In early 1940, America produced 100 major combat and transport aircraft each month for the U.S. Army Air Force. Shortly before D-Day four years later, the American aerospace industry reached a peak wartime production of 5,200 wartime aircraft per month. Civilian industry transformed to meet wartime needs. American automobile manufacturers produced more than 3 million cars in 1941, and almost none the next 3 years.
Whether discussing metals, rubber, or munitions, military production has never reached the same levels. During WWII, the U.S. dedicated more than 40% of the entire economy to wartime production, outproducing all competitors. We have never seen production levels like this again; perhaps for good reason – as the need has never been as great. But what if the need arose tomorrow?
It is apparent that there are many differences with today’s economy and industry as compared to the 1940s. However, we cannot enter another great war and merely dust off the World War II industrial base playbook. We have known for years that a production surge will not materialize overnight. Planners also know in the next war, victory will go to the nation with the greatest ability to surge – rapidly. Surge challenges should be a national security issue and at the forefront of the defense industry study.
Defense Contract Survey by NDIA
To that end, the National Defense Industrial Association (NDIA) has published Vital Signs 2022 – Health and Readiness of the Defense Industrial Base with alarming findings. The NDIA conducted a member survey, gathering responses from nearly 400 corporate members. Interestingly, the data-driven look at the state of America’s defense industrial base (DIB) survey was conducted in August 2021, well into the COVID-19 pandemic lockdown period.
The NDIA summarized the U.S. defense industrial base’s overall health and readiness with a final score of 69 out of 100, which reflected the first overall failing grade in their Vital Signs series. These findings reflect the continued challenges to the DIB along with the unprecedented disruption caused by the pandemic.
Skilled Labor Shortages
With COVID concerns dominating much of the survey and results, American businesses indicated a huge struggle finding qualified workers. When members were asked about their ability to surge defense production in response to a military demand, availability of skilled labor was the number one factor. Over 77% of respondence stated that skilled labor would be a moderate or significant problem. However, labor shortages have been a challenge for many years, long before the pandemic.
Materials Issues
Availability of materials was the second greatest challenge for respondents, should a military production surge occur. Almost 59% of respondents reported this factor to be a moderate or significant problem. We have known for years that the U.S. faces huge vulnerabilities in obtaining critical raw materials in the event of a war. Before the pandemic, American production of key aerospace and military raw materials, including aluminum, titanium, steel, lead, zinc, and nickel were at or near record lows.
Dependence on these critical materials continues to grow, increasing our vulnerability as demonstrated by overseas logistical transport problems the past couple of years. Before COVID, the Chinese leveraged rare earths materials to block exports to Japan over a Chinese fisherman detention. We will see future pandemics and embargos, and we must assume during a major war, rare earth imports from China will be non-existent.
Contract Concerns
Among several topics not discussed in the NDIA Vital Signs 2022 were maintaining warm industrial base and the sole sourcing of repair parts. Last year, USAF logistics chief Lt. Gen Warren Berry, sounded an urgent warning on surge capacity, stating 90% of repairs performed on U.S. Air Force aircraft are by a sole-source vendor. “How do we incentivize you [the vendor] to be able to have a surge capability and surge capacity?” Berry asked. “So when we need it, at least I have a higher level of confidence that it will be there, because right now, today, I don’t.”
Now more than ever, policymakers must consider solutions to bypass potential production bottlenecks. Historically, the Pentagon has partnered with industry on many products such as synthetic rubber during World War II. Today, defense leaders must think through potential surge solutions on key raw materials, labor force education, cybersecurity issues and contract related problems and not wait for the next surge.
