297: Defense Spending, Contract Manufacturing, and Navigating Regulated Industries with Fathom CEO Rush LaSelle

0:00If you're heading to IMTS this year, make sure Hexagon Manufacturing Intelligence is part of your game plan. While jumping into an F1 racing simulator or participating in a free throw competition might not sound like your typical trade show booth, Hexagon is anything but typical. Hexagon is the architect of innovation in manufacturing and a global leader in measurement technologies. You can find them in the East Building at booth 134102, and when you visit the booth, you can claim a free LEGO set of their Maestro CMM by going to manufacturinghappyhour.com slash LEGO. Hexagon's precision measurement, digital, and autonomous solutions help vital industries build, inspect, navigate, and innovate with confidence.

0:45Whether you're looking to solve inspection challenges or just geek out over some very impressive manufacturing technology, the Hexagon team will be at IMTS to talk shop. So if you're at IMTS 2026, make sure to visit Hexagon in the East building at booth 134-102 and tell them Chris from Manufacturing Happy Hour sent you. Sign up to meet with them and claim your free Lego Maestro CMM by going to manufacturinghappyhour.com slash Lego. And we hope to see you in Chicago. You can only stare at Instagram and Facebook so long. And those guys are pretty good at sucking you in. So where do you go next? Physical AI.

1:29Welcome to Manufacturing Happy Hour. The podcast where we get real about the latest trends and technologies impacting modern manufacturers. Manufacturing Happy Hour. Each week, we interview industry experts that are at the top of their craft and give you the tools, tactics, and strategies you need to take your career and your business to the next level. And now, your host, Chris Lukey. Hey, what's up, folks? It's episode 297. Our guest this week is Rush LaSalle, CEO of Fathom. Fathom is a precision manufacturer focused on speed and scalability. They're a contract manufacturer designing around what you need.

2:18I mean, this is a company that I've gotten to know over the past year, and I view them as a contract manufacturer that designs around you. Whether you're looking for tight tolerances, a short timeline, or just a white glove treatment around your manufacturing, I mean, they cover just a gamut of advanced manufacturing technologies from 3D printing to injection molding, sheet metal fab, CNC machining. I mean, you name it. Additive, subtractive, Fathom does that. I've done events with them. We did a tour with them this past year. Needless to say, I've enjoyed getting to know Rush and his team over the past year.

2:55And in this episode, we really get to know Rush. While we dive into our topic of the day, why increased defense spending does not automatically translate to increased manufacturing capacity. Yes, this is a defense manufacturing focused episode. We actually have a few of these coming in the very near future, and I can't think of a better person to kick this off than Rush. We'll start by learning about Rush's background in robotics and highly regulated industries, and then we shift into our conversation around defense. If you are a manufacturer trying to serve the defense industrial base right now, this is definitely an episode you want to listen to.

3:33So with that, let's head out to Fathom's Heartland, Wisconsin manufacturing facility to meet up with Rush LaSalle.

3:48Rush, how's it feel? Feels like we're flying at 50 ,000 feet. Yeah, except we're in the front office of a manufacturing facility right now in Heartland, Wisconsin. Yes, sir. So, you know, maybe we, well, actually, there's only one proper way to start a conversation in Heartland, and that is with some iconic Wisconsin beer. So here's a Spotted Cow. You already knew this was going to be the beer when I said, hey, I got something for you. And you're like, is it Spotted Cow? Yeah. Tell me what you know about Spotted Cow, and then I might be able to fill in some of the gaps for our audience. I know that it's from Wisconsin.

4:26I know that it's one of those things that I can't get at home from Denver. Correct. And I enjoy it. You can't get it outside of the state of Wisconsin. And they're on the southern border, I think very strategically. So they make, I think it's partially just a joke on their end where it's like, ha, all these folks from Illinois have to drive across the border in order to access this. And people definitely do bring it home in large quantities. And on a hot 90 degree day like this, this feels like the proper beverage for the conversation. It feels like a great choice. So I appreciate you. Cheers.

5:03Thanks for being on Manufacturing Happy Hour Rush. Absolutely, Chris. Appreciate the invitation. It's always great to see you. I was going to say, it feels overdue. You and I have had some good dinners together. We've thrown some good parties together. And yet this is your first time jumping on the podcast. I'm honored. I was wondering if ever I was going to make the cut. So thank you for that. This is long overdue because you have a great background in the manufacturing and automation space. We're going to get into that. We're going to get into some conversations around defense spending topical in this day and age.

5:36So, you know, before we get there, I want to ask you the basic question, because we are recording this at Fathom in Heartland. How do you describe what Fathom does when you're having a spotted cow with someone? Probably the same way I'd describe it with any other beer, but maybe with a little bit more flavor. So Fathom, we're a contract manufacturer really focused on precision manufacturing. We've got 450 folks who are just absolutely passionate, Chris, about taking NPI, new design, and converting it into really high-quality product. And really, I think topical for today is doing it in a way that we can actually get it into rate production.

