even with the largest defense budget in
the world the US government is not
immune to supply chain challenges next
year's National Security Budget will
likely
really a trillion and a half
Congress wants to add tens of billions
of dollars to that number despite the
fact that the Department of Defense has
shown time and again that it's not
managing its finances effectively I
don't think that this necessarily means
we're going to blow the top off of the
defense budget I think it's probably
more about developing a an ability to to
scale and ramp production when and where
it's needed despite over a billion
dollars set aside for contracts to
replace items sent to Ukraine the U.S
still faces an uphill battle to build
these replacement weapons a bipartisan
group of senators have introduced the
securing American Arms act to find a way
to specifically backfill weapons sent to
Ukraine through the award of
non-competitive contracts also according
to the Department of Defense 352 million
dollars has been set aside to replace
the javelins given to Kiev 624 million
to replace Stinger surface steering
missiles and 33 million for high Mars
under the Ukraine security assistance
initiative but supply chain issues have
been a problem for every industry the
last several years including for the
defense industry which could slow down
this process in 2020 alone the Aerospace
industry lost around 55 700 jobs in
small and medium-sized businesses due to
supply chain issues critical components
critical suppliers uh critical materials
or minerals having that depended upon an
international country think about like a
China what's going on with the war in
Ukraine with Russia I mean it's just not
what we want to do from a standpoint of
risk to our own Critical Defense to bike
chain figuring out what the issues are
with your supply chain as they exist is
one matter but then saying I want to
increase production by 50 not only to
supply myself but then to supply two
countries it poses a whole other set of
problems but look we're dealing with a
country in China that's got 1.4 billion
people we need allies and partners we
have a real opportunity for scale and we
can solve some of these problems there's
there's plenty of money to go around and
we want them to have skin in the game
can the U.S retool the defense industry
to meet new challenges
the U.S has donated billions of dollars
worth of military aid to Ukraine this
includes everything from bullets to
high-tech anti-ship missiles most of
this equipment came from the existing
Department of Defense Arsenal keeping
track of everything is a huge task one
potential problem is the lack of
permanent inspectors General it is truly
stunning that the state and defense
departments are handling billions of
dollars in Ukraine assistance without
permanent inspectors General in place to
ensure that they're spent as effectively
as possible in conducting this proper
oversight
some weapons were nearing the end of
their lifespan javelin's and stinger
missile systems are good for about 10
years before they need to be checked and
re-certified this all eats into the U.S
military's current supply of weapons and
equipment which could hurt its ability
to respond in an extended conflict the
Pentagon has put together a so-called
tiger team to find ways to speed up U.S
arms sales to allies in part to help
refill stockpiles depleted from sending
arms to Ukraine that's fine that that's
a good thing but it's it's
magnitude right but
for the United States was in massive you
know military buildup the Navy itself
aircraft production and of course was
building on what was then called the
Detroit deterrent basically the fact
that we had the largest industrial
production by far in the world that's
not the case anymore so we're a long way
from where we need to be it's not just
about keeping a stockpile of the things
themselves sitting around in a warehouse
somewhere but you also need stockpiles
of all the spare parts in case anything
goes wrong now we've been talking about
Munitions specifically but that's even
more imperative if you talk about
Vehicles so if it's aircraft or ships or
or tanks or any kind of ground vehicle
those things not just need the the item
itself but all of the items that make
that thing work
industry capacity plays an important
role in the ability of the United States
to produce weapons a capacity that could
be hindered in the event of a major war
we can talk about weapon systems we can
talk about Electronics I think you can
talk about propulsion systems right as
core competencies like if we think about
America the defense of America defense
of the Free World we really want to have
ownership of those capabilities when a
production line shuts down such as what
the F-22 stealth fighter that talent and
expertise moves on to different careers
and the valuable hard-earned experiences
shifted to either a different defense
industry project such as the F-35 or
Talent moves out of the industry
altogether shipbuilding is another field
where the Ebbs and flows of skilled
labor employment depend on orders that
can change from year to year I mean the
practical skills that were uh you know
that are necessary for a healthy
industrial base I mean shipbuilding but
also I mean getting into more of the
specifics like welding and pipe fitting
and these things that seem kind of
mundane to you know somebody who's not
familiar with it but these are kind of
the areas that are critical for you know
industrial production despite these
challenges the US has some of the most
well-funded defense companies in the
world that raises the question of
whether further investment is the right
proposition for the U.S taxpayer my
response to those citing China and even
Russia as reasons to increase military
spending is more is not always better
and how you spend money is just as
important as the money itself the United
States is currently spending more than
the next nine countries combined on
National Security I think most folks
have heard that statistic before and of
course those nine countries include both
Russia and China skill worker gaps are a
concern among those in the defense
industry if you think about electric
vote you know they've publicly stated
their 200 000 man hours Short per year
anything about that 200 000 man hours
for per year to make submarines
submarines are the first line of
deterrence for the U.S Navy Facebook for
the United States right for anything
that that might happen with China it's
the first the first action is going to
be of a submarines if we can't even get
the labor to build those on time on
schedule right we've got serious issues
even before the war in Ukraine arms
deals were being worked out by U.S
defense contractors since the Russian
invasion demand has only increased
China's Hardline stance towards Taiwan
only heightened the concerns that
international relations are heading for
turbulence new orders of weapons like
the javelin an anti-tank missile system
that has proved its value in Ukraine are
pushing the limits of what production
lines can produce in the coming years
and with success on the battlefield
comes more orders from customers Brazil
recently ordered 74 million in Javelin
missile systems Taiwan is increasing its
request for advanced U.S weapons as part
of a 1.1 billion arms sale meanwhile the
U.S needs to replace the approximately
one-third of its Javelin stocks given to
Ukraine if you want to for example ramp
production of high Mars which has been
used to such great effect in Ukraine
you're going to be robbing from your
ability to produce the sm-6 you know
air-to-air munition for for example
perhaps or the tomahawk land attack the
cruise missile perhaps because they
might share some sub-components whether
they be chips or a little you know
Motors and whatnot the US is also
looking at increasing domestic orders to
increase production line output which
could also help replenish weapon stocks
that were donated to Ukraine with so
many weapons going to so many countries
concerns about end use abound there are
obviously transparency and security
concerns to proliferating weapons around
the globe of course the United States is
the biggest arms proliferator in in the
world and the Pentagon on top of its
Financial mismanagement issues isn't
particularly good at keeping track of
those weapons much less how they're used
on the ground
the push and pull of where the U.S
defense budget goes continues this is
really important we want to be able to
get something as you mentioned from
Amazon or anywhere else that we want to
go shopping want to live the lives that
we have uh we have to have this layer of
support uh in the defense industry to be
able to guarantee that Congress is
arbitrarily increasing the defense
budget and all of the defense related
spending and other federal agencies it
is not making the country safer it is
actually hurting our national security
and it is at the expense of taxpayers
with China producing more military
weapons than ever the U.S could be
sleepwalking into a disaster you know we
can't rely on China to build components
for our weapons which is to some extent
potentially what we have done whether
knowingly or Not That Base of suppliers
that web that Supply web that that feeds
things like chips and explosives into
places like the large Prime contractors
your Lockheed Martin's your raytheons
Etc who go out and build these munitions
all of those are interconnected with
each other and all of those are
supplying multiple weapon system
programs one of the critical things with
the defense industry in particular is
volumes are low right if the US builds
eight to ten warships a year that's a
lot right there isn't anyone that's
going to be able to say oh we're going
to have to just in time you know engines
or just in time critical components
there's not enough volume there to do
that you actually have to have that
Source you have to have that material
ahead of time you can't wait