Manufacturing edge essential to defense.

• Author: Farrell, Jr., Lawrence P.
• Position: PRESIDENT'S PERSPECTIVE

IT IS HARD TO ENVISION AN INDUSTRY that provides leading-edge military systems without also being a leader in advanced manufacturing.

While the U.S. defense industry remains unsurpassed, it faces long-term challenges--one of which is its ability to secure innovative manufacturing capabilities. This applies all the way from bombers to boots.

We tend to dismiss the needs of industry on the quite reasonable grounds that commercial enterprise should be subject to the forces of the marketplace. Producers of typewriters were forced by market circumstances to adapt or perish without government intervention. Why should defense industry be any different?

Well, I contend that the defense industrial base is different. Throughout U.S. history, defense manufacturing has played a vital role in national security. In the industrial age, the overlap between industry and national security is significant and unavoidable.

Defense industries cannot be invented on the eve of a national emergency: The day before the 9/11 attacks, Undersecretary of Defense Pete Aldridge warned against peacetime complacency by observing that three of the nation's last five major wars came as surprises. Just 24 hours later, he had to revise that number to four out of six. The current conflicts in Iraq and Afghanistan once again underscore the importance of keeping a strong defense industry in place, with the ability to adapt quickly to emerging requirements. Witness the truck-armor program and the response to improvised explosives targeting U.S. troops.

In fairness, there is much good news about the state of manufacturing in the United States. Productivity is at an all time high. We are still the world's largest manufacturer and make 75 percent of what we consume.

But our competitors are close behind. Just like a good running back, we must keep our feet moving.

Manufacturing has proven to be a boon for the economy and for American workers. Wages in this sector are only second to information services. Seventy percent of workers receive health coverage. Each dollar invested in manufacturing returns $1.37 to the economy: By comparison, one dollar invested in government returns only 73 cents.

But the defense sector must contend with several unwelcome developments, such as the prospect of declining military spending and pressures to cut the mounting cost of weapon systems. As the industry seeks ways to cut costs, manufacturing deserves close attention. Even relatively small investments...