Thread: Losing OUR manufacturing for armed services too!

http://www.americaneconomicalert.com/ne ... ID=2291356


October 8, 2006


A losing battle: our industrial base
Experts hint that the decline of U.S. manufacturing, reliance on imports imperil future defense capabilities




By Ted Evanoff
ted.evanoff@indystar.com
American troops drive 10,000 Humvees in Iraq. But if the U.S. Army suddenly needed 10,000 more of the slab-sided trucks for the war, the Indiana factory that makes them could not soon deliver.




ON ALERT: A U.S. soldier keeps watch near a military Humvee in Baghdad. The Indiana-made vehicle is a necessity in Iraq, but its manufacturer would be hard-pressed to meet a sudden surge in demand. That kind of manufacturing hurdle is a trend that worries some defense experts. - File photo

Tooling and machine shops that supply critical Humvee parts, such as extra-large 3.5-inch shock absorber bolts, aren't prepared to gear up output quickly.

"The industrial base just isn't there if we ever had to surge production,'' said Craig Mac Nab, spokesman at South Bend-based AM General, whose cavernous 1,100- employee Mishawaka plant is the Humvee's sole producer.

It's not only army trucks the U.S. might have trouble producing in large numbers.

For the first time since America emerged as a first-rank war and industrial power in the 1890s, some U.S. military planners openly doubt the country's manufacturers can sustain the nation in a major war larger than the Iraq conflict.

"What kind of superpower are you if you can't make what you need?'' asked systems engineer Sheila Ronis, a lecturer at the Pentagon's Industrial College of the Armed Forces.

The decline of the Detroit auto industry and the rise of industrial China have decimated a supporting cast of die, machine, mold and tooling shops, a metalworks industry centered in Indiana, Illinois, Michigan and Ohio.

For the same reason imported chairs, televisions and clothes fill American homes, imported parts appear in increasing volumes in military hardware. Imports cost less than homemade.

While no one is sure how many imported parts are used in weapons systems, a growing chorus of researchers and trade groups express concern. They warn the rise of imports and the demise of the metalworks trades threaten the nation's manufacturing base.

"If we needed to seriously increase our capacity for military goods, it'd be a real challenge,'' said Bruce Braker, president of the Tooling and Manufacturers Association. The trade group, in Park Ridge, Ill., represents 1,627 companies, down 25 percent in a decade.
Shakeout in Heartland

In Indiana alone, 20 percent of the 524 tool, die, mold and machine shops open in 1998 had closed by 2004, idling 36 percent of the state's 11,000 metalworks employees. Throughout the industrial Midwest, 1,991 metalworks plants closed and dismissed 80,000 workers in the same years, the U.S. Census Bureau's County Business Patterns reports show.

For three decades, union members have urged consumers to buy products made in the U.S., largely to save union jobs. Ronis, head of the consulting firm University Group in Birmingham, Mich., says the stakes are larger. She links Detroit's decline with national security.

It's a controversial point. Pentagon researchers regularly assess the nation's industrial base. Each year they deem it capable of supplying the armed forces. Even so, some senior commanders now echo Ronis.

"One area of utmost concern for the Defense Department and defense industry is manufacturing machine tools,'' wrote Lawrence Farrell Jr., a retired U.S. Air Force lieutenant general, in the February 2005 issue of National Defense magazine.

"There is a compelling case to be made," he wrote, "that both the federal government and the private sector need to step up their investments in manufacturing technology, so we can remain competitive with economic powerhouses such as Japan, Germany and China.''
Experience evaporating

America has enough factories. What's inside is in short supply -- experienced manufacturing engineers and talented machinists, diemakers and other highly skilled workers.

"We could ramp up production if we had to, but the problem would be finding experienced machinists. They aren't out there anymore,'' said Sam Reed, president of Reed Manufacturing Services, a 40- employee Franklin machine shop that supplies diesel and appliance makers.

