Industrial Mobilization: Assessing Surge Capabilities, Wartime Risk, and System Brittleness

Abstract

With the shift of U.S. strategic focus to great power competition, interest in industrial mobilization for a long-term, high-intensity conflict has returned. However, the highly consolidated and fragile U.S. defense industrial base is not designed to meet this challenge. To gain insight into the ability of the defense industrial base to meet the demands of great power conflict, the project first reviewed the history and literature on industrial mobilization and then analyzed the time needed to replace contemporary weapon systems’ inventory at peacetime and surge production rates.

That history was not encouraging. In World War I, U.S. industrial mobilization began with the declaration of war. Although industry scrambled to respond, U.S. forces were mostly equipped by the French and British until late 1918. The interwar period saw much planning but lacked the resources for concrete action. Mobilization for World War II began before U.S. entry into the conflict, spurred by naval expansion in the late-1930s and then by French and British war orders. By the time of the attack on Pearl Harbor, the United States was mobilizing as fast as it could. Nevertheless, it was late 1943 to early 1944 before U.S. forces were fully equipped. During the Cold War, large defense budgets sustained a robust industrial base, but the end of the Cold War brought radical consolidation. Most studies on the industrial base focus on sustainability and the health of the peacetime industrial base, but there is little on industrial mobilization. This history shows how long the industrial mobilization process took, the importance of early action, and the value of prior planning.

This project then analyzed the capabilities of the current industrial base by calculating the time needed to replace weapon systems’ inventory at peacetime and surge production rates. This analysis was based on an original data set developed using production data found in the P-21 and P-40 exhibits in the Department of Defense (DoD) procurement justification books from 1999, 2008, and 2020. The analysis produced several findings. First, the project found that the time needed to replace Major Defense Acquisition Program (MDAP) inventories at surge production rates would take an average of 8.4 years, down from 13.8 years at efficiency production rates. Second, some investment categories are at more risk than others, with space-based and aircraft and related systems having significantly longer replacement times than others, and Navy shipbuilding facing the longest replacement times of all. Programs with analogs in the civilian economy, such as wheeled vehicles, mission support vehicles, and C4I (command, control, communications, computer, and intelligence) systems, appear to have faster replacement rates than uniquely military systems. Third, although the Army has by far the largest number of systems, the Air Force has the longest replacement times of any of the services (excluding Navy’s ships). Finally, the project found that the industrial base has become more brittle over time, as it takes longer to replace inventories at FY 2020 production rates than at FY 1999 production rates. These findings indicate that existing surge capacities for major defense acquisition programs fall short of what would be needed for a long-duration great power conflict. More research is needed to provide decisionmakers with options to cope with this shortfall.