[piano intro] - Hello, I'm Nido Qubein.

Welcome to "Side By Side."

My guest today has been a journalist for 40 years and is now diving deep into North Carolina's military defense industry.

Join me for an insightful conversation with Dan Barkin, author, columnist, and researcher.

- [Announcer] Funding for "Side by Side" with Nido Qubein is made possible by... - [Announcer] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors locally, thanks to our teammates.

We are Coca-Cola Consolidated, your local bottler.

- [Announcer] The Budd Group has been serving the southeast for over 60 years.

Specializing in janitorial, landscape, and facility solutions, our trusted staff delivers exceptional customer satisfaction.

Comprehensive facility support with the Budd Group.

- [Announcer] Truist, we're here to help people, communities, and businesses thrive in North Carolina and beyond.

The commitment of our teammates makes the difference every day.

Truist, leaders in banking, unwavering in care.

[upbeat music] - Mr. Barkin, welcome to "Side By Side."

You've been a columnist for many years.

You have been known across the country for your writings, and now you're an expert on the defense industry in North Carolina.

I can't wait to delve with you on all these subjects, but I wanna begin with this question.

How does a columnist write a column?

Do you come up with an idea?

Do you sit down with a pad and pen?

Do you structure an outline?

Run us through the process of a columnist who runs, let's say, a weekly column.

Where do you get the idea?

Do you have 10 ideas at the same time you're working on?

- That's a good question.

The writing is actually the least part of it.

What I do is I spend a lot of time talking to people.

I go to a lot of places, and I ask questions, and ideas come from that.

You basically have to go out and be a reporter.

You have to go places and learn things, and all of a sudden, you'll hear something.

You'll go, "That's interesting.

I wanna write about that."

You don't do it by sitting in your office and just brainstorming.

That's not the way to get good ideas.

That's the way to get bad ideas.

- Are there weeks when you just go, "My brain is blocked.

I have no idea for a column"?

- I always have ideas.

Some are better than others, but I spend a lot of time out there talking to people and reading things, and it's a lot of work like that.

I don't just sort of think up ideas.

I'm not that kind of person.

I have to really go out and talk to people.

- You were at "The News & Observer" in Raleigh for, is it 40 years?

- No, I've been a journalist for 50 years.

- 50 years.

- I came to "The News & Observer" in 1996, and I retired from there in 2018.

So it was about 22 years.

- You were born in Boston?

- I was born in Boston.

- What brought you down to the glory land of North Carolina?

- Well, I've lived in the South since 1971.

I came down.

I'm a graduate of Old Dominion University in Norfolk.

My first job was a reporting job in Martinsville, about 50 miles from here, also a furniture town.

And that's where I met my wife, who is from Sampson County, and she thinks I talk funny.

[Nido chuckles] - From Boston.

- Because I'm from Boston, yes.

- Yes.

And let's go back to "The News & Observer."

When you wrote that column, was it weekly column?

- Yeah.

- It was a weekly column.

- Yeah.

- How long does it take you to write a column?

- Oh my goodness.

Well, right now, for example, I write a column for the magazine, and I write a weekly newsletter on the military.

And it can take me a lot of time to really report the information, to gather the information.

That's the most labor-intensive- - The research part.

- Yeah, yeah.

Like I said, most of what I do is research and reporting.

The writing comes pretty quickly.

If I do a good job of gathering the information, the writing isn't hard.

If I don't do a good job of gathering information, the writing is hard.

- So you write a column now for "Business North Carolina."

- Right.

- Magazine.

- [Dan] Right.

- Which is ironically owned by the same family that used to own "The News & Observer."

- Right, the Daniels.

- And I don't know how many people know that, you know, and now they own a newspaper in Southern Pines.

- Oh, yeah.

- Among other things.

So did you ever get, you know, readers mad at you because of stuff you said?

Did you have fans and enemies when you wrote those columns?

- In 50 years, I've interacted a lot with readers, and, you know, they're customers, and I always welcome their feedback.

- [Nido] Even when it makes you upset and mad?

- Well, sometimes the feedback is loud.

- [Nido] Yes.

- But, you know, I found that if I listen to them, and one of my favorite expressions is, "Well, you may be right."

But if I listen to them, what they wanted was to be listened to.

And they didn't necessarily expect that I was gonna agree with 'em.

Although sometimes I did.

But mostly they wanted to be listened.

They wanted to be heard.

And I mean, that's what you've experienced in your career, is that people wanna be heard.

