Posted on 06/02/2003 7:33:07 PM PDT by NMC EXP
The question of whether the United States may be overly dependent on foreign suppliers for critical military equipment has been debated for decades.
The Army, particularly, has been concerned about the reliance on non-U.S. suppliers for critical items used in the manufacturing of ammunition.
The issue now is taking added importance in the aftermath of the U.S.-led war in Iraq, which some of our NATO allies—whose industries are suppliers to the U.S. military—did not support.
What worries Army leaders is the hypothetical situation in which a country that does not agree with U.S. policies may take retaliatory action by refusing to export certain items that are needed in the production of ammunition.
During the recent conflict, for example, the Swiss government refused to sell components to Honeywell, because it did not agree with the U.S. military stance on Iraq. The problem was solved and did not impact U.S. combat operations, but it served as a cautionary tale nonetheless.
In the ammunition sector, there are at least 71 items (out of 302 critical items) for which there is only one U.S. supplier. Approximately 10 percent of our ammunition components come from 13 different countries. (By the way, under this definition, Canada is considered part of the North American industrial base and not viewed as foreign.)
The reality is that the United States, in many instances, depends on foreign sources for critical components, because making them domestically is not profitable for a U.S. company. Declining U.S. orders in the post-Cold War era resulted in a 68 percent decline in industrial capacity. The basic problem is that many ammo items have episodic demand and are produced in small quantities. Further, manufacturers must make significant capital investments, making their products marginally profitable.
Under our capitalist approach to industrial policy, companies that cannot make a profit from government contracts go out of business or into other lines of business. When that happens to a company that makes a critical component for ammunition, the U.S. government has no choice but to seek a foreign source.
That happened, for example, when the only U.S. supplier of cotton linters shut down its operations, unable to stay alive on declining government orders. Linters are indispensable items in ammunition production. Now, the U.S. Army buys them from Germany.
Another example is a mortar fuze that we also purchase from Germany, because we do not have a U.S. supplier.
The flap with the Swiss over the Iraq war got the Army’s attention, because the Swiss supply a unique propellant for the 25 mm armor piercing round employed in the Bradley fighting vehicle.
The dependency on foreign suppliers for raw materials also is an issue of concern. As it turns out, the world market for tungsten is dominated by China. Only one U.S. firm currently can process tungsten, which is widely used in tooling for many industrial applications. China has been capturing a growing share of the market and has been tightening exports (much like OPEC controls oil exports), making tungsten more expensive for other countries to buy. A tungsten mine in California had to shut down, because it could not compete with the Chinese.
No matter how one feels about the merits of globalization, it would be fair to say that, when it comes to national security, it does not make sense to put the U.S. military at risk because a supplier nation disagrees with our policies.
Congress has spoken on this issue before. Legislation passed in 1999 stipulated (under the so-called “806 section”) that if a military component is viewed as being at risk, the Defense Department must restrict that procurement to U.S. sources.
In an effort to better focus on these ammunition industrial-base challenges, the Army created a program executive office for ammunition. That office has been working with the Joint Munitions Command on a comprehensive strategy to guide future industrial-base decisions.
Meanwhile, the top leadership of the Army is grappling with a related but separate problem: what to do about the Army’s ammunition production facilities, which are costly for the Army to run but may be needed for national security reasons.
The Army Materiel Command supports the notion of migrating to public-private partnerships. After all, 95 percent of all munitions are produced by the private sector.
The government today owns and operates 14 facilities that run 73 production lines and employ 7,000 workers. Already, the government has contracted out the operation of 69 production lines to private firms, in arrangements known as GOCOs (government owned contractor operated).
What the future holds for Army plants is uncertain. A study by the Rand Corporation, which has not been released, reportedly recommends privatization of those plants. AMC is working on alternative approaches, in an effort to address industry’s concerns that there are few incentives in place for any company to want to invest in recapitalization of aging facilities.
Any final decisions would be made by the secretary of the Army.
As a 2005 round of base closures approaches, it is important for the Army to come up with a viable industrial base strategy that protects the national interests but also makes financial sense.
In previous base-closure rounds, ammo plants were not included in the BRAC process. The Army closed facilities over the years, but did so outside the BRAC deliberations. This time around, it may be different.
There is no question that the industrial base must be properly sized and modernized, but there clearly is no magic or simplistic solution.
Undoubtedly, any strategy to reshape the industrial base will require close cooperation between government and industry. It is important for the nation’s security to ensure that our ammunition production capabilities remain the best in the world.
One strategy to consider is to bring single source/foreign source items under Army responsibility for capitalization, either at Army organic or private U.S. facilities. The Army could then compete the contracts on a cost-plus award fee basis. Since there would essentially be no capital barrier to market entry, there would be ample competition for most of the items and a resulting robust industrial base, even if each competition only resulted in one award.
The Army is working this area hard. Now is the time for industry to make an input. What do you think?
Fundamentally, we believe that the U.S. government needs to devote more resources and put in place new programs to build wider expertise about China and to protect our industrial base from eroding as a result of our economic relations with China.
-- C. Richard D’Amato, chairman
U.S.-China Security Review Commission
(How to improve U.S.-China relations )
Pretty simple solution to this whole mess if you ask me.
