The U.S. protection industrial base is dealing with an uphill battle. A 2023 report discovered that 64 % of protection companies struggled to rent expert labor. In late 2024, the nationwide safety advisor warned that the protection industrial base “we inherited was less than the duty that we face in a brand new age of strategic competitors.”
In April, an government order from U.S. President Donald Trump framed the issue in equally blunt phrases: Many years of offshoring, consolidation, and underinvestment have left the USA with out the capability and workforce wanted for sustained navy manufacturing.
This yr, Pentagon and White Home officers have enacted numerous insurance policies to deal with this fragility, with Protection Secretary Pete Hegseth going as far as to name for a renewal of America’s “Arsenal of Freedom.”
Whereas such efforts appropriately state the urgency of reform, these actions is not going to clear up a far deeper set of issues. The US can’t construct what it wants as a result of it doesn’t have the workforce, the factories, or the partnerships to take action.
Policymakers speak about “surge manufacturing,” “industrial resilience,” and “allies and companions” as cure-alls for the business’s illnesses. However these phrases assume that the machines, instruments, robots, and networks exist and have the certified folks to function them. Too many policymakers deal with the protection industrial base as a black field: {Dollars} go in, and components ought to come out. However nobody is aware of which factories have modernized, that are out of date, that are staffed, and that are silently eroding.
We contend that three structural issues lie on the coronary heart of this harmful fragility within the U.S. protection industrial base. First, Washington lacks primary information on modernization. Second, the skilled-labor pipeline is collapsing. And third, small but important suppliers are getting left behind within the push for automation.
First, the info drawback. For all of the political momentum behind “repairing the commercial base,” the U.S. authorities can’t reply essentially the most primary query about protection manufacturing: Which factories have truly modernized? Regardless of years of speak about automation, robotics, additive manufacturing, and digital integration, it has surprisingly little perception into the place these applied sciences are deployed throughout hundreds of protection suppliers.
This isn’t a easy oversight. It’s a structural consequence of a multidecade-long pattern of outsourcing manufacturing to an opaque, and usually untracked, community of personal companies. Over the previous 20 years, periodic efforts to map the commercial base have did not construct a complete database, leaving policymakers with out a dependable baseline to evaluate the system’s well being.
Not like main aerospace firms reporting quarterly earnings or semiconductor fabs asserting capability expansions, protection subcontractors face no requirement to reveal their operational capital investments in robotics, high-end machine instruments, or industrial connectivity. Whereas the Pentagon’s undersecretary of protection for acquisition and sustainment oversees the protection industrial base, it has little to no perception on the tough realities dealing with most of those firms and subcontractors.
The authorized doctrine of “privity of contract” usually restricts the Protection Division from straight auditing or demanding operational information from lower-tier suppliers, as the federal government’s contractual relationship sometimes stops on the prime contractor.
Prime contractors, or primes, usually deal with their provide networks as proprietary commerce secrets and techniques to guard aggressive benefits and incessantly lack visibility into their very own deep provide chains. Consequently, the federal government’s regulatory view stops on the prime’s entrance door, leaving an enormous community of small subcontractors structurally opaque. Consequently, whereas the federal government might even see the prime’s direct suppliers, its regulatory view successfully fades to black past the primary tier, leaving the huge community of lower-level subcontractors structurally opaque.
This blindness creates a serious planning error. Protection planners routinely overestimate surge capability as a result of they assume the commercial base can scale linearly with funding. If a plant produces 30 Patriot interceptors per 30 days, they assume it may well produce 60 with double the cash. However doubling output requires way over doubling {dollars}. It requires realizing what the fact seems to be like on the bottom. Are machines growing old out? Does the power have the expert labor it must increase? With out this important info, surge projections grow to be little greater than optimistic extrapolations.
Nearly all of protection applications already face critical labor shortages. Take the submarine business, which wants about 100,000 new specialised employees, from precision machinists to pipe fitters, over the following decade to fulfill the Navy’s commitments for constructing Virginia-class and Columbia-class submarines. Most will want safety clearances.
No different industrial sector has such a fraught mixture of ability depth and clearance necessities, and no training pipeline is producing employees at anyplace near the wanted scale. Reaching mastery in important protection trades calls for sustained apprenticeship and 5 to 10 years of expertise—a developmental horizon not often appreciated in short-term coverage planning.
The identical story performs out throughout the missile, area, and munitions sectors. The protection industrial base desperately wants machinists to run 5-axis laptop numerical management (CNC) mills, that are basically computer-controlled metal-cutting robots. It wants welders able to becoming a member of unique alloys; automation technicians who can preserve robotic welding cells on-line; and controls engineers who can combine sensors, digital twins, and industrial networks. These occupations face an growing old workforce, declining apprenticeship charges, and stiff competitors from business sectors with higher pay and no safety clearance.
Policymakers usually assume that putting in robots will compensate for labor shortages. But automation truly will increase the want for higher-skilled employees: robotic programmers, upkeep technicians, industrial-network specialists, and cybersecurity operational-technology personnel. A single robotic cell could get rid of two low-skill roles however require 5 superior technicians to maintain it working below the Pentagon’s requirements. Whereas a single robotic cell could get rid of repetitive guide roles, it creates a web new demand for superior technicians to program, preserve, and safe the system—roles which can be far tougher to fill.
