Military

Mobilizing The Deteriorating Defense Industrial Base
AUTHOR Major Michael J. Terry, USA
CSC 1990
SUBJECT AREA National Security
-TEXT-
                        EXECUTIVE SUMMARY
TITLE:   MOBILILIZING THE DETERIORATING DEFENSE INDUSTRIAL BASE
THESIS:   The nation's industrial base is presently unable to
support the needs of our country if we went to war today, and
should current trends stay the same, the future as well.
ISSUE:   Throughout the history of the United States, we
continuously relied on the industrial might of our nation to see
us through periods of armed conflict.   The importance of
maintaining a strong industrial base, particularly in defense
related operations, has lost its place during the period
following Would War II to present.   The lack of strength in a
defense industrial base mirrors what is occurring in industry
aimed at civilian consumption.   It is questionable whether,
under current circumstances, the armed forces of the United
States could be sustained during a long war should the situation
arise.   Economics as well as politics influence the state of
defense related industries.   With more sources of support moving
outside of the United States,  it will be more difficult to
sustain our forces without sufficient lead time or external
influence by those countries providing us support.   With our
nation becoming more reliant on being a service based economy
rather than that of an industrial based economy, the problem is
further compounded.   Government has not helped much either.   The
complexities of the system the government has set up with its
interface with industry, has had a negative effect on this
situation.   Disincentives exist which turn potential industries
away from getting involved in defense related operations.   Also,
realistic forcasting of force expansion has not correctly
occurred in order to provide planners a true picture.
CONCLUSION:   Unless the United States government can establish
a system to attract industry to get involved, and once involved
a proper support mechanism to keep them involved, the current
trend of deterioration will continue.   The bottom line is that
the armed forces of the United States cannot be supported today,
and it looks even worse for the future.
   MOBILIZING THE DETERIORATING DEFENSE INDUSTRIAL BASE
                            BY
                   Michael  J.  Terry
Thesis:   The nation's industrial base is presently unable to
support the needs of our country if we went to war today,  and
should current trends stay the same, the future as well.
I.    Power
      1.   What power is.
      2.   The role of the Industrial Base in regards to power.
II.   A historical perspective.
      1.   World War I--Capability without a plan.
      2.   World War II--The Arsenal of Democracy.
      3.   Korea--Readiness studies.
      4.   Vietnam--The lack of urgency.
III.  The current situation.
      1.   The will of industry and government.
      2.   The complexity of political decision making.
      3.   Can we go to war today, and sustain our forces through
           mobilization of the present industrial base?
IV.   The future.
      1.   The decreasing industrial capability of the United
           States.
      2.   A service vs. industrial economy.
      3.   Further U.S. dependence on other nations.
      4.   What does the future hold for our forces should
           sustained support be required for conducting war?
        THE DETERIORATING DEFENSE INDUSTRIAL BASE
     Japanese and European automobiles are more reliable than
those made in the United States.   The processing and developing
of optics finds Germany at the head of the pack.   Although
originally developed in the United States, the production of
microelectronics has steadily shifted within the last 10 years
to Japan.   These are just a few examples of how our nation has
lost its leadership role among the world in technology and
production.
     The concern that America has lost its leadership and
industrial preeminance in the world economy has put the United
States in the midst of a major debate on the future of its basic
industries.   The comparisons which have caught the attention of
the American public deal, to the large extent, with consumer
goods.   The feeling today is that the good old American way of
doing things is  not "cutting it" anymore.
     The problem with the knowledge of the American citizen today
is he does not realize that the decline in our ability to
produce in the competitive world has effected not only the type
of car or television he has,   but our industrial capability to
support our forces, should we have to go to war.   The nation's
industrial base is presently unable to support the needs of our
country if we went to war today, and should current trends stay
the same, the future as well.   Let us look further at what kind
of role the industrial base has in influencing our security.
    The post-World War II era has presented current leaders with
amazing challenges in dealing with qustions that have remained
virtually constant since the United States' birth in 1776.   That
is, how do we as a nation protect our sovereignty, while at the
same time maintain the ability to influence other countries to
act in accordance with our national goals?  The terminology used
today to describe this dilemma is our "National Security."
There are various contributing factors that play a role in
solving this problem.   For the purpose of this paper, the
factors just mentioned in the previous sentence will come under
the general heading of power.   The American Heritage Dictionary
of the English Language defines power as,  "A person, group,  or
nation having great influence or control over others," and "the
might of a nation, political organization or similar group."
