State of manufacturing base is cause for concern.

• Author: Farrell, Lawrence P., Jr.
• Position: President's perspective

One lesson that we learned from the "Buy America" debate last year was the need for a thorough and detailed discussion on a national level about the state of the U.S. industrial base, particularly the capabilities of American industry to manufacture sophisticated components for weapon systems.

The Buy America provisions passed by the House of Representatives as part of the Fiscal Year 2004 Defense Authorization Bill ultimately were defeated, given the strong resistance from the Bush Administration and defense industry leaders, who successfully argued that protectionist laws only would hurt the competitiveness of the industry and the ability of the Defense Department to obtain state-of-the-art technology from the most competitive suppliers.

The problem that needs more analysis and concerted action, however, is the decline in U.S. manufacturing capabilities.

If the decline continues, it could have an impact on our ability to access competitive sources in the military market. A strong industrial base is essential to competitive sourcing and a cornerstone of national security. The state of manufacturing capabilities in the United States today gives cause for concern about the health of those manufacturers that produce highly sophisticated weapons and components for the armed forces.

In objecting to the Buy America legislation, the Administration acknowledged the need to take a detailed look at the U.S. industrial base, its critical capabilities, and its ability to meet demands for advanced military technology and components at competitive prices.

What we are seeing today is that large defense firms gradually are outsourcing much of their manufacturing business. Most manufacturing now is done by small and medium-sized enterprises. Large manufacturers have downsized their workforces and are outsourcing production of final parts and components.

Mark Huston, of the National Center for Defense Machining & Manufacturing, points nut that these smaller manufacturers typically lack the resources to invest in research and development. "The technologies they use today in many cases are not even state-of-the-market, let alone state-of-the-art," says Huston.

His organization, NCDMM, has worked with defense contractors to help them upgrade outdated technology, improve processes and incorporate new tooling.

In recent years, says Huston, "we've fallen behind the curve." A lot of know-how was lost as people retired, companies went out of business and cut back...