Today’s defense-industrial base bears little resemblance to the 1960s defense infrastructure President Dwight D. Eisenhower warned against. America then had multiple companies competing to produce tanks, fighters and ships, supported by a robust ecosystem of medium and small producers providing a broad, resilient supply chain. Now, Defense Department buyers are at times hard-pressed to find enough domestic suppliers to reasonably compete for major weapons systems contracts.
Decades of military downsizing and industry consolidation left a few world-class U.S. companies producing extraordinary capabilities for our war fighters. However, they’re supported by a fragile network of suppliers that serve a fastidious defense customer who is client, regulator and enforcer.
Our weakened supplier base faces increasing challenges. More than 11,000 companies left the defense industry since 2011 due to multiple factors such as budget instability, declining nondefense manufacturing and a diminished U.S. STEM and trade-skills workforce. Thankfully, the current administration is shining a light on this risk to our nation’s security.
The administration has released a sobering report on the health of the U.S. defense-industrial base. Buffeted by the forces mentioned above and myriad risks, the report identifies more than 250 areas where our industries are on the cusp of critical failure. For instance, several key parts for major defense systems rely on a sole source — a single producer in the supply chain. If that producer goes out of business, the supply chain for that major defense system fails.
Another example is dependency on unstable or unfriendly foreign suppliers of critical parts or commodities. We depend on China for almost all the rare earth elements vital to multiple advanced components. In an era of great power competition, we cannot afford to depend solely on one of our competitors; it leaves us unacceptably vulnerable.
Our military’s superiority, based heavily on the dominance of our weapons systems, is not a birthright. Generations of Americans paid for our preeminence in blood, treasure, and through sustained investments in people and technology. The end of the Cold War and almost three decades of unchallenged military dominance have lulled us into complacency and underinvestment.
As a fighter pilot and later commander of Air Combat Command, I saw our Air Force go from 134 fighter squadrons during Operation Desert Storm down to today’s 55. Where we once had more corporations than you could count on your hands building U.S. fighters, two remain. Compounding this risk, the talent that used to flock to defense companies now looks to Silicon Valley startups to work on the most exciting advances, or, frankly, is no longer nurtured in our schools, colleges and universities. That must change, and the recommendations in the administration’s report chart a path.
Government and industry are implementing several of the report’s recommendations. These include streamlining acquisition processes to deliver capabilities faster and cheaper while making it easier to reward innovation to encourage more creative Americans and companies to join the 21st century defense industry. Congress is also updating the Committee on Foreign Investments in the United States guidelines to counter predatory investments and forced technology transfer threats from countries like China. And the administration just announced significant reforms on how we sell our systems to allies and partners, creating opportunities for our companies, lowering weapons costs to American taxpayers, and enabling interoperability with our allies and partners since America does not fight alone.
The report thankfully tackles the harder imperatives, too. For example, it recommends accelerating workforce development efforts to grow domestic STEM and crucial trade skills, such as the high-tech welders needed in our aerospace industry. This initiative is win-win, delivering high-quality jobs while creating a sustainable, resilient workforce that builds the best equipment to protect our nation.
The report also calls for more innovative uses of existing programs such as the Trade Expansion Act of 1962, the Industrial Base Analysis and Sustainment Program, and the Defense Production Act Title III. The Pentagon’s leveraging of these authorities can rush investments to eliminate critical bottlenecks, support fragile suppliers and mitigate single points of failure to ensure industry’s ability to meet vital needs.
These recommendations are executable, but only if Congress follows the one at the top of the list: scrap sequestration, and make the normal order, the on-time budgeting and appropriations of resources, truly the norm.
Only through a constant, predictable flow of adequate resources can we make the investments over time to remain dominant, enabling our war fighters to effectively deter and defeat potential adversaries.
Eisenhower would not recognize today’s shrunken, more vulnerable defense-industrial base. There is no doubt he’d champion the initiatives in this new report.
Retired Gen. Herbert “Hawk” Carlisle is president and CEO of the National Defense Industrial Association. He came to NDIA after a 39-year career in the U.S. Air Force, from which he retired as a four-star general in March 2017. His last assignment was as the commander of Air Combat Command at Langley Air Force Base, Virginia.