VIEWS: 5 PAGES: 5 CATEGORY: Science & Technology POSTED ON: 6/18/2010
9 The most important commodities restricted by the law are specialty metals, which include steel. [...] almost every component of a weapon system must be purchased from a U.S. manufacturer. According to the FairTax white paper: Nations around the world have scrapped their antiquated tax codes (i.e., codes like ours) in favor of newer, streamUned systems that help them compete globaUy while ensuring that their governments coUect adequate revenues.
Diminishing Manufacturing and Material ROA NAtiONAl SecuRity RepORt Shortages: U.S. Industrial Base in Peril By Col Michael J. Cole, USAFR budget for possible savings.2 As 2008 to spare. The unfortunate aspects of T ended, the Institute for Supply Man- DMSMS are that no U.S. agency is he defense of our country is in agement reported that manufacturing responsible for managing industrial a perilous state. The message activity in the United States reached policy as it relates to national defense, of the few who are aware of its lowest level in 28 years.3 With this and the loss of the industrial base is a the problem is not reaching the key unending series of bad economic news, self-inflicted wound created ultimately government decision-makers. Due to the time has come to address diminish- by corporate tax laws that encourage skyrocketing acquisition and sustain- ing manufacturing sources and material offshore manufacturing. ment costs, the U.S. defense budget is shortages (DMSMS) and their strategic Offshore manufacturing caused in severe trouble. effect on the sustainment of weapons serious howls of disgust in 2008 during One experienced Department of systems. the ill-fated Northrop Grumman KC-X Defense (DoD) researcher, John Chris- DoD defines DMSMS as “the loss tanker award as it became a national tie, warns that costs to acquire and or impending loss of manufacturers of issue,5 but the practice has been perva- sustain equipment are growing at much items or suppliers of items or raw mate- sive for decades.6 As companies moved faster rates than the budget can ever rials [that] may cause material short- their manufacturing operations overseas grow, and that “if these historic trends ages that endanger a weapon system’s or and shuttered plants, the United are not addressed, the U.S. military will equipment’s development, production, States lost its manufacturing capacity, cease being a significant influence in or post-production support capabil- commonly referred to as its “industrial world events because of shrinking force ity.”4 DMSMS has many other associ- base,” and its manufacturing expertise. structure.”1 ated terms, such as “obsolescence,” Closed factories can be re-opened, but One can hardly open a defense pub- which, in essence, means the non-avail- once the knowledge base is gone, it lication without reading that the eco- ability of a part or commodity used in takes a long time to re-develop. Even nomic difficulties of 2008 are forcing a weapon system that results from the Boeing has acknowledged losing ex- the DoD to evaluate every area of the source company going out of busi- pertise, “yet it willingly and proactively ness or simply choosing not to make outsources American jobs and engineer- This report is a publication of the part anymore. When the original ing to overseas companies.”7 source of a component goes away, solu- “In many cases, the United States the Defense Education Forum of tions include reverse-engineering the is already unable to manufacture the the Reserve Officers Association component or redesigning the system equipment and technology used to and is intended to advance to do without it, both costly undertak- fight and win the nation’s wars. This discussion and scholarship of ings that have a negative impact on an situation is not documented. It is not national security issues. The already stretched defense budget. monitored,” says Dr. Sheila Ronis, The main cause of DMSMS is the president of University Group Inc., a views expressed in this report are erosion of the industrial base. Yet management consulting firm special- solely those of the author and not DMSMS is no ordinary budget prob- izing in national security and public necessarily those of ROA. lem that can be solved by an infusion policy.8 Find the root causes of the of money, even if there were money disappearing industrial base, and one WWW.ROA.ORG the Officer / SEPTEMBER 2009 53 can take measures to counter them. nomic and Security Review Commis- grams may benefit from the solution One obvious culprit is cost. Sadly, it is sion to study the strategic implications and for performing “resolution cost- simply cheaper in almost all cases to of doing business with China. The July trade-off studies” when evaluating solu- make products in China and ship them 2006 hearing on China’s effect on the tions for non-available parts.15 These to the United States than to make them auto industry revealed some startling recommendations, while useful, attack here. findings: DMSMS at the program manager level. In 1941, Congress passed the Berry • As many of the Army’s traditional For a meaningful, long-term solution, Amendment requiring DoD to give suppliers go out of business, it is Congress must enact strategic legisla- preference to domestic manufactur- becoming more difficult to locate tion, because DMSMS is a strategic ROA NAtiONAl SecuRity RepORt ers for procurement. The intent of
Pages to are hidden for
"Diminishing Manufacturing and Material Shortages: U.S. Industrial Base in Peril"Please download to view full document