You Go to War With the Industrial Base You Have, Not the Industrial Base You Want
In 1924, the Army Industrial College opened its doors for the first time. In the wake of the difficulties in mobilizing the American economy and supporting the expeditionary force in World War I, Congress established the college to lay the intellectual foundation for mobilizing the American industrial base in the next war. Seventeen years later, that war came with Japan’s attack on Pearl Harbor. The Army Industrial College proved its value by providing the National Defense Advisory Commission with the baseline for World War II’s economic mobilization. A century after the college’s founding, the lessons that the United States painfully learned on industrial mobilization for great-power conflict have largely been forgotten and a new generation of national security professionals now find themselves in urgent need of its teachings.
Defense planners’ focus on short war scenarios and the commensurate development of a military built around exquisite high-tech platforms has opened the United States to potential strategic failure in conflict, with an inability to sustain the force it has. After a generation of globalization and de-industrialization, the U.S. national security architecture needs a better understanding of the effect of prolonged conflict on the military — and its increasingly advanced platforms — to facilitate the development of an industrial base and supply chain that can be resilient and endure through a long war. This should be accomplished through close cooperation with private industry to establish what the resource requirements of prolonged conflict could be and their ability to satisfy them when global supply chains collapse. Understanding where those chokepoints are provides a guidepost for more precise investments in the industrial base, to both strengthen the backbone of the military in a time of increased budgetary constraints and to better prepare the industrial base for large-scale conflict.
“You Will Be Home Before the Leaves Fall…”
As the Imperial German army marched into Belgium in August 1914, Kaiser Wilhelm II promised his men that the war with France would be a short one. But, as Robert Gilpin has highlighted, wars between great powers are unique because they possess the will and capability to continue fighting for a prolonged period. And, as Cathal Nolan describes in Allure of Battle, great-power conflicts almost always expand, protract, and become contests of attrition between materiel and personnel. Even today in the Russo-Ukrainian conflict, a great-power proxy war, the war has extended well into its second year. With very few exceptions in history, wars between great powers inevitably expand and protract.
While the historical record thus indicates that a war between the United States and China would likely be protracted, current planning on both sides of the Pacific seems to be in preparation for a short conflict. China has been investing in the technologies and developing the force structure to support a rapid strike on Taiwan since the early 1990s. And as early as 2001, Chinese leadership discussed the strategy of surprise, striking hard and fast against a “distant enemy” — the term that Chinese leaders use to describe the United States. Meanwhile, U.S. defense planners have been focused on developing concepts and capabilities that seem most focused on blunting an attack and less focused on surging and mobilization — this in spite of warnings from Hal Brands and Andrew Krepinevich.
This begs the question: Do leaders in the United States believe China would stop fighting if the U.S. military sank 300 ships? Do U.S. leaders also believe that the U.S. military would stop fighting if China reached Taipei in a few weeks? The answer is not likely, as both sides have significant political incentives to continue a conflict. First, there is the overarching balance of power between regional hegemons that would incentivize continued conflict. And, in the case of China, it’s difficult for authoritarian regimes to survive a significant loss, while for the United States any significant attack on American forces would likely increase domestic political pressure to fight on, even though there would be concerns about nuclear escalation. If both sides have the will and capacity to continue fighting, shouldn’t leaders be asking the question: Why wouldn’t war with China protract, in spite of nuclear risks?
Protracted conflict would have significant economic, societal, and political fallout, likely upsetting political order. But over-emphasis on planning and organizing around a short, sharp conflict has also opened the Department of Defense to a separate set of weaknesses.
The More Advanced the Technology, the Harder It Is to Sustain
The challenge the United States faces is being able to last long enough in protracted conflict to succeed. For the last generation, U.S. military-technological superiority proved its utility on the battlefields of Kuwait, Iraq, Serbia, Afghanistan, and Libya. But while none of these conflicts lasted long enough, or proceeded at high enough intensity, to stress the industrial base and supply chains, signs of trouble did appear.
This superiority was the culmination of 30 years of effort from defense intellectuals, engineers, reformers, and national security professionals who sought to change the Department of Defense after Vietnam. These pioneers utilized the American technological advantage to develop faster, more precise, and longer-range targeting, which was dubbed the second offset. The integration of concepts like Extended Battle and the development of long-range kill chains became a leading effort for the Advanced Research Projects Agency and ultimately evolved into Assault Breaker and the development of the Joint Surveillance Target Attack Radar System, the F-117, and Joint Direct Attack Munitions, among others. But even during Desert Storm, the presumed high watermark of American military power, there would have been significant challenges had the war gone on any longer.
The F-35 program, the apotheosis of peace dividend program development, has a just-in-time supply chain that likely risks operational success in a potential conflict. Additionally, the Russo-Ukrainian conflict has laid bare the atrophy in Western and Russian defense companies, as they struggle to replace lost materiel at the pace of attrition. And, in a case of history repeating itself, the phrase “shell famine,” popularized during World War I, has resurfaced as both sides struggle to produce sufficient numbers of artillery shells.
