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Defense Procurement: Emergency Measures Versus Long-Term Policy
AmericanEconomicAlert.org ^ | Friday, May 21, 2004 | William R. Hawkins

Posted on 05/22/2004 12:04:13 AM PDT by Willie Green

For education and discussion only. Not for commercial use.

Israel´s government-owned Rafael Armament Development Authority soon will begin shipping reactive armor kits for installation on the U.S. Army´s M2 Bradley fighting vehicles deployed in Iraq.  The rush deliveries are part of the Pentagon´s belated effort to protect against the damage inflicted by roadside mines, explosive charges and rocket-propelled grenades (RPGs), which have killed more than 150 American soldiers and Marines in Iraq.  The Israeli-developed armor allows the Bradleys to withstand direct hits by RPGs without injury to crew members.  Each reactive tile, which is attached to the outer skin of the vehicle, has a small explosive charge that can destroy an attacking shaped-charge warhead.  

Proponents of outsourcing U.S. military contracts will undoubtedly cite this purchase as evidence that buying foreign-made military equipment is good for national security.  Indeed, in this case, it will directly save American lives.  Yet this kind of example does not refute the risks-to-security arguments of those who favor rebuilding the U.S. defense industrial base and restricting the substitution of foreign-made components and sub-systems for American production.

The purchase of Israeli reactive armor is exactly the kind of emergency measure that is contemplated under the current waiver authority granted to the Secretary of Defense for  procurement of foreign-made items.  It is impossible to plan for everything in war, so there must be flexibility.  But that waiver authority does not and should not contemplate the design-in of foreign components in American weapons systems from their inception.

A more telling issue is why there is no American company in the business of making the needed  reactive armor.  The answer is that the Pentagon did not place a high enough priority on such systems.  Israel began using reactive armor technology immediately after the 1973 Yom Kippur War, becoming the first nation to do so.  The Soviet Union later applied reactive armor to its tanks, but the United States did not do so because its Abrams M1 tank already had superior armor built in.  Indeed, the M1 is nearly impervious to the kinds of attacks being launched by insurgents, which is why the 1st Armored Division has been kept in Iraq longer than planned to support the Marines in urban combat.  

Unfortunately, the need for reactive armor on more thin-skinned vehicles did not become a priority until the realities of close-range combat became apparent in Iraq.  In recent years, too much emphasis has been placed on long-range, “precision” strike systems fired from high in the air or from over the horizon to worry much about the ground troops.  Yet, as we have again been reminded, wars are ultimately won on the ground because they are fought for the control of territory, people, and governments.  The lack of a U.S. production capability for reactive armor is the result of ill-advised strategic decisions and a lack of military industrial planning, which, however abhorrent to free traders in the commercial realm, is an absolute necessity in the defense and national security realm.  Without it, too many of our young men and women in uniform die needlessly.

What is at stake in the debate over the defense industrial base is the critical question of whether major weapons systems should have foreign dependency built into them from the start.  After the “procurement holiday” of the 1990s, the United States is now embarked on an across-the-board transformation process that will see new fighters, warships and armored vehicles roll out of American factories for over a decade.  The programs should be directed towards the re-expansion of the nation´s industrial base, which has taken such a beating in the last decade, losing some 3 million manufacturing jobs since the late 1990s.

Many firms dropped out of the business of building parts for weapons systems due to lack of work.   Many were bought up by foreign interests who wanted U.S. technology and knowhow to add to their own industrial capabilities in order to help them compete with the surviving American firms.  Foreign companies had plenty of surplus dollars on hand due to their large trade surpluses their countries ran with the Untied States, often resulting from predatory trade practices and government subsidies.

The battle for industrial supremacy is a critical front in the struggle for world leadership – commercial, military, and political.  Foreign leaders seem to understand this very basic fact better than do American leaders.  At their May 13 summit, French President Jacques Chirac and German Chancellor Gerhard Schröder expressed their desire to jointly spearhead European industrial policy.  Heavy engineering, aerospace, pharmaceuticals, shipbuilding, and other strategic manufacturing sectors were at the core of their discussion of how to create “national champion” industries that can challenge American firms in critical markets – including defense.  A key player coordinating consolidation and restructuring is the French conglomerate Thales, which derives the bulk of its revenues from the defense and aerospace business.  The basic formula is to find a major national corporation, bring in other European firms to consolidate around it and then aim their combined output at the American market.

The American defense market is a vital target because the Europeans are doing so little spending on behalf of their own military.  France´s new Finance Minister Nicolas Sarkozy is looking at further defense cuts as part of his plan to balance the books.  American taxpayers should not suffer the double indignity of being called upon to bail out the defense industry of France or Germany, as well as defend them as part of NATO, while U.S. manufacturing withers away and high-paying American industrial jobs disappear.  

