Re-Imagining America’s Defense Industrial Base

Mark J. Gerencser, and Ethan Ingram

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The US military’s prowess finds its origins in the Second World War’s defense industrial base (DIB), which preemptively identified the Axis Powers’ threat. This foresight enabled the United States to churn out an “arsenal of democracy” that included 1,500 naval vessels, 303,713 aircraft, and 41 billion rounds of ammunition. The DIB today is nowhere near as capable. It cannot produce what the US military needs to face modern threats. Several issues plague this once-robust industry.

Without significant transformation, major problems and shortfalls loom over the military. This transformation must address gaps in domestic manufacturing, the need for resilient production at scale, and the threat of disruption risk from adversaries. A re-imagined DIB can no longer be stovepiped as a separate subset of US capabilities. By necessity, it must incorporate a large part of the commercial industrial base.

Increasingly Complex Military Equipment

Past US mobilization efforts managed to rise to the occasion. In both World Wars, American industries broadly engaged to support the warfighter. For example, Frigidaire manufactured aircraft parts alongside its signature refrigerators during the Second World War.

Today, the challenge is infinitely more complex. The contemporary F-35 Lightning II fighter jet’s central fuselage alone comprises more than 10,000 parts. With more complex weapon systems, future production surges cannot rely solely on the simple retooling of production lines in adjacent industries. A much more challenging solution is required.

Manufacturing and Innovation Atrophy

In 1950, the US manufacturing labor force made up 33.7 percent of the domestic economy—a figure that has dwindled to less than 8.4 percent today. US defense manufacturing capabilities have struggled to keep pace with Ukraine’s expenditure of 8,000 155mm howitzer shells per day. The same kind of challenge holds true for electronics. In the 1990s, 37 percent of the world’s computer chips were produced domestically. Today, that number has declined to 12 percent. Offshoring these capabilities for a cost advantage is emblematic of a critical production shortfall in several domestic sectors that will take years to resolve.