By Justin — ex Palantir, Peregrine, Vannevar
In 2018, Elon Musk called Tesla's Model 3 production line "production hell." The robots weren't working. The automation was breaking down. His solution? Rip out the robots and hire humans. Lots of humans.
This dramatic pivot worked. Tesla scaled.
Ironically, American Dynamism is facing exactly the opposite problem: we’re depending on an army of humans to show up in the next 10 years to support manufacturing objectives…and they won’t.
There's an assumption baked into every American Dynamism pitch deck, every defense tech Series B, every steel mill restart plan. The assumption is simple: if we build it, they will come. Just build the factory or open the shipyard, and skilled workers will line up.
This assumption is wrong.
Over the next 10 years, the Navy alone needs 250,000 new workers for submarine and surface vessels. The broader manufacturing sector needs 3.8 million over the next eight. The average defense manufacturing worker is 55 years old, and a huge percentage will be retiring over the next 10 years.
We expect a major conflict within this time frame. With this in mind we have a hard truth to face. The next generation of Americans is not able, ready, or willing to backfill the blue-collar workforce.
In two recent surveys, nearly half of Gen Z respondents said they wanted to be social media influencers if given the opportunity and the top two career aspirations among Gen Alpha respondents were to be YouTube or TikTok content creators.
The majority of this generation are not likely to throw on coveralls and bring a lunch pail to work. The defense tech world needs to plan for this reality and start building to solve it.
I'd be remiss not to acknowledge a very real trend: skilled trades are booming. Registered apprenticeships have grown from 360,000 in 2016 to 667,000 in 2024, an 85% increase. Enrollment in vocational-focused community colleges rose 19% since 2020. All this is good and it means there is a subset of the next generation that is interested in trades. We're producing way more plumbers, electricians, and HVAC technicians.
However, we are notably not producing machinists, production managers, cleared welders, or submarine pipefitters. In fact, welders are only projected to grow 2% through 2033, below the 3% average for all occupations. The Hampton Roads maritime industry's vacancies could increase to 40,000 by 2030.
It’s not too hard to see why.
And of course, a plumber doesn’t need to pass a drug test or get a security clearance.
So yes, resurgent interest in trades means you’ll be able to call an expert when your toilet backs up. But it’s far less clear who we will call to build the next 100 years of American defense and prosperity.
This is a looming problem. In fact, I’d argue that the only reason we haven’t hit a wall yet is because no defense tech company has scaled enough to overburden the system. Anduril has 7000 employees. Shield AI, Saronic, and others are still measured in low thousands. They're surviving by paying technicians 30-50% above OEM rates to get them in the door or contracting external machine shops to get the job done.
This will work out ok for Anduril, because they have the resources to brute force the hiring problem. It won’t work when thousands of VC backed defense companies win contracts and need to field 50,000 units each to make products that win a war.