Munitions industrial base: trouble on the horizon.

• Author: Holmes, William R.
• Position: COMMENTARY

A confluence of current events indicates that a vital national resource--the munitions industrial base--urgently requires attention.

These concerns are not merely theoretical or speculative. They are based on historical facts. Between 1985 and 1994, Defense Department funding for the procurement of ammunition declined by 80 percent. The inevitable result of severely restricted production was a shake-out of producers. More than 70 percent of the firms that had participated in the manufacture of munitions exited the field, never to return. The ranks of a highly skilled and experienced work force were similarly decimated.

Little consideration was given to this reality, and little or no planning was done to ameliorate its effects. Individual producers and suppliers struggled to adjust, but lacked a clear, approved baseline to serve as a guide to the future. Knowing little more than the fact that funding was decreasing from one year to the next, ammunition producers had no satisfactory basis for business decisions on investments and the setting of production rates. There was no light at the end of the tunnel, and the rational business choice for many was to go in another direction.

What may have been a rational choice for an individual firm, however, often was irrational from the point of view of the industry as a whole and its continued ability to meet the needs of the military services. The cumulative effect was a munitions industrial base in crisis, literally on the verge of collapse. One reaction of the private sector was the formation in 1993 of the Munitions Industrial Base Task Force--a coalition of 18 major producers. Its primary goal was to make clear that the munitions industrial base was in danger of disappearing. A strong, unified message was carried to the Defense Department, the services and Congress.

An injection of funds allowed the situation to be stabilized. In 1995 and 1996, the office of the secretary of defense added more than $2.2 billion to ammunition budgets between 1996 and 2002. Congress appropriated more than $1.9 billion above service budget submissions for ammunition procurement for the 1995-2002 period. In the ensuing years, depletion of stocks caused the services to increase their funding requests. Ammunition consumption had increased substantially as a result of the Iraq war and the global war on terrorism.

Compared to its former perilous state, the munitions industrial base is today on a relatively sound footing...