6:20And so that's a lot of what we do here. Yeah, I think of it as the spectrum of additive and subtractive manufacturing, classic machining methods, as well as we'll say new age manufacturing methods with additive. I know there's a lot of that here in this facility. But I think you got to the deeper point is you're helping companies bring products to market and scale production. That's a huge part of it, where it's not just where I think a lot of people, even in this day and age, I think they still think of additive as, hey, this is a prototyping form of manufacturing where there is a lot of scalability that you're able to attest to.

7:01Absolutely. And I think the fact is, is that if you think about additive 15, 20, it's about a 30-year-old technology. It wasn't ready to do things with the requisite level of quality. If you think about aerospace, it was going through all of these allowables and it was just tough. And so what do you do? Well, you kind of take the easiest path, crawl, walk, run. Crawl then was, you know, let's do tchotchkes. Let's do things that don't have critical mechanical requirements. And we've grown a long way. We've got a lot better control over the processes. And really important, especially in this day and age, when we talk about how fast product iteration is and the desire to do smaller, more customized batch sizes and tailoring of product for people and purpose.

7:45to be able to do it that fast and do it with that level of quality today. That's where that particular converting technology has matured to. And it sets up for a nice off-ramp for a facility like this, where we do have additive, we have molding, we have CNC. So you can kind of say, well, at this particular rate, let's actually explore some other technology. So it's a really, if you're an engineer, if you're a designer, this is like being in Disneyland. Yeah, yeah. Yeah. And if you were to put a simple definition around digital manufacturing, what would it be? Because the full name, Fathom Digital Manufacturing, we're going to talk about that in a little bit because this isn't your first soiree in that area.

8:25How do you define digital manufacturing? No, that's the hardest question. I think hopefully you'll ask me because I don't know if there is a simple definition. I mean, there's so many layers to that onion, Chris. And so hopefully we'll talk a little bit about security, which is the last layer of that onion. But, you know, if you think back in manufacturing all the way back when, you know, folks like newer in mechanical engineering, we used pencils and paper. The challenge then is that that doesn't scale. You can't get that to different locations. It's very difficult. You know, so digital manufacturing really CAD started that.

8:59And what that did is it democratized moving design, you know, through a manufacturing ecosystem. And so really what digital, when Fathom came online about 15 years ago and everybody else, the Xometry and everybody else, it was really the quoting to the digital design. And so then you figured out, you got a quick return on it's going to cost you this much to put that design into a CNC or it's going to cost you that much to get a mold built and run it at this sort of volume. And then where it's really matured to now, Chris, is it's about how do you do that plus get into the right location with the right certifications, right requisite quality.

9:38So digital manufacturing went from design to supply chain pretty quick over the last 10 years. And that's the not so simple answer. I actually think that's a really good way to describe it, right? Started more with design and quoting things that digital makes sense right out of the gate. But to get it into production, that takes an extra level of finesse. Absolutely. And then the other thing is you have these folks who, again, I fly a lot. So I like to have really safe aircraft and the components that go in it. And just to make a part and not think about the mechanical properties, not think about the quality flow downs.

10:15That's where digital design and now the quoting and the digital infrastructure into all these wonderful factories. That's where we are now. So it's a pretty exciting time. Well, I appreciate the background around digital manufacturing, what you do. Obviously, I always enjoy talking about Spotted Cow as well. But I really wanted to get into your background because it lays some good foundation for where we're going to go with this conversation later. And this is a fun one. I understand that you started your career cutting your teeth at Fantas. Is that correct? That was kind of the entry, the start to your career.

10:50But after that, you were working with mobile robots, mobile robotics from around like 2011 to 2013. And that was before they were really mainstream, to be perfectly honest. It wasn't until later in the 2010s that I feel like we really saw companies adopting them. So what was it like being in the early innings of that, you know, after having gotten a foundation in robotics and let's say more classic spaces and classic applications? Yeah, no, it's wonderful, although I would just say that my time at Fanuc, I was not in the Rust Belt. I wasn't serving automotive. So I felt like a pioneer even with that.

11:27We were putting robots into crazy places like packaging, and we had to overcome the fear of these big robots that were going to kill people. And so it's just interesting because there's such a psychology behind working alongside a robot in any way, shape, or form. There's always a new fear that comes with it, right? Back then it was, as you're saying, like a safety concern. It was safety. But, you know, I love this question. So, you know, circa 2011, when we got involved with it, it's just a classic technology looking for a home. And at that time we were talking and there were AGVs in the world.

12:01So products were moving around without somebody having to drive a fork truck, as an example, in a warehouse. But what AGVs really promises to do that, or I should say mobile robots, is to do that safely without the sort of infrastructure that had to follow lines. and it really promised to get outside of factories and so that you could do things like home delivery at some point with an autonomous vehicle. And so the technology was wildly promising and I think a foreshadowing to some of the technologies that we're still cutting our teeth on today was it was really all the things that went around it to make it useful.

