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[AUTHENTICITY CERTIFIED: Text version below transcribed directly from audio]

Thank you. Thanks to my partner, Bob [Work], and thanks to all of you in this room. I think if I went around this room, two-thirds, three-quarters of you I know by name and in person. And it’s wonderful to be back with you again, and wonderful to be back with this wonderful institution. The last time I was in this auditorium, I was departing, I thought for the last time, and Marty Dempsey mistook me briefly for Ashton Kutcher. But only very briefly.

And that was the last opportunity I had to be with you. But I’m very pleased to be back with you. It’s been a highest honor of my lifetime, and the highest honor that I think an American can have to be a Secretary of Defense.

We have been blessed -- Secretary Work indicated that I’ve worked for 11 secretaries of defense, and that’s true -- and I think it’s true that our country has been blessed with the secretaries of defenses we have had. And the ones that I’ve worked for have been very distinguished.

And in that connection, I want to extend a thanks to my predecessor, Secretary Chuck Hagel. I knew Chuck Hagel for decades before he became Secretary of Defense. I worked for him as Secretary of Defense, and as distinguished and as dedicated a public servant this country has never had exceeded than Chuck Hagel. So I thank him wherever he is now, I hope he’s relaxing somewhere, for what he did for all of us and for his dedication to this institution.

I’m going to be brief, but I want to be very specific about how I see this job and what I’ll be doing and what my commitments and priorities are, and thereby what I’ll be asking you to reflect in your own accomplishment of your own jobs.

The first and most important commitment for me always has been and always will be to you. And to that, I mean the greater you. I know this is getting filmed and anybody who has the opportunity in our greater force to see this, I mean all of you -- those who make the greatest fighting force the world has ever known, and the finest and most decent fighting force the world has ever known. And that’s soldiers, sailors, airmen, and Marines. It is civilians. It is contractors, as Bob said, because in our system, that’s the way we do things. That’s the total national team. And our -- my -- first commitment is to you, to your excellence, to your welfare.

Bob mentioned the fallen, the families of the fallen, wounded warriors. I mean, I think we have to start there. When I started my career in defense, it was very, very rare that an American servicemember was wounded-in-action or killed-in-action. It was extremely rare. And when it happened, it was a big deal. It led the news on CNN.

When I came to the department six years ago, that was a daily event. And when you went out on Saturdays to the hospital, there was a fresh group of freshly wounded every week, every single week. Week after week after week after week. Thank God those days are largely behind us -- we never will know for how long, that is true -- but I just think that we have to start there. We have to keep those people in our hearts every day.

And that leads to me to a commitment to what is my largest responsibility in this job, which is to make sure that we never put anyone and their family in that circumstance without the greatest care and reflection about why we’re doing it and what its purpose is and what the benefit is for our nation and for the future.

We have an obligation, those of us here in the Pentagon, to the entire force to make sure that they have everything that they need to accomplish their mission. And that means first of all appropriate compensation, because -- and I always say you can’t pay people enough to do what we ask many of our people to do. And -- but this needs to be a profession which is, whose honor is reflected in the way society honors it. And compensation is part of that.

Compensation is only part of it because I think a member of our community knows that their entire value and satisfaction in doing what they do is only partly measured by what they’re paid. It’s also measured by whether there are people to the left and right of them who are equally capable, who are numerous enough to help them get their job done, who are well-enough equipped and well-enough trained that it’s safe for them to do what they’re doing, and that they can be successful doing what they’re doing. So there has to be a balance here.

But the objective, which is the overall honoring of service, has to be paramount to us and that’s a generational -- an intergenerational responsibility as well. We honor those who came after us or before us. We honor those who are in service today. And we need to look to how we’re going to honor those in the future. More about that in a moment.

We are blessed in that our institution is unparalleled in the world and is held in the highest esteem in our society. And that’s something to be grateful for, but also to honor back. And we do that when we respect the dignity and the safety of each and every member of our community as well, and that’s a priority for me also.

And then just to repeat, the most sacred responsibility I have as your Secretary of Defense is to make sure that the dedication and commitment that brought each of you into service is reflected in the way I conduct myself and in the care that I and others, rest of the leadership, express in each and every one of you.

A second thing that you’ll see me doing in this role -- and this is a very different job from the jobs I’ve had here in the past -- is to be helping the President and our national leadership make the decisions that will keep us safe and protect our country and protect our allies and friends now and in the future.

And the President, able as he is -- and the people around him, able as they are -- that’s just one guy. He needs help. He needs our best thinking, our best ideas, our best analysis. The fact that many of you have vast experience around the world, vast experience going back in, through the decades with what it takes to offer protection to our society -- we need to bring that to bear to help him.

We’re a large institution. We’re a beacon of quality, if I may say so, in the federal service. And so, we have a lot to offer our national leadership in helping them make decisions. I intend to be very active in doing that. And I will be counting on you to help me, and lift the great expertise of this department and all of its people to the service of the country’s national security decisions.

I’ll be, at the same time, making sure that with the Chairman and the Vice, who’s here today, I am making sure that our President has the best military advice -- in addition to what I will aim to make the best civilian advice he could have -- so that he’ll have another channel into the excellence that is represented in this department. Two heads are better than one, and he’ll get both heads.

Then, he will be expecting us, and I will be expecting you, to help me implement those decisions with the excellence for which this department is so long and justifiably known. We -- In that connection, I should emphasize that I’ll expect each of you to be conducting yourselves in a way that reflects the trust that the country has in you, and the appropriateness of the role prescribed to you. And I don’t have any doubt that we’ll do that as we always have, but we need to retain our reputation for being the best and the most honorable.

