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.
|Join the GlobalSecurity.org mailing list|