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Appendix A Historical Perspective on the U.S. Defense Industrial Base
Historical events have always influenced the United States' perception of its defense needs, which, in turn, have influenced the nation's commitment to maintaining defense supplies and manufacturing capacity. Participation in the French and Indian War (1750–1770) taught the colonists the importance of maintaining arms and the capability of using them when necessary. Prior to declaring independence in 1776, the colonists had gathered military supplies at a number of locations, some of which were used at Lexington and Concord after the ''shot heard round the world" was fired. Immediately after achieving independence, while operating under the Articles of Confederation, the states established and equipped militia to ensure the integrity of their boundaries. Official purveyors of powder and guns were established, as well as locations for storing weapons and supplies. States with long coastlines established their own seagoing defense forces, procuring some vessels from shipyards that had been operating along the Atlantic coast before independence. These munitions storage locations and maritime construction yards were the first elements of the U.S. "defense industrial base."
Pre-World War I
Before World War I, U.S. defense policy was still based on George Washington's philosophy of avoiding foreign entanglements. Except for a few occasions when it was necessary to send forces to protect U.S. interests abroad, the military's mission was perceived to be protecting U.S. borders from direct attack. Arsenals had been established to develop ground weapons appropriate to
that task, and naval shipyards were responsible for providing vessels for U.S. naval forces to protect the coasts. Arsenals and shipyards devised, established, and operated defense manufacturing processes within their facilities. From 1885 to 1914, the United States enjoyed unprecedented industrial growth and economic prosperity, and new technology was used for the manufacture of large quantities of consumer and industrial goods rather than military weapons.
The best known developments in manufacturing technology that became important during World War I were based on the work of individuals, such as Samuel Morse, Alexander Graham Bell, Thomas Edison, Guglielmo Marconi, and Henry Ford. The use of wires to transmit messages over long distances, first in code and then by voice, put the United States in the vanguard of technical nations and expanded military communications capability beyond semaphore and messengers. Edison's development of the electric light bulb and the "talking machine" made him an internationally-known inventor. Marconi's wireless transmission devices, in turn, transcended wire-based technology and transferred information by "radio," a capability of tremendous military significance in the naval activities of World War I. Manufacturing methodology and practices developed alongside these advances. Ford's production line, which enabled the continuous large volume production of complex products, had the most profound effect. Production lines set the stage for the manufacture of complex defense systems on a grand scale.
World War I
Initially, the United States acted as a supplier of military capability to other nations during World War I. However, support for Great Britain and France led first to U.S. assistance in North Atlantic convoy patrols (protecting maritime interests), then to supplying military equipment and other commodities to allied nations, and, finally, to U.S. entry into the conflict with the dispatch of the American Expeditionary Force to Europe. Mass production, already installed in many U.S. facilities, made it possible for the United States to augment allied industrial capacity by providing arms, ammunition, and some military vehicles. The United States had no capability, however, to produce or provide combat aircraft. The United States used foreign-manufactured aircraft in combat, with the exception of the Curtis JN-2, or "Jenny," which was used extensively to train pilots who later engaged in air combat as members of other national forces or with the American Expeditionary Force in France.
1919 To 1938
From 1919 to 1938, the U.S. military role was mainly to protect U.S. interests throughout the world. The disarmament begun in 1919 fostered hopes of peace throughout the world, and the League of Nations was widely regarded as a
mechanism for overseeing an extended period of peace and prosperity. In 1929, this vision was undercut by the onset of the worldwide depression. First the United States, then Europe, was badly shaken by such severe economic turmoil that many questioned the very foundations of democratic government. In Italy, Mussolini and his Fascists assumed power and then embarked on aggressive military campaigns on the African continent. In Germany, Hitler's National Socialists began to consolidate their power. These nations rapidly expanded their industrial capabilities for producing armaments under the guise of producing commercial items (e.g., typewriters, baby carriages, glider aircraft). Emphasis was placed on the development of aircraft, and German factories were built based on new manufacturing concepts. The number of naval vessels constructed sharply increased, breaching the treaties limiting the size of naval forces. In Japan, mass production was introduced, and modern munitions and arms production facilities were established. During this period, munitions and other specialized military products were designed and produced within the U.S. armed services. Support for these weapons systems was provided by depots, arsenals, and shipyards in conjunction with the service supply and maintenance systems. These facilities can be considered a defense industrial base, although many weapons and weapons systems (e.g., aircraft for the Army Air Corps) were designed and produced in privately-owned plants. Although the Navy owned and operated two aircraft production facilities, many naval aircraft were also produced outside the defense industrial base. State-of-the-art manufacturing methodologies were used by both commercial and military facilities.