In Turkey, there is a variation on the European theme.  Ankara has announced that it has shelved a $4 billion tank co-production plan and halted another $3 billion worth of helicopter and unmanned aerial vehicle projects. This a major blow to foreign defense manufacturers, including American firms.  According to a statement released by the Defense Procurement Executive Committee, Turkey´s top decision-making body on defense procurement,  “It has been decided to meet the needs of the Turkish armed forces with new models based on domestic production and original designs and by making maximum use of national resources.” The Turks see defense as a leading edge of industrial/technological, and hence economic, development. Why can´t the Pentagon see the merit in the Turkish model, which we used to follow?

Most discussion of the dangers of foreign military dependence revolves around the problem of reliability.  In an age of unstable alliances and rapidly changing governments, long-term programs cannot find much promise of stability overseas.  But political risk is not the only factor to worry about.  Loss of foreign capacity due to downsizing, corporate restructuring, and multilateral mergers, and disputes over worksharing arrangements have already slowed many multilateral projects. Lack of export controls and the sale of defense technologies to rogue states, who might then counter the foreign systems built into U.S. weapons should be another strong concern. Defense is too important for the U.S. to risk its future on shaky or shady overseas contractors, or arbitrary foreign politicians.  

A great nation needs a strong domestic industrial base not only to provide manufacturing capacity, good jobs, and a high standard of living to its citizens, but also to integrate long-term research and development with advanced industrial processes to support economic progress and  meet national needs and strategic goals.  The United States cannot allow its defense industry and supply network either to wither away or to become the prey of foreign rivals.  American enterprise has provided the country with superior weapons, a defense trade surplus, and diplomatic leverage, all while preserving America´s ability to act independently when the nation´s interests require it.  There is no sensible reason to give up any of those advantages.  

William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.


TOPICS: Business/Economy; Editorial; Foreign Affairs; Government
KEYWORDS: globalism; industry; manufacturing; nationalsecurity; outsourcing; trade

1 posted on 05/22/2004 12:04:13 AM PDT by Willie Green
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To: AAABEST; afraidfortherepublic; A. Pole; arete; billbears; Digger; DoughtyOne; ex-snook; ...

ping


2 posted on 05/22/2004 12:05:03 AM PDT by Willie Green (Go Pat Go!!!)
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To: Willie Green

YES and NO!

The US already used ERA (Explosive Reactive Armor) in 1991 on the M60A3 from the Marines. We had the stuff in our inventory for a long time and even in 1993 in Somalia after some heavy forces were sent in (Few know that happened) ERA was put on the M2 Bradley. While it is true that Israel used it first with the Blazer design and is producing it for the US Army (has been for a while), the fact is that the Army needs MORE than anticipated. Not that it was not present or that we didn't think of it. Originally the Army was to purchase more armor tiles starting 2005, BUT this war will increse the estimated requirement that was put fourth in procurement several years ago. Basically, we're using it, damaging it and need to modify how much we originally were going to buy.

Also in the US we have the means to manufactuire ERA. Some of our old stuff was. ERA is not really that state of the art anymore. Why not support Israel and get a quality product at a good price? The Israeli's buy our F15, F16, AH64........ It's only fair if we allow them to compete for bids on contracts for DoD since they also buy A LOT of US made hardware that REALLY is state of the art technology!

I believe that the US should build out the military trade agreements with Israel, Australia, Canada and some others. The Europeans are at BEST a psuedo free economy where a government aircraft manufacturer (Airbus) really does not have any competition from Boeing since the Government Airlines (Lufthansa and many other Europeans) will guarenteed buy the aircraft built. The Europeans are a very closed market to US goods and the restrictions are NOT through tarifs but subtle and often through taxation, environmental policy or gene-technology bans etc. It is difficult for the US to sell there except for the fact that is you want some high end products like Patriot & AWACS, you either have the US or Russia to choose from since their domestic market does not allow the developement costs of some big high end systems (economy of scale). We should see them for what they are. A psuedo-free economy where nations like Germany have nearly a 47% Government share of the GDP (US 19%). The US government should push much harder for less trade restrictions and just accept the fallout, whatever it may be. However, issues like trade with Israel for some ERA tiles is hardly an issue.

Red6


3 posted on 05/22/2004 1:03:29 AM PDT by Red6
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To: Willie Green
Thanks ping back.

What it shows is the almost total collapse of America'a industry. A recent issue of The Wanderer quoted that the U.S. Military is running low on bullets since no U.S. manufacturer can produce the quantity we need fast enough. The Department of Defense has contracted with bullet makers in Israel and Canada.

As the article concluded "IT MAKES YOU WONDER WHAT WILL HAPPEN IF WE ALL OF A SUDDEN RUN OUT OF THE CAPACITY TO MAKE TANKS, PLANES, JETS, AND SHIPS IN SHORT ORDER. CAN WE OUTSOURCE EVERYTHING?

The answer is to outsource all incumbents of either party who support outsourcing America.

4 posted on 05/22/2004 7:24:32 AM PDT by ex-snook (They had their chance. Dump all incumbents who won't bring back outsourced America.)
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To: Willie Green; chimera; kattracks; Alamo-Girl; Travis McGee; Jeff Head

Bump!