12:38And so as an example with mobile robots, and by the way, the following year, We had actually bought this wonderful technology out of New Hampshire, leading optics and mapping software and everything else that needed to make a robot go. A small company by the name of Kiva was purchased by a small company, not so small at that time, named Amazon. Yeah. That was like the moment when people saw it was real, I feel like. It is, but I think that the why, the why was what's really amazing because they bought them for$775 million. And everybody in the logistics space who are doing cranes and forklifts were like, that valuation is unheard of in industry.

13:24And the why behind it, Chris, which illustrates, I think, what's really fascinating about putting technology into manufacturing, anywhere in the world for that matter, is that valuation had little to do with those orange robots running around a factory. What it was really about was how it integrated into a system and the software that Mick and the team had built so that when you order a tube of toothpaste and a toothbrush, they actually come from the same factory. They come from the same factory. Prior to them doing the heat maps that actually told the robots where to go, they didn't have that sort of thing across all these, and they weren't as many as they are now, but all the different warehouses.

14:00So it was the software, the implementation, and how that physical product interacted with Amazon's ordering systems. And so now you think about digital manufacturing again, and we're reliving much of the same, whether it's additive manufacturing. But it was how it worked within the environment that made mobile robots so very, very fascinating. Is it fair to say that that was kind of back to your digital manufacturing theme? You know, that brought in supply chain to robotics, right? at the end of the supply chain, all of a sudden you have a more effective way of getting the product out to the consumer.

14:35Do you think that's a fair conclusion to draw? Absolutely. But I would also just argue that it's one piece of a much broader ecosystem. And that's one thing about technologies in manufacturing. Many people don't recognize, and you can think about it, we've got a number of CNCs out here. The CNC itself doesn't do anything. Yes, you can plug it Yes, you can put some materials in it. There's so much more that goes on around it to make it a useful tool. And that was absolutely true with mobile robots, with robots way back when, and then certainly as we started talking about additive manufacturing.

15:08The technology itself is novel, but the utility behind it takes a whole lot more. What, I appreciate that you brought up the fact that you felt like a pioneer back at FANUC as well and as well you know also when you went into the mobile robotics space so I have to ask how do you feel being let's say a pioneer in your industry for like really the first decade and a half of your career or so like how do you feel that shaped the way you operate today or the way you look at manufacturing today because that's a pretty novel way to start an industrial career Yeah. Well, I'd love to say that it was really calculated and planned.

15:52It was largely accidental at every turn. But, you know, the reality is that, I mean, let me go back a little bit further in the Wayback Machine. I was a mechanical engineer, not a great one, but I just, I love physical things. And I went to school in the Bay Area. And I was one of the only people that went to a physical industry. Most everybody else is going to places like Cisco and other places where, yes, they've got routers that are physical, but it was bits and bytes. I mean, Rush, I felt that way when I moved out to San Francisco in 2015 and I was working for Rockwell Automation. I'm like, everyone else out here is working for Meta and Google, and here I am working in the manufacturing space.

16:29Yeah, and I think that, you know, and hopefully we get a chance to talk. I know when we're not, you know, mic'd up, we talk a lot about, you know, the workforce and young people, but the reality is that everybody that's in manufacturing to some degree is a pioneer. Every product you make every day is new. It's novel. It's great. And so for me, I was just really lucky. You know, at that time, we were just really in early stages. You could argue, you know, 50 years ago, we were in a race to globalization. But as I came into manufacturing, we were really trying to figure out how to do more manufacturing at home, even back then.

17:02And automation was part of the answer, you know, the same way that you've tried to get efficiencies in every other business. And, you know, fast forward, I think that all the way up to today, you know, we're still doing novel things, trying to find new ways to satisfy new demand signals. And frankly, try to make the physical world of manufacturing as efficient as the digital world that everybody was so excited about with Apple and everybody coming out of Silicon Valley. So we're still pioneering. Yeah. Well, you continued to pioneer after that, because if I looked at your history right, you went into contract manufacturing.

17:35manufacturing after that. What did you learn about advanced manufacturing and digital manufacturing during that stint? Because what it looked like in 2013, 14, 15 is probably pretty different from what it looks like now. Absolutely. The Jabil experience was just phenomenal on so many levels. I mean, the efficiencies that you have to have to run that large of an organization serving predominantly consumer electronics, where if you want to be able to buy something from Apple, it's got to be cost competitive and the amount of technology that they packed into phones and everything else, it's an amazing thing to be a part of.