World War II
In 1938, Congress chartered the Defense Plant Corporation, which, in anticipation of hostilities, was assigned the task of expanding production capabilities for military equipment. Its charter permitted both the building and equipping of new facilities and the expansion of existing facilities. It also had the authority to enlist the help of industrial organizations in establishing and operating facilities in the public interest. U.S. involvement in World War II began in 1940 when, under the Lend-Lease Program, the Roosevelt administration provided 40 World War I destroyers to Great Britain for use on North Atlantic convoy routes.
From 1939 to the end of World War II, the Defense Plant Corporation built many government-owned, contractor-operated (GOCO) facilities, the preponderance of which are either still operating or are on inactive standby. At the same time, arsenals and navy yards were expanded and worked two or three shifts a day producing weapons. With the help of government agencies, many U.S. industrial sectors converted to military production, incorporating new manufacturing methodologies that enabled the massive production of war equipment. Automobile and truck production lines were converted to military production, existing commercial shipyards were expanded, and new ones were built. In some commercially
owned and operated shipyards, a new class of vessel—the liberty ship—was produced in massive quantities using newly developed manufacturing concepts. By the end of the war, Kaiser Industries was able to build a liberty ship in one day at its shipyard in Richmond, California.
Aircraft production was improved through new manufacturing technologies. Taking advantage of mass production techniques for automobiles, Ford built a plant at River Rouge, Michigan, to build B-24 bombers designed by the Consolidated Aircraft Corporation. Production throughout the aircraft industry soared with bomber production ultimately reaching the level of one bomber per hour. By early 1945, the combined capability of converted commercial plants and GOCO plants to produce military goods was truly awe-inspiring, and mass production manufacturing technologies had been significantly advanced.
1945 To 1950
With the defeat of the Axis Powers, the Alliance, with the exception of the Soviet Union, began dismantling its military production capability and redirecting it to the production of consumer and commercial goods. A strong economy was considered the best defense, and most commercial facilities that had been converted to the production of military equipment reverted to the production of consumer and commercial products, while many GOCO plants were either downsized or closed down.
Perhaps the most far-reaching defense-related change in the postwar period was the reorganization of the military establishment and its associated civilian agencies. Wartime experience had shown that an integrated military organization was necessary to prepare for and fight a modern war and to coordinate land, sea, and air forces using common military equipment. On July 26, 1947, President Truman signed into law the National Security Act and Executive Order 9877. The Executive Order implemented the act and set forth the functions of all elements in the newly created U.S. Department of Defense (DOD). The new defense establishment faced not only the turbulence of a major reorganization and realignment of responsibilities, but also had to contend with a continuing reduction of forces as thousands of reservists were involuntarily discharged from the services.
In 1948, President Truman directed Secretary of Defense Louis Johnson to perform a complete review of defense needs, which resulted in further cuts in the already demobilized military base. Many units were dis-established and their equipment sent to storage areas. Aircraft were sent to Davis Monthan Air Force Base in Arizona, and ships were anchored in Mobile and Chesapeake Bays, the Hudson and James Rivers, and the Bremerton and Philadelphia navy yards. Some land combat equipment was dispersed to storage areas, but much of it was sold for scrap. The need for new equipment was minimal, and the significantly downsized defense industrial base was easily able to fill the demand. This retrenchment program was euphemistically known as the "Johnson Axe."
Paradoxically, during this period of demobilization, new defense technologies and manufacturing methods, especially in the area of aeronautics, were introduced in some of the armed services. The Air Force and Navy progressed from propeller to jet aircraft and developed several new military aircraft systems. Manufacturing methodologies and tooling in aircraft plants kept pace with the modernization trend. The Army, Marines, and Navy, however, continued to use World War II-era weapons and weapons systems.
By 1950, the defense industrial base, at its weakest point since the mid-1930s, was generally not prepared to meet the greatly accelerated demands brought on by the Korean War. In terms of aircraft-related research, development, and manufacturing, the defense industry had been reasonably well modernized or was modernizing, but this was not true in other areas of defense materiel production. Most U.S. military forces had to make do with World War II equipment for the first several months of the war.
Congress quickly responded to the crisis and passed legislation encouraging and facilitating industrial expansion to meet projected military needs. The most important piece of legislation, signed into law by President Truman, was the Defense Production Act of 1950, which has been extended several times since and is still in effect today. The act (1) defined the defense industrial base; (2) established a priority system for obtaining necessary military hardware and software during emergencies; and, perhaps most importantly, (3) provided for seed money to establish quantity production of new defense materiel and to increase production capacity for specific equipment through the improvement of production methodologies and facilities.
