Choosing a permanent successor to Mattis is among the most important national security decisions Trump will make. There are signs he’s about to name Shanahan. Other candidates have receded, and as for new potential nominees, “the silence is quite profound,” said Arnold L. Punaro, a former staff director for the Senate Armed Services Committee.
Newt Gingrich, one of Trump’s confidants, told me approvingly this week: “Shanahan is probably the best manager to be secretary of defense we’ve seen in many years. He has a deep understanding about how we need to rethink big systems to be able to compete.” That sounds like an endorsement.
But who is Shanahan? What strengths and weaknesses would he bring to the government’s second-toughest job, after commander in chief? Shanahan has never served in the military, has been in government just 19 months and, despite 31 years as a successful engineer at Boeing, was never chief executive there or anywhere else. Skeptics wonder: Is he in over his head?
Two basic conclusions about Shanahan emerged from a dozen interviews about him with Pentagon insiders over the past month. Internally, he may be precisely what the Pentagon needs — a tough manager who’s prepared to break some rice bowls to reform what the military buys and spends, and drag it fully into the 21st century.
“I’m used to being directive. I’m relentless,” Shanahan told me in an interview this month. I’ve gathered a half-dozen examples that support his claim. “He steps on people’s toes,” said Punaro. “He’s a tough customer. If you’re not performing, you’re going to hear about it.” The Pentagon could use that “fear factor.”
But Shanahan’s prospects are murkier as an external manager, dealing with the White House and key foreign allies and adversaries. The questions are especially important when it comes to his ability to challenge Trump.
Many Americans slept better knowing that Mattis, the tough old Marine general, was around to talk Trump out of ill-formed and sometimes downright dangerous impulses. Shanahan can’t call on the same gravitas. Critics worry that his eagerness to show public loyalty to Trump on issues such as border security and Syria might limit his ability to push back against his boss in private, when it counts.
Gingrich sees the benefit of having a senior team, topped by Shanahan and Secretary of State Mike Pompeo, that’s aligned with the White House. “Trump will have two guys who want to do what Trump wants to do. It makes him more relaxed. He doesn’t have to fight.”
But others are wary of a top leadership team that seems so acquiescent. It was only careful work by Mattis that reassured NATO, Asian and Middle East allies that Trump’s disruptive policies didn’t negate the United States’ critical importance as a long-term partner.
The sweet spot of a Shanahan appointment would be his proven skill as an engineer. He had a golden career at Boeing, moving from the 737 to the company’s troubled helicopter division, then managing its complex missile-defense programs and then taking on the toughest challenge of all, rescuing the innovative but foundering 787 Dreamliner.
Shanahan succeeded each time because he was willing to push colleagues and make enemies when necessary, former associates say. The ex-CEO of another defense company remembers how Shanahan repaired a broken 787 supply chain by sending Boeing technicians out to fix what some suppliers had botched.
“Pat blew things up,” he said. “It was painful. You could hear the cries from within Boeing.” But this bruising process helped save the plane.
Similar hard-nosed management is essential at the Defense Department, because the military procurement process is broken. The Pentagon spends vastly too much on things that don’t match today’s challenges. Defense weapons systems and employee benefits are far too expensive, and the gargantuan Pentagon budget masks what’s often gross misuse of money that prevents spending on technologies to counter Russia and China. “We can’t turn DOD into a benefits company that occasionally kills a terrorist,” warned Punaro.
“I think the building needs to be profoundly shaken up to move at the speed it needs,” said Gingrich, reflecting an emerging consensus in the defense community.
Shanahan says he recognizes how bad the situation is and is trying to fix it. Some examples gathered by members of his staff:
● Readiness. Shanahan decided to focus on aviation maintenance, something he knew about. One stop was a base in Washington state for Navy P-8s, anti-submarine-warfare planes that have been adapted from Boeing 737s. According to an aide, Shanahan asked for the “mission-capable rate” and learned that it was 65 percent or less. Rates for some fighter jets are even lower.
Readiness rates like that would be inconceivable at Boeing or a commercial airline, so Shanahan demanded change. Last summer, over protest from the military, Mattis set the target mission-capable rate at 80 percent — still too low, but a big improvement.
● Bureaucratic overhead. The Pentagon’s costs are high partly because it insists on doing so many things in house. According to Punaro’s data, six of the top 10 entities doing business with the Pentagon are defense agencies. In fiscal 2017, for example, the Pentagon spent $38 billion at the Defense Logistics Agency, compared with $29 billion at Lockheed Martin, its largest civilian contractor.
Shanahan tried to fix the overhead problem by pressing Chief Management Officer John H. Gibson II, the Pentagon’s No. 3 official, to combine or eliminate regulations for procurement, performance and financial operations. Gibson didn’t deliver what Shanahan wanted, and he was forced to resign in November.
● Technology. Although it operates some very high-tech weapons, the Pentagon does poorly with departmentwide technology management. To begin fixing that, Shanahan recruited Dana Deasy, former chief information officer of JPMorgan Chase, as Pentagon chief information officer. Since then, investments in cyber, artificial intelligence, information security and other key technologies have increased substantially.
There’s still a frighteningly large technology gap between the Pentagon and the best private companies, but supporters of Shanahan and Deasy say they have at least started the needed reforms.
● The F-35. Cost and performance problems have plagued the fighter-jet program for more than a decade, but Shanahan has been unusually blunt about it. He told Defense News in November that “the biggest challenge for the F-35 is . . . going to be affordability,” and told reporters in January that the plane “unequivocally . . . has a lot of opportunity for more performance.”
To lower F-35 costs, Shanahan applied Boeing engineering techniques. He focused on what’s known as “takt” time, meaning how long it takes to produce each plane. According to Shanahan’s staff, takt time has decreased 33 percent from December 2017 to August 2018. Costs have fallen on the latest delivery of F-35s this year, saving the Pentagon $600 million, according to the Pentagon aide.
●2020 budget. Shanahan’s biggest test yet will be the budget for the fiscal year that begins in October. Plans call for buying two new aircraft carriers, a vastly expensive purchase of what critics say are vulnerable platforms. Shanahan opposed buying the carriers in internal debates, but facing opposition, he settled for a compromise: The Navy will shelve plans to rehab one of its midlife carriers, potentially saving as much as $4 billion.
If Shanahan is appointed secretary, this year’s budget battle could be memorable. It will show whether his reforms can survive what Sen. John McCain (R-Ariz.) once called “the military-industrial-congressional complex.”
● Space. Shanahan may get the nod for secretary largely because he found a way to meld Trump’s passionate desire to create a Space Force with the equally fervent desire of the Air Force and its congressional allies to strangle this offspring.
Shanahan reassured both sides: The Space Force will be contained within the Air Force department, saving money and easing the concerns of Air Force generals, much as the Marine Corps is part of the Navy. But there will be a new Space Development Agency, reporting directly to Michael Griffin, undersecretary of defense for research and engineering, to give an independent prod to acquisition of advanced technology.
Can Shanahan work comfortably with Trump and also be the independent change agent the Pentagon needs? That’s the real issue with his nomination.
Shanahan’s gift is clearly his ability to straddle. But he would make a mistake if he thought he was playing to an audience of one. The president’s support is important for any Cabinet official, but the defense secretary has a crucial role in reassuring allies, wisely managing the military and deterring adversaries. If Shanahan is seen as Trump’s yes man, he will lose his clout.