Analysts: Scattershot ‘industrial strategy’ better than none

Analysts: Scattershot ‘industrial strategy’ better than none

Remember when we talked about how difficult it is for the Pentagon to even think coherently about its industrial base — let alone draft an “industrial strategy” that could help keep its vendors healthy? Yep. You’ll have that, three defense analysts told House lawmakers on Monday. Acknowledging those contradictions and moving forward could be the best way to preserve key parts of the defense business, they argued.

DoD and Congress’ ironclad faith in “competition,” for example, doesn’t make sense in some areas but does in others — and that’s just the way it is, said Pierre Chao of the Center for Strategic and International Studies. If the Army wanted to field a new digital gadget for every soldier, for example, it could probably get a great deal by taking advantage of today’s vibrant consumer electronics industry, he said. If it wanted to build a new tank, not so much — there just aren’t the same number and diversity of companies for that to make sense.

Chao said the Pentagon can be good at planning to help support industries, but the areas in which it choses to do so often don’t make sense in the big picture. “I have a very specific industrial strategy for black berets, but I don’t have one for semiconductors,” he said. This can mean that DoD often does not fully realize how its decisions affect not only the big brand-name defense contractors, but the ones two and three notches down the line. Chao gave another example about the importance of planning: Suppose there’s a company that makes the linen bags that hold the gunpowder Navy warships use to fire their 5-inch shells. If the only other thing that company does is make habits for nuns, and the nuns cancel their contracts, that means the firm might close and cost the Navy a key piece of equipment.


Fred Downey, a vice president for the Aerospace Industries Association, acknowledged that preserving certain parts of the industrial base “might not seem like the most cost-effective thing, program by program.” But he argued it could prove money well spent either for many small things, such as Chao’s linen subcontractor, or a few big important things, such as nuclear submarines or long-range bombers. The important thing to understand is this is not a free market, said Barry Watts of the Center for Strategic and Budgetary Assessments — we’ve heard him make this case before — so he said it’s no good treating it as one.

If you’re holding your breath waiting for all-encompassing strategy guidance — or an announcement about when one might appear — it’s all right to let go. Although House lawmakers were eager for witnesses’ analysis and got in a few digs of their own against DoD, there didn’t seem to be much sense of urgency. Downey even acknowledged that other countries with industrial strategies like the one AIA wants, including France, the United Kingdom and China, haven’t “been exceedingly successful in all cases.” Yes — what he and lawmakers did not address Monday was the downsides of those other cases, and how they might not transfer well to the U.S. military.

European militaries, for example, tend to phase in new programs over long periods of time to make them more affordable, but not ready to fight. The Royal Navy’s Type 45-class destroyers entered service without the missiles that were to have been their signature weapon. France’s deliberately built its aircraft carrier, the Charles de Gaulle, with a nuclear power plant that would require more frequent service to create work for maritime workers on its Mediterranean coast. Eurofighter Typhoon skeptics have argued for years the program is more about aerospace jobs in the U.K. and Europe than it is about fielding a relevant combat aircraft — a DoDBuzz commenter once turned a terrific phrase to describe it, calling the Typhoon “the greatest VCR ever made.” (That’s another discussion for another time.)

So there’s no question that planned systems can produce good and even great weapons, as the Europeans and the Russians have proven. The question for Washington today is whether those models make sense in an American context, even if they do, which elected officials will take the risk of standing up and fighting for them.

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Wouldn’t it make sense for the DOD to develop a defense strategy first (“ here are the likely threats for the next decade, here are the systems we don’t have yet that we need to deter/defeat those threats, and here’s what it will take to develop and field those systems”) BEFORE it establishes an “industrial strategy”?

The September 8, 2011 article in these pages on “Washington’s Defense Strategy Paradox” would seem relevant here.

Also the Sept 21 article in these pages on the CSBA approach expounded by Watts and Harrison:

“If the Pentagon identified, say, six to eight key areas that it knew it must protect to have them around just in case of a major war, it could plan and program accordingly to be sure it never lost what they contribute to American national power. But if Washington persists with its official illusion that the defense game is a traditional free market and should be permitted to behave as such, the U.S. could lose essential skills forever, or face enormous costs to regain them down the road.

If the DoD wants a planned economy it should just nationalize the firms. Paying money to keep firms afloat and then paying for their profits is just stupid. Not even the soviets were that dumb.

There are a lot of ex-soviet apparatchiks who we should hire, who would be willing to help the DoD run a soviet style system.

The idea that a government run defense industry is a good solution is silly. They can’t run the VA health system nor the Post office. Can you imagine what kind of equipment our Soldiers, Sailors, Airmen and Marines would have to fight with? We would be back issuing wooden sticks as an in-lieu-of item for rifles.

