A Defense Industrial Base in Crisis?
In his March 28 testimony on the Pentagon’s FY2024 budget request, Secretary of Defense Lloyd Austin told the Senate Armed Services Committee that the Pentagon planned to invest over $30 billion to expand the US. defense industrial base (DIB). This commitment responds to the emerging consensus that defense sector consolidation and inconsistent investment have left the United States without the defense industrial capacity to meet the demands of a major power war or adequately arm allies and partners, including especially Taiwan and Ukraine but also key frontline allies in Europe and countries like Philippines and Japan in the Indo-Pacific, for self-defense.
Many policymakers and defense experts argue that the best solution to these perceived shortcomings is a rapid and significant increase in DIB capacity aimed at filling US stocks and arming partners “to the teeth,” including a shift to wartime levels of weapons production and a re-creation of the “arsenal for democracy”—the term used by Franklin D. Roosevelt to describe the mobilization of American industry to support European and US involvement in World War II.
A critical assessment of the US DIB and its response to the Ukraine war, however, suggests that existing gaps are limited and pose a less severe national security threat than the prevailing narrative warns. A move to rebuild an “arsenal for democracy” would be out of proportion to underlying challenges and impose new costs and layers of bureaucracy. Shifting the US DIB to wartime footing also risks becoming a self-fulfilling prediction, making war more likely by further militarizing US foreign policy, and potentially feeding new arms races.
Instead, Washington should adopt a more narrow and sustainable strategy, using existing defense industrial bandwidth more efficiently by modernizing production lines, eliminating supply chain bottlenecks for key systems, increasing flexibility, and more rigorously prioritizing arms transfers across partners.
Meeting Near-Term Weapons Demand
The primary source of near-term pressure on the US DIB comes from Ukraine’s insatiable demand for weapons, including Javelin anti-tank and Stinger air defense systems, artillery, and ammunition.
Most of what the United States has sent Ukraine to meet near-term needs has come from US stockpiles, but Washington has struggled to keep pace with Ukraine’s requirements. There are now signs that remaining reserves are reaching levels that the Pentagon is unwilling to fall below, especially for high-demand capabilities. More recent US security assistance packages to Ukraine have not included any additional Stingers or Javelins, for instance. Furthermore, military aid to Ukraine over the first four months of 2023 included a greater share of promised future production through the Ukraine Security Assistance Initiative than was the case over 2022.
However, this does not mean that US stocks are “low” in absolute terms or unable to meet other near-term demands should they arise; just that the Pentagon sees risk in drawing down stocks—sized to meet US needs in specific contingencies—any further. The United States has sent Ukraine about a third of its stockpiled Javelin missile systems and a fourth of its Stingers, but that leaves at least 60-70 percent remaining in each case. Refilling US stocks to pre-war levels will take time, but Chairman of the Joint Chiefs of Staff General Mark Milley has noted that the US military can meet near-term requirements with the weapons it has on hand today.
As US stocks become more constrained, Washington will have to rely more on new production to arm Ukraine. The US DIB is already ramping up to meet these demands. For example, production of 155mm ammunition will increase from 15,000 to 90,000 shells per month by the end of 2024. By the end of 2023, production rates for Javelin missiles will double their pre-war baseline, and Stinger missile production will rise 50% by 2025.
The scale and speed of planned increases are objectively quite large, but they will still fall short of Ukraine’s demand. There are isolated obstacles – for example, supply chain bottlenecks and obsolescence issues – that have constrained production timelines for key systems. But the gap between Ukraine’s requirements and US production capacity is as indicative of Ukraine’s sky-high requirements as it is of US DIB deficiencies. For instance, Ukraine says it needs 250,000 ammunition rounds per month, about 25 times the amount used for a similar period in Afghanistan. An effort to supercharge DIB capacity might result in this higher production level in the long-term but it will be no better in meeting near-term demands than the status quo. Furthermore, it is not clear that the additional investments and risks required to meet this higher production level are aligned with the narrow US interests at stake in Ukraine.
A Long-term Munitions Gap?
Whether a larger-scale investment across the DIB makes sense for reasons beyond demand coming from Ukraine will depend in part on the types of wars the United States is most likely to confront in the future . Some defense analysts suggest that the experience in Ukraine shows that future wars are likely to consume munition stocks more quickly than the Pentagon has planned, creating a long-term gap. However, the reality is murkier for two reasons.
First, the risk of a major near-term US ground war seems lower than that of a maritime or air conflict in the Indo-Pacific. A substantially weakened Russia is unlikely to pose a significant conventional military threat elsewhere for some time, and there are few other flashpoints that could trigger a US ground campaign. An Indo-Pacific war, however, would rely on different weapons and military strategies than observed in Ukraine. Second, although Ukraine is fighting using US systems, it is not fighting as the United States would fight. It lacks the manpower of US forces, the more advanced and longer-range US weapons, and facility with the US combined arms approach—which Secretary Austin has argued could reduce Ukraine’s ammunition use. With these advantages, the US “burn rate” of munitions in a future war might be much lower than Ukraine has experienced.
