502: Chris Power—The Other Hadrian's Wall
The Way I Heard It with Mike Rowe
In this episode of The Way I Heard It, Mike Rowe interviews Chris Power, the Australian-born CEO of Hadrian, a cutting-edge defense manufacturin
Key takeaways
- America's defense strength depends on a resilient domestic manufacturing sector rather than overseas dependencies.
- Hadrian uses AI and automation to transform factory workers into technical overseers, increasing efficiency and reducing training time to under 30 days.
Main topics
- Rebuilding American manufacturing
- National security through domestic production
Notable quotes
"We think we're Mike Tyson in his prime, but we're actually Mike Tyson just before the Buster Douglas fight."
"It's going to look like complete chaos. There's no plan. Bang. And it's going to get done."
Conclusion
Chris Power's vision for Hadrian represents a bold effort to revitalize America's industrial
Transcript preview
Speaker 2 (0:03) Hello, friends. Me again with another episode of The Way I Heard It. My guest today is Chris Power, a remarkable American who sounds an awful lot like he came from Australia, because he did. He immigrated over here a few years ago with $6,000, I think he told me. And in that period of time, built a company called Hadrian, which now employs lots of people and is worth about $7, $8 billion. It's a defense company. And if you're a student of history, you'll recognize the name as belonging to a famous Roman emperor. By the way, this episode was recorded at the Ronald Reagan Library. The gift that just keeps on giving. I was there a couple of months ago for an economic conference and just ran into so many cool people who I thought had stories that you guys might appreciate. And this guy in particular has done something near and dear to Microworks. I really... Wanted to talk to him, and I was so glad he had an hour to spare, because what he's built, I think it's important, not just for our national defense, but, well, for our national identity. If you know your history, and believe me, Mr. Power does, he studies how empires rise and fall, particularly the Roman Empire. And you can draw a couple of really cool parallels between Hadrian, the emperor, his philosophy, and Chris's... modern defense mission. First thing that'll jump out is borders. It's all about securing borders over expansion. So in the old days, the Roman emperors, they focused very heavily on invading new territories. That's how they grew. Hadrian was the guy, the first one really, to pivot toward domestic consolidation. He built a massive wall, Hadrian's Wall, to reinforce and protect what Rome already had. Power chose the name for his company because Hadrian is doing something almost identical. They're focusing on reinforcing America's domestic supply chains and shoring up defense walls rather than outsourcing dependencies overseas. So it really comes down to infrastructure as well. Chris was very inspired by Emperor Hadrian's sweeping. historical efforts to restructure and stabilize and rebuild Rome's infrastructure from the inside out. His startup was created to tackle a modern version of that same crisis, rebuilding the hollowed out U.S. industrial base and rescuing the aging aerospace manufacturing sector from terminal decline. There's a lot of crossover in this episode. The stuff I've been doing with the Pentagon over the last year. They've dropped a lot of names and, you know, we've rebooted a show and we're going back and we're highlighting companies like Adrian. In fact, I'm going to reach out to Chris and see if he'd like our cameras to come maybe to Alabama or Arizona where he's building his factories. I'm telling you, it's so impressive what he's done and it's so important. Speaker 2 (3:11) kind of validating, frankly, to talk to somebody who confirms a lot of the stuff I've been mouthing off about for the last couple of years. He has a front row seat to what it takes to reinvigorate the skilled trades in this country. And he talks at length about some of the things that they're doing internally, the way they're shifting from manual labor to technical oversight. He talks about the autopilot model. So workers on a floor at a Hadrian factory, they operate a lot less like manual crank and cut machinists and more like flight controllers. There's massive output leverage to talk about, a ton of career growth. Mostly, though, it's the onboarding speed. They've got proprietary software. I hope I get this right. I think he called it Opus. But they absorb the super complicated tasks of machine programming. And they're bringing people up to speed. They're training factory technicians in 30 days or less in an effort to address the skilled labor shortage. So it's a super intuitive onboarding system that he's perfected. They're actively recruiting and elevating individuals with zero manufacturing background. So this is just an amazing story. and a huge bit of good news for veterans and former nurses and hospitality workers and people who want to jump into the manufacturing game from the ground up, this is definitely a place for you to consider. It's a great conversation with a great American who talks kind of funny on account that he's from Melbourne. It's the other Hadrian's Wall with Chris Bauer right after this. Speaker 2 (4:58) Big news this week in the wide world of agriculture. In an effort to lower beef prices, the government's okayed the importation of 300,000 metric tons of foreign ground beef into the U.S. market without the normal tariff. This is a decision that's got a lot of people up in arms, and I'm going to talk about it at length in an upcoming