The situation is grim for the U.S. Defense Industrial Base (DIB) compared to the relentless military output of China. The reality is that despite voluminous policy statements from the Biden administration in meeting U.S. defense commitments to allies and partners in the Middle East, Europe, and Asia, the DIB is not substantially expanding its production throughput.
One of the standouts of the epic April and October missile shoot-out was the SM-3 Missile produced by Raytheon. Firm numbers of SM-3s used in April and October are not publicly available. An informed estimate in the absence of official numbers from the Department of Defense (DOD) is that roughly between 100 and 400 SM-3 missiles were fired at the 480 Iranian missiles, cruise missiles, and drones launched at Israel in April and October.
Need for New GOCO Plants
The missile situation is not isolated but emblematic of a broader dearth of capacity in the DIB across many areas. The DOD has realized that the existing DIB is not capable of higher rates of production to support the building of deterrence or supporting broader conflict, and has addressed this by releasing its first Industrial Strategy in December 2023. Part of the solution identified in this strategy to increase production is reinvigorating the World War II operating concept of GOCO. Combined with co-production and multi-year contracts, this substantially increases the throughput capacity of the Industrial Base.
“This primarily is due to [the] industry’s inability to make the capital investments necessary to create production capacity beyond the DoD’s contractual demand signal.”
Suits continued: “To quickly meet increased production quantities, firms require facilities, equipment, tooling, raw materials, and people on standby to make the transition. However, two powerful dilemmas within the DIB make that difficult, if not impossible. Large firms are penalized by their shareholders and Wall Street for investing in or holding onto capital that is not actively producing profit.”
Co-Production With Trusted Partner Nations
A parallel program with GOCOs is the intuitive step of seeking what’s called “co-production” agreements, in which trusted partner nations are permitted to produce the products they have been sold. This is a win-win for both sides. It increases the production capacity of common equipment—a key tenet for victory in World War II-style global conflict.
Multi-Year Contracts With ‘Protected’ Funding
In a keynote address at the 30th annual Pennsylvania Showcase on Commerce in September 2021, Deputy Secretary of Defense Kathleen Hicks said the data show that “if the DIB continues along the same trend, [DOD] could lose an additional 15,000 suppliers over the next 10 years.”
Passionate embrace of GOCOs, co-production, and multi-year funding can be the pathway for the success of the Arsenal of Democracy 2.0.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
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This article first appeared in Epoch Times and was reprinted with permission.
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