Marine Corps Plays Part In a Shrinking Military Vehicle Industrial Base

By Stew Magnuson
Whether it’s munitions, space, combat vehicles or submarines, maintaining the industrial base for sectors unique to the military has been a growing concern.

A halt in new-start programs caused by declining budgets has sent up warning flares from companies that are worried about permanently losing the capability to produce hardware.

The Marine Corps has singular needs as well, particularly for amphibious vehicles that support ship-to-shore operations.

But when a spokesman for one of the service’s major contractors was asked if his company was concerned about the Marine Corps vehicle industrial base, he said there was no such thing.

“Their vehicle purchases are not significant [enough] to create an ‘industrial base’ as we know the Army’s combat vehicle industrial base today,” Peter Keating, spokesman for General Dynamics Land Systems, said in an email.  

“They’ve not executed a design and development effort for a new combat vehicle since the [expeditionary fighting vehicle] program was canceled by the secretary of defense,” he said.

The mine resistant, ambush protected tactical wheeled vehicles the service purchased were off-the-shelf designs, he noted.

“The above is why I would have difficulty commenting on [a] U.S. Marine Corps ‘industrial base,’” Keating added. 

Mark Signorelli, vice president and general manager for combat vehicles at BAE Systems — GD’s main competitor in the amphibious vehicle market — mostly agreed.

“While there isn’t what I would call a unique Marine Corps industrial base, the Marines are an important part of both the tactical wheeled vehicle industrial base and the combat vehicle industrial base,” he said.

There are some singular characteristics in some platforms that are developed or delivered to the Marine Corps, but they are a component of those categories, he added.

The expeditionary fighting vehicle was one of those unique platforms. It was designed to be launched from a ship miles away from shore, sail as it if were a boat, then change into a fighting vehicle after it reached land. After GD Land Systems and the Marine Corps spent more than a decade developing the program, it was canceled in 2011 because it could not meet performance requirements.

Since then, no vehicle program devoted to the Marine Corps has gotten underway.

The follow-on Amphibious Combat Vehicle program is still being “studied.” The land-based Marine Personnel Carrier program is on hold. There was no money in the fiscal year 2014 budget allocated to it.

Signorelli said the tactical wheeled vehicle and combat vehicle industrial bases are at risk. There are two components to both: the engineering and development side and the manufacturing side.

As far as capabilities that are at risk of atrophy or perhaps disappearing altogether, the Marine Corps’ amphibious vehicles fit that description, he said. 

“In that engineering base, there is a unique set of design characteristics and parameters that are associated with the amphibious vehicles that are complementary to the larger combat vehicle industry,” he said.

The Army’s Ground Combat Vehicle program is currently keeping the engineering portion of that sector alive, Signorelli said. It was hoped that the Amphibious Combat Vehicle would dovetail with that program and keep the momentum going, but now there is a possibility that both these programs may slip, he added.

“We are in discussions with both the Marine Corps and the Army about the potential impacts of that gap, or the loss of that capability,” he said.

Tom Stevenson, lead for logistics and sustainment at the Marine Corps’ program executive office land systems, said industrial base issues are taken into account when the service does its business case analyses for programs.

It looks at the risks associated with all the potential strategies.

“We will try to balance risk with cost. [The analysis] takes into consideration what does the industrial base look like, where is support needed. Are there political implications for one strategy against another? What is the most cost effective way to do this?” he said.

While there aren’t any big, new-start vehicle programs on the horizon, there are plenty of business opportunities with the Marine Corps, mostly in the form of upgrades and refurbishment of equipment returning from battlefields, Stevenson said.

“As we’re starting to retrograde that equipment now and looking downstream at the expected continued fiscal austerity, we all in DoD are faced with doing more with less money,” he said.

The refurbishment and upgrade work is split between organic sites — military parlance for government-owned depots — and the private sector. The service wants to keep both active, he said.

“That is what we are always striving for — where we can find that sweet spot in there. Where we can get the most effective work, bringing the skill sets of both the organic and commercial side to the table in the most cost effective way we can,” he said.

While there may be fewer new procurement programs in the future, contractors should “swing around” and look to other opportunities, he said.

“The equipment we have is critical to sustain. ... The things Marines are going to take into battle are still going to need to be taken care of,” he said.

Whenever equipment is brought back, upgraded and overhauled, there is a need for spare parts.

PEO land systems spokesman David Branham noted that Oshkosh Corp. last spring won a $192 million contract to build 164 firefighting vehicles for Marine Corps airbases.

However, that work is taking place at the company’s factory devoted to firefighting equipment, and did not stem the loss of hundreds of workers being laid off at the Oshkosh military vehicle factory, the Milwaukee Journal Sentinel reported.

Upgrades are planned for three of the MRAP tactical wheeled vehicles returning from the field, the Cougar, the Buffalo and the All Terrain Vehicle variant.

The Marine Corps is also participating, with the Army, in the Joint Light Tactical Wheeled Vehicle program, which will eventually replace the Humvee.

Signorelli said the engineering and development phase is nearly wrapped up on JLTV, with only some minor adjustments to be made. There isn’t much left to be done for the cadre of engineers the company employs in regard to that program, he said. However, the program will help boost the manufacturing part of the industrial base once it gets under way, he added.

Meanwhile, there is an upcoming program to keep the remaining Humvees in service, Stevenson said.

“We are working through how the Humvee is going to be sustained,” said Stevenson. Request for proposals for a sustainment modification initiative are expected in early 2014, he said.

The now nearly 40-year-old Amphibious Assault Vehicles will also have to be kept running as the Marine Corps awaits decisions on how it will proceed with the next-generation of ship-to-shore vehicles, Stevenson said.

General Dynamics’ Keating struck a pessimistic note when it came to the Marine Corps’ upgrade and refurbishment work.

“The Marines have pursued a course of upgrading vehicles with enhancements provided by suppliers and installed at their West and East Coast depots. From time to time they have contracted for upgrades by suppliers, but rarely used the original equipment manufacturers,” he said.  

Signorelli said Army Bradley Fighting Vehicle upgrades are keeping BAE’s manufacturing division running for the time being, but that work may wrap up by 2015.

An AAV survivability upgrade program — if BAE is successful in winning that contract — will sustain a small core of workers in the amphibious vehicle category.

As far as manufacturing, Signorelli said “we are in a bathtub. What we are trying to avoid is not only being in the bathtub, but taking it out of the house,” he said.

Stevenson said the Marine Corps is aware of the risks to the vehicle industrial base.

“We treasure that competition. We are full believers in Better Buying Power 2.0 and the idea that competition helps to lower the price,” he said.

Signorelli said: “What we see over time is one or two major development programs, then upgrades, engineering changes, modernization efforts that add to the volume, but probably don’t sustain the core capabilities,” he said.

The question is what comes after that.

“Is the Marine Corps going to find itself in a position where there is only one competitor without something like an Amphibious Combat Vehicle program to come around and provide some more volume?” Signorelli asked.

There is a possibility that one of the two companies vying for this work may exit the sector entirely, he said. 

Topics: Business Trends, Combat Vehicles, Land Forces

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