibly. The secretary was born in havana cuba and they emigrated to the u. S. With his family as refugees in 1962. Raised in the Hells Kitchen neighborhood of new york city he attended Public Schools and received an appointment to the u. S. Naval academy where he earned a bachelors of electrical engineering. Secretary del toro was commissioned as the Surface Warfare officer upon his graduation in 1983. His 22 year naval career included a series of critical appointments and numerous tours of duty at sea where he helped manage the budgets of the dod, department of state, cia, dia, National Reconnaissance office, and peace corps. After retiring at the rank of commander secretary del toro founded std Technology Solutions inc. In 2004. As the ceo and president he supported the Defense Program across a host of longterm and immediate issue areas like shipbuilding, ai, cybersecurity, acquisition programs, space systems, Health Command training. He was sworn in as the 78th sec. Of the navy august 9, 2021. Secretary del toro holds a masters in National Security studies from the naval war college. A masters in National Security im sorry, a masters in Space Centers engineering from the Naval Postgraduate School and a masters in legislative affairs from George Washington university. Its wonderful to have you home again. Thank you. Its great to be back. Great. That was the nice part. We have a lot of ground to cover. Here we go. I will let people know we wont have time for q a at the end. Get yours we will hold a time for q a at the end. You can submit questions at www. Stimson. Org questions. As that of the navy you are responsible for an institution with over 900,000 sailors, marines, reservists and civilian personnel as well as overseeing a budget of more than 210 billion. And whats more, the u. S. Navy is marking a major milestone next year, 250 years since its founding. With all these considerations in mind and given your position as secretary, can you outline for us what you have outlined as the biggest and most pressing priorities for the navy and marine corps and what easy as it greatest opportunities . Sec. Del toro thank you for having me. It is a tremendous privilege to serve as the secretary of the navy and served for nearly one million marines, sailors, and civilians i laid in the department of the navy. We have gone from 210 billion to 250 billion. Having said that, it is a privilege to lead these great men and women. For the past 6. 5 months we have been battling dailyhouthi attacks with over 600 engagements over the past six months. The men and women that served and the red sea are courageously defending our National Security interests. It is a privilege to work on their behalf, to provide them the most capable platforms and most capable personnel to combat commanders around the world. Susan thank you for that. The multifaceted nature of your role now is greater i think than ever before. What i would like to do is focus on different aspects of your role. And then work our way through some of those. Let me start with the navys role in securing economic interests. Last september in a speech delivered at the Harvard Kennedy school you said history proves that in the long run there has never been a great naval power that was not also a maritime power. A commercial shipbuilding and Global Shipping power. In 20 23, more than 50 of the worlds commercial shipbuilding output came from china. In your opinion, is the u. S. Seating commercial naval power at this moment . What are the actions you are taking around this . Sec. Del toro we have already conceded commercial shipbuilding capability to the chinese. Luckily we have allies in japan and korea that have also invested heavily in the commercial shipbuilding side of the house. But we have not, by any means, conceded our naval power. We have the most powerful navy and marine corps on the face of the earth. In terms of the capabilities we have. In terms of the lethality we can bring anywhere around the globe. We are currently demonstrating that today in the pacific and in the red sea and also in the defense of israel as yet another example. We are the most powerful, capable navy and Marine Corps Team in the world and we dont plan on conceding that. Message received. Sec. Del toro we are doing it with three guiding principles. One, strengthening maritime dominance in every domain we operate in. Space, air, on the surface and subsurface and cyberspace. Second is cultivating a culture of war fighting excellence across the entire fleet and training our fighters to be the best they can be while treating them all dignity and respect. Third, strengthening our relationships with our stakeholders, with industry, with congress, with the rest of the government, and also, with our allies and partners, more importantly, that are an essential part of our war fighting capability in every region around the world. I often say its the difference between us and our adversaries. We have plenty of allies, friends, and partners that can cooperate and operate with us throughout all regions of the world. Susan thank. Secretary, i want to spend another second or two on the issue of shipbuilding. A navy, a recent report released by the navy, showed several major shipbuilding programs were behind schedule and over budget. What can be done to ensure navy shipbuilding, which is central to the services mission, as you said, can get on track . Sec. Del toro we need to go to the root causes of the problems and how we got here. Look at what happened in the early 1980s when reagan was president. He believed we could leave the core elements of the shipbuilding commercial shipbuilding industry to the private sector and he was right. We did leave it to the private sector. Regretfully, countries like china took over with cheap labor and were able to build their commercial shipbuilding industry and dominate the market. I am also thankful to japan and south korea who also invested and are tremendous commercial shipbuilders today. The industry atrophied through the cold war. We shut down many shipyards in the country thinking we would not need them. We became less competitive. Now we are at the point where our commercial shipbuilding industry has really suffered and atrophied and we have to rebuild that one step at a time with what i call a National Maritime statecraft. Because of that, the building of our naval capabilities, our