podcast. But for now, I'm just going to remind you that when that beef finds its way onto the shelves of your local grocery store, you'll have no way of knowing where it came from. The administration's working on correcting that as well. But for now, if you want beef grown and delivered by American ranchers, you need to shop at Good Ranchers. This is the number one company delivering 100 % American meat to your door. Good Ranchers partners with over 100 local farmers and ranchers to deliver 100 % American meat straight to your door. This is pasture-raised. It has no antibiotics, no added hormones. None of the other stuff that you need to think about when you're eating imported meat. This is the number one option for American meat delivery with over 25,000 five-star reviews on Trustpilot, including my own. Yes, I left them a five-star review. I've been eating their meat for over a year now, and I love it. For a limited time, you can get a free ground beef bundle. with your first Good Ranchers order. That's four pounds of 100 % American Angus ground beef to help stock your freezer. Just visit goodranchers.com slash Mike to claim your free ground beef bundle. Plus, when you start a plan, you'll get free meat with every order. That's goodranchers.com slash Mike for your free four-pound ground beef bundle. Goodranchers.com. American meat delivered. Speaker 1 (6:46) If you could eat a steer, if you could eat a cow, don't take a chance on a foreign ranch, get good ranchers Speaker 2 (6:54) now. Speaker 1 (6:55) Yeehaw! Speaker 2 (7:01) Power or powers? Singular. Really? Yeah. I guess that's good. I mean, from an individualistic standpoint, you think Austin Powers, and of course that's seared into the zeitgeist, but you're simply Chris Power. Yep. One man, one power. Yeah, that's it. What part of Australia? Melbourne. Yeah. What a great cafe society that is. Yes. Best coffee in the world. I mean, I haven't been in years, but I was there, I guess maybe 20 years ago. Do they still, there's a river festival. Yes. Is it the Mumba maybe? Yeah, Mumba, Mumba festival. That still happens. So there was an F1, there was this river festival. Yep. There was a lot of jet lag and there was just, there's nothing I can tell you about Australians you don't know, but what a spontaneous, fun-loving, dangerous group of bipeds you are. Speaker 1 (7:57) Yes, they call it the lucky country for the reason because it's the best sport, beer, everything in the world. It's also why nothing ever really happens of significance. Well, then why'd you leave? I mean, simply put, personally, doing business in Australia always feels like being at the kids' table at Christmas. Speaker 2 (8:16) Hmm. Speaker 1 (8:18) And then secondly, I wanted to work on something that was very difficult I could work on for 100 years and then I'd be perfectly happy working 24-7 on. And I'm a big history guy and I'm a big strategic finance interest rate guy. What does that even mean? So basically what happened is I was working for this software company and I said, I'm going to move to America. You've got 12 months to replace me. And I spent that 12 months rereading history, rereading all my interest rate books and trying to figure out where is the world going. Speaker 1 (8:54) And it was very obvious, at least to me, seven years ago, when I've now been in the country for six years, is that three big things are really going on. The only thing that mattered was, you know, the West versus the CCP, and that's largely just America because everyone else is pretty degraded in capability. The second thing is, is that we'd stretched the manufacturing system of the defense and commercial industrial base to the point where there basically was none. but it hadn't been tested in a long time. We think we're Mike Tyson in his prime, but we're actually Mike Tyson just before the Buster Douglas fight. And then the third thing is that we traded for 40 years or so, we traded financial returns for industrial resiliency. And we offshored 95 % of all jobs in manufacturing capacity, largely to China. Speaker 2 (9:47) Now, when you're saying we, you're referring to Speaker 1 (9:50) the United States. And were you still using that pronoun when you were in Australia? No, I think I became an American in my mind four or five years ago. Interesting. Yeah. So Speaker 2 (10:03) when you're diving into the history part of this, is it like big world geopolitical stuff that you're interested in? You're looking Speaker 1 (10:12) top line stuff. Top line stuff. Roughly every 120 years, the reserve country, the world changes because the global order gets reset because of a great conflict. The last one was World War II. But underpinning all of that is this cycle of industrial capacity, military readiness and strength, reserve currency, and then you get really lazy and you lose that. And that's what happened to the British and the Dutch. And people forget that the reason why America saved the world in World War II is because we had the largest manufacturing logistics base. And we didn't even have the best tanks. We just McDonald's the hell out of everybody else. We were able to pivot. You were able to pivot. Because of the commercial manufacturing base. And it is. But Speaker 2 (10:58) what about the specs? I asked Palmer Lucky about this, and he had a whole kind of riff on it where, you know, we we basically used the specs that we had committed to commercially and just use those same specs in the war effort. But. He's very concerned that we couldn't do that now. No. Or really anything approaching Speaker 1 (11:22) it. There's two reasons behind this, and I agree. One is the