President Donald Trump last Friday directed the Defense Department to work with other federal departments and agencies to assess and report on the strength and resiliency of the U.S. defense industrial base, including the long-tail of the supply chain, and to identify capability gaps and provide options to strengthen the defense base and supply chain, White House officials said on Friday.
The forthcoming unclassified report, due in 270 days, is “the first ever whole of government assessment into the health of the defense industrial base,” Peter Navarro, deputy assistant to the president and director of the White House Office of Trade and Manufacturing Policy, told reporters on Friday prior to the issuance of the executive order. He also said the directive is “one of the most significant presidentially-led actions on the state of America’s defense industrial base since Dwight Eisenhower was in office.”
Navarro said the study isn’t setting in motion the seeds of a self-sufficient defense industrial base, saying “this is not an argument for autarchy.” Rather, it’s an assessment of current sourcing and related risks, he said.
Navarro highlighted that there is currently just one company in the U.S. that can repair propellers for Navy submarines, creating a “single point of failure gap” that if it were to go out of business, the Navy wouldn’t have the capability to repair propellers, which in turn “harms our ability to protect the country.”
Wartsila Defense, part of the U.S. operations of Finland’s Wartsila, manufactures engines and propellers for U.S. Navy vessels.
There are also “endangered species” of technologies within the larger defense industrial base, he said, mentioning some “military grade semiconductors and printed circuit boards,” adding that “Flat panel displays for aircraft and the processing of rare earth elements have left our shores entirely.”
There are also workforce concerns across the industry base for “skilled trades,” Navarro said.
Bryan Clark, a senior fellow with Center for Strategic and Budgetary Assessments, a policy institute, told Defense Daily that the administration wants to increase the content of U.S. produced goods used by the defense industrial base and larger supply chain. There are concerns that many of the smaller suppliers, who are “always on the bubble,” are so specialized around their defense products that they don’t have commercial outlets to ease their way through periods of slow or non-existent defense orders.
There are also concerns within the administration of cases where foreign competition “undercuts” the commercial side of U.S. businesses that also are part of the defense industrial bases, making it more difficult for these companies.
Alex Graves, Navarro’s deputy, outlined a wide range of areas the report will touch on, including the “defense, intelligence, homeland, economic, natural, geopolitical, and other contingencies in which supply chains can be disrupted, strengthened, maintained or compromised. It will also identify the military and civilian materiel, raw materials and other goods that are essential to our national security, as well as the manufacturing capability necessary for producing goods essential to our national security.”
The study will also look at capacity and resiliency of the manufacturing and defense industrial bases and related supply chains for national security, Graves said. It will also make recommendations to the president and department heads for improvements in these areas, he said.
Navarro cited several additional statistics to highlight concerns about the nation’s overall industrial base, saying that since 2001 the country has lost more than 60,000 factories and five million manufacturing jobs.
“President Trump, like President Eisenhower before him, truly understands the United States cannot be a military power without a prosperous economy and a vibrant manufacturing and defense industrial base,” Navarro said. “President Trump is deeply committed to rebuilding our military and the president has already made great strides in restoring the readiness for our troops and laying the ground work for the ships, vehicles and aircraft that we need.”
The study will be led by the Pentagon’s Office of Manufacturing and Industrial Base Policy, which is part of the Under Secretary for Acquisition, Technology and Logistics. The office annually issues a report on U.S. defense industry capabilities, but Navarro and Graves said the new report will build on the current DoD assessments but be broader in scope.
A DoD spokesman told Defense Daily that acquisition issues will be kept in mind as part of the assessment.
In addition to DoD, the Departments of Commerce, Energy, Homeland Security and Labor will work on the assessment, and will consult with the Departments of Interior and Health and Human Services, the directors of the Office of Management and Budget, National Intelligence, National Economic Council, Office of Trade and Manufacturing Policy, and the National Security Advisor.
The latest DoD Annual Industrial Capabilities report, was made public in June, says that “Overall, the defense industry remains viable and competitive,” highlighting that larger defense companies are profitable and that new technologies are being developed outside the traditional defense “acquisition process to create new markets.”
The Pentagon report says concerns stem from future budget levels, which in turn can influence “companies’ investment in their defense portfolios and sometimes deter new firms from working with the Department.”
There will be classified annexes to the report.