Today, the Department of Defense is doubling down on the second offset with offset X, using advanced technology like autonomy and hypersonic missiles to provide a decided operational advantage. All the services are investing in underwater drones, collaborative combat aircraft, new hypersonic air-to-air missiles, and autonomy. These technologies look to overcome adversaries’ geographic and quantitative advantages with faster systems and greater numbers of autonomous platforms — and the evidence for their utility is compelling, with repeated success across wargames.
However, these complex systems are also reliant on more diverse global supply chains. For example, tantalum, a key metal for hypersonic platforms, isn’t even mined in the United States. Meanwhile, China produces over three-quarters of the world’s bismuth, magnesium, and tungsten, all three of which are key elements for semi-conductors. The basic issue is that investments in autonomous platforms to deter the Chinese military rely on Chinese-produced materials. If the U.S. defense industrial base is challenged to sustain artillery rounds for Ukraine in peacetime, how would it sustain even more advanced platforms in a protracted conflict with China?
There Is No More Arsenal of Democracy
The popular answer is that the United States would mobilize the national economy just as it did during World War II. While the United States remains the third largest manufacturer in the world, the effects of de-industrialization and globalization challenge the ability of the industrial base to scale for prolonged conflict. There is no more Rosie the Riveter to fill the role of servicemembers going overseas, or American Locomotive Company to build Sherman tanks, or Ford Motor Company to build B-24s. Then the United States had the advantage of being the world’s largest manufacturer, having an underemployed workforce due to the Great Depression, and getting a head start on mobilization after the war began in 1939.
The long process of de-industrialization in the country and the development of global supply chains has allowed for the movement of more labor-intensive manufacturing jobs overseas while keeping, to a degree, finished goods manufacturing. The clearest example is the decline of manufacturing employment from 34 percent of all U.S. jobs in 1950 to roughly 9 percent today. This is reflected across the board in other key areas like forging (lost half of all businesses since 2002), foundries (lost half of businesses since 1984), or machine tools (28 percent of global market share in 1968 to 5 percent in 2019). These businesses didn’t go away, they just went abroad. The rise of globalization, specifically containerization and logistics information technology to streamline global value chains, allowed multinational corporations to move these labor- and capital-intensive industries overseas in order to provide a cheaper product to the consumer. As David Autor discovered, the entry of China into the World Trade Organization alone was responsible for the loss of nearly one million manufacturing jobs in the United States.
When examining the rare earths market, the materials so critical for manufacture of high-tech, Offset X platforms, the challenges for sustaining protracted conflict are worse. While China only controls half of the global rare earths market, it controls between 80 and 90 percent of the separation and refining processes. Furthermore, the Mountain Pass mine, which is the largest rare-earth mine in the United States, ships all of its material to China for refining. Even with projected investments outside of China, only 15 percent of rare-earth refining capacity will exist outside of the country, making it harder for the Department of Defense to fulfill shortages in 53 critical materials. These industries would be critical in any long-term conflict but don’t exist within the United States in any appreciable form to scale in a relevant timespan to endure a protracted conflict.
Compounding the effects of de-industrialization and globalization are the consequences of the peace dividend — in particular, consolidation and a drive towards efficiency in the defense industrial base. Before the infamous Last Supper in 1993 there were 75 defense companies, today there are five. In 1985 three million people worked in defense. Today, the total is around 1 million. As fewer companies work with Department of Defense it has created a paradigm where fewer companies understand how to work within the government enterprise and fewer industry workers even have the necessary clearances to do defense work. There is no slack in the labor market that would allow industry to easily scale to meet wartime demand signals. When layered with de-industrialization and globalization, these effects have caused significant atrophy across the defense industrial base that means it is only able to support peacetime or low-intensity conflicts.
Re-Building the Base
It would be nearly impossible for the United States to overcome two generations of de-industrialization. Containerization, logistics IT systems, and more efficient transportation means will continue to incentivize the free market to find cheaper manufacturing sources. At the macro level, current efforts by Congress to facilitate the re-shoring of semi-conductor manufacturing cost $52 billion — considering current budgetary pressures the United States is unlikely to see significant financial incentivization to re-shore large portions of the industrial base. While on-going efforts by the Department of Defense to secure supply chains or critical minerals are helpful, they not at a significant enough volume to appreciably strengthen the industrial base for protracted conflict.
First, the United Sates needs to understand the relationship and requirements between the totality of force structure in a prolonged conflict, the industrial base, and global supply chains. Lengthening the duration of existing modeling tools like synthetic theater operations research model to similar durations as to match Air Force Materiel Command’s long-duration logistics wargame, to understand the consumption of resources and attrition of forces over not just weeks but months, would at the least give a more informed understanding of what the demand signal would be in a protracted conflict on the organic and commercial defense industrial base.
This requires the Department of Defense to map out the totality of global supply chains to understand existing throughput capacity from manufacturing back to raw material. Co-opting existing efforts to map the supply chain to reduce risk and malign influence can be utilized to understand capacity. Expanding this out to include the supply chain for the individual tools that create the parts needed would give the department the understanding to scale manufacturing in the event of a protracted conflict.