(5:1027)
     Power itself is a nebulous term which tends to present an
ominous picture of some country that has more of "it" (power),
stepping on the throat of a less fourtunate nation whose lack of
"it" allows for its domination.   Power is an intangible, made up
of elements with which the effective use determines the amount
of "it" a nation wields.   Several elements of power a nation may
employ,  if strong enough, are:   economic,  it must have a strong
base to survive;   education, modern society demands an educated
people;   science and technology, success is determined by the
intellectual base it is founded upon;   psychology, national
will;   military power, forces, potential and reputatuion.
(3:14,15)  The combination of these elements and others or the
selective use of one contributes to the use of power.
     The most complex of the elements is military power.   As
mentioned earlier, military power is made up of three
components: forces, i.e., military strength; potential, i.e.,
the capacity to expand or improve forces; and reputation,  i.e.,
the expectation of other nations based on past experiences.   The
most critical of the three components is potential.   Without
potential, the other two components would flounder.   The
capacity to expand or improve forces is further defined as
mobilization readiness, which is a state of preparedness in
terms of military equipment, the stockpiling of critical raw
materials, reserve military production capacity, and basic
industrial capacity to wage war on short notice.   However, the
life-blood to military power, as an element of power, is the
basic industrial capacity to wage war on short notice, or
mobilization of the industrial base.
     The United States' Department of Defense defines the
industrial base as,  "That part of the total privately owned and
government owned industrial production and maintenance capacity
of the United States government.   Territories and possessions as
well as capacity located in Canada, expected to be available
during an emergency to manufacture and reapir items required by
the approved forces."   (1:1-2)  The United States has learned
valuable lessons concerning the ability to exert military power
and its relationship to industrial mobilization.
     The period of time most studied because of relevance,
focuses primarily on World War I, World War II, and the period
between those wars.   World War I taught us that it was not
enough to have an immense capability to produce large amounts of
war materiel.   Effective planning had to accompany that
capability.   Large amounts of money were set aside to purchased
much needed military hardware and orders were placed.   However,
due to the complete absence of industrial mobilization plans, we
fought the war by either borrowing or buying guns, muintions,
airplanes, and other materiel from the French and British.   An
example of this identifies the fact that between April 1917 and
June 1918, the United States spent money for 50,000 pieces of
artillery.  Only 143 pieces reached American forces in time to be
used.   The lack of military power then was the direct resulty of
poor industrial mobilization.
     The period between World War I and World War II became a
time for organizing and planning.   The underlying reason for
these actions was the recognition of the fact that future wars
could be expected to be total wars requiring the complete might
of the nation.   Prior to Pearl Harbor, the United States was
already "gearing-up" for a fight.   The "Arsenal of Democracy"
was involved in providing equipment to belligerents before the
first bullet was fired in anger at a United States' serviceman.
     When the United States entered World War II, the industrial
base required a lead time to increase production rates.
However,  lead time was probably shortened somewhat by our
acceleration of materiel support to the Allies in 1939 and 1940,
and our oun preparations.   The United States was able to
influence nations on a global scale because of its industrial
capabilities during the war.
     The capability the United States gained between the World
Wars, and during World War II gave us the ability to use power
for what Klaus Knorr, Author of Power and Wealth, describes as
"two reasons."  The first is noncoercive.   Noncoercive use of
power is intended to be mutually fulfilling.   Both nations win
or expect to be successful.   The second is coercion.   Coercion
occurs when a particular nation is affected by its fear of
sanctions of one kind or another; that is, some threat, actual
or imputed, to its goal or achievement.   This nation is
consequently restricted by the country which is applying the
influence.  (3:14,15)   In other words, the affected nation loses
or expects to lose.   The key point here is that having great
potential for carrying out actualized military power gives a
nation more freedom in developing its strategy in dealing with
other countries.
     After World War II, particularly during the Korean War era,
we went through a restructuring of the nation's mobilization
readiness planning.   Two key reasons were responsible for a
fresh look at the wartime industries:   Soviet desires for world
domination, and the nuclear weapons owned by the Soviets.
     The Korean War era was also unique in that it was the first
time in our history we established the policy and the study of
readiness for war, both in terms of operational readiness
(forces and their ability to carry out assigned missions), and
industrial readiness, during a period when no war had been
declared.   Part of the goal of military power here is military
deterrent power.   Again,  the capability of industry to support a
force becomes an important factor in warding off potential
enemies who may perceive the risk as being too great.
