Defense industry on sidelines, for now, during pandemic fight

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WASHINGTON — The defense industry has high-tech production lines sprinkled around the country and a skilled workforce that has been deemed essential during the COVID-19 pandemic, factors that would seemingly make it a candidate for building desperately needed ventilators and personal protective equipment.

But Pentagon contractors are, for now, sticking to what they do best: making weapons.

In March, defense contractors were designated “essential” workers, allowing them to keep reporting to their jobs in spite of various shutdowns and closures imposed by state and local authorities. And President Donald Trump has formally invoked the Defense Production Act to instruct General Motors to start making ventilators.

But at this point, the federal government has not asked the sprawling defense industrial base, which includes giants like Boeing Co. and Lockheed Martin Corp., to switch over to making products directly related to dealing with the COVID-19 outbreak.

That is, at least in part, because the most direct way for defense contractors to contribute to national security is to manufacture and maintain the military’s weapons and equipment, said Arnold Punaro, a retired Marine Corps general and the incoming chairman of the National Defense Industrial Association.

“Our companies are forward leaning, they want to work,” Punaro said.

But, he acknowledged, concerns over the safety and well-being of the workforce can cause interruptions. Last month, some employees at Bath Iron Works, a shipbuilder in Maine, stayed home to compel ownership to do more to disinfect the facility, and aerospace giant Boeing closed operations at its Puget Sound facilities because of the COVID-19 hotspot in Seattle.

There are also practical realities keeping the defense industry focused on business as usual.

Factories and shipyards that build stealth fighters and nuclear submarines are not well suited for suddenly making protective equipment for medical workers. And those factories rely on thousands of smaller subcontractors to keep their production lines humming, taking many of those firms out of the business of COVID-19 response.

Take out one link in a supply chain, and the whole thing might come grinding to a halt.

The Defense Department office that handles acquisition and sustainment has been in steady contact with industry officials, trying to provide what flexibility it can to avoid manufacturing interruptions as social distancing becomes the order of the day.

“I don’t think the conversation right now is how can the Department of Defense help you start a new line of business,” said Andrew Hunter, an analyst at the Center for Strategic and International Studies. “What’s happening right now to the defense industry is a real supply shock, which means they’re struggling to meet their obligations.”

The Defense Production Act sounds as if it were tailor-made to shift the focus of the defense industrial base in times of great domestic need. But the Korean War-era law actually authorizes the administration to incentivize specific companies to ramp up production of badly needed items for keeping the nation safe.

If the financial carrots don’t work, the law provides the administration with a stick, allowing it to force companies to make what it wants.

Last week, after failing to strike a deal with General Motors, the Trump administration required the automaker to make ventilators for coronavirus patients.

For now, though, it seems the White House wants the defense industrial base to stay the course. And the administration may even use the Defense Production Act to keep weapons programs on track by helping defense contractors avoid parts shortages and manufacturing interruptions on their weapons programs, which could ultimately cost billions, both in fines and lower stock prices.

“Now is the time to start gathering data to start using that authority in two or three months’ time when I think a lot of this stuff is going to hit,” Hunter said.

The Pentagon has signaled it wants to work with the defense industry to provide more flexibility to help navigate these requirements. But there are still contractual obligations to be met.

“A lot of what I’m seeing is industry just struggling just to meet the contractual requirements they have with the government,” said Hunter, a former House Armed Services Committee aide who served as chief of staff for two Pentagon acquisition chiefs.

In other words, Hunter said, defense don’t have much extra time to pivot to “good things,” such as helping manufacture medical items, when they’re struggling to deliver the Pentagon the weapons already promised.

For Mieke Eoyang, the head of Third Way’s national security program, the defense industrial base would be in better shape if the administration had started using the Defense Production Act much sooner.

Once the threat that the coronavirus posed was understood, the Defense Department should have initiated an aggressive effort to improve preparedness and resilience inside the United States, she said. If it had, then perhaps the defense industry would be more directly involved with the COVID-19 response.

“DOD and the rest of the government should have been doing this planning months ago, looking around, identifying shortages, saying where can we ramp up production capabilities, where do we have authorities to expedite things if we need them,” she said. “This was all predictable.”


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