Remarks by Deputy Secretary Lynn at Carnegie Mellon University, Pittsburgh, Pa

            MR. LYNN:  The history of advanced manufacturing in the Defense Department can be told through three individuals: the famous inventor Eli Whitney, former Lockheed Martin CEO Norm Augustine, and Regina Dugan, Director of DARPA. Now, let me put them all together. 

            Before Eli Whitney had success in with the Cotton Gin, he went to Congress with a proposal to build muskets with interchangeable parts. It was 1801.  He was fairly dramatic in his presentation. Congress, then as now, is pretty skeptical of new ideas.  But Eli had a fairly dramatic way of demonstrating his. He took 10 muskets to Congress.  He disassembled them.  He threw all the parts in a pile.  And then he reassembled them, with different parts constituting each new musket-something that had never before been done. Congress was impressed.  Eventually, the Department of the Army issued a contract for 10,000 new muskets to be built using this method.  It was one of the first widespread uses standardized parts, and it contributed enormously to the advance of in manufacturing in the United States. 

            Fast-forward a couple hundred years to Norm Augustine, the former CEO of Lockheed Martin.  Norm wrote a book that is well known in defense circles called "Augustine's Laws." One of his laws was that he charted the increase in cost in high-performance jets and tactical aircraft against the increase in the defense budget.  When he plotted these two lines -- and it would not be that different now -- they crossed in 2054.  And what that meant was that in 2054 we would have to spend the entire defense budget to buy one airplane. He observed that that we could work this out.  The Navy would get it for three days a week, the Air Force for three says, and the Marines would have it on Sundays. 

            Obviously, this kind of rise in manufacturing costs is not sustainable.  But costs have continued to rise at roughly the rate Augustine predicted.  The cost increase in high-performance jets and other advanced equipment has been going up in a linear faction.  And part of the reason, a strong part of it, is the length of time it takes to design and approve them.  The time horizon of design and development is increasing at a similar pace. 

            Which brings us to Regina Dugan, the current Director of DARPA.  Under her leadership, DARPA has focused on an advanced manufacturing effort that uses integrated circuits manufacturing as a model for open design and configurable foundries.  And that will lead you to the ability to crowd-source your design, greatly diversifying the sources of your design and the east with which it can be manufactured.  Altogether, we think this can significantly speed up the manufacturing timeline-on the order of dividing it by a factor of five.  That is to say we could do it five times as fast, which could yield enormous cost-savings. 

            As you will see later this morning, DARPA has built a pilot of a vehicle that was designed exactly in this way in under 90 days.  Now only the body and shell was designed in this time. This is a pilot, not yet a complete vehicle.  But for DOD, this pilot has the ability to undo Augustine's law and yield advances in manufacturing equivalent to what Eli Whitney ushered in during the early 19th century.  This is indeed the prize for us, for warfighters, and for taxpayers. We will continue working with Ron Bloom and OSTP and the White House to try and both develop this approach to manufacturing for DOD and to understand its broader implications for U.S. manufacturing. 

            Thank you.