The 2023 National Defense Authorization Act Section 1415 started this effort by focusing on the impact of prolonged conflict on rare earth materials — but, while helpful, it is also putting the cart before the horse. Until we understand the impact of resource consumption and the attrition of forces, and what the existing industrial base can support, then it’s just the back half of the equation. The department should define the requirements for prolonged conflict, understand the ability to rapidly replicate what’s lost, understand the ability of industry to scale manufacturing, and then prioritize investment in the industrial base based on resilience and endurance.
An interagency approach through the Department of Commerce, Department of State, and Department of Defense should first understand what the resource requirements are for protracted conflict. Second, the Defense Department should develop a risk-mitigation framework based off material criticality in conflict, ability to rapidly scale, and supply chain security. Finally, it is important to understand the inherent ability for private industry to sustain production outside of conflict. This would be a targeted approach to industries that need long-term support because they are too critical, too time consuming to scale, or too at risk from adversary disruption.
The U.S. military should also invest in resilience. The Department of Defense is reliant on the organic industrial base and improving the existing force structure to survive the initial phase of the campaign. The depots and shipyards are supposed to provide the bridge until the rest of the economy can catch up, but years of divestment have weakened them. As Chris Dougherty highlighted earlier this year, investing in the revitalization of the jawbone of American defense, in particular logistics systems, will ensure the sustainment of U.S. forces in a campaign. Additionally, working with the industry to break down the walls to get data on parts to increase utilization of additive manufacturing and bring battle damage repair capability back will help keep more platforms operational for longer periods. Lastly, the Office of the Secretary of Defense Comptroller should start budgeting for the attrition of certain platforms. While it isn’t likely to budget for the attrition of aircraft carriers, increasing the requirements for things like collaborative combat aircraft, which should also be considered by authorizers and appropriators when looking at future system development.
Third, the Department of Defense should increase cooperation with private industry and begin to make substantial investments in the defense industrial base to be able to respond in a time-relevant manner so that the United States can endure protracted conflict. Following the example set by the Roosevelt administration’s Office of Production Management would offer an instructive path to level-set between industrial capability and military requirements. This means including venture capital, private equity, and commercial partners in major wargames and exercises. A lesson from World War II mobilization is that neither side knew how challenging the reality was until they side started working together.
Fourth, long-term success in a protracted conflict will ultimately rely on securing access to the critical materials, especially rare earths, that are required to support the manufacture of advanced platforms. Driving the Development Finance Corporation to increase its focus on national security-related issues, especially sustainable rare earth mining, under the auspices of climate change would be a reasonable pivot. Furthermore, equity investments in companies would ensure the United States is doing due diligence and preventing malign influence by adversaries that could be problematic during conflict. This would allow the scaling of existing near-shoring and friend-shoring efforts and provide immediate tangible benefits to the industrial base. As the department pursues increased investments in advanced platforms that rely on rare earth materials, securing these critical mineral supply chains is imperative.
Lastly, the Office of the Under Secretary of Defense for Acquisition and Sustainment should expand existing Defense Production Act Title III authorities to include private equity and debt financing. This could be accomplished in-house by using profits from the Defense Logistics Agency’s Defense Working Capital Fund to make investments in the defense industrial base rather than using additional appropriations from Congress. Historically, the Defense Working Capital Fund has been raided to support projects like the World War II Memorial. Focusing investments in capital-intensive, priority industries that have left the United States would provide a necessary capability for a future fight as well as provide well-paying jobs for Americans. Additionally, it would allow the department to make significantly more profit to re-invest in the industrial base. During World War II the Defense Plant Corporation served in a similar capacity, providing subsidies for the expansion of the defense industrial base through significant investments in facilities with a pure government utility or facilitated tax credits for industrial capacity with more dual-use possibilities. With increasing budgetary pressures being levied on the Department of Defense, finding opportunities to use existing income streams without going back to Congress offers significant opportunity to help re-build the American industrial base after decades of atrophy.
A protracted war between China and the United States would be a globally cataclysmic event that would shape our world for generations. But can the United States prepare its industrial base to potentially deter an adversary? Increased industrial capacity, capability, resilience, and a demonstrated commitment to fight the long war would go a long way to signaling resolve. These recommendations aren’t meant to be all-encompassing — workforce issues, existing regulatory law, and budgetary constraints are very real — but the challenge of preparing for prolonged conflict began yesterday. A few generations ago, Gen. Douglas MacArthur commented on the relevance of “too late” — nations always find themselves too late in preparing for conflict. The challenges in the defense industrial base will take years to fix, so better the United States start now than be too late.
John Barrett is a career logistician in the U.S. Air Force. He wishes to thank Maj. Gen. Dave Sanford, Dr. Kelly Grieco, Krista Auchenbach, Jake Chapman, and Dominique Yantko for their guidance and feedback. Any errors are the author’s own.
The views expressed are those of the author and do not reflect the official guidance or position of the U.S. Government, the Department of Defense, the U.S. Air Force, or the U.S. Space Force.