Probably the most missed drawback often is the hundreds of small factories that kind the spine of the U.S. protection industrial base. They don’t seem to be family names as a result of they often make use of fewer than 50 folks and depend on second- or third-generation house owners. However their merchandise are indispensable for important applied sciences resembling submarine propulsion methods, Patriot missile canisters, or housings for Javelins’ seekers.
They’re additionally the locations the place the commercial base is its most weak, as modernization has largely handed them by. A chief would possibly present Congress a futuristic digital manufacturing line with robotic arms, laser trackers, and superior metrology. On the identical time, one in every of its tier-three suppliers may be machining missile parts on a 1987 Haas mill with no digital controls, no cybersecurity, no automation, and no capability to surge manufacturing. Most of those outlets are working legacy tools as a result of they don’t have the type of revenue margins or shareholders to exchange costly tools. As a substitute, they function in a contracting setting the place Pentagon awards are sometimes unpredictable, funds are gradual, and margins are skinny.
This explains why small suppliers are exiting the market sooner than they are often changed. A 2022 report from the Protection Division revealed that the variety of small companies within the protection sector shrank by over 40 % within the final decade, regardless of elevated spending. In response to a companion report, this attrition was most acute within the particular sub-tiers required for surge capability. The Pentagon explicitly designated castings and forgings and kinetic capabilities as among the many top-priority sectors for instant federal intervention.
Additional compounding the issue, prime contractors not often know the complete state of their very own subcontractor networks; the federal government is aware of even much less. In a world of fragile provide chains and peer competitors, the commercial base is just as robust as its most brittle tier-three provider. The US can spend billions on new applications, but when a single small store in Ohio or Arkansas goes out of enterprise, a whole weapons line can grind to a halt.
The ultimate barrier is institutional. If the USA can’t modernize its industrial base alone, the apparent resolution can be to distribute manufacturing amongst its allies. In idea, the USA has by no means had a stronger community. Australia, Japan, South Korea, and most NATO members possess world-class machine-tool sectors, superior robotics clusters, precision-casting services, and extremely automated microelectronics crops.
South Korea produces a few of the most trendy armored autos and artillery methods on the earth. Japan and Germany lead in ultraprecision machining. The UK and Australia are already aligned below the AUKUS partnership to develop next-generation submarine expertise and autonomous methods. In lots of of those sectors, these allied nations should not simply companions; they’re the worldwide commonplace that the U.S. is now struggling to match.
On paper, this reads like the inspiration for the brand new Arsenal of Freedom that policymakers envision. In apply, nonetheless, these partnerships collide with a bureaucratic drawback. American firms can’t share technical information rapidly or simply sufficient to make coproduction possible. The identical system designed to safeguard delicate protection expertise—resembling export controls, classification limitations, and strict disclosure guidelines—additionally makes it tough to construct seamless manufacturing networks even with America’s most trusted allies.
This impediment will not be merely authorized—it’s entrenched within the protection business’s tradition. The Division of Protection’s Chilly Conflict-era “Not Releasable to International Nationals” coverage has grow to be one of the crucial important challenges to the very allied coproduction and technological integration that trendy protection technique now seeks to attain. It’s a drawback practically each AUKUS and Nationwide Know-how and Industrial Base (NTIB) working group faces when collaborating: extreme disclosure guidelines that delay or stop allied engineers from accessing the designs required to construct or take a look at parts.
The US doesn’t want one other new alliance to resolve this drawback. It wants to permit its present allies to assist.
The uncomfortable fact is that policymakers can’t repair the protection industrial base till they peer contained in the black field and make sense of it as an actual and complicated system of machines, employees, suppliers, and allied companions.
First, the Pentagon ought to construct an “superior manufacturing readiness” baseline. It ought to require a standardized and nameless reporting framework for protection suppliers to reveal the age, functionality, and digital maturity of key manufacturing belongings. With out this visibility, each effort to scale manufacturing is guesswork. A nationwide map of modernization, tracked and up to date throughout the provider community, would allow the Pentagon to focus on investments intelligently.
Second, put money into employees, not simply workshops. America wants a deliberate pipeline for cleared machinists, welders, avionics technicians, automation specialists, and cyber employees. Meaning increasing applications and alternatives in excessive colleges, neighborhood schools, union apprenticeships, and technical credentialing for high-skill trades, in addition to fast-tracking safety clearance pathways for industrial employees.
Third, modernize the small suppliers that carry the true load. The federal applications that fund industrial-base upgrades and focused modernization initiatives should prioritize tier-two and tier-three companies for brand spanking new tools, digital integration, cybersecurity, and automation help. Grants and cost-sharing mechanisms might help small outlets purchase high-end machine instruments, robotic cells, or industrial networking. These are the sorts of investments that prime contractors can afford however the small companies on which they rely can’t.
Lastly, the USA must unlock allied coproduction by reforming disclosure guidelines. Partnerships like AUKUS and NTIB can solely operate if allied engineers can entry the technical information wanted to construct, take a look at, and combine parts. Reforming export controls for pre-approved companions, enabling digital technical-data environments, and delegating extra disclosure authority inside the Pentagon would flip allied goodwill into precise manufacturing.
American industrial energy have to be greater than a slogan. It’s the sum of machines, employees, suppliers, and companions. The earlier Washington opens this black field, the earlier it may well rebuild the arsenal it believes it already has.
