American War Industry Faces Hard Limits
A new Pentagon report says it could be hard for the United States to keep up with the escalating strain of having to fight more wars every year.
The March 2018 edition of the Annual Industrial Capabilities report, created courtesy of the Pentagon’s Office of Manufacturing and Industrial Base Policy, dropped a bomb of sorts on those who are anticipating more years of continued escalating war.
Over the past 20 years, the United States has continued a policy of supporting more regional wars around the world every year. Some are ones the country is directly involved in. Others are ones where it is a major supplier of weapons and munitions to help others wage battle and profit U.S. war corporations. The combination of those for “twenty years of intermittent conflict,” as the report says, has created serious stresses on the supply chain for U.S. builders of more and bigger weaponry, aircraft, tanks, ammunition and spare parts.
War is very big business and is, in fact, America’s largest industry by far; thanks to aggressive and rising spending trends on behalf of the U.S. Department of Defense (DOD) and other countries, the war industry continues to be the hottest major sector in American business. This is happening in a major way because of continued warfare on multiple fronts and with varying adversaries throughout the Middle East. As a business segment, war contracting significantly outperformed its second-closed competitor, the aerospace sector, at a relative ratio of 347 to 247, according to the report. Technology companies came in third on the list.
As the report notes, however, “Factors such as obsolescence, foreign dependency, fluctuating demand, industry consolidations, and loss of design teams and manufacturing skills for critical defense products continue to threaten the health of the industrial base, limit innovation, and reduce U.S. competitiveness in the global markets.” The report goes on to say that because of these issues, “while U.S. national defense demands for materials are seldom unmet, there exist risks to their supply now and risks are anticipated in the foreseeable future.”
One of the major factors of concern is what the report labels as “high U.S. import reliance on foreign countries who may become adversaries and cut off peacetime supply during future conflicts.” An example of this is Dechlorane, a flame retardant that happens to be used in all of the military’s missile systems. It is currently provided by only one supplier, Occidental Chemical, which is located in Belgium. Another is dimeryl diisocyanate, one of the critical chemicals used in Sidewinder and AMRAAM air-to-air missiles, both of which are part of the standard weapons systems used on U.S. fighter jets throughout the world. There is one
manufacturer making the chemical right now, but that manufacturer has put the Pentagon on notice that it plans to exit the business soon. There is no other manufacturer anywhere who is making it.
A second concern is that many of the new technologies military providers are using depend on scarce materials with little ability to ramp up production.
Yet another problem for the U.S. defense supply is continued industry consolidation. One direct result of this is that approximately 97% of missile and munitions procurement gets awarded to only two contractors: Lockheed Martin and Raytheon. Further, 98% of almost all second- and third-tier suppliers of munitions components are sole sources. This industry consolidation has three major negative effects, all of which are highly undesirable for the DOD: (1) The lack of competition tends to raise the cost of products, (2) it sometimes leaves the DOD begging for a company to bid at all and (3) it keeps the country at risk of a sole-source supplier choosing to exit an industry at precisely the wrong time.
Products the report highlighted in this category include solid rocket engines, fuses, small turbine engines and thermal batteries.
A further challenge is the lack of investing in facilities and spare parts for the defense industry from 2000 to 2016. Facilities such as U.S. naval shipyards have been subjected to “overuse and underfunding” for so long that ships have been waiting longer and longer for repairs. As the report notes, “Inadequate facilities and equipment led to maintenance delays that contributed in part to more than 1,300 lost operational days … for aircraft carriers and 12,500 lost operational days for submarines.” Fighter jets are also not immune to this. Because of supply and maintenance problems, the F-35 stealth fighter fleet is not considered “mission capable.” Possible Solutions
One way the DOD has dealt with the limited number of contractors it can approach for bids is by expanding the definition of what it considers its National Technology and Industrial Base (NTIB). That grouping previously included only the United States and Canada. As of FY 2017, it now includes Australia and the United Kingdom of Great Britain and Northern Ireland. The Pentagon plans to expand collaboration within this new, broader NTIB to allow for closer working together “in technology, engineering and manufacturing.” That may help with the current capability shortfalls, but increasing the number of contractors will take time.
A second way the DOD intends to handle the industry-consolidation and sole-source issues is by becoming more involved in the approval process for defense industry mergers and acquisitions. Many who have looked at the industry are concerned that this is an action that should have been taken long ago and that it is now too late.
Another solution being considered is further investment in advanced technology institutes that could help develop a future generation of competitive warfare solutions, along with the manufacturing technology to develop them. One of these is Advanced Robotics for Manufacturing (ARM), developed in partnership with Carnegie Mellon University and based in Pittsburgh. And there’s BIOFABUSA, supported by the Advanced Regenerative Manufacturing Institute (ARMI), which is located in Manchester, New Hampshire. It has the mission to “make practical the large-scale manufacturing of engineered tissues and tissue-related technologies.” Both are promising offerings that should greatly augment the DOD in the future, but bringing these up to their full capabilities will also take years.
These are just two of a total of 14 manufacturing institutes that work both individually and on a shared-technology basis to advance military equipment advanced manufacturing technologies across the country.
Despite the optimism of the defense industry as a whole for its expected continued ability to outperform the rest of American industry for some time, the longterm trend is concerning for those who see the “forever war” as part of modern life. With U.S. capability lagging in this area and the federal debt weighing down the country’s ability to continue to invest in the industry, it is likely that sooner rather than later America is going to face the reality that it cannot continue waging war the way it has in the past.
Perhaps Americans will someday wake up to recognize the fact that being a nation of war is not only morally wrong but is unsustainable and that being a nation of peace is infinitely better.
Imagine the kind of country the U.S. could be if it had invested the $30 trillion blown on the war industry on education, health care, R&D, green energy, eradication of poverty and infrastructure.