Wednesday, September 29, 2010

Maintaining and Protecting U.S. Defense Industrial Base

Andrew Gonyea
Communications Assistant

What can we do about the declining U.S. defense industrial base?

The question was brought to the forefront once more at a Sept. 22 House hearing held by the Subcommittee on National Security and Foreign Affairs, Committee on Oversight and Government Reform.

Subcommittee Chairman John F. Tierney noted that in 2003, a Swiss company delayed delivery of parts for Joint Direct Attack Munitions (“smart bombs”) because of the Swiss government’s disapproval of the Iraq War, forcing DoD to acquire the parts at a higher price and delaying the delivery of those parts to our forces overseas. He also noted cases where poor-quality equipment was delivered, including seatbelt clasps for the Army which were fabricated from a substandard grade of aluminum and would break when dropped.

Witness Robert Baugh of the AFL-CIO discussed the loss of critical industries to foreign companies including propellant chemical, space qualified electronics, advanced battery, specialty metal, hard disk drive, and LCD production. He also lamented the erosion of U.S. leadership in research and development of metals, superalloys, composites, and electronic and opto-photonic materials, which are all essential to advanced production.

High-power lithium-ion HEV batteries at Argonne National Laboratory
Also highlighted were China’s unfair trade practices, including currency manipulation, export subsidies, and tariff and non-tariff barriers, which have allowed it to build powerful export markets and decrease U.S. competitiveness in key industries, sectors, and technologies.

Ideas proposed by the witnesses included removing incentives for companies to move jobs overseas, reducing the U.S. trade deficit, pushing China to end its currency manipulation, and reforming DoD procurement practices to encourage domestic production.

ROA recognizes that the defense industrial base provides the “cutting edge defense and aerospace technology and manufacturing capabilities” necessary to deter potential adversaries, and is essential for power projection capabilities such as strategic airlift, sealift, tactical fighter aircraft, space and missile propulsion, satellites, directed energy weapons, and long range strike aircraft.

More importantly, ROA is greatly concerned that key production lines which provide those capabilities are being threatened by shrinking budgets and production decisions at DoD. And so ROA urges Congress, the President, and DoD to carefully consider the effects future budget and program decisions will have on the industrial base, and more specifically, to protect military equipment production lines that once shut down would be extremely costly and time-consuming to get running again.

DoD laid out its approach to handling a declining defense industrial base in its annual industrial capabilities report submitted in May. The report explains the fine line DoD must walk between relying on market forces in its activities, and when absolutely necessary, intervening to create and/or sustain competition, innovation, and essential industrial capabilities. It also describes recent policy changes at DoD, including conducting assessments of the effects of terminating acquisition programs on the defense industrial base, and aggressively targeting acquisition programs that have issues with performance, cost, or rationale, in order to save money for essential programs.

While different parties may disagree on concrete solutions, all can agree on the need to halt, and eventually reverse, the relative decline in industrial and technological capabilities. DoD has to take its own report seriously when making future program decisions.

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