Ah yes… because the government’s track record of running complex systems that interact with the free market is just so stellar I want DC political appointees in charge of an already corrupt system.

LOL! It DOES sort of remind one of the fox and the hen house fable.

The part that kills me is that back in the “60s” and “70’s” military technology was far in advance of civilian technology on a wide range of basic systems. Today, you look at the technology that is in a iPhone 4S and compare it to the technology in the latest military radios and.…. its shameful. The gap is all “for good reasons” Im sure, and also sure that some will point those reasons out to me, but the fact remains that we have imposed a form of technological “obsoletism” on our warfighters and I have to wonder if the reasoning REALLY is sound or if its just there to protect “the system”. Call me simple minded if you wish, but WHY.… :-)

Yeah, didn’t you see what a mess Von Braun made of NASA back when he designed their rockets? The space shuttle was sooooo much better. That’s why it cost more per launch than the Saturn V and yet only put 1/3rd the payload into a much lower low earth orbit. That’s why we’ve been stuck in low earth orbit for the last 30 years, unable to go back to the Moon or on to asteroids and other planets. Yep, nationalizing our defense industries would be every bit as big a failure… Better to pay defense contractors more to drag out development and jack up the cost of weapons. That’s real capitalism.

I hope that it IS sarcasm that I seem to see dripping off of that comment about Von Braun and the Saturn V? If you compare the technical advances made under NASA oversight from 1960 to 1970 to any TWENTY year period since…. . but it was sarcasm, right?

And yet we can’t build weapons as cheaply as socialist governments in Russia and China, so is nationalizing defense bad or do you just hate Democracy? Personally, I’d like to see us offer companies capitalist incentives to provide good weapons on time and on budget instead of what we currently do which is to provide them incentives to drag out development and jack up the cost of weapons. Both are capitalist incentives. The one approach provides companies with a capitalist incentive to do the right thing, the other provides them with an incentive to screw us. Which would you choose?

Plus, there are weapons programs that are literally too big to fail, such as aircraft carrier programs. What do we do about those? Continue to incentivize contractors to screw us, or nationalize the design and development process for those kinds of big ticket items? I’d go along with nationalizing ship design, which is the way we used to do things via the Naval War College. You know, back when we had a Navy with more than 300 ships, none of which were capable of being sunk by a fast boat with a .50 cal machine gun mounted on the deck.

And yet we can’t build weapons as cheaply as socialist governments in Russia and China, so is nationalizing defense bad or do you just hate Democracy? Personally, I’d like to see us offer companies capitalist incentives to provide good weapons on time and on budget instead of what we currently do which is to provide them incentives to drag out development and jack up the cost of weapons. Both are capitalist incentives. The one approach provides companies with a capitalist incentive to do the right thing, the other provides them with an incentive to screw us. Which would you choose?

There are weapons programs that are literally too big to fail, such as aircraft carrier programs. What do we do about those? Continue to incentivize contractors to screw us, or nationalize the design and development process for those kinds of big ticket items? I’d go along with nationalizing ship design, which is the way we used to do things via the Naval War College. You know, back when we had a Navy with more than 300 ships, none of which were capable of being sunk by a fast boat with a .50 cal machine gun mounted on the deck. Maybe you should think before reacting.

And yet we can’t build weapons as cheaply as soc ialist governments in Russia and China, so is nationalizing defense bad or do you just hate Democracy? Personally, I’d like to see us offer companies capitalist incentives to provide good weapons on time and on budget instead of what we currently do which is to provide them incentives to drag out development and jack up the cost of weapons. Both are capitalist incentives. The one approach provides companies with a capitalist incentive to do the right thing, the other provides them with an incentive to screw us. Which would you choose?

Your comment must be approved by the site adminstrator if you use the word “soc ialist”? Give me a break!

Von Braun was an engineer and a scientist, not an administrator or bureaucrat and had nothing to do with the oversight of the program. Saturn V and Shuttle is an apples/oranges argument. Shuttle was developed for ONLY LEO missions, again… a bureaucratic choice to abandon deep space exploration missions in favor of a politically useful ISS.

Also… adjust your numbers for inflation. Cost per Saturn V launch in 1969 = 1.11 bilion in 2011 dollars. Cost per Shuttle launch = 450 million in equivalent currency.

The soviet system had competition too, one supplier built aircraft and another built submarines and they competed for attention from the politburo. Just the same as our system.

Pierre Chao is calling for a five year plan we just call it an “industry strategy” that’s all.

You all miss the real point here which is that there is every incentive to build bad and expensive weapons which are neither efficient nor effective. Operational Uniform services have little to no say in what/how/why weapons are procured; and any suggestion/concept is routed through a civilian bureaucracy and congressional kleptocracy which attempts to kill anything that doesn’t funnel money into their department or district. Contractors are rewarded for complicity and punished for innovation by a system that overpays for developmental failure and waste but refuses to procure finished products/platforms.

