Defense Coproduction: A Proven Model of Success

America—and her allies—keep running out of munitions to prosecute wars and change outcomes. Ukraine’s scale of casualties and ammo consumption to beat back Russia is causing U.S. commanders to call for a fundamental re-think of war planning assumptions and an emphasis on sustained industrial capacity as important to victory as the number of trained and ready troops.

While the U.S. Army’s surge to support allies and build more artillery is showing great progress, these efforts have demonstrated just how brittle our munitions industrial base has become from decades of decline.

It’s not just us, either. Around the globe, our friends and partners are struggling to restore surge capacity for munitions production to supply both their own militaries and Ukraine. Allied capitals across the Atlantic have thus reached similar conclusions that changes are needed quickly to reverse this corrosion of manufacturing might.

Washington must leverage the opportunity of increased demand and strike while the iron is hot.

This followed the announcement from the Pentagon earlier this summer of the intention to coproduce munitions for the Guided Multiple Launch Rocket System (GMLRS) with Australia by 2025. Urgent expansion of GMLRS production is not only critical to provide “landmark” capability for Ukraine, but also to backfill our own depleted weapons inventories.

Additional announcements, such as the potential coproduction of thousands of armored Stryker vehicles with India, indicate that Under Secretary LaPlante’s strategy may be catching on beyond our European allies.

Industry seems to be on board, too. At last month’s Reagan National Defense Forum, Christopher Calio, President of RTX, lauded recent coproduction initiatives as a key method of improving allied interoperability and technology adaptation, noting “…it [coproduction] can make a much more seamless experience for our allies.” Just a month later, a group of NATO allies coalesced to purchase 1,000 PATRIOT missiles, to be produced jointly by RTX and German company MBA.

While coproduction isn’t a silver bullet to rebuild munitions, it could serve as a useful tool to reverse these trends with the added benefit of helping resupply forces forward in war.

During the Cold War, rebuilding western European militaries to deter conflict with the Soviet Union was a continual strategic imperative of U.S. defense planners. This strategy, combined with demand for advanced American weaponry, culminated in the creation of coproduction agreements to boost continental European production capacity and expand local surge infrastructure.

The AIM-9 Sidewinder air-to-air missile serves as a notable historical example, where a coproduction plan that allowed West Germany to coproduce the missile in its own borders. Not only did the agreement boost munition production for the NATO alliance, but the thousands of missiles produced through German companies also netted improvements to the design including a more competitive unit cost, according to the Logistics Management Institute.

Further examples of successful coproduction are numerous—including the Stinger ground-to-air missile and HAWK surface-to-air missile. RAND analysis has found that even more advanced systems, such as the F-16 fighter jet, benefitted from coproduction agreements. While these weapon systems are dated, all have been or will be supplied to the Ukrainian Armed Forces by the United States and allies and will require renewed sustainment efforts.

Increased and dispersed coproduction also has the potential to begin insulating U.S. and partner supply chains in war—just as it did in the Cold War. Our ability to freely supply Ukraine with a steady flow of equipment should not be taken for granted. In another scenario, such as war in the Indo-Pacific, urgent aid to allies would be complicated by insecure sea lanes and contested logistics. The Soviet Union planned to compromise allied logistics in the North Atlantic, just as China’s A2/AD capabilities threaten to deny the U.S. and allies access to resupply Taiwan in a potential conflict over the island.

Dispersed coproduction, however, allows for local construction and supply of crucial systems needed to sustain combat power, such as 155mm artillery shells, air defense capabilities, and anti-ship missiles, which would diminish an adversary’s ability to choke off needed replenishment of supplies.

Aside from insulating logistics, coproduction agreements have the added benefit of directly strengthening foreign partners by providing technical knowledge needed to produce shared military equipment and improving readiness through increased availability of materiel.

Israel’s Iron Dome system is another standout example of successful coproduction. Though initially developed solely in Israel with U.S. funding, both countries signing a coproduction agreement in 2014 which allowed for American companies to manufacture components of the system and access the advanced technology. Under this coproduction agreement, 75 percent of the components for the “Tamir” interceptor and 55 percent of the entire Iron Dome system have been built here in the U.S. The coproduction of the Iron Dome has been beneficial for countries by bolstering Israel’s ability to defend against attacks while simultaneously allowing the U.S. to build our own batteries to cover missile defense gaps.

Additionally, these agreements can allow for specialization, where specific countries can emphasize their industrial strengths and avoid duplication with limited resources. An example is the SM-3 missile, the backbone of American and Japanese ballistic missile defense. To produce the missile, development of key parts was split between facilities in both countries, which resulted in reduced risk during the initial stages. A similar division of labor may be employed for the coproduction of Japan’s PATRIOT PAC-3 missiles.

Though enhanced coproduction has the potential to buildup much-needed industrial capacity, various “Buy America” provisions pushed by the Biden administration and sympathetic members of Congress could undermine the success of such initiatives. Language in the most recent 2024 National Defense Authorization Act would require up to 75 percent of the materials for major defense acquisition programs to be produced in the United States within the next five years. This arbitrary requirement will needlessly balloon costs for the Pentagon’s already expensive acquisition projects, and pump the brakes on nearly all coproduction initiatives. As my AEI colleague Bill Greenwalt has written, these counterproductive domestic sourcing mandates, “...are encouraging countries to stop buying from the United States and to increase the production of their own defense items,” leading to increased prices and a net loss of domestic jobs.

These protectionist restrictions serve to undermine our relationships with allies and continue to let our adversaries stride ahead. Secretary of Defense Lloyd Austin recently emphasized President Biden’s goal of “…working with allies and partners like never before.” If serious about deepening reinvigorating our defense alliances, the White House should drop support for onerous legislative provisions that threaten to erode critical investments in the defense industrial base.

Additionally, Congress should heed opposition from our allies and domestic defense industry to ensure exemptions for key partners. If policymakers want to make serious investments in stateside jobs, they should work to reverse years of budgetary neglect and fully fund munitions.

Bolstering and opening new manufacturing lines forward in three theaters using proven methods of coproduction will not fully mend our equipment shortfalls, but these are steps in the right direction to increase deterrence and win faster if war breaks out. Further coproduction agreements could prove useful in the effort to strengthen the defense industrial base of the United States and our allies while also offering a potential solution the deepening challenge of contested logistics in the next conflict.

Mackenzie Eaglen is a senior fellow at the American Enterprise Institute (AEI) and has previously worked in Congress, the Department of Defense, and on three previous national defense strategy commissions.