America’s defense industry produced 17 aircraft carriers, 300,000 planes and about 50,000 Sherman tanks from 1942 to 1945, when the U.S. was “the Arsenal of Democracy” for the Allies in World War II.
Today, the U.S. lacks the defense capacity to meet its own peacetime needs or supply Ukraine with sufficient weapons to fend off Russian invaders.
On Monday, the Washington-based Heritage Foundation released “A Strategy to Revitalize the Defense Industrial Base for the 21st Century,” to expose what the conservative think tank says is the danger of having an anemic manufacturing capacity during an increasingly complex and hostile global environment.
Robert Greenway, director of the Allison Center for National Security at The Heritage Foundation, said America’s industrial capacity has been on the decline since the 1970s. The new cold war with China will require the complete restoration of the nation’s defense industrial base, he said.
“This special report encompasses the interdependent economic, security, and workforce issues to provide actionable recommendations for federal and state legislatures, the executive branch, and our partners and allies,” Mr. Greenway said.
In 2014, the Biden administration released the first-ever U.S. National Defense Industrial Strategy 2024. But the report fell short of providing sufficient solutions to today’s problems and is disconnected from the Defense Department’s own budget, defense analysts said.
The study acknowledges that today’s weapons and military equipment are far more technologically advanced than those needed to fight the Germans and the Japanese. Producing a WWII-era P-51 Mustang is not the same as manufacturing a modern F-35, and a Sherman tank lacks the high-tech depleted uranium armor used in today’s Abrams tanks.
“But more to blame than necessary increases in complexity are policy decisions and processes that create uncertainty for industry, drive up costs, limit incentives to invest, shrink the available labor pool, discourage innovation, and weaken supply chains,” the report states.
The Defense Department’s budget request for the 2025 fiscal year cut procurement of several critical precision-guided munitions, sending a shock wave through the defense industry. The budget also asked for six new ships while cutting 10 from the fleet. The Heritage analysts said the move sent a negative demand signal to the industry.
Heritage said current economic incentives don’t favor investment in new production capabilities. To provide an incentive to industry leaders, the government must extend procurement orders beyond the current capacity of the defense industrial base.
“A strong economy is the foundation of a strong military. Reckless expansions of government regulation and taxation have strangled the economy, driven up costs, shrunk the labor pool, discouraged investments, and weakened supply chains — creating a ‘Perfect Storm’ for national security failures,” said Richard Stern, director of the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget.
The White House should focus on ensuring that necessary capital is flowing to industry, both reducing costs of production and expanding the available labor tool. Such a move would increase and stabilize the demand while increasing innovation, Heritage officials said.
“The U.S. defense industrial base must be revitalized to meet today’s needs. Output is insufficient, innovation is lagging, and supply chains are brittle,” according to the report. “It does not appear that current efforts will be effective enough to ameliorate these issues.”
