- The war in Ukraine, entanglements in the Middle East, and potential conflicts in Taiwan have revealed shortfalls in US weapons systems and structural vulnerabilities in our defense base.
- To deter future conflicts with powerful, nuclear-armed adversaries, America’s defense force is modernizing to produce weapons systems more quickly, in greater numbers, and more cost-effectively.
- Tech innovators are building autonomous, software-driven systems and using non-traditional approaches to manufacturing and supply chains.
KEY INSIGHTS:
Across the world, and on multiple fronts, the US faces a weapons crisis.
A prominent policy think tank found that in a potential conflict with China in the Taiwan Strait, the US military runs woefully short on the long-range, precision-guided missiles that can hit Chinese naval forces from a safe distance. In nearly two dozen hypothetical war games scenarios, the Center for Strategic and International Studies (CSIS) determined that the US exhausted its supply of these critical missiles in less than a week. To help defend Taiwan against Chinese aggression, some estimate that our military needs between 800 and 1,200 long-range, precision-guided, anti-ship missiles. Currently, the Pentagon has roughly 400.
On the other side of the globe, stockpiles of a variety of missiles have been dramatically reduced. The US sent roughly one-third of its stockpile of Javelin anti-tank missiles to Ukraine. These missiles, which are precision-guided and launched from land, are a critical reason Russian forces were not able to capture Kyiv and were forced to retreat from the capital city early in the war.
The US military remains the most well-funded defense and fighting force in the world. Even with China’s recent weapons buildup, the US still spends more on national defense than the next 10 countries combined. So why are we facing weapon shortages? The answer has to do with the types of munitions we produce, how we produce them, and the number of companies that make them.
“Why are we facing weapon shortages? The answer has to do with the types of munitions we produce, how we produce them, and the number of companies that make them.”
Javelins, anti-ship missiles, and many other systems are expensive and difficult to manufacture, often requiring a highly specialized, bespoke approach. Replenishing or building up new stocks of these and other so-called “exquisite” weapon systems takes far too long. CSIS has estimated, for instance, that replacing the 8,500 Javelins could take eight years, while producing the 1,600 Stinger surface-to-air missiles that have been used in Ukraine would take 18 and the 5,200 155mm precision-guided munitions used would take seven. In the Asia-Pacific region, producing the roughly 1,000 anti-ship missiles needed for both deterrence and military readiness would take just as long. We also aren’t able to effectively supply our allies. NATO and Egypt recently placed orders for $700 million in Stinger missiles, which won’t be available until 2030.
Efforts are underway to accelerate these production times, but the shortages highlight a significant challenge in America’s defense industrial base. Secretary of the Army Christine Wormuth called the situation a “wake-up call.” To adapt, the defense industry will have to modernize, changing not only how existing systems are produced but pursuing new avenues of innovation. Speaking at a defense conference in Washington, D.C., in August 2023, Deputy Secretary of Defense Kathleen Hicks called on the defense industry to make different types of weapons and vehicles — those that are “small, smart, cheap, and many.” These systems, she said, will be mass produced and flexible, using advanced software to quickly make changes when the needs of a mission change. Instead of the many years needed to make current systems, critical numbers of these drones, autonomous vehicles, and lightweight weapons, Hicks said, could be made in 18–24 months. This so-called “affordable mass” would add significant power to the strength of existing systems, serving as an effective deterrent force.
The arrival of market competition
After decades of defense production lying in the hands of a few large contractors, a wave of defense tech companies is helping drive new levels of innovation. Companies like Aeon are using nontraditional approaches to produce weapons systems that are more flexible and responsive — both in how they are manufactured and how they operate on the battlefield. In a world of evolving threats, our company and others are designing and engineering weapons that can be manufactured quickly and on-demand.
