U.S. Defense Executives Warn Against Shutting Out Foreign Competitors - Blog
The Pentagon for decades has been a reliable buyer of
"Made in America" weapons technology. While that should please U.S. companies,
defense CEOs are warning that protectionist policies over time will backfire by
thwarting innovation and by making U.S. companies less competitive in the
cutthroat international arms market.
The U.S. defense industry is in a
fight for its future, and the government is not helping, says former Deputy
Defense Secretary William J. Lynn, currently the CEO of the aerospace and
defense firm Finmeccanica North America.
American industry is shrinking
and many of the technologies the Pentagon wants are not domestically available,
he says. Nonetheless, the Defense Department consistently shows bias against
foreign products, which in turn hinders U.S. companies' access to overseas
markets, Lynn adds.
"You need something of a realignment," he says in an
interview. Today's military-industrial complex consists of a small group of
conglomerates that are coping with declining Pentagon sales, investing less
money in new technology and increasingly depend on the global market for
innovation. A more open market would benefit the Pentagon by spurring
competition and also would help U.S. companies to more easily tap into global
sources of supply, he says.
"We need to have global sourcing. Our export
regulations make that somewhat difficult. And our patterns of behavior make that
even more difficult," Lynn says. "The market has shrunk enough that if you want
to maintain competition you have to look globally. The Defense Department needs
to adapt."
Both the military and the defense industry would benefit from
globalization, Lynn argues in a recent Foreign Affairs article, titled, "The End
of the Military-Industrial Complex." The U.S. military fights alongside allies
in war zones, but the Defense Department "still often ignores technologies and
products made overseas, sometimes at significant cost to the American taxpayer,"
Lynn says. In the 1990s, for instance, the Pentagon sought to develop a new
artillery system, called the Crusader, rather than adapt an existing German
design that met most U.S. requirements. The Defense Department ended up
canceling the program in 2002 when the cost spiraled, "wasting $2 billion and
leaving the U.S. Army to rely on upgrades to a much older artillery model." The
United States, Lynn says, "no longer has to be the source of all advances in
military technology, and in fact, bringing foreign companies into the fold will
help distribute the burden of development costs, as it did with the
F-35."