- In the two decades-plus that you were in Raleigh writing this column, does the column stand up in your mind as more impactful or most impactful?

Did you write a column that changed the world somehow, and you felt really good about it, and you got tremendous response to it?

- You know, when I wrote a column at "The News & Observer," it was about business, and it was about people in business in the Raleigh-Durham area.

[chuckles] And I wrote some columns that turned out to be, you know, not very smart, and I get reminded about that.

- In terms of upsetting some people?

- No, in terms of saying, "Well, this is a good company you might wanna consider investing in."

And, you know, then two years later, it's not a good company anymore.

I have a friend, a longstanding friend, who constantly reminds me of those columns.

But you know, over the years, it made me cautious about how you evaluate companies, you know, because people are gonna remember.

You know, there are a lot of financial journalists who thought Enron was a great company, and- - [Nido] We know what happened to Enron.

- Yeah, so that's something, you know, that you learn by hard experience.

And you have to remember that, you know, people are reading the financial press and the business press for investing ideas.

And you need to be careful about what you write.

- You're teaching now.

You're an adjunct professor at the University of North Carolina Chapel Hill.

- I taught a course, I think it was last year, in economic reporting, teaching journalism students basically how to cover business and the economy.

- What do you tell 'em?

What are the two or three pointers that you say to them?

- Well, I tell them to, you know, be good critical thinkers and to understand, you know, balance sheets and financial statements, income statements, and to know the difference.

And I spend a lot of time basically with them, you know, on that because if you can't read financial statements, then you shouldn't be writing about business.

- If I'm looking at financial statement of a company, what should I be looking for?

What are the two or three things I ought to, or sort of would drive my thinking or illuminate my understanding?

- You can't fake cash.

So cash is either there, or it's not there, and looking at changes in cash is important.

- [Nido] Cash flow?

- Just cash.

- Just plain cash?

- Yeah, you- - Cash on hand?

- Yeah, you wanna see, well, what is the liquidity.

You want to very much focus on any changes in the accounts receivables because if they're not doing a good job of collecting and turning those accounts into cash, then you're gonna see the accounts receivable balloon.

Okay, so, you know... And you want to maybe look at some of the ratios, you know, debt coverage.

I'm a bigger fan of the balance sheet, which is harder to fake, than I am of the income statement, which is easy to fake.

- Well, because if you have a growth company, for example, you're gonna look at that very differently than you would an established company.

- Sure, but, you know, one of the things that companies do sometimes is they play funny games with recognizing revenues, especially software companies.

So you have to really kind of... You know, the interesting thing about a lot of these financial scandals is that the story was there in the financial statements if anybody cared to look at them.

But, you know, a lot of journalists who covered these really didn't understand what they were looking at because, you know, I wasn't a genius at that, but I had a business degree majoring in financial management.

So I could read a balance sheet, and I could read an income statement and a statement of changes in financial conditions, and I read the footnotes.

So, you know, if you can do that, then it's hard to, you know, fake it for very long.

- Mislead, yeah.

- Yeah.

- So when you look at the stock market today, and as you wrote those columns, as you analyze this financial data, do you give it any importance, the stock market?

Or do you say, "The stock market is just, it's a buy and sell.

I pay more attention to the fundamentals of the business"?

- You know, I make the mistake that a lot of people do of looking at your portfolio too often.

I have good financial advisors.

I'm not a huge customer, but they treat me well, and I let them make the decisions.

You know, I kind of, you know, watch the stock market, you know, as an interested observer, but I don't kid myself into thinking that I'm smarter than people who do this for a living on Wall Street.

- But when you wrote the column, you know, about business, did you make any correlation between stock market values and the company's performance as you looked at balance sheets and P&Ls and so on?

- I learned a lot of lessons in the 1990s because you had companies that had tremendous valuations and no revenues or earnings to speak of, and it all crashed.

- Well, tech companies are a good example of that.

- Okay, so you had lots of companies that had sky-high valuations.

So what I learned was, you know, that you want to see companies that actually have earnings and that have real revenues.

And you want to be a little cautious about companies that are just stories.

You know, so I look at a company like Uber, for example.

Okay, never made any money.

Okay, every Uber ride you take, the investors in Uber are subsidizing that ride, okay, and yet Uber has a very high valuation, high market cap.

And I'm thinking, "Okay, at some point a company like Uber has to actually turn a profit."

- Or Wayfair or Amazon or many of those.

- Well, interestingly, Amazon basically is able to break even because Jeff Bezos had the foresight to create Amazon Web Services.