     The post-Korean War era identifies military potential as
being at three levels.   The first level, and the lowest,  are
countries whose economies are at such a  low level of economic
and technological growth that they could only provide food,
clothing, and shelter.   The second level  are those with
industrial societies.   These second-level countries have the
capability to produce trucks, gasoline,ships, drugs, radios,
guns, and ammunition.   Finally, the most demanding and complex
weapon systems, and high performance aircraft and ships are
produced by nations possessing the most highly developed
technology.   These countries, of course, are on the third level.
     During the Vietnam time frame, for political reasons, a
national emergency was never declared.   Mobilization was never
instituted.   Instead, competitive procurement was used to the
maximum extent.   The feeling that there was no urgency for
military requirements existed.   This situation is another
example of the relationship between strong successful military
power and a strong mobilized base.   Here, the disjuncted
national policy toward Vietnam carried over into this key area.
The end result has had an effect that is still being felt today.
    The United States has not had to test its industrial base for
quite awhile.   How do we as a nation protect our sovereignty,
while at the same time maintain the ability to influence other
countries to act in accordance with our national goals?  The
answer is a strong industrialized base in support of military
power used as deterrent power.   Knorr states that,  "In the
contemporary world, the military application of nuclear
technology has brought to the potential battlefield weapons of
great speed, range and destructive power.   Deterrent power in
the nuclear age is having the capability of providing so much
destruction to the enemy that the risk is too great for his
perception of success." (3:107,108)  The would-be aggressor is
told;  "If you attack me,  I will punish you."   The threat of
punishment is to influence the behavior of the enemy.   Deterrent
power can mean denying success to the potential enemy,  or
coercion in terms of, having hurt the potential enemy, holding
out further damage to him should hostilities continue, and
expecting him for this reason to change his course action.
     As I have mentioned earlier, the United States has relied
heavily on its industrial power to see it through during every
war this century.   The system to maintain this valuable asset
has been, and is now, broken.   The consequences of this
shortfall can be fatal if action does not take place to correct
this travesty.
     The relative growth of Soviet military power increases the
importance of industrial preparedness to national security.   The
United States' defense strategy depends on flexible response,
that is, being prepared and capable of responding to external
threats to the United States' security at whatever level is
required.   It was assumed that the United States would be able
to influence other powers by threatening to escalate to nuclear
warfare should conventional means fail.   However, the Soviets
have reached parity in strategic nuclear weapons, the strategy
of flexible response may no longer be credible.   Therefore,
United States' conventional forces must become more of a
deterrent.
     A larger standing force is not a practical solution, since
it is politically unattractive and too expensive.   A more
acceptable means would be to develop a combination of strong
standing forces and the potential to quickly increase their
numbers by mobilizing natural resources.   This combination would
provide conventional deterrence and, in the event deterrence
failed, a credible capability for conventional response.
Industrial preparedness would be an essential element of such a
strategy.
     As I described earlier in this paper, major United States'
conflicts of the twentieth century have demonstrated the
importance of industrial strength to national security.
However, there is a strong tendency in the United States to
neglect industrial preparedness in times of peace.   Expanding on
this thought, the House Armed Services Committee issued a report
citing major deficiencies in our ability to produce items needed
by our armed forces in the event of hostilities.   According to
this report, the United States, experiencing a relatively long
period of peace, has allowed its industrial base to decline due
to increasing reliance on sole sources for critical components;
increasing reliance on foreign sources of raw materials,
subassemblies and components;   declining productivity;
potential or actual shortages of skilled labor;   critical
materials capacity and supply shortages;   outdated production
equipment and tooling;   increased lead times;  and increased
costs.   The combination of these factors have sharply decreased
the effectiveness of our nation's defense strategy, that is,
deterrence.  (2)
     An argument arises concerning the need for indepth
mobilization planning for industry, stating that if we should go
to war, we could expect a "short war."  Basically, the general
consensus has been that a war with the Soviets in Europe would
be won or lost within thirty days.   Much of this reasoning has
not only been influenced by tactical considerations, but
economic as well.   The United States, at present, would not be
capable of supporting itself for a period much beyond that time
frame.   It is also noteworthy to mention that our allies have
less capability than we do.  The "Arsenal of Democracy", as in
the past, would be relied on to assist its allies during a
period requiring a sustaining force.
