By Emelie Rutherford

Though a few suppliers for one military vehicle program have gone out of business, observers said they do not see the domestic automotive industry’s financial problems currently harming Pentagon weapon programs.

Still, some analysts said it is likely only a matter of time before Pentagon programs suffer some sort of impact if companies that supply basic parts to U.S. automakers fail in the future.

“What the impact is we’re going to have to wait and see, because (of the question of) when does this reach critical mass,” Dean Lockwood, a weapons systems analyst with Forecast International in Newtown, Conn., said in an interview. “But the threat is out there, that looms.”

He noted military and civilian vehicle makers generally share only suppliers for the most basic parts.

Three small casting houses that Oshkosh Corp. [OSK] had planned to use for the Pentagon’s nascent Mine Resistant Ambush Protected All-Terrain Vehicle (M-ATV) program have gone out of business. Oshkosh, the prime contractor for the closely watched vehicle effort, said it easily switched to alternate suppliers.

Pentagon officials examined the three business’ failures and determined they did not indicate a larger trend of supplier closures impacting M-ATV and other vehicle programs, said Brig. Gen. Michael Brogan, the Marine Corps Systems Command leader and MRAP joint program executive officer.

“My understanding is in that industry they typically take the summer off, so all the workforce goes on vacation at the same time, and then they come back to work,” Brogan said in an interview. “Three of these small casting houses did not come back to work.”

He said the closures were “three isolated incidents.”

“It’s probably fall-out from the U.S. automotive industry and the downturn that they’ve experienced, but it is not a trend,” Brogan said. “It is not going to impact our ability to produce. Oshkosh has already found alternate suppliers. So we have no anticipated shortfalls in the materiel required to deliver that vehicle.”

Andy Hove, executive vice president and president of Defense for Oshkosh, said in an interview his company was able to respond “very quickly” to those supplier closures.

The auto industry’s troubles are “something we are watching very closely, and I haven’t seen any issue that we have not been able to work around,” he said. “In many cases, we identify those things ahead of time and we have alternative suppliers or second sources that we can go to. If there’s a high-risk area we’ll not generally get locked into one single supplier, in order to make sure that we don’t have the risk that ultimately they fail and then you can’t get anything.”

Oshkosh, Hove said, has a formal process for evaluating the health of suppliers and the supply base in general.

“There has been quite a bit of talk about what’s the impact on the troubles that the automotive industry’s having right now, and whether there’ll be any impact there, and we do watch that very closely,” he said.

Lockwood, the analyst, said the possibility of the auto-industry contraction impacting Pentagon programs is “the kind of thing you would worry about it becoming a trend.”

Drawbacks in the military realm could include higher costs and production delays, he said.

Still, Lockwood said the major subcontractors the “Big Three” automakers–General Motors [GM], Chrysler, and Ford [F]–use aren’t generally involved with Pentagon contracts. Cross-over tends to happen with small “nuts and bolts” kinds of suppliers, he said.

During heated debates on Capitol Hill last winter over government support for the auto industry, some lawmakers argued auto-parts suppliers that contribute to Pentagon vehicle programs also need work from the commercial industry to sustain their business. Politicians also cited the need to help the Big Three to maintain a manufacturing base that can surge if needed to build military equipment.

Senate Armed Services Committee Chairman Carl Levin (D-Mich.) further argued at the time that Army vehicle efforts are tied to fate of ailing domestic automakers. He highlighted synergies he said exist between auto manufacturers and the military service in terms of technologies–including batteries and light-weight material solutions–used in commercial and military vehicles.