DRA partners with Fairlead to modernize US Navy shipbuilding production planning with AI

live stream. I made a big mistake. Things make mistakes. I've also mispronounced. Oh, tons of now we're boys here in Washington last year for the third time. Join the stream. There he is. Yes, gentlemen. How is it going? Welcome to the stream, Mel. Welcome to the stream. It's been ages.

I haven't talked to you on stream in three days. It's terrible. Yeah, I'm uh so glad to be back. Uh you guys dearly. Yes, I'm in New York in the Empire. You know, in the Empire State Building. Capital of the Empire. Capital of the good liar. I love it. Uh, okay.

Quick intro, explain like M5, what the company does, and then the announcement today. Absolutely. So, we're DRA. We have some software that automatically generates assembly instructions for manufacturers. We like to say it's all about contextaware production planning.

Um, that's not the, you know, 5-year-old wouldn't really get that part. Lego instructions for ships. Yeah. Imagine IKEA assembly instructions, but for planes, cars, engines, and now boats. And that's what we're going to talk about today. Okay. So, what boats? Break it down. So, we're talking about yachts, right?

Potentially transitioning Alcatraz toots yacht harbor, you know, tax haven yacht harbor. No, sorry. Go, go on. Go on. All about yachts. Uh, specifically yachts that can launch projectiles. Got it. Okay. The best. Yes. So, unfortunately, uh, ship building for a while in the US has been slowly slipping.

Uh we at DRA have decided to partner with a company called Fairlead who is a you know captain of maritime production in the United States. They're based out of Norphick, Virginia. They're a you know sort of the Norfick shipyards. They run the they run the place. Um they work with all sorts of different primes.

They're a massive ship builder. Uh we're talking submarines. We're talking destroyers. We're talking carriers. Uh Fairle has selected DRA to basically modernize a lot of their production planning and infrastructure. So really really excited to work with them. Uh they are super tech forward.

Uh funny enough they actually launched their own venture fund uh earlier today. So great timing uh for them and you know we're excited to announce this partnership. This looks like us uh basically getting into the forward deployed engineer game.

We're going to we're going to have a guy deploy down there modernize a lot of their infrastructure and deploy uh the latest and greatest rack technologies to their production play. So if we uh Yeah. Yeah. So, uh, break down the, you know, the massive onion that is the layers of building an actual ship on fairly. com.

I see they have an aircraft carrier, but it seems like they build systems that go into the aircraft carrier. So, are they like a are they under a prime contractor? Do they work for Lockheed and Northrup or someone else or uh Huntington? Is that right? Yes.

So I got, you know, in the in the interest of preserving fair lead's confidentiality. I uh I won't I won't say exactly which primes, but they have many many many prime contracts that they systems directly onto.

I can tell you the the biggest ship builders and maritime producers uh that are primes are Huntington, Ballinger, General Dynamics Electric Boat. Um these are potentially the types of companies that hypothetically fairly be working with. Um and so yes, they support and what are they actually building on the ship?

I see some systems varial variable speed drives switchboards control systems like can you concretize this and like break it down and more simple to understand like is it the steering wheel that they're building what are they doing?

So basically when you get a boat, right, you're you're you're saying it's time to ship, right? We're we're gonna make a boat. Uh it it's which is a you know uh you a ship builder makes a hole, right? They make they make this uh you know they make the they start to make the hull.

They start to make various uh systems within that ship, but really they're making like a shell. What then happens is a integrator needs to come in and actually soup it up with the latest and greatest technologies.

you know, they need to integrate software, they need to build in the control panels, they need to build in all the infrastructure and weapons platforms that then go on that boat. So, it's different as an industry in the way that you produce than automotive, then aerospace defense, than a variety of other industries.

But when you look down at like the types of things they make, these are subasssemblies that you can see on any type of platform out there in the world. Um so that's you know ship building as an industry if we were talking about it relative to other industries.

Um they build obviously the largest systems on the planet because you know those are basically boats. Um if you look at automotive as an industry automotive is fairly modern. You have you know uh you know automated facilities. Automotive is fairly modern.

Aerospace and defense as an industry is probably like around 20 years behind automotive. And then ship building is probably 30 or 40 years behind that. And so, you know, CAD as an example of like a metric or the CAD adoption, like 3D modeling adoption as a metric for, you know, how advanced the industry is.