Private companies cannot stay solvent making unique parts for the Army because there is only one customer for these parts, that is the Army. If Congress were to suddenly make these items easy/legal for civilians to use, then the market would increase, and you would have more demand for these goods.
If the stupid "greater-than 50 caliber" rule for firearms were repealed, you would have people buying 25mm cannons for shooting, and all of a sudden, the Army's share of 25mm ammunition would be small, and there would be a constant and consistent demand for 25mm ammunition.
Hello WG -- I was going to ping you but here you are.
I do not have time to read the link you provided tonight but does this D'Amato mean this statement or is it just smoke and mirrors?
Regards
J.R.
Right now only Boeing and Lockheed are significant builders of large launchers. Boeing uses Russian launch vehicles in its "Sea Launch" fiasco. Lockheed's Atlas V uses imported Russian engines.
The knowledge base is retiring/dying. The plants are being closed and sold for scrap. Places where you can test rockets are being put 'off limits'. The supplier chain is dead. Tooling and jigs long ago were scrapped; perhaps blueprints exist on nearly-illegible microfiche.
What this is, folks, is TREASON, and we shall pay dearly for it.
--Boris
Absolutely.
We will wage virtual wars with our real enemies in the meatworld while we flip burgers and do laundry for each other here in the land of "free trade" and the "global economy".
A virtual military.....thats what rumsfeld has in mind in his push for "lighter and more agile".
Regards
J.R.
Yup.
The US is becoming nothing more than a source of raw materials, agricultural products and a source of interest payments on all the money we borrow.
Good to see (read) you. I hope you are well.
Regards
J.R.
Excellent idea.
Regards
J.R.
It's not a question of a loss of jobs, it is a question of a loss in the capacity of the United States to maintain a technological superiority in research, development, and manufacturing.
There is an article in the May 16th issue of Manufacturing & Technology News that addresses this very subject.
The question to be addressed is: Do we want our military to face an enemy with us having overwhelming technological superiority as we did in Afghanistan and Iraq, or do we want them to have to face an enemy of similar technological sophistication as the Russians are facing in Chechnya? If we want the technological superiority, we will have to keep the high tech R&D and manufacturing jobs in country.DoD Technology Advisory Group Says Military Capability Is In Doubt Due To Loss Of Electronics Industry
The Department of Defense "faces shrinking advantages across all technology areas" due to the rapid decline of the U.S. electronics sector, warns the Pentagon’s Advisory Group on Electronic Devices (AGED). "Off-shore movement of intellectual capital and industrial capability, particularly in microelectronics, has impacted the ability of the United States to research and produce the best technologies and products for the nation and the warfighter. DoD is forced to rely on perceived system integration advantages to maintain superiority."
AGED, which was created in 1945 as a federal committee to advise the directors of Defense Research and Engineering (DDR&E), DARPA and other top military officials within the services, says DoD is now in the position of having to obtain the most advanced technologies from overseas. This situation "assigns those nations political and military leverage over the U.S.," says the briefing document. "We recommend that immediate corrective actions must be taken in order to sustain our technology leadership."
AGED also calls for DoD to monitor "the way chipmaking and the innovative aspects of chipmaking are being conducted," says one of the AGED briefing participants. "If you have the center of gravity of chipmaking go offshore, pretty soon it drags everything else with it. It is such a striking conclusion that there seems to be no issue about it. The bureaucrats get uneasy about something that seems to be correct and is gaining visibility. That makes them even more uneasy."
Does this mean you oppose collective bargaining?
Regards
J.R.
The results of that path (among other things) are portrayed fictionally HERE.
Now, I learn that Kollsman, here in NH, is part of a conglomerate owned by an Israeli company. The USA gives Israel foreign aid money. The Israeli government uses this money to help fund acquisitions of American defense contractors. The new ownership shifts production to over-seas plants. The American work force is left without a job or control over the most critical systems in the arsenal. (Kollsman was instrumental in the development of avionic and optical navigation equipment for the AF). Or, take the company who used to own the "Edison" TM. Formerly ARMTEC of NH, we made all the LOD's (light off detectors) for all the military jet engines used in the western world that employed afterburners.(augmentors) They also made nearly all the fuel and oil pressure transmitters for all the same engines as well as commercial engines. Meggitt Plc. of the UK owns them now and has been dismantling them for the last ten years. They even sold the "Edison" TM. The real sadness is that this company was formed by Thomas Edison in NJ years ago. Another, Sanders Associates of NH is the USA's source for ECM ansd ECW equipment as well as targeting hardware. BAE of the UK purchased them and again, unless a government contract requires local content jobs are leaving the USA.
This is three critical companies about 15 miles apart being destroyed by the notion of globalism and free trade. But with it is even a bleaker picture, there will be no one left to carry on the tradition of technical manufacturing after they discharge the last person. As we who have made a living in this industry know, companies like this can't go out and hire competent help even in good times but rather they have to develop their own from within over years (techs, inspectors, designers, assemblers, etc.) and when the companies contract the productivity and the future viability collapse much faster.
Why do we need all of that old stuff when it's not as good as the new stuff? We're still improving rocket engines with fewer parts and welds.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.