18:14And so for me, my assignment was to go in and help answer the question of how do you put more flexible automation into something that has this level of rate? And I'd just tell you that the learning there is when you scale things, it's the exceptions, right? Once again, we were looking at robotics, We were looking at vision technologies. We were looking at all these things. And the oddity is, is that if you did it 99 times right and you did it one time wrong, that one time, I mean, it would take down lines and they're very optimized in how they get product through a factory. And, you know, you have to be very judicious about what sorts of technologies you put in and their level of readiness.

18:54And that was really the thing that just struck me because, you know, between working on the mobile robots program and then going to Jabil. I had an opportunity to go work in the healthcare space where regulated just meant something different. Don't lose it, right? If you're tracking medication through a hospital, yes, there are critical things that move through a hospital, but it's a lot less volume. And when you get to volume, exception management is the job. And we used to say when we'd implement new technology, if you're 95 % of the way there, you've still got 95 % to go. Fair. So those were a lot of the learnings.

19:32Yeah. Well, let's go in. And I think you started hinting at it, right? Tracking medicine through a hospital, right? Don't lose it. What did you learn as you started getting into more regulated spaces, right? You were working in healthcare automation at Swiss Log. I feel like this is a nice, you know, sets the stage for what you're doing now. Yeah. Well, for me at that point, information became really important, right? Right. If you're moving a lot of things around in a factory with a robot, they're not always high value things. So yields and OTD are your measurement. When you go into a hospital and regulate it, you're starting to talk about people's health.

20:12And that all of a sudden from a regulated perspective becomes really important. Don't lose critical medication. Get it there on time. And the other thing with mobile robots is that I had the opportunity to sit on a steering committee talking about the sorts of environments at that time in the early 2010s that mobility could work. We weren't yet at a point where we had autonomous cars driving around. So if we look back, then factories are safe because people are trained. You move into a hospital. And part of that regulated answer is how do you move around people that aren't trained to work with robots or others and do it safely?

20:51So there's that component to it. How does the technology work amongst people? But again, really the value in that proposition was making sure that you track from a pharmacy to a patient, how did that medication get there and ensure that from this pharmacist's hand to this nurse's hand, you had full traceability on that? And that was my first view and what regulated in that context meant. Yeah. Well, you highlighted that in addition to full traceability, that's where some of your focus became from, you know, you were building physical things, you were working in other industries, but you put a bigger focus on information at that point in your career.

21:30As we have more information now and as manufacturing has changed, one area that maybe felt, I don't want to say stagnant for a while, but just, you know, an enigma for me, one I haven't paid attention to as much over the years was defense spending as well. And I think we're seeing more visibility to that right now. We're seeing more people with the opportunity to participate in that right now. And I'm curious to get your take on why increased defense spending doesn't necessarily automatically translate to increased manufacturing capacity. And I think some of our conversations around digital manufacturing, regulated industries, all of those come together in this space.

22:18So maybe to kick things off for this segment of the conversation, In your own words, what is it like for manufacturers right now trying to support the defense industrial base? Can I start with crazy? Yeah. One word answers are good. Well, I couldn't answer your earlier one quite that concisely. Boy, there's so many different ways that this conversation wants to go, Chris. Insofar as, you know, look, let's talk about the industrial base because it's really important to all regulated industries for that matter because there's more of a desire to do work at home for security purposes. I mentioned traceability earlier.

22:58And you just get faster iteration, frankly, if you're doing work down the street and you can go and partner with the people who are manufacturing parts for you. As it relates to the defense spending right now, it is just such an absolutely fascinating time. We've had an erosion of our industrial base, and you need visibility to bring things up. Think about decades ago, steel mills. You need to have 20, 30, 50 years worth of visibility to revenue to put hundreds, millions of dollars in place. And frankly, the government doesn't always give you that level of visibility. And when you're talking about some advanced technology in the defense sector, only very few people, and we talk about them as primes, tend to play in that.

23:44So there's a little bit of a cornering of that market that the balance of the industrial base doesn't have visibility to. and I can't go, we can't go as industrial participants, justify putting up a new factory or borrowing new equipment if you can't see the demand signal. So there's a bit of a visibility issue. And so for us manufacturers, that's been challenging. He asked about how digital intersects with it. Well, right now, in fact, a general by the name of General Cain was at an innovation conference in Philadelphia earlier this week, and he said, please go faster, much faster, and be bold as he's speaking to the industrial base.

24:22That's because what we've seen out of some of the conflicts over the pond today is the iteration cycle for things like drones. They're demanding the industrial base to move a lot faster. What's the significance of that? Well, we're not talking about steel mills anymore. We're talking about how do you make drones in small quantities cost effectively with design iterations within days or weeks, not months and years. So as we sit here today, we're trying to modernize our fleet, replace much of our munitions that have been depleted right now for some of our interceptors like Thad, Tomahawks, 25 to 51 weekly times as our industrial base sets today.