Powered by advanced, AI-enabled software, these next-generation defense systems can also be quickly updated and adapted to respond to changing operational needs and shifting battlefield conditions. Zeus precision-guided, anti-tank missiles, for instance, can address countermeasures and new threats with rapid software updates. Instead of relying on ’80s- and ’90s-era computer vision for tracking targets, our system uses AI-based models to do automatic tracking and target recognition, allowing missiles to quickly engage a variety of targets, including tanks, amphibious landing vehicles, and hovercraft.
The deterrent value of massive fleets of affordable, on-demand weapons should not be understated. In the CSIS war games, a Taiwan-US-Japan alliance still won the war and preserved an autonomous Taiwan, but the victory came with a high cost: the loss of dozens of ships, hundreds of aircraft, and most importantly, tens of thousands of servicemembers. Preventing something like this from ever happening is the ultimate goal. An overwhelming mass of missiles, drones, and other autonomous vehicles would both protect and enhance the arsenal of America’s expensive legacy systems.
“The deterrent value of massive fleets of affordable, on-demand weapons should not be understated.”
Unintended consequences
The origins of the military’s current predicament date back to the end of the Cold War. In 1993, with military spending cuts on the horizon, Deputy Defense Secretary William Perry hosted a dinner with the CEOs of all the major defense contractors. At what became known as the “Last Supper,” he issued an ultimatum: either consolidate into very large companies or die. The resulting wave of defense industry consolidation was one of the fastest transformations in modern US history. By the end of the 1990s, the 50 so-called “prime” defense contractors, which work directly with the Department of Defense, became five: Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics. It achieved the goal of keeping defense contractors strong and profitable, but over time, the consolidation eroded the defense industry manufacturing base, weakened its supply chains, and hindered innovation.
Take the Javelin, for instance. Its rocket motor is produced by just one supplier at a single facility. That same company, L3Harris, is also the only supplier for both composite-case and steel-case solid rocket motors for the Guided Multiple-Launch Rocket System (GMLRS), which fires surface-to-surface rockets. Another company, Williams International, is the single supplier of the turbofan engines for most cruise missiles, including those important long-range anti-ship missiles. Having a single supplier for these critical components severely hampers efforts to speed up missile production.
Supply chains for more mundane items aren’t any better. Just one foundry is currently able to produce the large titanium castings for some important weapons systems. Much of the fastener and casting industries, which make important components for virtually every vital weapon and vehicle system, has been outsourced to China, making us highly vulnerable in the event of a military conflict.
Labor shortages also hold back the speed of production. The specialized components and core technologies that comprise most US missiles require workers and engineers specifically trained to create and manufacture them, not to mention have any necessary security clearances. Much of this workforce is now aging out, and not enough new machinists, welders, and CNC programmers are being trained to replace them. To restart its production of Stinger missiles, for example, Raytheon had to call in retired engineers to teach its employees how to build from blueprints drawn up during the Carter administration.
Better, faster, cheaper
To avoid these pitfalls, new companies like Aeon are approaching manufacturing in very different ways. Zeus missiles, for instance, use a high proportion of components that are commercially available. Many of our suppliers have long histories of delivering large orders and do not require specialized training. Producing weapons with these easily accessible, high-volume components affords the flexibility to quickly scale up production. For components we can’t or don’t want to outsource, we manufacture ourselves, giving us control over production volumes. Moving away from a specialized supply chain also helps lower costs. The projected annual production rate for Zeus missiles is five times that of the Javelin, at a fifth of the cost.
“Producing weapons with these easily accessible, high-volume components affords the flexibility to quickly scale up production.”
The dramatic consolidation of the defense industry made sense at the end of the Cold War. Great power threats were waning and military conflicts centered on regional insurgencies. But today’s geopolitical dynamics represent very different challenges. The pressures mounting from China, Russia, and the Middle East have highlighted the need for far more competition in the industry — for the Department of Defense’s five prime contractors to now swing back to 50, or more. This renaissance of innovation will not only alleviate the backlog of weapons orders, but produce the kinds of smarter, cost-effective systems that will help preserve peace and keep America safe.
