Maintaining the Arsenal of Democracy

By Craig R. McKinley
In 1919, a group of Army officers met at Aberdeen Proving Grounds in Maryland and formed the Army Ordnance Association.

These individuals had witnessed first hand the difficulty of developing and fielding major items of equipment needed in World War I. They found it disturbing that the United States had been forced to rely on its allies for many of the weapons of modern war — including artillery pieces and the first fighter planes — because U.S. industry was not prepared to do so.

These original members of the Army Ordnance Association were determined that this unfortunate experience would not be repeated in an uncertain future. They succeeded.

The National Defense Industrial Association is the linear descendant of this original group of forward-thinking patriots who gathered together in 1919, and I am proud to have been asked to serve as your new president and CEO. I look forward to doing so and to continuing NDIA’s role as a respected and effective advocate for a vital national asset, our defense industrial base.

Those who have preceded me have never forgotten the lessons of the past and the costs of being unprepared. Through the dedicated efforts of that original group, within 20 years President Franklin Delano Roosevelt was able to label the United States the “Arsenal of Democracy.”

The U.S. defense industry that evolved after World War II is today widely acknowledged as the best in the world. As one scholar of national security affairs has noted, if a nation “had to choose a ‘military-industrial complex’ that has stood above all others since the early 1940s, and continues to do so today, the American military-industrial complex would surely be the one most people and nations would choose.”

Despite this, the defense industry faces numerous challenges driven by an increasingly chaotic international environment, where new enemies have emerged with different approaches to warfare. Many Americans are war-weary and believe that the nation has been engaged overseas for too long. And fiscal and budgetary constraints are forcing hard choices on our military leadership. Through all of these current challenges, the defense industry has continued to perform despite being largely misunderstood and underappreciated.

President Dwight D. Eisenhower coined the term “military-industrial complex” during his farewell address more than 50 years ago. Since then, the image has persisted of a huge defense industrial base that is making a large impact on both the national economy and the national manufacturing base.

This was true at the time of Eisenhower’s speech. When he stated his warning about the size and potential influence of the defense industry, a large, private-sector defense manufacturing base was a new presence on the national scene. It was indeed larger than the steel, automobile, and oil and gas industries. By some measures, it accounted for approximately 10 percent of the gross domestic product.

But 50 years is a long time. We are today at about the same chronological distance from President Eisenhower as he was from the Wright Brothers. Under any measure, the defense industry of today is a fraction of the one President Eisenhower referenced.

Consider this: the combined annual revenue of the top five defense firms in 2014 was less than half that of Wal-Mart — and that defense revenue figure includes commercial aircraft and other items not directly related to defense. Only three defense firms can be found among the Fortune 100 companies. Of the 11 largest firms that designed and produced the major components of the space program, such as the Apollo lander, only two still exist as separate companies and only one of them is a major presence in defense.

An image persists among Americans and many of their elected officials of an expansive industrial “complex” producing large serial runs of sophisticated equipment. But the days when the Ford Plant at Willow Run, Michigan, produced a B-24 bomber every hour, or the nearby Chrysler Plant produced 40,000 M-4 tanks in three years, are long over. Today’s defense industry is much smaller, more specialized and, as one noted observer has commented, “looks more like Ferrari than Ford — producing very sophisticated and expensive items almost one at a time.”

When Defense Secretary Ashton Carter was the undersecretary of defense for acquisition, technology and logistics, he noted that a healthy defense industrial base is not a “God-given right.” The secretary understands that a thriving, innovative, agile and responsive arsenal of democracy needs to be nourished and nurtured.

The Pentagon and Americans need to understand that the defense industrial base today has been placed in the hands of publicly owned corporations, and is managed by those having financial fiduciary responsibilities to shareholders. But most importantly, everyone needs to recognize that today’s defense industry looks nothing like the “military-industrial complex” President Eisenhower mentioned a half-century ago.

And this is where I see the role of NDIA. It is little changed from that of the Army Ordnance Association nearly 100 years ago: to inform, educate and — when necessary — advocate for the major strategic assets that have served the United States and many others around the world so well. As Carter ably put it: it can’t be taken for granted.

I am excited about this new role, working with dedicated professionals and the challenges and opportunities it presents. I look forward to meeting and working with those of you who continue to be committed to ensuring that all our servicemen and women will always have the tools they need, when they need them, and to maintain the asymmetric technological advantage we have enjoyed for decades.

Topics: Defense Department

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