Export Sales May be the Only Salvation for Parts of the U.S. Defense Industrial Base

First two production F-35 fighters in final assembly.

(Photo: Lockheed Martin)

February 29, 2012 Daniel Goure, Ph.D. / Early Warning Blog, Lexington Institute – defpro.com

Maintaining the world’s best all-volunteer military is a very expensive proposition. People costs continue to rise as do the costs for military hardware. Each generation of equipment costs significantly more than the one that preceded it. This is not because of a broken acquisition system, although problems with the way the Pentagon defines what it wants and contracts to acquire it do contribute to rising prices. Costs for military equipment go up because we want our military to have the best airplanes, tanks, ships and guns.

When defense budgets were flush, the United States generally pursued foreign military sales for geo-strategic reasons. Sales of U.S. fighter jets such as the F-15, 16 and 18 both ensured that U.S. friends and allies could defend their own airspace and created a web of common interests, practices and capabilities that supported coalition defense and partnership activities. In the case of the F-35 Joint Strike Fighter, the Pentagon created an international co-development partnership with eight other countries to help defray the costs of development and gain access to more technologies as well as to secure a broader base of sales. But the F-35 program has been one of a kind, so far.

One exception to this rule has been the M-1 Abrams program. Several times in the past, the danger that production of the world’s best main battle tank would be brought to an end was averted by sales to Egypt and Saudi Arabia.

Now, in order to live within its means and at the same time acquire critical military equipment and maintain an adequate defense industrial base, the F-35 and M-1 examples may have to be more the rule and less the exception. The Department of Defense and the next administration -- regardless of political affiliation -- are going to have to aggressively sell U.S. military hardware overseas.

We are already seeing signs that the Pentagon is becoming more pro-active in helping the U.S. defense industry in foreign markets. The Army is reported to be pushing to sell foreign customers on the idea of upgrading existing armored vehicles, such as M-1s, or acquiring new systems like the Stryker. The Air Force is searching for new customers for the F-35. The Navy is hoping to make the Littoral Combat Ship available to allies in the Middle East and East Asia and to convince some of our NATO partners to acquire the missile defense variant of the Standard Missile 3.

At this moment, the Pentagon sees expanded foreign military sales as a way of covering temporary production stoppages in some programs. The idea is that the U.S. will come back into the game in a few years. However, if future defense budgets get cut again, foreign sales may be the only way to sustain critical portions of the defense industrial base.