     In a crisis,  it would take the United States' industrial
base at least two years to significantly expand production to
meet the needs of forces involved in combat.   With troops
already forward deployed in Europe and elsewhere, this country
cannot expect the enemy to stand still while United States
industry mobilizes.   We, therefore,  need to be prepared to
support the "long war," beyond thirty days,  and start doing so
now.
     Another factor influencing the current state of the
industrial base is that of the institutional problem of how to
make the acquisition system run efficiently in terms of planning
and performance.   Wartime presents an entirely different set of
production goals and circumstances than peacetime does.   An
acquisition system geared to optimize peacetime values may not
be very efficient at responding to wartime ones.   An example of
this is illustrated by the way in which the United States Army
sets forth its requirements in support of future plans.
     The Army DCSOPS determines mobilization requirements by
employing a theater warfighting model to analyze equipment
demands of the first 180 days of war. The model is programmed to
fight in accordance with primary planning scenario.  The
analyses includes a maintenance factor.   Two-force level impacts
are used:   the current programmed force, and the force approved
for the fifth year of the Five Year Defense Plan.   In both
cases, the model assumes that the force is fully equipped at the
time of conflict.   Therefore, the demand on industrial
production is solely to sustain the given force at combat
consumption rates.   The analyses does not consider force
expansion.
     Besides the lack of proper prior planning on all of the
services side, the "red tape" involved within the acquisition
process is a disincentive to industry from which expansion to
meet wartime needs is crucial.
     The legal relationship between the government and industry
also further lessens the nation's industrial capability to
support our forces during war.   A recent report published by
Tufts University entitled, The U.S.  Defense Mobilization
Infrastructure,  basically states,  "that defense insustry
participants pointed to the harmful effects of federal
regulations that impede investments in new industrial processes
and technology, which in turn lengthen lead times and limit
production capability."  Basically, government is not providing
the proper incentive for influencing industries to become
involved in defense-related production.  (6:8)
     Again, the effects of a shift in our nation's capability,
along with the government's inability to institutionalize a more
feasible process, have resulted in casting serious doubt on
whether our forces can be sustained during war.   Of course, this
lack of capability has not gone unnoticed, nor unchecked.
During President Reagan's administration an increase in defense
expenditures helped the situation somewhat.   However, as
compared to the Soviet rate of investment in their defense
industry, we are still far behind.
     The main issue underlying our achievement of an adequate
industrial base is whether our nation possesses the will to do
so.   Currently, events occurring in Eastern Europe are placing
our nation into a false sense of security which will result in
additional losses in our defense industrial capability.   A
perceived "peace dividend," will certainly not go towards
building our defense related industries.   Further degradation is
imminent.     Today, approximately 76% of all United States
workers are employed in industries commonly thought of as
services:   communications, transportation, health care,
wholesale and retail distribution, financial services, and
professional firms.  (4)   The shift from an industrial based
economy to a service based economy is significant in that this
trend is due to increase in the future.   The result being that
the manufacture of required equipment will have to come from
outside of the United States.
     Foreign sourcing of key parts, components and complete
products is an extensive and growing business practice in both
commercial and defense manufacturing.   Foreign sourcing could
possibly evolve over time into our being dependent on foreign
countries for critical equipment.
     The potential for foreign influence, be it political or
economic combined with the industrial means to back it up could
have serious ramifications to our nation should tough decisions
on foreign policy be required.
     Unless this deteriorating trend is stopped and reversed,
future hopes of supporting our armed forces by means of our
industrial base is very bleak.
     The total turn around of something like this is most
definitely an extensive, and long-term task, to say the very
least.   However, a singularly major step in correcting the
current situation would for the government to establish a
better,  non-adversarial relationship with industry.   Although
this is not the "cure-all",  it is a good place to start!
                        BIBLIOGRAPHY
1.    An Industrial Mobilization Handbook for Industry,
           Washington D.C., Department of Defense,  1985.
2.    Clem, Harold, J., Mobilization Preparedness, Washington
           D.C., Narional Defense University,  1983.
3.     Knorr, Klauss, Power and Wealth:   The Political Economy
           of International Power,New York, Basic Books,  1973.
4.    Harvard Business Review, March-April 90, No. 2, Glasgow,
           Ky., R.R. Donnelley and Sons Co.  1990.
5.    The American Heritage Dictionary of the English Language,
           Boston Mass.,  Houghton Mifflin Co., 1978.
6.    The U.S. Defense Mobilization Infrastructure, Conference
           Report, The Fletcher School of Law and Diplomacy Tufts
           University, Foreign Policy Analysis Inc., 1981.



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