The Debate | Security

The United States Has an Industrial Problem in the Indo-Pacific

A central part of the deterrence question

The littoral combat ship USS Freedom (LCS 1) transits the Pacific Ocean June 17, 2010, while enroute to participate in Rim of the Pacific (RIMPAC). RIMPAC is a biennial, multinational exercise in and around the Hawaiian Islands.

The United States has spent years warning about China’s growing military power. Much of that discussion focuses on ships, missiles, aircraft, artificial intelligence, and other weapons, but considerably less attention is paid to the industrial capacity behind them. China has built an enormous manufacturing base capable of producing ships, electronics, machinery, batteries, components, and other goods at a scale the United States cannot easily match. In a prolonged conflict, that difference could become as important as the capabilities of the weapons themselves. The United States would need to replace damaged equipment, replenish munitions, repair ships and aircraft, and keep production running under wartime conditions. Its allies in the Indo-Pacific would face similar demands.

Washington is increasingly aware of the problem and is trying to bring new companies, private investment, and manufacturing methods into the defense sector. The Navy’s recently announced Arsenal-2 project with Anduril Industries is one example. Announced October 6, Arsenal-2 is a planned $6.6 billion manufacturing facility at Tradepoint Atlantic in Maryland. Anduril plans to invest $3.7 billion of private capital, while the Navy could provide up to $2.9 billion. The facility is intended to manufacture components and large assemblies for Virginia-class submarines, initially including torpedo tubes and potentially expanding to larger sections of the boats. The project addresses a genuine weakness in the American defense-industrial base: the Navy needs more production capacity, particularly as it tries to expand the submarine fleet.

The difficulty is that Arsenal-2 will not be operational tomorrow. Initial operations are not expected until 2030, and the manufacturing methods that will underpin the facility still have to be developed and validated. Anduril will have to establish the workforce, suppliers, quality systems, and production processes needed to meet the demanding requirements of the submarine industry. That raises a broader question for Washington as it tries to rebuild the defense-industrial base: how quickly can the United States create industrial capacity that can actually be relied upon in times of crisis?

The question is particularly important in the Indo-Pacific. A conflict with China would place enormous demands on American production while US forces were operating thousands of miles from the continental United States. Ships would require repairs, missiles and drones would need to be replaced, and munitions stocks would have to be replenished. The United States would also be relying on its allies. Japan, Australia, South Korea, the Philippines, and other partners are increasing their defense capabilities, but American credibility in the region depends partly on whether Washington can continue supplying and supporting those forces during a prolonged crisis. A military that can deploy advanced systems but cannot replace them at the required rate has a very different deterrent value from one that can sustain production.

China’s advantage is not limited to the size of its military. Its civilian manufacturing base supports military production in ways that are difficult for the United States to replicate quickly. China is already a major producer of ships, electronics, machinery, industrial components, and many of the materials and products that underpin modern manufacturing. The United States, by contrast, is trying to rebuild capacity that has contracted over decades. This is why the defense-industrial debate should be viewed as part of the broader strategic competition with Beijing rather than simply as a question of Pentagon procurement.

That effort will require private capital and new companies capable of........

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