So his retail business is basically a break-even business because he's making money hand over fist as a cloud supplier.

If he didn't have that cloud business, Amazon would run out of cash.

So anybody competing with him in package delivery and retail is going up against a guy who doesn't mind losing a little money.

- You know, there's a lot of talk about Elon Musk today.

What's your take on Elon Musk?

If you're writing a column today about Elon Musk, what would you say?

- [laughs] I would say be very cautious.

Now, Elon Musk may be our Thomas Edison.

I don't know.

You know, if you were- - It took Thomas Edison 1,000 times to get to the bulb.

- Right, right.

So, you know, I look at Elon Musk, and I think, you know, he may turn out to be an historic figure, or he may be a footnote.

That story is not written yet.

It concerns me that he's trying to do a lot of things simultaneously.

And, you know, if I'm gonna buy a Tesla, or if I'm gonna hitch a ride on SpaceX, I want him to be focused like a laser on Tesla and SpaceX.

In fact, I think it would be a full-time job to manage Tesla, let alone SpaceX and Twitter, and also run the federal government.

So, you know- - So you're saying focus is more important sometimes than intelligence?

- I think that's the concern that everybody should have, is that, you know, he's spread very thin.

Now, people who know him say, you know, this guy has a superhuman capacity to, you know, juggle all these things.

- Or great leadership in management.

- Well, you know, he's one of a kind.

The question is, you know, our space program is very dependent upon SpaceX, and the EV industry is very dependent upon Tesla.

And meanwhile, he's out trying to basically reinvent the federal government.

So I don't know how he does it, and I don't know how he can sustain it, but, you know, that's a story.

That's one of the most fascinating stories of our time.

- To watch, for sure.

So tell me how you went from writing a business column for "The News & Observer" for so many years, and then now military column for "Business North Carolina."

First of all, what interested you in military matters, defense matters, specifically in North Carolina?

And then what is it that intrigues you about it, and what findings have you discovered?

- Well, when I retired in 2018, I wanted to continue writing because that's why I got into the business in the first place, was to tell people's stories.

And so I knew Dave Mildenberg and the folks at "Biz North Carolina."

And I said, "Hey, can I do some freelancing for you?"

And they said, "Sure.

How'd you like to do a column for us?"

And I said, "Great."

And then they produced something called the "Daily Digest," which is a great daily newsletter, general business newsletter.

And they had an opening after I was there for a couple of years.

They had an opening for a Tuesday, a temporary opening.

That temporary opening lasted three years.

Increasingly, I was writing more and more about the military.

And the reason was is that the military is the second largest sector in our economy in North Carolina behind agriculture.

- Say that one more time.

Military is the second-largest sector- - It is the second largest sector in North Carolina.

- In what regard?

- In economic activity.

- I see.

Would you define economic activity as- - Contracts, business, selling, you know, fruit to the military, jobs supported.

We have the fourth-largest footprint of uniformed military in North Carolina in the country behind Texas, California, and Virginia 'cause Virginia has the Pentagon and the Navy.

So we have a tremendous military presence in this state, Fort Liberty, Camp Lejeune, Cherry Point, MCAS New River, and the Seymour Johnson in Goldsboro.

- What's the head count in- - [Dan] 140,000.

- 140,000?

- Right, in North Carolina.

That's DoD personnel, uniformed, civilian.

You know, we have 20,000 civilian DoD employees.

Fort Liberty is the largest military base in the country by population.

We have 40% of the Marine Corps here on the coast, so- - 40% of the national Marine Corps?

- [Dan] Yeah, yeah.

- On the North Carolina coast?

- Yeah, you know, Havelock, Jacksonville, New River, okay.

So nobody was covering it much, really, and so, you know, nature abhors a vacuum.

And I said, "I wanna write about the military because it's really interesting."

And we have a defense ecosystem made up of companies that sell to the military.

We have companies who want to sell to the military.

We have academic researchers who do research from the military.

We have a ton of war fighters all over our state.

The problem is, the reason that it doesn't get covered much, is because they're not in Charlotte and Raleigh.

Okay, they're in Fayetteville and Jacksonville and Goldsboro and Elizabeth City.

Okay, well, you know, those aren't the big population centers.

So I said, "I want to cover this area, this sector, and go to the bases and talk to folks and talk to defense contractors."

And so I did, and I was writing about it more in the "Daily Digest."

And finally they said, "Why don't you just do a weekly newsletter on the military?"

And so we started it up last January.

It comes out on Wednesday.

And you know, I write it every week.

And, you know, there's a lot.