naval ships, has become far more expensive because there are far fewer shipyards that actually build navy ships. We have more public yards to do maintenance on our aircraft and submarines in the navy and two that do Nuclear Powered work and six essentially shipyards either private sector that builds our submarines, frigates, destroyers, and Aircraft Carriers. Susan continue on this issue another moment, some of the delays and challenges you articulated, what is the balance between some domestic dysfunction that might include supplychain challenges, shortages of skilled labor, versus international interference. What is that balance . What do we do about both sides of that . Sec. Del toro apart from the shortage of just having less commercial shipbuilders and shipyards in the country we have been significantly inevitably significantly negatively impacted by covid, no question. I think the bigger problem than that is actually lack of bluecollar workers in the country. Regretfully, we are a pretty divided country politically. Its time for congress to get together and pass comprehensive Immigration Reform and increase the amount of Legal Immigration we allow into the country. Increase the amount of work visa problem programs authorized for bluecollar workers to come from other nations and do work here as it has existed since the founding of our government. Its a good think the economy is as strong as it is with unemployment as low as it is in so many states across the country. We have to open up the to get a bit on Legal Immigration to allow bluecollar workers to come here and or divert enormous resources into retraining individuals so they can work in our shipyards and be employed by the types of trade open to Shipyard Workers. We at the department of the navy and department of defense are committed to that. In the next five years we will pump in 15 billion of investment into the simmering Industrial Base alone. An additional 15 billion of investment into the surface Industrial Base. These are measures we are trying to take to work with industry to bring production rates up to where they need to be so we can build more naval capability and at the same time hold the government efforts around the National Maritime statecraft so we can reinvigorate commercial shipbuilding and get us to a better place. Susan what about the other side of the equation . What about chinas predatory practices . What are the actions on going now . Sec. Del toro they have been able to dominate the commercial shipbuilding Industry Worldwide because of unfair practices. There is a lawsuit or play now being considered by the u. S. Trade representative to take a look at the unfair market practices of china when it comes to commercial shipbuilding. This is vital to what i believe would be the continuous revitalization of our economy. If we can get to a place where we can contribute to commercial shipbuilding in the country it can help the economy and bring more american jobs to the country. I have gone around the water south korea, japan, and other nations and encouraged them to invest in americans. To come here and open up subsidiaries of their Shipbuilding Industries under the u. S. There are numerous small and midsized shipyards around the country that could use that Capital Infusion and create more american jobs here to help with the bill. With both our naval capability and commercial shipbuilding capability. Susan lets turn to the navys role in the indo pacific. Just a small topic to address. I want to talk about emerging challenges and opportunities. In this context you visited the western pacific, specifically yokohama japan and south korea to tour shipyards over there. You noted we have much to learn from the shipyards. What specifically did you see that you would like the u. S. To put into practice and how do you hope to engage japan and south korea in the future . Japan and south korea are two of our most important allies and partners. Agreements moving forward for mutual collaboration among the three of us is exciting in the end of pacific. When you see allies and partners working together as closely as we are in the indo pacific, we just had a Naval Operation exercise where we operated with japan in the philippines as well. Now we have another major exercise taking place off the Southern Coast of the philippines. These are all very exciting measures. Can i travel to japan and south korea, i was impressed by the amazing amount of Capital Investment they made in their own shipyards and in the quality of life and quality of service to their Shipyard Workers outside the yards. They build hospitals, schools, and entertainment facilities for their own shipyards for workers to want to stay there. Their retention rates are very high. They have made Major Investments in the digitization of the shipyard. They know at any one time if you change something on one side of the yard what will be the impact on delivering the ship on time and on budget. Those are things we could export to the u. S. For both private and public shipyards. Susan do you think it is possible coproduction be an option Going Forward . Sec. Del toro it can be in some ways. There are abilities for us to build certain modules overseas. We do this in the aircraft industry for example. In india we are building aircraft and flying them in the u. S. There are opportunities we can pursue and we need to remain open mind is about those to increase production rates of our ships and aircraft. Susan thank you. You mentioned Global Supply chains earlier. Both in terms of vulnerabilities and opportunities for more resilience and durability. 90 of our globally traded goods go by c. By sea. Sec. Del toro how many of you get amazon packages at home . The rest of you are lying. The first and last leg of the journey may come from my truck but the metal leg comes to you because of the u. S. Navy and navies of three democratic nations well lines of Communications Open for free trade as we are currently trying to do in the red sea. Susan Maritime Trading volumes are expected to triple by 2050. Its not going in and cash anywhere. Sec. Del toro there are also fiberoptic cables on the seabed important to the global economy. Susan what steps is the navy taking to shore up maritime trade to ensure that our ports can support this increasing demand . Sec. Del toro we are trying to strengthen maritime dominance in a