Opinion | America Can’t Make What the Army Wants

The Constellation is just the latest in a string of American shipbuilding failures. Over the past 35 years the Navy has commissioned more than half a dozen new kinds of ships, from small combat vessels to large destroyers. Nearly all of them have flopped, running billions of dollars over budget and years behind schedule and failing to perform as promised, leaving the military reliant on a fleet designed largely in the Reagan era.

Recent efforts to build fighter and bomber aircraft have similarly disappointed. It takes, on average, 12 years to produce a war-ready jet, ship or tank, and the Air Force is retiring planes faster than it can replace them. America’s defense industry, like so much of the economy, has lost the ability to build quickly and effectively.

That has left the United States at risk of falling behind China, which has embarked on one of the biggest peacetime military expansions in history. Beijing now operates the world’s largest naval force, with over 370 warships compared to America’s 296. It has several types of ship-killing hypersonic missiles, while the United States has deployed none. Most of all, China is making all this at speed: It currently produces more than three warships for every one the United States makes, and nearly 200 commercial ships for every American boat.

Rebuilding America’s defense industrial base is crucial to preventing wars from starting and winning them if they do. If the United States can’t make what it needs to prevail in a long war — one lasting months or years — its adversaries are more likely to attack. As the military maxim goes: Industrial might is deterrence.

Workers at Fincantieri Marinette Marine shipyard were mid-construction on the first two Constellation frigates when the U.S. Navy canceled the program.

America needs to reinvest in building military hardware. The United States spends about 3.4 percent of its gross domestic product on defense, down from nearly 5 percent in 2010 and 9.4 percent in 1967. Half a percent more, or around $150 billion, spent on manufacturing capacity would represent a major effort to rebuild our industrial base.

More important, though, is whom the Department of Defense is buying weapons from.

The defense industry has consolidated from 51 major players in the early 1990s to five today: Lockheed Martin, RTX (formerly Raytheon), General Dynamics, Northrop Grumman and Boeing. Partly as a result, the U.S. domestic supply chain has withered as smaller machine shops that make key components for ships, submarines and aircraft have gone out of business.

Those big five contractors, known as the primes, have built their businesses around government contracts. They have become masters of the bureaucracy but are incapable of churning out weapons quickly, a fundamental requirement in modern warfare. As we have seen in Ukraine, the mass production of off-the-shelf drones has countered high-priced weapons like tanks and helicopters. Ukraine immobilized Russia’s formidable Black Sea Fleet in part with remote-controlled speedboats laden with explosives.

Monopolizing the Military

Follow the mergers dot by dot.
Each line
represents one major American contractor.

At the height of the Cold War, dozens of U.S. companies competed to make weapons for the Pentagon.

After the Soviet Union collapsed, Pentagon officials convened a meeting known as “The Last Supper,” instructing companies to merge or fail.

Now only five major defense contractors remain. Their business depends on the military, and the military depends on them.

Protected from competition, the companies have little incentive to innovate or hold down costs.

There have been 0 main protection
contractors in 1980.

Larger firms must adapt to the speed of modern conflict, while smaller firms need a chance to get in the game. The government should place bets on innovative start-ups rather than defaulting to the slow, costly primes.

Mr. Trump is pushing a “Golden Fleet” initiative to develop new classes of Navy warships, along with an armada of unmanned vessels. In an attempt to imitate Ukraine’s successes, the Navy’s 2026 budget calls for spending aggressively on unmanned systems, including billions of dollars for air, surface and underwater drones. How the Navy plans to achieve any of this in the wake of one failure after another is anyone’s guess. So far, the government’s efforts to diversify and innovate have mostly shown how bad things have gotten, and how far we still have to go.

America had more than 300 commercial shipyards in 1980 and produced dozens of ships every year. That production depended on federal subsidies, allowing the industry to compete with shipyards in countries with lower manufacturing costs. President Ronald Reagan, trying to shrink government, canceled the subsidies in the early 1980s, and American shipyards lost many of their private sector customers. Tens of thousands of workers lost their jobs as foreign competitors picked up the business. American shipbuilding collapsed.

Forty years later, the Constellation project ran into that reality. Initially, the Navy’s approach seemed smart. Rather than building a new ship from scratch, it would use a proven design for a frigate already in service with the French and Italian navies. To build it, the Pentagon chose Marinette Marine, a Wisconsin-based shipyard owned by the Italian company Fincantieri. What began as a quick and low-risk way to get what the Navy needs, however, soon turned into another sad example of American industrial dysfunction.