You know, there's a lot to write about.

- Like give us some examples.

- Well, today's is about the US Army Corps of Engineers.

We have the Wilmington District, you know, at 450, mostly civilians.

And they have a tremendous impact on North Carolina.

You know, all the water resources, the lakes, the reservoirs, the dams, that have fueled our growth over the last 80 years, that was mostly the Corps of Engineers.

They built it for flood control, but it also out to be great water supplies for Raleigh and the Piedmont and Virginia Beach.

They regulate anytime you wanna put a pier or a wharf in a river.

That's the Corps of Engineers that you have to get a permit for.

They dredge the harbors in Morehead City and Wilmington so we can get these massive container ships in and out.

They nourish our beaches so our tourism economy can flourish, and we can have coastal protection.

So I wrote about that, and the reason I did was because I went to an industry day last month in Wilmington that the Corps was having.

I just wanted to go 'cause I hadn't done anything on the Corps, you know, in a year, and I really didn't know what there was to tell.

And I got down there, and I was fascinated.

You know, that's the thing.

I didn't serve in the military.

Most Americans haven't served in the military.

So I bring to this basically just sort of, you know, a fascination with this because- - And who's the audience for that?

- The defense ecosystem, defense contractors- - I see.

- Academics, people on military bases.

I run into people all the time who are getting it, and you know, who tell me that they read my latest newsletter.

And, you know, there's a lot of people who, you know, wanna do business.

I focus especially on how do you do business with the military.

- I see.

- How do you get in the front door?

It's not easy.

The government is not easy to do business with, okay?

But you can, you know.

I mean, it's like doing business with Microsoft.

If you're gonna do business with a big customer, you've gotta do it their way.

- Yeah, you have to know the process.

- Right.

- So, your, not theory, not assumption, but the reality in your mind, is that military is so important from economic impact perspective in North Carolina?

- [Dan] Enormous.

- And you don't have a number for that, do you?

- Yeah, basically, it's about an $80 billion economic impact on North Carolina.

For example, in the last 15 years, Burlington Industries has done a billion dollars' worth of business with the Department of Defense because they wear a lot of stuff, okay.

And so that's one company, Burlington, okay.

- And they would do, what did Burlington do?

Is it uniforms?

- Yeah, yeah, gloves, mittens, you know.

The military buys all kinds of clothing.

- Sure, it's a- - And they have to buy American clothing by law.

That's an interesting little detail, and so- - Everything in the military?

- All the military clothing.

- Including all of the components?

- The buttons, the zippers, everything- - In clothing, but in terms of the actual military equipment?

- The gear, yeah, yeah, it's all American.

You know, the- - Not all the components in an airplane, for example, would be made in America.

- Well, they'd either be made in America, or they'd be made by our friends.

- I see.

- Okay.

So the F-35 that is built by Lockheed Martin in Fort Worth, Texas for $80 million a pop, that has a supply chain that extends all over NATO.

- [Nido] I see.

- And beyond, you know.

So that has a supply chain that is global, but our friends, okay.

And that's a really important sticking point because, as you know, a lot of the stuff that gets sold in electronic stores is not made by our friends.

- Correct.

So, Mr. Barkin, when you look forward in the few seconds we have left, what is it that intrigues you about, let's say, your present endeavor, which is writing about the military?

In just five seconds or so, what is it that intrigues you?

- Right not, a lot is changing, for example, drones, you know, uncrewed aerial vehicles.

And so we don't know if we're at one of those moments like 100 years ago when navy aviation became the thing instead of battleships.

We don't know if we should continue buying $80 million planes instead of looking towards unmanned vehicles.

That is the big strategic question.

- So much unknown about the future, which is what makes it exciting and intriguing.

Thank you for being with me on "Side by Side."

It's all very interesting stuff, and I wish we had more time to chat about it, but thank you for being here.

- [Dan] Thanks for having me.

[upbeat music] - [Announcer] Funding for "Side by Side" with Nido Qubein is made possible by... - [Announcer] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors locally, thanks to our teammates.

We are Coca-Cola Consolidated, your local bottler.

- [Announcer] The Budd Group has been serving the southeast for over 60 years.

Specializing in janitorial, landscape, and facility solutions, our trusted staff delivers exceptional customer satisfaction.

Comprehensive facility support with the Budd Group.

- [Announcer] Truist, we're here to help people, communities, and businesses thrive in North Carolina and beyond.

The commitment of our teammates makes the difference every day.

Truist, leaders in banking, unwavering in care.