25:03So right now for companies like ours that can can get the requisite level of quality, can manage data safely. And I think we'll probably talk a little bit about that. It's a great time, but it's crazy because the demand signals are coming so fast that just prioritizing where to spend that and how to support the government, it's a fascinating challenge. Do you have insights on how to prioritize right now? I mean, that strikes me as something. If I'm a manufacturer listening to this, trying to participate in the defense industrial base, I'm probably struggling to figure out how to prioritize right now.

25:41What would be your tip in that regard? Yeah. I mean, it's kind of like Maslow's hierarchy. I mean, first and foremost, know what you do well, right? Just from a manufacturer. I mean, two machine shops don't always manufacture the same types of materials or types of geometries the same. So know what you do well, know where you add value. Then you have to really answer the question, there is a high cost the quality to deliver those parts, documentation, traceability, and that's a requirement. And then you need your CMMC compliance or NIST scores. And, you know, there's a variety of things that when you stack that, it pretty quickly falls out that you should be supporting this sort of a program in a land-based system, or you can participate in drones, or I think it becomes reasonably clear because most operators know what they do well.

26:29And if you know that, then you can go plug into the right place in the supply chain. Yeah. Well, let's focus on some of the areas that manufacturers likely need to ramp. Maybe they're good in some spots, but they need to ramp up in other areas. What do manufacturers need in order to make the investments required to support the demand in the defense industrial base? Is this a question of capital equipment, supply chain, workforce, all of the above, where would you start? Well, there's been a lot of conversation and as a taxpayer, I guess, watching the government and how they're spending our money, I am appreciative of agencies like the DIU.

27:11They're an innovation unit and they're trying to figure out how to answer the very question you're asking, which is how do we participate better with our industrial base? So I would just say I'd start with how contracting looks. I mentioned that for us as manufacturers to hire more people, to put more equipment on our floor, build more factories, we have to have visibility to some degree of longevity in our demand and production. And kudos to the Defense Department. Over the last couple of years, they've gotten better about LTA's long-term agreements. That used to be relegated predominantly to these people called primes, the really big folks who make big airplanes and things of that nature.

27:50But the Lockheed Martins of the world for the folks that might, I think most of our audience knows it, but I always want to jump in just to clarify, like that's one of the household names you'd come across. Yeah, the real big defense contractors. That's exactly right. But, you know, if you if you look over the last five years and you've been paying attention to the news, there's a lot of call startups. Andrel, which isn't a small name anymore, but there's these other non primes that are trying to go fast, trying to match those demand signals. So I'd say contracting first and foremost is important.

28:18And then how do you get the right level of bureaucracy around ensuring that you're getting a good and robust supply chain? There's a number of different things that that means. One, if you're going to give sensitive data to manufacturing, you got to make sure that doesn't get in the wrong hands. So I think we'll probably talk a little bit about that. But again, you also have to have traceability. You don't want to buy materials from somewhere that is an unreliable part of the country, or the world rather, and all of a sudden find out that you don't have that material any longer. So there's a lot of stability in the supply chain.

28:51But I'd say the contracting at the outset is one of the most key components. And then despite the news that just came out this week, which was a change in policy around CUI, you still have to be really secure with your data. And that's just a business thing beyond just a government thing. And we'll timestamp this. We're recording this at mid-late July 2026. So when this comes out, you know, in a few weeks from now, you know, who knows what the news is going to be? I mean, we might know what the news is at that point, but we don't have a crystal ball here at Manufacturing Happy Hour today. But timestamping it for the audience so they know when we're talking about this.

29:28We will get to CMMC here in a little bit. But you talk about, OK, start with contracting on, you know, there needs to be the right level of supply chain, right. You want to be getting things from the right spot. You need that traceability to ensure that everything is coming from where you expect it to. I mean, you mentioned it earlier. You and I have chatted over dinner, drinks before, about workforce. How does that play into this? It is. It's always people. It doesn't matter what conversation. We can talk about data all day long. Right now, in part because a lot of folks like me didn't choose to go into manufacturing and went in and did the Facebooks and the metas of the world.

30:08We've had a bit of a run on manufacturing talent, frankly, over the last couple decades. And so your question is a really tough one to answer because there is a talent war going on where everybody's trying to get the right level of folks on the floor. Because despite all the automation we talk about and the augmentation that we even do here with using AI for programming and trying to get the rote tasks off of our creatives plate, which are our machinists, you still need talented people out there. I mean, the curve to get to a level three machinist, it's about seven years on the job. That's not hanging out in the trade schools, which I'm glad to see are getting more prominence now.

30:53But those folks, those are the folks with the paintbrushes that make all this happen. And we've lost a lot of those, A lot of them left the industry, retired. That singular role in our factory is one that we focus on every day. Yeah. It's interesting that you just drew all those parallels to art. Unprompted as an artsy guy and a musician guy on this side of the table, like the fact that you referred to as machinists as creatives, you talked about having that paintbrush out there. Do you regularly equate manufacturing to art? I just kind of want to hear your take on this. I do. I do. I'll tell you, for me, and it's from the executives down to the folks that we depend on out at the shipping dock, you have to come to work with a degree of passion.