The Pentagon ordered new weapons and equipment for the ship, including a different electric propulsion motor, propeller and diesel generator. The ever-growing list of changes required work-force and supply-chain flexibility. A shortage of machinists, welders, pipe fitters, electricians and other skilled tradesmen needed to make the parts and adjust the ship’s ever-changing design meant added costs and delays. With no end in sight, the Navy canceled the program in November. It says it will buy the two ships that are in the initial phases of being built, if they’re ever finished; delivery remains at least three years away. A week after the Navy’s announcement, Fincantieri Marinette Marine laid off 93 workers.

The problem is set to get worse. The shipbuilding work force in the United States includes nearly 150,000 people. By the government’s own admission, contractors need an additional 140,000 just for new submarine orders over the next 10 years. It’s hard to recruit for those labor-intensive jobs when the pay is comparable to working in the service industry. “This is really an issue of wages,” U.S. Navy Secretary John Phelan told a crowd in Fort Wayne, Ind., on Nov. 12.

Fixing America’s decades-long industrial decline is the work of a generation, but we don’t have time to wait when it comes to national security. Adding back shipbuilding subsidies is a start, and the government has begun to do so to rebuild the trade work force. Over the past decade the Pentagon has spent nearly $6 billion to strengthen the industry. Companies are taking steps to build back their work forces by forging partnerships with technical colleges and establishing training academies. Shipyards are offering bonuses.

Congress should continue to fund these programs and expand them. It should also pass the bipartisan Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act, which aims to expand the U.S.-flagged fleet by 250 ships within a decade by investing in yards and requiring that more international trade travel on American vessels.

American stagnation

China’s shipbuilding prowess will
help it dominate
the western Pacific
over the next decade.

Source: Center for Strategic and International Studies

Government subsidies aren’t enough, however. The Navy has spent $700 billion on shipbuilding since the early 1990s, yet the size of its fleet has declined by 45 percent over that time. The Pentagon needs to tap into the dynamism of the broader American economy beyond the primes if it is going to make tomorrow’s weapons at the scale that they are needed. Traditional department of defense suppliers accounted for 86 percent of major program spending in 2024.

So far, the Pentagon’s efforts to diversify where it buys its weapons have underwhelmed. The Replicator program, which sought to buy thousands of cheap aerial and maritime drones within two years, failed to achieve its initial goals. The program is led by the Defense Innovation Unit, one of several Pentagon efforts to streamline commercial technology into the armed forces. These have been hampered by limited decision-making power, spotty funding and complicated regulations that make it hard for new entrants to succeed.

The so-called valley of death between concept and production is a major barrier. Too often, Defense Department seed funding for research and development dries up before the Pentagon decides to risk spending real money on a program. From 2001 to 2016, about 40 percent of new companies competing for government contracts dropped out of the running after three years. After a decade, about 80 percent had abandoned trying to work with the government altogether.

The 2,000 pages of regulations for companies seeking federal contracts further favor the primes, with their armies of lawyers and former government weapons buyers. Companies built to compete in America’s dynamic commercial markets don’t have the time or resources to master the byzantine art of government acquisition. The Pentagon should relax its rules for buying weapons to clear the way for younger companies to seize the opportunity to compete.

The Trump administration deserves credit for several moves addressing the defense industry’s shortcomings. Mr. Trump has announced large investments in shipbuilding and drone manufacturing, and in November Pete Hegseth, the secretary of defense, ordered a sweeping reform of how and from whom the Pentagon will buy weapons. “Either you — our companies, our industries, our defense industrial base — deliver, or we fail,” Mr. Hegseth told weapons makers on Nov. 7 at the National War College in Washington. “It is literally life or death.”

The administration’s messaging is on target. But it’s an open question as to whether it can follow through — and earn congressional sign-off — on these initiatives. Even if the moves are successful, the United States will need to collaborate with other countries to keep pace with China. The largest of Beijing’s state-owned shipbuilders delivered more than 250 ships last year. Collectively, they can carry more than all the ships that U.S. shipbuilders have produced since the end of World War II, according to the Center for Strategic and International Studies, a Washington think tank.

In extraordinary cases, the government also should force weapons makers to produce more of what it needs — particularly munitions, long-range missiles and air defense interceptors — through invoking the Defense Production Act.

The benefits of these changes will extend far beyond national defense. Military production has a long history of producing spillover economic advantages. Many major American industries today — aviation, satellites, robotics, radar, microwave technology and Silicon Valley — owe their existence at least partly to military research and production. A bigger, stronger and more efficient defense industry can make America both safer and more prosperous.