In response to the Soviet development and introduction of the MIG series of jet fighters, the propeller aircraft of World War II were replaced by new jet aircraft. In addition, engine manufacturing methodologies and processes were updated to produce the Century Series of jet fighters.
1953 To 1972
After the Korean conflict, the Cold War between the United States and its allies and the Soviet and Chinese blocs intensified, with the shift in political perspective greatly affecting the structure and mission of military forces. The emphasis shifted from preparing for tactical warfare to preparing for strategic warfare. Under the Single Integrated Operations Plan, planning and targeting became joint functions with all strategic forces placed under the operational control of a single commander in chief in the event of war. These strategic forces consisted of land-based bombers, land-based intercontinental ballistic missiles, and submarine-borne ballistic missiles, and were known as the "Triad." The
development of nuclear weapons and their delivery vehicles was given high priority, with defense manufacturing focused on providing the requisite equipment.
In 1958, after the launch of Sputnik, the development and production of space systems burgeoned. Most U.S. space systems were designed to contribute to the country's overall nuclear deterrence by providing intelligence and early warnings of attacks and performing other command, control, and communications functions. Because spacecraft could not be produced using manufacturing systems designed for nonspace equipment, many new manufacturing processes, methods, and tools were developed. Extended operations in space created a need for metals that exceeded previous levels of purity. As the U.S. space program was accelerated toward the promised moon landing, pressure increased to investigate the effects of prolonged orbital and extra-terrestrial activities on equipment and human beings.
The conflicts in Vietnam, Laos, and Cambodia reversed these priorities for a time. Industry was called on to shift gears once again and produce more conventional weapons and weapons systems, while continuing to meet equipment requirements for nuclear deterrence. As the conflicts in Southeast Asia ended, development and production priorities shifted back toward nuclear capable systems and their supporting research and development. However, as a result of the experience in Southeast Asia and changes in the state of the world in general, dually capable and purely conventional systems were still given some priority.
In the late 1950s, DOD established the Manufacturing Technology (ManTech) Program under the provisions of the Defense Production Act of 1950 and its extensions. The objective of this program was to strengthen the U.S. defense industrial base by encouraging the development and use of innovative manufacturing methods and processes.
During the 1970s and 1980s, there was a period of relative calm in defense manufacturing. Military activity throughout the world was contained, and the pressure to develop more sophisticated weapons eased. Emphasis was placed on improving command, control, communications, and intelligence capabilities. Commercial industrial activity was focused on increasing the capabilities of computational equipment and using this equipment in manufacturing processes. The military also benefited from these advances, although the costs of manufacturing military equipment remained high. In 1975, the Secretary of Defense directed the armed services to increase their emphasis on and support for the ManTech program. Some ManTech funds were allocated to the adaptation of commercial products for use by the military in the nondevelopmental item program, the forerunner of the dual-use program.
1985 To the Present
The disintegration of the Soviet Union and the end of the Cold War had a profound effect on the military establishment and its supporting industries. The level of expenditures that had characterized previous defense budgets was no longer politically supportable. Congress and the public at large demanded that the "peace dividend" (monies saved from defense) be used for social programs. Defense allocations plummeted and have only recently begun to level off. Large reductions of forces and significant retrenchments in research and development and procurement were necessary for the military to stay within funding constraints. Projections of greatly reduced defense budgets and advice from defense officials encouraged widespread consolidations among defense-oriented firms, with mergers and acquisitions accelerating between 1985 and 1995. The twofold objective of these consolidations was to maintain a critical mass of defense-oriented business while diversifying into the production of commercial goods and services and minimizing dependence on the defense budget.
Since 1787, the characteristics and size of the U.S. defense industrial base have changed significantly. Although, the defense industrial base certainly existed during World War II, the Korean War, and throughout most of the Cold War and the conflict in Southeast Asia, the term has become less relevant in recent years. Today, it is difficult to define exactly where commercial industry ends and the defense industrial base begins. Although many aircraft plants, arsenals, shipyards, and other industrial facilities are devoted mainly (some exclusively) to providing military hardware, many of them only assemble system components that have been manufactured elsewhere, usually by commercial industrial facilities. With the exception of munitions, the trend has been and continues to be a blurring of the line between commercial and defense industries. This trend is most apparent in the organizations that produce aircraft; space systems; command, control, and communications systems; and the infrastructure and support systems related to them.
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