The West needs to boost its industrial capacity fast

  • Themes: War

The West must re-examine its capacity to produce critical military supplies.

A worker at the US Army Nebraska Ordnance Plant in Omaha, Nebraska, with 1000 lb bomb cases in May 1943.
A worker at the US Army Nebraska Ordnance Plant in Omaha, Nebraska, with 1000 lb bomb cases in May 1943. Credit: Pictorial Press Ltd / Alamy Stock Photo

In February this year, a few days before the Russian Army began its invasion of Ukraine, the Pentagon released a report on the state of the US industrial base. The report examined reduced competition in the defence industrial system since the end of the Cold War, and the resulting increase in costs for military items such as rocket motors, microelectronics, and munitions.

A few months later, a July report from the Center for Strategic and International Studies exploring defence industry from a NATO perspective found that ‘many parts of NATO’s diverse national systems of weapons development and production have very limited surge capability. It can take years for given countries to rebuild stocks of modern and critical weapons.’ In the same month, the US Government Accountability Office described further challenges in the US industrial base, noting that ‘the Department of Defense’s (DOD) Industrial Base Policy office does not yet have a consolidated and comprehensive strategy to mitigate risks to the industrial base.’

The past eight months have been an opportunity to observe the impacts of this reduction on the US, and other nations’ military industrial capacity. The war in Ukraine has seen a return to what one analyst at the Royal United Services Institute (RUSI) describes as industrial scale warfare. This war has been a massive consumer of people, equipment, fuel, and munitions. The resupply of ammunition has been a major undertaking. Both sides have deployed large forces of both tube and rocket artillery. The use of the ammunition for these weapons has been prodigious, particularly during key phases of the Donbas campaign in May and June.

Recent reports from the Wall Street Journal, the Financial Times, and CNBC have noted concerns in several military institutions about decreasing stockpiles of munitions across the US and NATO countries. There have even been initial meetings among Western procurement officials addressing this issue. And alternative sources of supply, such as the Republic of Korea, have been identified for some Ukrainian munitions requirements.

The West has a problem with constrained defence industrial capacity.

Lulled into a false sense of security in the wake of the Cold War, and because of low usage rates during the conflicts spawned by 9/11, most nations have consolidated and downsized their defence industrial bases. Large-scale continuous production has given way to periodic, lower-risk, small scale (and expensive) production runs. A major industrial expansion programme will be required if the nations of the West are to rebuild the capacity to design, produce and stockpile the large quantities of munitions (and platforms) that will be required for both deterrence and response missions in the twenty-first century. It is a challenge that authoritarian nations such as Russia and China have already been working on.

The Russians are beginning to mobilise their industry. In his September speech in which he announced the partial mobilisation initiative, President Putin spoke of industrial production: ‘The heads of defense industry enterprises will be directly responsible for attaining the goals of increasing the production of weapons and military equipment.’ He also described how ‘the government must address without any delay all aspects of material, resource and financial support for our defense enterprises.’

The Chinese, who have undertaken one of the largest peacetime rearmament programmes in history, have developed a robust industrial capacity able to produce large quantities of nearly every form of defence material. Their ship-building capacity is churning out naval vessels at a rate not seen since the Second World War. They produce their own ground and air combat systems, although there are still areas, such as jet engines and advanced microchips, that are not indigenously produced.

There have been limited similar programmes in the West. There are good reasons for this, particularly in nations where inflation, COVID health costs, and other domestic pressures on government spending can crowd out funding for ‘just in case’ factories and munitions. However, the growing industrial capacity of potential adversaries, reduced warning times for possible conflicts, and the lethality of the modern battlefield means the West must rapidly reconstitute its ability to mass produce and stockpile key weapons and munitions for future conflicts.

War — and the competitive activities beneath the threshold of violence — is now a battle of industrial systems. In some respects, this is a return to previous eras where mass production for conflict, such as during the US Civil War and the World Wars, provided a decisive advantage. The post-Cold War ‘small, exquisite, periodic and expensive’ approach to weapons procurement in the West must end.

The expansion of defence industrial capacity, whether nationally or as part of a larger compact between democratic nations, is an integral part of conventional deterrence. In defending themselves, countries need potential adversaries to know they can (and will) step up production if authoritarians pick a fight. The possession of an expanding industrial base is a demonstration of capability, and importantly, telegraphs the will of peoples to actively defend against the predations and aggression of countries such as Russia and China.

While this issue currently focuses on supporting Ukraine in defeating Russia, a larger and more challenging question is present in the Western Pacific. The industrial capacity of nations such as the US, Japan, India, Korea, and Australia is vital in deterring the wolf warrior diplomacy and military bellicosity of the Chinese Communist Party. Chinese expansion into the South China Sea, and President Xi’s clear designs on retaking Taiwan, provide a very compelling imperative for Western rearmament and industrial expansion in order to deter Chinese aggression. And if China can’t be deterred, nations in the western Pacific and beyond will need a large supply of lethal, long-range munitions to halt Chinese territorial ambitions.

Countries in Europe and beyond will need to make hard decisions about their indigenous industrial capacity. Programmes must consider industrial resilience through duplicating and dispersing capacity. They must also balance production of munitions versus platforms, crewed versus uncrewed systems, and the production of expanded war stocks. This will require investment from both governments and defence corporations. Small, medium, and large enterprises must all be included, as must venture capital firms looking to invest in defence industry and infrastructure. All must be willing to accept greater risk, over shorter time frames, with the development and production of new technologies that may yield a decisive advantage for soldiers, sailors, and aviators.

There is a final dimension to this expanded relationship between government and the defence industry: personnel mobilisation. If industrial mobilisation is a key ingredient of conventional deterrence and response, so too is an expansion in the number of people in military institutions — and in the defence industry itself. New and compressed learning methods will be necessary; expanded military forces will not have the time for current, exquisite training regimes of all-volunteer, professional forces. Industry has a role to play in this, and at the same time, will be required to develop platforms and munitions that possess simpler human-machine interfaces and a much-reduced training liability.

American scholar Anthony Cordesman has recently written on industrial capacity across NATO nations. He describes how ‘in spite of years of studies and warnings, little or no progress has been made in dealing with these issues in most countries with major defense industries and development efforts.’ The growth of potential adversary defence industrial bases, and the growing willingness of countries such as Russia and China to use military force, means there is little time to fix these problems. As the 2020 Defence Strategic Update in Australia noted, ‘reduced warning times mean defence plans can no longer assume Australia will have time to gradually adjust military capability and preparedness in response to emerging challenges.’

Therefore an imperative exists for urgent action to expand and improve the West’s defence industrial base. As the RUSI report concludes, ‘the war in Ukraine demonstrates that war between peer or near-peer adversaries demands the existence of a technically advanced, mass scale, industrial-age production capability … If competition between autocracies and democracies has really entered a military phase, then the arsenal of democracy must first radically improve its approach to the production of materiel in wartime.’

Good, strategic and courageous decisions are needed now in the West. We may almost be out of time to make them.

Author

Mick Ryan