31:41And that passion in manufacturing tends to coincide very, very closely with your level of curiosity. I think curiosity, there's an artistic aspect of that no matter how you apply it. And, you know, we have folks on this floor, and I'm not kidding you, they can walk up, put their hand on the machine, and they'll know if something needs to be tuned, just like your guitar. So, no, I think that, you know, obviously I like to use analogies, but there is a lot of creativity that really contributes to the types of efficiencies, especially at the front end of a product lifecycle. Because when you've done your millionth part, you've kind of got it dialed.

32:18When you're doing yours first and then trying to go to your hundredth part, that's where these folks, they create magic out there. It's amazing. And as an organization like yours, it's very much focused on NPI and then getting those first parts ready for scaling and production and getting there. It makes a lot of sense that that's front of mind for you. One thing I did want to ask, because we started our workforce conversation here, you talked about the war on talent. I feel like you're doing a good job here at Fathom getting great people within your organization. And I'll add some context. I've been lucky enough to see multiple facilities of yours from here in Heartland, Wisconsin, down to Central Texas and Round Rock.

33:02Everything from, as we talked about, additive manufacturing, machining, etc. I've seen it all. And you run what I look at as a more high-tech manufacturing operation. I'm sharing some of these things as an outsider. And I want to hear your thoughts on it because I'm curious if and how that has helped you in any way with finding good talent, finding, hiring, retaining good talent, all of the above there. Yeah, absolutely. I mean, you know, starting with me, I was delighted to get the opportunity to come here. I mean, as a, again, a bit of a failed mechanical engineer way back when coming here and just seeing, one, the amount of technology that we have on our floor.

33:48you know and then really what's amazing is you know in this very room we're sitting in we have some of the best and brightest design and engineers from our customers sit down with the teams that we have here and just watching that take place it it attracts good people they want that sort of a conversation they want that engagement they want to feel like they are contributing to design and you know many cases we we talked already about defense but we do a lot of work. In fact, our number one market in the last quarter was healthcare. And so for people to come in here and use their creativity and not just make the same widget a million times, like an I Love Lucy for old enough members of the audience to know, you know, they love that they get to do something and face a new challenge every day.

34:34And that unto itself makes my sales job of trying to attract talent a smidge easier. But I'll tell you, everybody else here is looking for the same great people, but we're lucky. We've got some amazing, amazing people here. But the product kind of sells itself. It's a really great company. Does having the word sell in your last name help at all? I knew I had to weave that joke in at some point. Yeah, you wouldn't be the first. I know it's hardly original on my end, and you're probably like, I can't believe Chris brought that up in this conversation today. It would be that or my first name. I get it one way or the other.

35:07But no, like I say, I don't even have to use my last name. I don't have to sell too hard here. Yeah, no, you make a great point. I like how you described the scene of the conference room where we're sitting today, which, by the way, is covered in a lot of really cool parts that you've made here as well. And for the folks watching the video interview, they'll see a few of those sitting in front of us today. But, you know, we will let's jump back into the most current event around defense spending right now. And that is CMMC. CMMC phase two recently being paused, I believe is the right way to describe it as a requirement.

35:45You live and breathe this more each day than I do. So for someone that is unfamiliar with CMMC and particularly the pause to it right now, tell us what it is and what that means. Sure. Well, CMMC for most of us lay folks is really just ensuring that the data, think about the designs, the digital designs that are sent to us so that we can quote it and ultimately manufacture a product. Some of them have very intricate and exotic designs that the government or those folks like Lockheed think is pretty special sauce, and they don't necessarily want that to get in other people's hands. So they treat it with great sensitivity.

36:24And that's what this policy, starting with CMMC 1, which is self-compliant, and then number 2, which is bring in third-party auditors and go through a lot of steps. That's what we're talking about today. So it's really the government's way of just ensuring that if you sign up to manage their data safely and securely, that you're doing so. And so to your point just this week, and it really strikes at the heart, Chris, is what I was talking about earlier. If you get down to the very, very basics of manufacturing, it hates change. I told you our people love change. They like a new challenge every day, but manufacturing does not like change.

37:01And so all of a sudden you start to think about policies that impact how you invest into a business and how you manufacture product. This week's announcement was pretty big change because for us, we have spent nearly nine months, nine months working on all the work, all of the processes, policies, and evidence to have those auditors come in and say, you're good. And now to find out that in 60 days, there's a very high probability, don't bet on this, that they're going to stand down. That's a lot of money we just spent. Now, by the way, it won't have been for not because we do need to be secure.