Ukraine’s high rate of weapons consumption might be more relevant to Taiwan – another heavy buyer of US arms and possible source of pressure on the US DIB – which could face some of the same force size and training issues. Still, Taiwan’s needs in a potential conflict are likely to differ from Ukraine’s, favoring longer-range missiles and air defense and anti-ship mines rather than the shorter-range systems and artillery featured centrally in Ukraine.
Taiwan does have unmet weapons needs, including a large backlog of delayed US deliveries. However, these delays result less from insufficient US DIB capacity than they do from ineffective prioritization of arms sales partners. Between 2018 and 2022, the United States sent arms to over 100 countries, but has no means to prioritize across buyers based on need; this leaves vulnerable partners like Taiwan waiting behind legacy clients like Saudi Arabia for crucial systems like Harpoon anti-ship missiles. The fastest way to meet Taiwan’s needs may be to find better ways to prioritize existing DIB bandwidth rather than building more capacity.
Meeting Surge Demands
Limited evidence that future wars will look like Ukraine does not mean that the US military has all the systems it might need in a crisis situation. Some wargames show that a US-China conflict would quickly burn through available stocks of medium and long-range precision-guided missiles (PGMs). The Pentagon is currently reassessing war plan requirements and may increase stockpiles of some systems as a result. But if gaps exist, DoD has time to address them: most experts assess the risk of an imminent war involving the United States to be low and the US DIB appears to possess a substantial ability to surge production when needed.
Contrary to some narratives, US DIB expansion in response to the war in Ukraine has shown that defense contractors can often reach surge production more quickly than expected. For example, Lockheed Martin was able to rapidly expand the production of HIMARS by 60% using cross-training of personnel and adding a second production shift. Some peacetime surge capacity also exists for advanced munitions. Production of long-range anti-ship missiles, the LRASM and JASSM-ER, is expected to double in 2023, due to modernization and automation introduced into existing production lines.
The US experience after Operation Inherent Resolve offers additional evidence of US DIB surge capacity. When DoD demand for PGMs increased following this campaign, defense contractors responded quickly with little lead time, producing about 400% more short and medium-range PGMs than planned in DoD’s Future Years Defense Program between FY 2017-2019. With this ability to meet surge demands even in the absence of a true crisis, there is little evidence that a shift to wartime production levels is required currently to meet future US needs.
An Alternative Way Ahead
The US DIB faces some challenges, but the “arsenal for democracy” model would be an overcorrection. Not only would such an approach encourage over-investment in the defense sector, but the move to wartime footing could raise the risk of future conflict. Mobilizing US industry to wartime levels of arms production lowers barriers to new conflicts, deepens the militarization of US foreign policy, and could provoke adversaries to take increasingly escalatory positions.
A more focused set of responses aimed at using existing DIB capacity more efficiently would be a better approach.
First, investments in modernizing the DIB: including upgrading production equipment and making greater use of automation and artificial intelligence can increase speed and capacity on existing production lines. The United States should concentrate efforts on systems in highest demand in Ukraine and most essential to a US-China contingency, including Stingers and Javelins, ammunition, artillery systems, and PGMs at all ranges.
Second, defense contractors should seek ways to increase flexibility across production lines to further expand surge capacity; like by building multi-use production facilities that can shift between systems as needed. Such facilities would have a standard set of manufacturing capabilities that can be easily modified for the needs of specific platforms. Cross-training of employees can support this type of agility.
Third, any additional investments in expanding capacity should be focused on vulnerabilities in the supply chains of high demand systems rather than spread across the DIB. The government should look into increasing the number of suppliers for some inputs, stockpiling key components, or building specialized teams to anticipate obsolescence issues.
Finally, Washington should develop mechanisms that prioritize existing DIB bandwidth based on national security goals. This will mean making tradeoffs between potential buyers based on need, for example between Taiwan and Middle Eastern partners. Relying on arms exporting partners like South Korea, India, and France to meet some global demand could be helpful. The United States should also encourage greater DIB investment from Europe, for its own defense and to increase contributions to Ukraine.
Rather than doubling down on increased DIB capacity—an expensive and blunt way to insure against geopolitical uncertainty—Washington should focus on flexibility and efficiency to more sustainably meet near-term defense needs and hedge against more diverse long-term risks.
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Jennifer Kavanagh is a senior fellow in the American Statecraft Program at the Carnegie Endowment for International Peace and an adjunct professor in the Security Studies Program at Georgetown University.
Image Credit: U.S. Army, Flickr
