American Industrial Mobilization: We're Now Learning What We Already Knew

There have been numerous surprises since Russian President Vladimir Putin’s brazen and brutal invasion of Ukraine on February 24, 2022. Putin’s “special military operation” was the latest, and hopefully the last, revelation of Putin’s penchant for international thuggery. Putin’s behavior has hardly been surprising, but the conflict has offered significant surprises in other ways.

In doing so, it has revealed something about American industrial capacity that has long been ignored, namely that the existing defense industrial base may be insufficiently large to support a lengthy, lingering conflict – particularly one that might involve a capable and determined opponent.

With the end of the Cold War in 1991, the U.S. “arsenal of democracy” began to shrink. What had once been over thirty major defense firms consolidated into five. The number of private companies capable of producing high-performance military aircraft shrank from fourteen to three. Similar contractions occurred in other sectors including shipbuilding and ammunition.

Today the ammunition production base has been consolidated to four (maybe five) facilities, all of them government owned and contractor operated (known as “GOCO” by the pentagon). They produce a steady stream of ammunition, but in modest numbers. That seemed satisfactory given existing strategic circumstances, but the war in Ukraine suggests those circumstances, along with the thinking behind them, may now be quite passé.

A recent report by The Hill newspaper indicates that as of now the United States has given (or soon will give) the following items of equipment to Ukraine:  806,000 155mm artillery shells; 1,500 TOW anti-tank missiles; 8,500 Javelin anti-tank missiles (the Russian army have – or had – a large tank force); and 16 High Mobility Artillery Rocket Systems (HIMARS). There were numerous other systems mentioned in the report, but for this discussion let us just focus on the two that have drawn the most commentary: 155mm artillery shells and HIMARS rockets.

A review of the justification books (J-Books) submitted by the Army with its fiscal year 2023 (FY23) budget shows potential disconnects between strategic demands and defense industry supplies. The J-Books show that the total number of high-explosive (HE) rounds requested for the coming fiscal year is about 70,000. For the entire 155mm ammunition family it is 93,000.

Looking back five years, one sees that the average HE production has been 75,000 and total 155mm production about 175,000. In other words, the number of 155mm artillery shells flowing to Ukraine equals four to ten years of overall production depending on the type shells being requested and provided. Looking forward, over the coming five years the total 155mm production is projected at 700,000 rounds, 100,000 fewer rounds than currently headed to Ukraine in just the past six months!

Regarding consumption rates, some reports indicate Ukrainian forces are firing some 6,000 artillery shells per day. That would translate to over two million rounds per year, some twelve times the annual U.S. production. This is clearly a sustainment and production challenge that will be difficult to meet without significantly dipping into American war reserve stockpiles.

The HIMARS story is clear in one regard, and less clear in another. Regarding the launchers themselves, the Army only expected to buy 23 systems with the FY23 funds. That means that the launchers given to Ukraine account for about 60% of that year’s production. The launchers fire rockets, either the older unguided MLRS rocket or the newer guided version, GMLRS. Each launcher carries a pod of six rockets. If each Ukrainian-crewed launcher only fired one rocket per day that would amount to 5,760 rockets per year. The FY23 GMLRS requested procurement is for 4,674 guided rockets, only 80 percent of possible Ukrainian usage. Moreover, each rocket costs about $170,000.

The defense industry consolidation of the 1990’s was mandated by large reduction in procurement as the Cold War ended. Between 1990 and 1998 procurement, the bread and butter of the defense industrial base, was cut by over 50% in real (inflation adjusted) terms. At the same time, a series of Base Realignment and Closure (BRAC) initiatives consolidated government facilities, including Army ammunition plants. Much of this seemed prudent at the time, but in retrospect, one must ask if this consolidation went too far.

Dr. William J. Perry, the Defense Secretary who oversaw this industrial contraction, commented later that what he was seeking was a larger number of more efficient firms, but what he got was just the opposite.

However, Norman Augustine, the then-Chairman of Martin Marietta, who led the consolidation that created Lockheed Martin, the largest of the pure defense firms, has commented that Perry’s vision was “not among the options” that were possible. With procurement levels so low, Augustine felt a large number of smaller firms would have been ones with “dubious futures.” 

There have been several “non-traditional” firms that have entered the defense market, some encouraged by initiatives such as that launched by former Defense Secretary Ashton Carter who sought to broaden the defense base by attracting modern firms such as those in Silicon Valley. But success in this regard has been limited as defense firms require significant overhead for government relations and have structured themselves to operate with the long lead times inherent in the defense business. Silicon Valley, by contrast, expects rapid product introduction and a quick return on investment.

So where does that leave us? In brief, no one really knows. Does the Ukraine experience a return to something that looks more like the industrial warfare of the past? Is it a warning precursor of the future? Is it a wakeup call if we are serious about a capital-intensive conflict with China – or Russia? Does a globally distributed supply chain, especially the one regarding microchips, create an even more complex set of challenges?

All these items raise serious questions in search of serious answers. But we had best begin the search for them sooner rather than later.

Tom Davis is a retired Army colonel who once was the chief of program development for the Chief of Staff.  He is also a retired senior executive from two of the major defense industry corporations.  He is a member of the Council on Foreign Relations.