You know, we're talking, you know, automotive, everything is catted up. Aerospace and defense, the majority of things at this point over the past 15, 20 years have been catted up in, you know, digital representation. in ship building.

You know, these these guys are largely on paper processes and they make the, you know, some of the most advanced pieces of technology that come out of an engineering department, but they're still looking at 2D drawings.

They're still, you know, basically drafting pieces of paper, and that is what we're getting maritime off of. Dra is leading the charge, captaining that ship.

What does that design kind of work and production workflow look like from a you know prime to a fair lead to the actual uh you know manufacturing engineers that are making you know individual parts and I imagine oftent times the the the initial designs or the specs you know you're actually uh I'm sure that fair lead and fair lead's engineers realize at different points like hey this worked uh in you know a CAD file but it doesn't actually work in practice.

We need to re-engineer it. What what does that kind of collaboration process uh look like on a on a general level without going into detail on on on fair lead's specific process? It looks a lot like a lot of plane tickets bought to Virginia.

You know a lot of folks flying from DC to ver you know from uh Norphick to uh to DC from Boston all over the place for you know to to California.

It is very difficult for these folks to communicate um technical designs digitally right now and it is because it is all on paper and so it looks like a very angry phone call down to you know the down down to the docs and saying hey uh we we got that you know system that you guys shipped this thing don't fit you know what's going on so that that's it's a unfortunately very frequent occurrence you know if you look at the average delivery date for a submarine on average submarines are three years late um so it is is really really bad because the barrel that everyone in maritime is staring down at is the year 2027.

Um it's a big year that the Navy that the Army that everybody in the US military is focused on because that is the year that we think uh you know some crazy stuff's going to happen with China. And so you know they're thinking okay it's 2025 we need submarines yesterday.

Uh you know the annual production rate for submarines in the United States is one and a half submarines a year. China makes more than 10 a month. And so, you know, that is a terrifying number because the as you were kind of asking about it just red alert. I mean, that that is staggeringly bad. That's terrible.

Uh, can you give me a little overview of the executive order restoring America's maritime dominance? What's in there? What does it mean for ship builders, you, America broadly? Uh and yeah and and uh does it make you more optimistic about that problem? Yeah, I would say it makes me more optimistic.

The administration, current administration is taking it extraordinarily seriously that we need to upgrade the modern American ship builder. Um these are things that are named like that statistic that I mentioned.

Statistics like this are named specifically in the executive order and they're basically calling out the ship building industry saying if you are, you know, 15% I I forgot the explicit number, but if you are late by a certain percentage on your contract, you will be fine. You are subject to losing your prime contract.

Like it is not okay to ship late anymore. Uh you know there unfortunately not too many Jira tickets flying around ship building, but they ought to use something like that at least. Uh it is a it is a staggering problem that at least the EO has taken seriously. Yeah. Yeah, that makes a ton of sense.

Uh well, thank you so much for hopping on. Do you have anything else, Jordy? Before we move on, we are going to hop over to talk to Fairlead the other side of this deal and get uh Jim's take over at Fairlead. Uh put the screws to him. We're going to pitch Fairle on leading a 100 million on 1 billion post into Draq.

So, wish us luck. Good luck. Well, uh thank you guys. I will catch you later. We'll talk to you later. Great to see you. Bye. Cheers. And let's bring in Jim hear the other side of this. We don't talk I mean fairly is not a company that a lot of people know about. Private it's been in business since the 80s.

Um but fa fascinating to hear from a true uh industry insider uh who actually works on building these ships. I you know we've seen in Silicon Valley a lot of companies kind of uh nibbling around the edges.

there's some, you know, a bunch of ship building companies that are building smaller systems or uh more swarm based systems, not really focused on the exquisite systems. Well, Fairlead is the company that actually works on the big ships, which we need to keep making.

Uh even as the landscape of the battlefield changes, um they do ship repair, maritime manufacturing, privately held, veteranowned, controlled by its founder. They're still in founder mode. You love to hear it, Jerry Miller. And they have a new venture fund. Sounds I have to ask about that.

Uh it was f founded by a former US Navy surface warfare officer and longtime Hampton's Road ship repair entrepreneur. Owns the company through closely held Miller Group.

In 2014, he rebranded his previous Miller IMG field operations as Fairlead Integrated and has remained chief executive officer and majority shareholder ever since. Uh in 2019, former uh General Motor CEO Dan Aerson