Solutions for the U.S. Industrial Base




Protect US Manufacturing Base: Military Success Rests on Industrial Policy

By Jeff Green & Bill Greenwalt, Defense News

The US defense industry has a proven playbook for success founded upon an elite manufacturing base. Today, faced with deep budget cuts, the challenge for the Department of Defense is ensuring that manufacturing base is available when crisis strikes.

Strategic and innovative policy — a game plan — is key for success. To illustrate, Duke University basketball coach Mike Krzyzewski begins each Olympic campaign distributing a playbook to his team with a photo of the gold medal on the first page. This impresses upon the entire team that they are working together with a unified vision toward one goal. Needless to say, he’s been pretty successful; Coach K has four Olympic gold medals and is the winningest coach in the history of Division I college basketball.

For DoD, its playbook is its industrial base policy. On the cover is the US as the most elite military power in the world, and the pages map the vital manufacturers that get it there.

Faced with significant budget cuts, DoD officials responsible for industrial and manufacturing policy have repeatedly said the Pentagon can no longer afford to “keep fixing million-dollar problems with billion-dollar solutions.” This is inarguable.

A senior official recently added, however, “We will identify critical key suppliers that will go under because we will have made the assumption, based on our strategy moving forward, that [they are] no longer a critical capability to our future force. Unfortunately, there’s going to be a lot of bad news that’s given out to companies.”

There’s no denying that the industrial base will have to contract to a certain extent. But where this statement is troubling is that the Pentagon is overlooking a pattern of acquisition problems that existed long before the current fiscal challenges. Allowing entire sectors of key suppliers to dissolve without addressing these root problems will have far-reaching, long-term repercussions on the military’s ability to respond to crisis and sustain high-intensity operations.

Effectively, it would mean tearing out vital chapters from the Defense Department’s playbook.

To understand the difficulties facing the Pentagon, consider a recent shortage for many US and NATO aircraft. The sole manufacturer of a specialized wire used in aircraft radar systems ceased production. Unfortunately, this manufacturer’s early warnings were only recognized by some of the services recently, prompting DoD officials to finally begin to understand this issue.

In a higher-profile case, a struggling manufacturer failed to meet production deadlines for transmissions in Apache helicopters. DoD’s solution involved removing the transmissions from previously delivered aircraft to test the new helicopters. The fix did nothing to improve war-fighting capability or readiness and drew fire from Capitol Hill.

These aircraft examples represent a multitude of cases that reach every branch of the military. Chinese parts were found in a Marine Corps anti-tank weapon, and many fear the capacity to produce the Army’s Abrams tank, the Bradley fighting vehicle and other tactical wheeled vehicles may disappear.

Rather than concede the need to shrink the defense industrial base, DoD should emulate the base that it relies upon: trimming overhead and nonessential services, streamlining management functions and, only as a last resort, passing cuts onto the critical manufacturing and engineering jobs that require large investments of training.

If the Pentagon’s industrial base policy enforces deep hardware cuts, it risks sacrificing the capability that has ensured victory in each major combat engagement since World War II. On its current path, the US may continue to lose capabilities and only realize the impact when the original equipment manufacturer can no longer provide equipment when needed.

These examples notwithstanding, when the entire industrial base team unites around the same playbook, past practice shows it can reach more cost-effective and sustainable outcomes. An example is the Navy’s Virginia-class submarines. Despite significant consolidation in recent decades, the Navy’s strategy discourages dependence on single sources of supply and retains the skilled labor required to build nuclear attack submarines.

Citing the Navy’s successful model while drafting the 2013 National Defense Authorization Act, Rep. Joe Courtney, D-Conn., said, “While we are all mindful of the pressures facing the defense budget, the fact remains that a steady submarine production rate today will ensure that the Navy has the submarine force structure it needs in the future and that our industrial base will remain stable.”

To maintain the world’s most elite military requires DoD officials to engage the technology and manufacturing companies. Through engagement and collaboration, the Pentagon and industry can forge policy utilizing government resources and authorities to maximize war-fighter capability and provide value for taxpayer dollars. With this kind of game plan, the Defense Department can preserve resources while protecting critical sectors of its industrial base for future needs.

Jeff Green, president, J.A. Green & Co., Washington, and executive director of the nonprofit Strategic Materials Advisory Council; and Bill Greenwalt, a private consultant and former US deputy undersecretary of defense for industrial policy.

Jeff Green