You do have a way with words.… . Unfortunately, you might well be right.

And if I do the analysis like a freight hauler might.… .I take the tons of cargo and the miles for it to go.… Shuttle LEO is something close to 300 miles max (i.e. the Hubble was a “long reach”) and the moon is 250,000 miles away.… Payload on the shuttle to LEO is at most 53,600 lbs, and the Saturn V, a whopping 285,000 lbs. The Saturn can toss 107,000 lbs to lunar orbit and the shuttle has a about 249,700 miles of issues.… since you are good with $$, I’ll leave the math to you! :-)

The other thing to remember is that the Saturn V (7.5M lbs thrust) / Apollo 4, was just over six years from the Jupiter 1 (78,000 lbs thrust)/ Mercury 3. The shuttle was a dead end program from the start in 1971, when it was sold as a pickup truck to orbit, and the political usefulness of it is still open to debate. Its first flight was in 1981, and it had the overall effect of stiffling the dynamism of the first 20 years of space exploration, IMHO of course! Rest in peace, shuttle!

By the way, Von Braun and his crew were engineers and scientists and they DID get us to the moon. His successors were administrators and bureacrats and aside from a large line item in the annual budget to maintain the bureaucracy, they have gotten us.… . Hm…. um…. to the point where we have to “hitch-hike” on a Soyuz if we want to put men into LEO… ?????

I think that you may be right.… apples and oranges. .. . or was that perhaps lemons? :-)

Good Morning Folks,

More then a little irony here. What you see happening is the defense industry through those peculiar institutions of defense think tanks is killing itself. With monster programs like the F-35, CVN’s and SSBN’s there is no way for an equitable redistribution of procurement funds.

What has emerged is an all or nothing on each of these projects. The politicians have left no doubt that defense procurement is going to take a $500-$600 billion hit over ten years. As it was in 91 there are two ways of doing this cut specific programs in total or as the Bush (41) administration say OK guys figure it out yourselves we are going to cut 40% of you procurement funds.

Of course this lead to the hallow force of the late 90’s. The choices of the services reflected more the desires of flag officers and them there think tanks who provided after service employment in the six figure and above the the needs of the military.

It appears that the next decade will be the same as the 90’s.

ALLONS,
Byron Skinner

I thought I put it on thick enough that I thought there’d be no doubt. Ever since our country became a parody of what it once was, it’s harder to do sarcasm.

There’s no “might be” about it. It’s a f’ing nightmare to be a part of this cluster f! Every week managment comes out with a new way to dork things up, reward the incompetent, and punish those patriotic fools who do a good job.

Yuo keep bringing this one back but the Naval War College was not the Navy’s ship design house. The Navy’s ship designs used to be done at the Bureau of Ships (BuShips) which was in Washington. They did a fine job on FEDERATED systems but not on modern integrated systems. The big costs in shipbuilding today are the systems that go aboard the ships and unless you’re suggesting that the Navy also build Radars, Sonars, Fire Control Systems, Computers, Radios, Data Routers, Electronic Warfare Systems, Missiles, etc then building just the ship wouldn’t get you very far.
By the way, the Navy still owns four shipyards but they do not build ships because they were found to not be cost competitive just as the Navy does not build their own airplanes but does still do refurbishment/rebuilds

Yeah, except their 5 year plan didn’t include paying Bob Stevens $25 million a year off the top, or James McNerney his $28 million. It takes a special kind of system to f’ up like ours does.

We need more of this for the country self defense and a lot of catamaran missile boats. I think Iran,Russia and others could be brewing something bad. We need to prepare for the country’s self defense on land, sea and air while promoting peace and relationship with these countries.

I liked it better when the Army built it’s own gadgets, it was exclusive, marked “For Military Use Only”, most people wouldn’t even think to try and buy it. Now everything is contracted, before the Military can get it’s hands on it good, it’s already being sold on the open market. I have nothing against contractors, but they need to realize, than when they make something for the Military they can’t sell that same item to the highest bidder. I see more civilians wearing more Military equipment than the military do, something is not right about that. If DoD made it’s own gadgets, they wouldn’t have to worry about an “Industrial Base”, they would only have to worry about making sure the Military had the equipment it needed to win the next war. Two people you can thank for that, Arnold the Governator, for being the first civilian in modern times to purchase a active Military vehicle(HUM-V), and daddy bush for allowing it to happen. Civilians should not be allowed to purchase active military equipment, retired equipment? yes, active equipment? no.

There is no such animal as a “Defence Industry”, (a lot of right wingers would love it if there was one), because DoD don’t make defence equipment, they just oversee what is made for the military, that is not a industry, that is a department. DoD don’t own the companine that make equipment for the Military.

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