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US defence industrial base |
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Tim Ripley reviews the status of the major players in the US defence industry. The United States defence industry is the largest in the world. It produces every type of weapon system known to man, from nuclear weapons down to combat knives. But the massive decline in defence spending since the mid-1980s, when the Pentagon was spending more than $160bn annually on new equipment, has transformed the landscape of the American defence industry. With only half as much in real terms to spend on defence equipment, the Pentagon is finding it has to make crucial procurement decisions to keep key strategic production lines open. Reproduced here are a number of tables illustrating the major defence production efforts in the United States during 1999 and 2000. The products listed are those that remain in funded serial production, rather than systems still in the research and development process, such as the joint strike fighter (JSF), THAAD ballistic missile defence system and Comanche stealth helicopter. Assembly location refers to the sites where prime contractors bring together key components before delivery to the customer. The very nature of modern defence systems means several partners and sub-contractors are almost always involved in their design, development and production. Space prohibits full listing of programme partners but the tables give a good idea of the spread of projects involving the major players in the defence industry. Some interesting trends are apparent from the tables. With now only half as much in real-terms to spend on defence equipment, the Pentagon is finding it has to make crucial procurement decisions to keep key strategic production lines open. A number of programmes such as the F-15E Strike Eagle, are reaching the end of the lives and direct replacements are still some time from entering production. Where the next generation of combat aircraft and helicopters are built over the next decade will determine the fate of a number of large airframe assembly facilities. The need to cut costs to boost corporate share prices and reduce unit prices, is likely to collide head-on with the influence of several congressional leaders who want defence jobs and dollars to remain in their districts. The two main armoured vehicle manufacturers, General Dynamics and United Defence, have large order books for upgrade work on existing platforms, but apart from the Crusader self-propelled artillery system and some specialist engineer vehicles there are no major new builds of armoured vehicles planned until well into the second decade of this century.
In the naval sector, decisions have been made to assign new contracts for Sea Wolf attack submarines to ensure that key yards remain open and the capability to produce nuclear submarines is retained. Once lost, the necessary skills and expertise will not be easily regained. The wobble in the share price of a number of major US defence contractors during the last six months of 1999, indicated that there may be more consolidation of the industry on the cards in the near future. Internal consolidation is likely to be high on the agenda to reduce real costs from companies’ balance sheets. How the Pentagon reacts to further plant closures and losses of real capabilities will be a major issue over the coming year. ©
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