No one expects a sudden turnaround, despite the Japanese automakers' expansion. Even as General Motors, Delphi and Ford set out to shed more than 40 factories between them, Honda and Toyota are investing heavily in the United States.

In Indiana, the two Japanese automakers will spend a combined $780 million on new car assembly lines employing 3,000 workers at Greensburg and Lafayette.

New jobs will help the economy, although Ronis says the new auto plants won't shore up the U.S. industrial base. While GM and Ford dismiss engineers, the Japanese automakers will engineer vehicle powertrains in Japan and obtain critical tooling there. She is concerned the United States' battered metalworking trades won't recover.


Since 1933, the Buy American Act has governed defense procurement. Last year, U.S. suppliers netted $79 billion in Pentagon contracts, compared with foreign firms' $1.9 billion.

However, Ronis, a director of the foundation supporting the Pentagon's National Defense University, contends America's weapons components supply chain now runs to China, France, Germany, Japan and other nations.

That's because U.S. companies spend an undisclosed share of that $79 billion on imported parts. As a result, China supplies as much as 10 percent of the parts for the U.S. Army's M1 Abrams main battle tank, Ronis suggested.

Overseas orders

If overseas supply lines were disrupted, U.S. manufacturers could step in. In many cases, though, engineers could not quickly scale up production. Much of the factory manufacturing equipment also comes from abroad.
In 2004, a third of the new U.S. metalworking machinery was imported, along with almost 46 percent of the process control instruments and nearly a quarter of the relays and industrial controls, reports the U.S. Business and Industry Council, a trade group in Washington that studies imports and exports.

"Imports may be the thing to do, but no one has asked the question, 'To what extent is a strong U.S.-located manufacturing base still vital to U.S. national security?' " said economist Alan Tonelson of the U.S. Business and Industry Council. The conservative trade group, based in Washington, favors import restrictions.

Pentagon planners divide into two groups. One emphasizes what is called systems integration -- as long as we know where in the world to buy the machinery and components, the U.S. can put it all together here.

A second group prizes U.S. manufacturing prowess. Some of these target Wall Street. They say manufacturers outsource merely for lower prices to meet Wall Street profit goals. Instead, some military planners argue, U.S. corporations no longer should report quarterly earnings. And U.S. tax incentives should encourage production and innovation in the United States.

Despite Detroit's decline, some metalworks plants thrive. In Indianapolis, Major Tool & Machine avoids automotive orders and focuses on defense, nuclear and aerospace.

Still, Jim Flanagan, president of the expanding 310-employee company, sees the industrial trend.

"This country,'' Flanagan said, "is losing its manufacturing edge.''


Call Star reporter Ted Evanoff at (317) 444-6019.


I would not trust anything made in China or other foreign countries to be used in our armed services.

Right...now add this fact to the mix.

Under FTA's like CAFTA and so many others, foreign companies and foreign nations have the right to bid on all our government contracts without prejudice which means we no longer have the right to designate American Manufacturers for ANY contract including defense contracts.

Not only do we not have the existing industrial base, they have made sure that we can't rebuild it.

These are the actions of Traitors.

When will everyone "see" the true dire pickle we're in?

We are being eliminated by our own government.

That's a fact.

Judy, this fits perfect with Lou Dobb's report of our losing our competitive edge. We have two organizations responsible for this. The Council on Foreign Relations and the Trilateral Commission. European members of the TC did it to Europe, but more slowly. And just like Europe, they have kept the people complacent and believing their lies. They have already made it clear that they have won. President Bush signed that fence bill knowing that it will never be built. My son picked up an article from a LA paper showing the White House with tanks out in front aiming at the White House. IT said in big letters R********N, YES!

QFlash...what did it say in Big Letters? IM me, thanks. I've just got to know.

Originally Posted by Judy

QFlash...what did it say in Big Letters? IM me, thanks. I've just got to know.

Yes. me too!