DoD's first industrial strategy seeks to bolster weapons production 'speed and scale'

Handout photo of workers on the moving line and forward fuselage assembly areas for the F-35 JSF at Lockheed Martin Corp’s factory located in Fort Worth, Texas. (Lockheed Martin)

Updated: 1/11/2024 at 11:15 am ET to include Pentagon, AIA comments.

WASHINGTON — With a central focus on the growing threat from China’s emergence as a “global industrial powerhouse,” the Defense Department’s “first of its kind” National Defense Industrial Strategy (NDIS) is focused on increasing the ability of domestic companies to more rapidly produce weapon systems in greater quantities to ensure the US military’s edge in any future conflict.

“While America continues to generate the world’s most capable weapons systems, it must have the capacity to produce those capabilities at speed and scale to maximize our advantage,” the strategy, released today, says. “DoD needs to move aggressively toward innovative, next-generation capabilities while continuing to upgrade and produce, in significant volumes, conventional weapons systems already in the force.”

Laura Taylor-Kale, assistant secretary of defense for industrial base policy, told reporters today that the drive behind the strategy is the increased threats to US national security, citing China and Russia in particular.

“America faces great threats to national security, our adversaries are building up their military power to levels not seen since World War II,” she said. “It’s important to note that America’s economic security and national security or mutually reinforcing and ultimately the nation’s military strength depends in part on our overall economic strength.”

Further, the 55-page document makes clear that efforts to bolster the US defense industrial base are needed immediately.

“The current and future strategic environment requires immediate, comprehensive, and decisive action in strengthening and modernizing our defense industrial base ecosystem to ensure the security of the United States and our allies and partners. As this strategy makes clear, we must act now,” Deputy Defense Secretary Kathleen Hicks writes in a forward to the strategy.

Therefore, said Taylor-Kale, “the NDIS will guide the department’s engagement policy development and investment in the industrial base over the next three to five years.”

The overarching goal, the document says, is to “make the industrial ecosystem dynamic, responsive, state-of-the-art, resilient, and a deterrent to our adversaries.” To that end, the NDIS lays out four priorities “to serve as guiding beacons for industrial action and resource prioritization in support of the development of a modern industrial ecosystem that supports the nation’s defense.” These are:

Resilient Supply Chains
Workforce Readiness
Flexible Acquisition
Economic Deterrence

The document does not shy away from acknowledging that a number of serious challenges must be overcome for the Pentagon to achieve those priorities. These range from a lack of skilled workers and “inadequate” domestic manufacturing capabilities, to DoD’s failure to adequately exploit innovative dual-use technologies, to the fact that the US military is an “unattractive customer” due to “low volume buying patterns, lengthy periods between modernization, and often unnecessarily over-customized design specifications” and budget instability.

The bulk of the NDIS is then dedicated to articulating top-level approaches to overcoming those challenges and achieving each of those four goals, although the document is light on specifics. It further contains few surprises, with much of the language echoing long-standing recommendations by industry and outside experts including the Government Accountability Office. Indeed, many of the strategy’s action points are based on efforts already ongoing within pockets of the Pentagon and within the military services.

For example, the NDIS vows DoD will “expand relationships with companies and industries not traditionally in the DIB [defense industrial base]” and “explore opportunities to expand programs that mitigate costs of entry” for those newcomers — something that the Air Force has been attempting to do since at least 2019 and that is a key part of the Space Force’s emerging commercial strategy.

That said, the NDIS notes that more specifics about planned activities will be forthcoming in a “classified implementation plan.”

“We are finalizing detailed classified implementation plan with near term, measurable actions and metrics to gauge progress,” said Taylor-Kale. “Note that while the detailed implementation plan will be classified, I commit to publishing in the coming months an unclassified overview of the implementation plan.”

The plan’s “intention”, she added, is “to create a prioritized list of tasks to actualize the strategy.”

Halimah Najieb-Locke, DoD acting principal deputy assistant secretary for industrial base policy, told reporters during today’s briefing that work on both already is underway at her office.

“This is more than an aspirational document. My team is working currently across the interagency to develop the detailed implementation plan. and we hope to publish the unclassified version in February with the classified version Following sometime in March,” she said.

She further noted that the implementation plan, like the strategy itself, will be crafted based on input from industry, “key stakeholders” and members of Congress.

As an example, Taylor-Kale said that “part of the implementation plan is really going to focus on setting up more public-private partnerships thinking through some of the risk mechanisms and the way that the federal government can work with industry to say: ‘If you are a part of co-funding an element that we’ve invested in … we will bear the burden of the risk, we will work to leverage our indemnification elements were feasible and where appropriate.”

She explained that the question of who bears financial risks is something of interest to “the capital markets” — which are funding many of the innovative startups working on cutting-edge dual-use technologies in DoD priority areas like artificial intelligence — in seeking to “protect their investments.”

The administration’s work on the strategy was welcomed by the Aerospace Industries Association (AIA) in a statement today, but with some caveats.

“The details will be critical, and we will continue to engage with the Department of Defense to ensure both sides fully understand the intent and impact of the recommendations,” AIA said. “The Pentagon’s success in this effort, and the health of the industrial base more broadly, rely on sustained investment that matches the strategy and reflects how industry operates.”

The following four charts summarize the planned DoD actions aimed at each of the NDIS’s priorities, and the hoped for outcomes.