5 posted on 05/22/2004 8:13:33 AM PDT by Paul Ross (From the State Looking FORWARD to Global Warming!!)
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To: Willie Green
A more telling issue is why there is no American company in the business of making the needed reactive armor. The answer is that the Pentagon did not place a high enough priority on such systems. Thanks for posting this article.
6 posted on 05/22/2004 8:40:30 AM PDT by LibertyAndJusticeForAll
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To: ex-snook
Excellent post and well said.

If things escalate to something like what I write about in The Dragon's Fury Series, we are going to be in a world of hurt.

...and they very easily could escalate if we are not extremely vigilant and extremely forthright and direct in our handling of the various security threats in Iraq, eslewhere abroad, and right here at home.

7 posted on 05/22/2004 9:36:14 AM PDT by Jeff Head
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To: Red6; Willie Green; ex-snook; LibertyAndJusticeForAll; Jeff Head
"...I believe that the US should build out the military trade agreements with Israel, Australia, Canada and some others..."

Hmmm... I tend to agree with you, Red6. I've been out of that business for a while, and I can't see a reason to seek it anymore. Dealing with Mil-Specs is a nightmare in our Country. Better to buy off-the-shelf from someone else. It's cheaper.

Of course, our middle-manufacturing-base is going to hell-in-a-handbasket. I don't have an answer. I'm being driven out of business by political appointees who have their own adgenda against white people. I got fined $600.00 for having a can of 'Raid' in my maintenance department, because there wasn't a warning-label near it, identifying it as a dangerous chemical!

Of course, we labelled everything in the Plant. It cost $400.00 to print the labels. Stupid! .................FRegards

8 posted on 05/22/2004 11:15:13 PM PDT by gonzo (I support a womans' right to choose!......."So, what are they? Silicone or Saline?")
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To: gonzo
I got fined $600.00 for having a can of 'Raid' in my maintenance department, because there wasn't a warning-label near it, identifying it as a dangerous chemical!

You'd think that the warning that manufacturers put on the cans themselves would be good enough.

Of course, we labelled everything in the Plant. It cost $400.00 to print the labels.

I thought fedgov gave those away as "freebies":


9 posted on 05/23/2004 9:38:14 AM PDT by Willie Green (Go Pat Go!!!)
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To: ex-snook
Region's mills, mines and factories fueled critical production during World War II
10 posted on 05/23/2004 10:18:39 AM PDT by Willie Green (Go Pat Go!!!)
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To: Willie Green
"...I thought fedgov gave those away as "freebies":..."

Nope! It was IOSHA - Indiana version of OSHA! My kids had to physically stop me from killing that bitch! I was goin' to beat her to death for stupidity.

A can of 'Raid'! Geez..............FRegards

11 posted on 05/23/2004 8:29:11 PM PDT by gonzo (I support a womans' right to choose!......."So, what are they? Silicone or Saline?")
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To: gonzo

My biggest gripe with ANY administration, Democrat or Republican is that the standards in the US are not applied to products imported. So while our domestic industry has to conform to OSHA, EPA child labor rules and so fourth it is completely OK according to the government to import products from China, Indonesia or Pakistan where these rules in part don't exist.

I see this as a BIG issue that is delicately avoided by EVERYONE! And even when or if they tear their mouth open they quickly forget the issue once in office (Clinton and Bush). Though very conservative, I must admitt that our government is more lead by large corporations and their bottom line than from principal, reguardless of administration.


12 posted on 05/26/2004 5:10:49 AM PDT by Red6
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To: Red6

While in the current instance it may be better to use Israeli facilities for the reactive armor, I cannot easily agree with your thesis that Australia and Israel should be used as sources. I will accept Canada.

Reason? Transport of the goods. Not for ONE minute should be wind up being dependent on trans-oceanic shipping, whether by air or ship, for our critical defense needs.

We can perhaps assign non-critical components to those allies, or perhaps the R&D contracts. But to leave ourselves exposed to the uncertainties of trans-oceanic shipment is, I fear, folly.


13 posted on 05/27/2004 2:05:26 PM PDT by ninenot (Minister of Membership, TomasTorquemadaGentlemen'sClub)
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To: ex-snook

There's a very large Fed facility north of Madison, WI., ---the Baraboo Munitions facility, which has been largely inoperative for about 7 years.

So what does the Pentagon do? Close it entirely and begin dismantling it.

Meantime, the Missouri ammo contractor is working 24x7 and is only marginally capable of putting out enough 5.56 for the M16.

Duuuuuuuhhhhh---maybe re-open Baraboo?

By the way, it's a very attractive site, just south of the Casino on US Hy. 12.


14 posted on 05/27/2004 2:11:16 PM PDT by ninenot (Minister of Membership, TomasTorquemadaGentlemen'sClub)
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To: Red6

No OSHA, no EPA, no FLSA, no EEO--

I don't know HOW those furriners can possibly get along without them.

Perhaps THAT'S what we should outsource!!! All those moronic bureaucrats.

Along with Congress, of course.


15 posted on 05/27/2004 2:12:49 PM PDT by ninenot (Minister of Membership, TomasTorquemadaGentlemen'sClub)
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