It’s a rough world out there. There’s a lot going on. I could start almost anywhere, but I’ll start where the headlines are -- with ISIL and the barbaric acts that you see perpetrated in the Middle East, and the larger Middle East, and emanating there from. The historical throwbacks in Europe we’re witnessing in Ukraine now, the throwback to an era we thought we had left behind, and I think history ultimately will leave behind, but not everybody understands that right now. The unhealed wounds of the past and the absence of a custom security structure in the Asia-Pacific theater, where half of the world’s population and half of its economy resides. Something that can, is going very well, we can’t afford to let begin go poorly. The ongoing campaign and, I believe, very successful campaign in Afghanistan, but it’s not finished, and it needs to be won, I think can be. Many of you -- I’ve given a lot of my own effort to that -- many of you have given much, much more. Enduring problems like weapons of mass destruction, which have been with us for decades and decades, and newer ones in new domains, like cyber, that have been with us for a much shorter time.

So, there’s plenty to do, and you all know what. And that’s what our country expects us to do, is to protect them from these dangers.

But, I want to say one other thing to you, to, which is I always try to, in my own mind, and in my own heart, and as I talk to people, remind them that miserable as all that is, and miserable as that -- all that seems to be, we have tremendous, bright opportunities in front of us also as a country.

We are not only the finest fighting force in the world, but I think we’re the brightest beacon of hope as a country in the world. If you want evidence of that, take a look at who has all the friends. United States has friends and allies in every part of the world. No other country on earth can say that. In fact, our antagonists have none or few. And that’s a reflection of the fact that our values, and our conduct, and our leadership are followed because people like them, and they’re attracted to them, and they want -- not because they have -- to. And if you want to call that exceptionalism, I call that exceptionalism. And it’s not because we say so, it’s because the behavior of others says so. We have an economy and an economic model that has long been a beacon to the rest of the world, and despite our fits and starts, continues to be.

So, we have a lot going for us, a lot to be proud of -- starting here, but everywhere -- and we have tremendous opportunities if only we can all come together and grab hold of them. And that brings me to the third thing I wanted to say about, which is coming together and grabbing hold of many opportunities in -- in front of the -- front of us.

One which you can’t talk about defense without mentioning is our budget and resource challenge, sequestration, and so forth. And that is unsafe. It’s dangerous. It’s wasteful. It’s unwise. And you’ll see me doing everything I can -- or everything a Secretary of Defense can do -- to try to bring our country together and get us out of the wilderness of sequester. We don’t belong there. That’s not what our people deserve. It’s not what this institution deserves. It’s not what the problems and opportunities that I was describing require and deserve. And we’ve got to get out of that.

That said, that’s just part of the future that we need to embrace. If we’re going to convincingly make the case to our people that they need to spend more on their defense -- which I believe they do -- we need to, at the same time, show them that we know we can do better at spending that money. And that we won’t be able to do unless we are open, and unless we are embracing the future.

We’re the most wonderful institution and fighting force in the world. That’s what I inherit from those who went before me. That’s what you all inherit from those who went before you. That’s what we owe to the future.

And so, my third preoccupation is to the future. And for us to excel in today’s world, in the future, we have to be open. We have to be open to change. We have to be open to what’s going on out there in the world. We have to be open to the wider world of technology, the wider world of culture, the wider world of how people do things. And maybe they have an idea that we haven’t had yet, and that we need to bring inside. So, if we’re going to continue to be the best, we need to be open to the future and open to change. And you’ll see me challenging you all and myself to be open in that way.

We’re also one of the oldest institutions in the country and we’re very proud of our traditions. But at the same time, if we’re going to continue to be that, we have to be open, and we have to change.

And one last note on that, which is very important to me.

We’re going to hand this place off to the next generation. And we need to be asking ourselves, what will make us attractive to them? What will make us compatible with them? What’s the environment within which they can do their very best? And they’re different from us. All generations are different. And all people, when they’ve gotten to our age, start talking about the next generation’s different. It’s actually true.

So, these are -- these kids are different. And we need to think about how we make the conditions of service attractive to them, what it takes to make them effective in an organization or on a battlefield. They behave differently, they think differently, they’ve grown up differently. They’re used to a different kind of environment around them, and we have to make ourselves attractive to them.

9/11 was a great galvanizing thing for our country. It brought many people into our midst. It motivated many people to want to be part of this enterprise. And that was a terrific thing, but at a horrible price. And no one could wish something similar upon us in the future.

But you do have to ask yourself, what is going to make us attractive in the future? And are we thinking that so that we continue to have young people who choose this life and this mission and this commitment who are as good as you are?

That’s not something I take for granted. But it’s not something I’m pessimistic about, either. I think we have something compelling about our commitment, our mission, and the excellence that we represent in these generations that are before me, that those to come will find attractive. And they’ll want to follow not in our footsteps, because they aren’t going to want to do that. They’re going to want to do it in their own kind of -- their own way, but in the same general direction that we came.

You’ll see me in the best way that I know how trying to speak to them and speak to the country as a whole about us and who we are. And be trying to reflect who you are. And speak to the generation to come and appeal to them and challenge them to fill the shoes of the really excellent people I see in front of me.

You are excellent. You mean everything to me. The people of this department are so very wonderful. And my wife, Stephanie, and I are so very devoted to you. That’s why I’m back. It’s that simple. It’s you. It’s the mission. And I look forward once again to being in your ranks and working with you.

Thanks so much.