systems are way more complicated. Whereas, I don't know, a World War II bomber is not that hard, and we can give it to Ford, and they'll figure it out. The second primary reason, though, is there was commercial capacity. America has no commercial capacity anymore because we offshored it all. And we also cut defense jobs over the last manufacturing jobs by 63 % just after the Cold War ended. So the first problem is there's no capacity. Speaker 1 (11:54) And then you've got 40 years of basically no one wanted to get into manufacturing, so everyone's retiring out, as we all know. I think average age of a skilled worker is early 60s. There's no one coming behind them because we killed all the jobs for 40 years, so why would anyone get into it? And the third and I think the most important thing is culturally we became a, America became a finance and technology services culture. And we told all the kids in the 80s and 90s that if you didn't have a four-year journalism degree, you weren't worth much of anything. And that is just as important as the kind of economics of manufacturing of are there actually good paying jobs or jobs to be done. And then the advancements in technology, especially for, I don't know, whether it's munitions or ships or whatever. They've kind of been built off actually the specs from the post-Cold War industrial base. But they're also such exquisite systems that you probably couldn't hand them today to a commercial manufacturing company in the United States, even if one did exist. So you kind of have to start with the defense industrial base and build that back up and then rebuild the commercial base because there's just no demand for commercial manufacturing without the president's tariffs and stuff as there was, you know, in the 50s or even before the 50s. Speaker 2 (13:12) To your company, when do you form it? Why do you form it? Is it a direct result of reading these history books combined with whatever your inner wonk is regarding finance? How does this happen, man? It's just so interesting that an Aussie comes over here armed with all these big ideas, and now you're like a regular guest at the Pentagon. Speaker 1 (13:35) Yeah. Well, what happened was I moved to the US with $30,000 and I knew that I wanted to do highly automated manufacturing. The reason why you have to do highly automated manufacturing to solve the skills and labor capacity gap is because it takes 20 to 30 years to catch up. So you have to make everyone 10 times more productive to even have a hope. And the only way you can do that is mass skilled immigration or software. And we were never going to do mass skilled immigration into the defense industrial base. So, okay, highly automated factories. So there's door number one. Door number one. Or door number one. Yeah. Now door number two, which I think is slightly more interesting, is I then spent six months cold calling factories in Dallas and Oregon and ever just basically be like, can I come in and talk to you and talk to the supply chain guys and talk to the factory guys? Like, you know, what's actually going on? And I started to get a good feel for what was actually going on. And then after that, I actually decided to raise a small, very small private equity fund because all advanced manufacturing in the US is highly certified and regulated. So you can't become a SpaceX or Lockheed Martin or Raytheon supplier unless your quality management system of manufacturing has to be, it's extremely complicated. It usually takes people seven years to get their foot in the door. Also known as the primes. The primes. So what I decided was the only way to actually... So if you start in uncertified manufacturing, you're competing with China, fail. But it takes seven, eight years to get AS9100 and qualify as a Lockheed supplier or whatever. It's just complicated. And it's very... It's as complicated as like a hospital billing system. Like you really need to get it right to ensure that what you're producing is up to spec, up to code, et cetera. So I raised a small private equity fund and spent 12 months diligency a bunch of aerospace machine shops. because you had to buy the certification first and then put the technology into them. And through that process, Speaker 1 (15:35) And then 12 months later, I changed my mind. And the basic reason was I realized that you had to rebase the CapEx and the training and the software at the same time. How much money did you raise? Oh, it was like $500,000. Okay. And you get a bunch of group investors together and they basically give you two years worth of runway to try and find a deal and then they'll fund it if it's a good deal. And they thought I was nuts because they'd never done a manufacturing deal before. And when we closed it, we gave everyone the money back and the 100 grand we spent was something we rolled into Hadrian at a severe discount. So everyone's very happy. But at the end of that, I basically decided that you could make legacy manufacturing businesses maybe 30 % more efficient, but you could never go the whole way to reindustrialize the country. So you have to greenfield everything. Workforce training, the capital equipment itself, the software at the same time. Explain that greenfield. Because the first time I heard that Speaker 2 (16:27) expression was in the Pentagon. People talk about it all the time, but I'm sure a lot of people don't quite understand. Speaker 1 (16:33) Well, there's existing factories that you can go and attempt to upgrade or improve with Lean Six Sigma operations processes or buy software and try and plug it into it. Greenfield is simply start with empty building