Darren Farber

And what you see these next generation guys doing is they're taking huge bets based on their taste. They're betting that their taste is greater than the requirements process of the Pentagon. And in some cases, that's true. And in some cases, it isn't. And I would say, the second there's an incentive for these primes to comport with, just give me your best.

And what you see these next generation guys doing is they're taking huge bets based on their taste. They're betting that their taste is greater than the requirements process of the Pentagon. And in some cases, that's true. And in some cases, it isn't. And I would say, the second there's an incentive for these primes to comport with, just give me your best.

Someone says, go ahead and give me your best bet whatever you think it is, screw the requirement. I think they can produce enormous technological stuff. Look, Lockheed is like a top five patent owner on earth, on the whole earth. There's enormous technology in these businesses. And we have 50 years of the world's best scientists working in these businesses.

Someone says, go ahead and give me your best bet whatever you think it is, screw the requirement. I think they can produce enormous technological stuff. Look, Lockheed is like a top five patent owner on earth, on the whole earth. There's enormous technology in these businesses. And we have 50 years of the world's best scientists working in these businesses.

And there's still a tradition of that engineering talent and capability. These guys can do a lot, man.

And there's still a tradition of that engineering talent and capability. These guys can do a lot, man.

They've been compounding at 50% for 25 years.

They've been compounding at 50% for 25 years.

These are broadly diversified conglomerates. And there are things inside of both of them that I want to own. And I think highly of those management teams. The margin tells the story a lot in these businesses in that Transline probably has, what, $3 billion of EBITDA, give or take, right now. And it's 50% EBITDA margins. Very sporty. And so when you look at it and say to yourself, good grief.

These are broadly diversified conglomerates. And there are things inside of both of them that I want to own. And I think highly of those management teams. The margin tells the story a lot in these businesses in that Transline probably has, what, $3 billion of EBITDA, give or take, right now. And it's 50% EBITDA margins. Very sporty. And so when you look at it and say to yourself, good grief.

How do they do this? And if you talk downstream, not to all their customers, but let's say some, some of their big customers, they hate these guys. And so that's a very tough paradigm to grow from. And actually, I think it's evidenced by the kinds of businesses that they're buying today. Like they bought CalSpan, which it's not really an aftermarket product.

How do they do this? And if you talk downstream, not to all their customers, but let's say some, some of their big customers, they hate these guys. And so that's a very tough paradigm to grow from. And actually, I think it's evidenced by the kinds of businesses that they're buying today. Like they bought CalSpan, which it's not really an aftermarket product.

It's like a wind tunnel testing activity. Boeing and Airbus. Boeing was so big at one point, it moved 2% of GDP by itself. And so if you're the elephant walking around the jungle and there's a bunch of peanuts on your back and some birds are eating it, okay, it's fine. It's de minimis relative to my share. I think the challenge now is the law of large numbers, that they're getting big enough.

It's like a wind tunnel testing activity. Boeing and Airbus. Boeing was so big at one point, it moved 2% of GDP by itself. And so if you're the elephant walking around the jungle and there's a bunch of peanuts on your back and some birds are eating it, okay, it's fine. It's de minimis relative to my share. I think the challenge now is the law of large numbers, that they're getting big enough.

And think about their business. Who owns the type certificate of these aircrafts? It's the designers. It's the Boeings and the Airbuses. They own the design. And so if it becomes so expensive to move through the supply chain, then it's going to incentivize a verticalization in certain areas. And by the way, before Dennis Mullenberg was fired, that was his plan. He had two things. He had...

And think about their business. Who owns the type certificate of these aircrafts? It's the designers. It's the Boeings and the Airbuses. They own the design. And so if it becomes so expensive to move through the supply chain, then it's going to incentivize a verticalization in certain areas. And by the way, before Dennis Mullenberg was fired, that was his plan. He had two things. He had...

Boeing Business Services, which was to control some of the activity in the aftermarket. And then also what he called partnering for success, which was, you're not going to make this margin on me anymore, the supply chain. I'm not going to design you into the next generation. You're going to be off the list if the toilet seat goes to $800. you're not going to be in that fulcrum.

Boeing Business Services, which was to control some of the activity in the aftermarket. And then also what he called partnering for success, which was, you're not going to make this margin on me anymore, the supply chain. I'm not going to design you into the next generation. You're going to be off the list if the toilet seat goes to $800. you're not going to be in that fulcrum.

I think the business model works beautifully when the downstream customer is so immense, they almost don't notice the difference. I always joke, the optimal business for Transdime is owning the cup holder in the Joint Strike Fighter. It's like, that would be amazing for them. You're not going to requalify that thing. It's craziness. So I just think there's a limit to how big you can do that.

I think the business model works beautifully when the downstream customer is so immense, they almost don't notice the difference. I always joke, the optimal business for Transdime is owning the cup holder in the Joint Strike Fighter. It's like, that would be amazing for them. You're not going to requalify that thing. It's craziness. So I just think there's a limit to how big you can do that.