FROM ROCKETS TO BALL BEARINGS, PENTAGON IS STRUGGLING TO FEED WAR MACHINE
Flow of weapons to Ukraine exposes production problems
The Navy admiral had a blunt message for the military contractors building precision-guided missiles for his warships, submarines and planes at a moment when the U.S. is dispatching arms to Ukraine and preparing for the possibility of conflict with China.
“Look at me. I am not forgiving the fact you’re not delivering the ordnance we need. OK?” Adm. Daryl Caudle, who is in charge of delivering weapons to most of the Navy’s East Coast-based fleet, warned contractors during an industry gathering in January. “We’re talking about war-fighting, national security, and going against a competitor here and a potential adversary that is like nothing we’ve ever seen. And we can’t dillydally around with these deliveries.”
His open frustration reflects a problem that has become worryingly apparent as the Pentagon dispatches its own stocks of weapons to help Ukraine hold off Russia and Washington warily watches for signs that China might provoke a new conf lict by invading Taiwan: The United States lacks the capacity to produce the arms that the nation and its allies need at a time of heightened superpower tensions.
Industry consolidation, depleted manufacturing lines and supply chain issues have combined to constrain the production of basic ammunition like artillery shells while prompting concern about building adequate reserves of more sophisticated weapons, including missiles, air defense systems and counter-artillery radar.
The Pentagon, the White House, Congress and military contractors are taking steps to address the issues.
Procurement budgets are growing. The military is offering suppliers multiyear contracts to encourage companies to invest more in their manufacturing capacity and is dispatching teams to help solve supply bottlenecks. More generally, the Pentagon is abandoning some of the cost-cutting changes embraced after the end of the Cold War, including corporate-style just-intime delivery systems and a
drive to shrink the industry.
“We are buying to the limits of the industrial base even as we are expanding those limits,” Deputy Defense Secretary Kathleen Hicks said this month at a briefing on the Biden administration’s 2024 budget plan.
But those changes are likely to take time to have an effect, leaving the military watching its stocks of some key weapons dwindle.
In the first 10 months after Russia invaded Ukraine, prompting Washington to approve $33 billion in military aid so far, the United States sent Ukraine so many Stinger missiles from its own stocks that it would take 13 years’ worth of production at recent capacity levels to replace them. It has sent so many Javelin missiles that it would take five years at last year’s rates to replace them, according to Raytheon, the company that helps make the missile systems.
If a large-scale war broke out with China, within about one week the United States would run out of so-called long-range anti-ship missiles, a vital weapon in any engagement with China, according to a series of war-game exercises conducted by the Center for Strategic and International Studies, a Washingtonbased think tank.
The shortcomings in the nation’s defense industrial base are vividly illustrated by the shortage of solid rocket motors needed to power a broad range of precision missile systems, such as the ship-launched SM-6 missiles made by Raytheon.
It was the shortage of SM-6 missiles in particular that had Caudle fuming; they are used to defend ships against enemy aircraft, unmanned aerial vehicles and cruise missiles.
There are only two contractors today that build large numbers of rocket motors for missile systems used by the Air Force, the Navy, the Army and the Marines, down from six in 1995.
A fire disrupted the assembly line at one of the two remaining suppliers, Aerojet Rocketdyne, causing further delays in delivering the SM-6 and other precision missile systems, even as Pentagon orders for thousands of new missiles pile up.
“Rocket motors, a bane of my existence, continued to be a problem,” Gregory Hayes, Raytheon’s CEO, told Wall Street analysts last month. He said the shortage would affect the company’s ability to deliver new missiles on time and was a problem unlikely to be solved “until probably the middle of ’24.”
Aerojet is building motors for older systems such as Javelin anti-armor missiles and Stinger anti-aircraft missiles, of which over 10,000 have already been sent to Ukraine. It is also building new rockets needed to power so-called hypersonic missiles that can travel much faster, as well as the rockets for a new generation of nuclear weapons for the United States and even the rocket for a new NASA spaceship soon headed to the moon.
The result is billions of dollars in backlogged orders at the company — and frustration at the Pentagon about the pace of delivery.
“At the end of the day, I want the magazines filled,” Caudle told contractors and Navy personnel in January, referring to the storage areas on his ships for guided missiles. “OK? I want the ships’ tubes filled.”
Other shortages slowing production include simple items such as ball bearings, a key component of certain missile guidance systems, and steel castings, used in making engines.
There is also only one company, Williams International, that builds turbofan engines for most cruise missiles, according to Seth Jones, a former Defense Department official now at the Center for Strategic and International Studies, weapons that would be vital for any war with China given their long range.
The problems have their roots in the aftermath of the Cold War’s end, when a drive for the “peace dividend” led to cuts in weapons procurement and consolidation of the industry.
Since the end of the Cold War, the United States — from the perspective of demands on its industrial base — has faced either short, high-intensity fights, like the first Gulf War in 1990-91 and periods of the Iraq War starting in 2003, or prolonged conflicts like the decadeslong war in Afghanistan, said Michael O’Hanlon, a Brookings Institution military scholar.
But even those engagements, far different in scale from potential confrontations with other major powers, exposed the emerging risks: By 2016, the United States ran short of precision missiles after a series of fights in Afghanistan then Iraq, Libya and finally Syria.
The Pentagon briefly ramped up production to rebuild missile supplies, but it was a temporary move, said William LaPlante, the undersecretary of defense who oversees acquisition. Defense Department leaders, and lawmakers who set the budget, would often turn to missile programs to cut spending totals.
Prodded by military industry lobbyists — and the hundreds of retired highranking military officers they have hired to their sales and marketing teams — the government has instead mostly focused on buying new ships, planes and other extremely high-priced pieces of equipment, where the major contractors make most of their money.
Lobbyists have also pushed Congress to hold on to older ships and planes that even the Defense Department says have limited military value but which burn large amounts of money to equip and staff.
But the lower-priced items — including the missiles and other munitions — became an easy way to cut budgets to keep up spending on the big-ticket items.
“It’s becomes very attractive when our budgets are being balanced, to balance them on the munitions funds, because it’s fungible money,” LaPlante said. “We really allowed production lines to go cold and watched as parts became obsolete.”
The Pentagon is now working to jettison an approach built around a Walmart-style just-in-time philosophy of keeping inventory low and instead focusing more on production capacity, LaPlante said.
The Biden administration this month proposed a 51 percent increase in the budget to buy missiles and munitions compared with 2022, reaching a total of $30.6 billion.
And that is just the start. The White House’s proposed budget just for Air Force missile procurement is set to jump to nearly $13 billion by 2028 from $2.2 billion in 2021.