37:43But a lot of that preparation was just for the paperwork to submit to those auditors. But I just tell you that because it's really problematic when you go and you make some of these decisions and you put some of this infrastructure in place and then you can't really monetize it. Because it would have been a huge differentiator for some of us. In fact, just a report I read a few weeks ago said 10 % of the industrial base would fall out if that policy was enacted because they're not going to either choose to or they can't afford to do the type of work I just mentioned we've been doing for the last nine months.

38:20So frankly, I think it was almost an obvious choice, but we had to essentially go through it because we need that level of security anyway. But it's big news. It's a big news because if you talk to a lot of different people, if you get 10 people in this conference room who have as much gray hair as I, I'd almost be willing to bet you that five of them would say it was going to happen prior to this week. And five of them, like me, would say no, because you can't starve off the government's needs. Right. Yeah. Now, what would be your, so your sentiment that, hey, a lot of this was stuff we needed to do anyway, right?

38:57There are a lot of wins that come out of it for us. So how should someone that has gone through these steps be thinking about what's next? And then what should someone that didn't go through these steps maybe be thinking about what's next? Well, I can almost assure you the folks that didn't spend the money and spend time on it are like, oh my gosh, I knew it wasn't going to happen. And so if they're out having a beer with their buddies tonight, they're going to probably say, told you. So that's certainly one of the sentiments. I mean, the other thing is, is that it's not, again, for naught. Even if it's not CMMC 2.0, there has to be a way for these designers, for our government to say, hey, we've got some really top secret stuff that we'd love you to manufacture.

39:41But we've got to make sure, absolutely got to, got to, got to make sure that this doesn't get in the wrong hands. There has to be belts and suspenders. So if it's not CMMC 2.0, there's something there. And so for us, again, I know that a lot of the documentation will have been wasted. But the principles and underlying processes to make sure that our people know how to handle that data, again, that's important for all of us. Well, I think that's the right attitude and a refreshing attitude, because whether it's CMMC or another program, another requirement decades down the line, someone can hear what you just said and realize, like, this is not going to be the last time we see this happen in American manufacturing.

40:23There will be something like this that, you know, does a little bit of a U-turn like that. But I appreciate the perspective on looking at the positives based on the activities that went in there. Well, and if you think back over the last 50 years in the medical space, there's been a lot of these, right? There's been a lot of, oh, this is going to be the best thing since sliced bread. Just kidding. Too expensive. Right. But the intent is always there to make it a better product for the patient, better outcomes. And I think you have no choice but to have that view of it. Otherwise, you drive yourself crazy.

40:54Well, from a career standpoint, I think you've made some great points on the value of getting some experience in different parts of the manufacturing world, right? You're drawing parallels between your highly regulated industries, right? Defense, healthcare, this isn't the first time you've seen this and it won't be the last. No, no. And, you know, it's, well, probably because I know you, we'll probably talk a little bit more about young people coming into this space. But look, this is such an amazing time to be a manufacturer. I think all 30 plus years of my life, I just couldn't imagine doing anything else.

41:28It's just so fascinating. But right now, the mashup between digital, right, all of the advancements in AI, which is, I'll tell you, it's impacting our business every day. And that's not just in accounting or sales. I mean, again, trying to take off the type of repeat work that you just don't want people wasting their time doing. Right now is just such an amazing time because a lot of these technologies that everyone touted and celebrated in Silicon Valley are making their way out to the heartland. Yeah. It's awesome. Yeah, and you've had the benefit of going to school out there, working out there, and you can see that coming to spots.

42:05It is ironic that we are having this conversation in a town that's literally called Heartland, although not spelt like heart. I wish I had done that intentionally. I didn't. No, no, no, my goodness. Part of my job of being a Midwesterner is to catch those moments to add a corny aspect to the podcast. All right. Well done. Yeah. Yeah, maybe this is a good segue into one of the last questions of the conversation. So you were just highlighting you've loved your 30 year career in this, but now is the right time to get into the industry. And this is a topic that comes up on the podcast frequently. I'm pretty sure everyone out there listening knows that, hey, this is this is a high tech time for manufacturing.

42:45This is a time to get into it. But I guess I'd be curious to hear what is the thing that excites you the most? or you think would excite a new entrant into this industry, whether they're coming out of school, whether they're coming from a more tech or software background, what are the things that you think would excite them? And certainly reflect on the things that are exciting you right now. Well, I mean, if it isn't exciting enough to walk away from a day and just physically put in your hands something that's absolutely beautiful and ready to go into a complex machine or anything for that matter, I don't know.

43:26That's baseline for me. But in answer to your question, just look at everything that's going on with AI right now. And at some point, you get a diminished return on how much more that's going to impact communications. You can only stare at Instagram and Facebook so long. And those guys are pretty good at sucking you in. So where do you go next? Physical AI. Physical AI. And don't immediately jump skip to thinking about all those humanoid robots, but that's certainly a very good illustration of a big limitation for adoption of robots for the last 25 years was programmers. Kind of the same thing I'm talking about with CNC.

44:07You take all the data that's now available in these monstrous data forms and you start applying them to physical AI. Physical AI in our case could be getting better control over atom machines. getting instead of 80 % of our programming done on CNC's, making it 98%. So the last 2 % is our person putting their hand on and just twisting the dial that much to get that much more productivity out of the machine. You know, for folks coming out of university and trade right now, manufacturing's amazing because there's so much design innovation going on, especially right here in the US. We never lost that.

44:45We may have lost steel mills. We may have lost a lot of factories. But boy, if we aren't the most innovative country in the world. And I will lay my hat on that every day long. And then you figure out what do you do with that? Well, you got to produce something. And AI, between those two things, sitting around this conference room and seeing the conversations, I don't know how else to tell you. It's the coolest thing in the world to be doing right now. Yeah, it was interesting. I was listening back to one of my interviews from over a year ago with MIT, and they were talking about how, hey, the U.S.

45:18never lost design and innovation. But we mistakenly thought we could just outsource all the production after that. And you lose the iterations, the seeing how stuff is made, the realizing, oh, here are a couple tweaks we can make to the design process, right? DFM, design for manufacturing. So I think you did a really good job of bringing together where technology is going, where the industry is going, our strengths, and how that's all tying together to make it a great place to be right now. Yeah, it's so much fun. With all that said, is there anything you wish I would have asked that I haven't yet as we finish off our conversation?

45:57What's similar or different to other folks you've talked to? Ooh, are you asking me a question then? I am. That often comes up. You're not the first person to flip it on me. Yeah. No, I'm not trying to test, but I watch your podcast. You talk to a lot of smart folks, and you're also a really good pattern matcher. So I'm just curious. So out of what you've heard today, what's similar and what's different? Yeah, I would say one of the differences was, and I highlighted it earlier, and you're not the only one, but I would say you're one of the exceptional ones that has made the connection between art and manufacturing as explicitly as you did.

46:42I think a lot of people do it subtly or indirectly, but you literally drew the parallel, you made the analogy between the two. that's something that's different. I would say something similar. Your sentiment around this being a great spot to be right now, the industry being a great spot for young people to enter into. It's funny, right? Because I get to hear that conversation a lot, right? But I need to appreciate the fact that there are a lot of people out there, you know, maybe the folks that aren't listening to every episode of Manufacturing Happy Hour, that they just need to hear it that one time.

47:19And maybe that's what's going to make them shift. So even though that is a key topic that comes up, I would say in over 50 % of our conversations, I think knowing that podcast audiences sometimes are only going to listen to an episode here and an episode there. Some people are going to listen to all of them, right? There are two different types of podcast listeners out there in that capacity. But those would be a couple of the things that, hey, this was novel. And then this is a theme that we're hearing is on the front of a lot of executives' minds right now. So that's my answer to your, I guess, last question to me today.

47:56Fantastic. Well, I would only say for those of you who are only listening once, make a habit. Spill the talks to some really fun people. Like and subscribe wherever you get your shows. Well, Rush, it's always a pleasure chatting with you. And I know you and I are going to be hanging out probably next time. We'll be at IMTS, I would think. We're in an IMTS year, another topic that I think a lot of our listeners are familiar with, but largest manufacturing show in North America coming up the, what is it, 14th through 19th this year? That's right. Yeah. Yep. I would just piggyback that one, you know, the other thing.

48:31So I'm going to add one more. Why it's great to be in this industry. It has just got an amazing community. And going to a show like that, you start to appreciate that a lot of people know a lot of things that we don't know. And so get there. Network with people, and you'll see some amazing stuff there as well. Well, Rush, good hanging out with you here in Heartland, Wisconsin. At Fathom today, we'll be back in the Heartland. You'll be back in the Heartland, I should say, for IMTS here in the very near future as well. Rush, thanks so much. Thanks for the spy, Cal. Cheers. Cheers.

49:10All right, everyone. That is a wrap for this week. Thank you to Fathom, one of Manufacturing Happy Hour's headliner partners in 2026. We had a great time touring the Rust Belt with them on our Rust Belt Renaissance Tour through some great events in Cleveland and Rochester, New York and Pittsburgh, Pennsylvania. Thank you, Rush. Thank you, Fathom. And hey, make sure to find all of us at IMTS2026 if you're listening to this before September 2026. that's going to run the 14th through 19th of September. It is the largest manufacturing show in the Western Hemisphere, and it only happens every other year in Chicago, Illinois.

49:57I'm going to be there. Fathom will be there. A ton of other people that have appeared on this podcast will be there. You should be there too. Again, that's IMTS in Chicago, Illinois. And with that, that's a wrap for this week. Stay innovative. Stay thirsty. Catch you next time here on Manufacturing Happy Hour. Thanks for listening to Manufacturing Happy Hour. Powered by the Industrial Network.