Complex post-industrial military
The war in Ukraine shows the West can re-arm without re-industrialising
Industrial capacity in peacetime is no longer necessary for success during war
Inside the Joint Systems Manufacturing Centre (jsmc) in Ohio, America’s main factory for armoured vehicles since 1942, the production line for the latest version of the Abrams tank snakes back and forth across the factory floor.
America no longer makes completely new ones.
Instead the plant refurbishes stripped-back hulls and turrets from old models, which are kept in storage in Alabama.
Every few days, a frame shuffles a few metres forwards, and a new worker begins painstaking labour on the world’s most advanced tank.
Each refit takes roughly two years.
Poland ordered a big batch of Abrams tanks from JSMC in 2022, less than six weeks after Russia invaded Ukraine.
It is still waiting for most of them.
This agonisingly slow approach is a long way in both geography and conception from the offices of a maker of advanced drones in the suburbs of Kyiv, Ukraine’s capital.
Every few months the firm (which did not want to be named) designs a new model that takes four weeks to come to life in facilities that are more like spiffy garages than factories, spread hundreds of kilometres apart to avoid presenting too tempting a target to Russian air strikes.
The firm makes twice as many machines as JSMC each month.
The idea that their defence industries are too slow and too small haunts Western governments.
Received wisdom holds that, at least since the Napoleonic wars, protracted, high-intensity conflicts are always won by the country with the greater production capacity.
Should America end up in a long war with China over Taiwan, they ask, or should NATO have to fight off another Russian invasion of a European country, would either be able to keep up with their adversary’s war machine?
The conviction is growing that many strategic industries will have to be preserved and nurtured to maintain the West’s military might.
But the examples of the lumbering jsmc and the nimble Ukrainian firm show how misguided such thinking is.
War transforms economies.
The sudden, urgent need to produce more and better weapons helps conjure up new industries overnight.
The pressure diverts much of a country’s labour and capital, forcing manufacturers to operate in new ways.
Industrial innovation eventually reconfigures the battlefield.
In 2022 the Ukrainian navy consisted of a single major warship, powerless against Russia’s formidable Black Sea fleet.
Ukraine did not have the industrial capacity, much less the time, to start building frigates and destroyers.
Yet its home-made naval drones have managed to sink enough Russian naval vessels to send the rest to cower in distant harbours.
America’s defence industry is much smaller than it once was.
It still accounts for 43% of the total value of weapons exported globally each year (China’s makes up just 6%), but it no longer churns out the same mass of materiel that was needed to sustain military operations from the 1940s to the 1960s.
Instead, the American defence industry makes relatively small numbers of the world’s most sophisticated and expensive military machines.
In 1956 the American air force had 26,000 planes. In 2025 it will dip below 5,000.
Sixth-generation fighter jets, currently under development, will be able to co-ordinate a fleet of drones, but each could cost as much as $300m.
The number of those fighters the air force is planning to commission is only 20% of the fifth-generation jets it plans to buy this decade.
Since 1980, as weapons have become more complicated, the portion of the armed forces’ budget going to care for and repair existing systems has doubled (see chart 1).
American defence firms have naturally adapted to this rarefied approach to procurement, largely by consolidating.
In 2022 there were just 29,000 of them, down from 42,000 in 2000.
Many are the sole supplier of whatever device or component they make, such as the rocket motors inside Javelin anti-tank missiles, or specialised bearings for submarines.
Consolidation, in turn, has led to a shrinking and ageing workforce: the average employee on the floor of one big defence factory is 59.
A shrunken industry making such sophisticated weapons cannot help but move slowly.
Most “systems”—jargon for the fanciest devices—take a year to manufacture, rising to 18 months for a fifth-generation fighter jet and two years for long-range missiles.
“These things are basically artisanal products,” says Chris Brose, president of Anduril, a defence firm.
“They are made over long periods of time, with specialised workers, materials and processes.”
Get a move on
The result is not only a smaller arsenal, but also one that cannot quickly be replaced or expanded.
At current rates of procurement it will take seven years to bring America’s ammunition stocks back to where they were before military aid to Ukraine began.
A confrontation over Taiwan could rapidly deplete America’s supplies, as ammunition is spent and ships and planes destroyed.
In a war game in 2023 simulating a conflict with China run by the Centre for Strategic and International Studies (CSIS), a think-tank in Washington, America exhausted its inventory of long-range missiles within three weeks.
Weapons might also be immobilised by cyberwarfare.
In 2015 the United States Naval Academy reintroduced celestial navigation onto its curriculum, for fear that satellite navigation systems might be degraded.
Efforts to crank America’s war machine up a gear have disappointed.
Last year the Pentagon set a target to produce 75,000 155mm artillery rounds a month by April of this year.
It missed by a mile, making just 40,000 a month, less than a third of Ukraine’s monthly usage.
American arms-makers can speed up production in emergencies, but not by much.
The best jsmc can do is double its output, from 15 to 30 tanks a month.
According to csis, it would take eight years to replenish those missiles that had been exhausted in three weeks.
Planners also worry that China might halt American production of some weapons by restricting exports of critical components or materials.
America’s defence firms could source some of their Chinese imports from elsewhere if needed.
But not all of them.
Policymakers in the West have long encouraged domestic production of semiconductors, to ease one possible chokehold.
China also has a near-monopoly on rare-earth metals that are needed to make jet engines and brushless motors which propel drones.
It is the main supplier of nitrocellulose, a component of gunpowder, which Ukraine struggles to obtain in sufficient quantities.
Western countries already spend more on defence than China and Russia and are increasing their budgets.
America, long the world’s biggest spender, devoted nearly $1trn to defence last year, four times China’s outlay (see chart 2).
The EU says it spent $378bn, or 1.9% of its gdp—30% more than in 2021.
This week NATO’s members promised to raise that figure to 3.5% of gdp by 2035.
Japan has almost doubled its outlay in gdp terms over the past decade.
In 2024 global defence spending was $2.7trn, up from $2.5trn in 2023, the biggest annual increase since the end of the cold war.
Yet America and its allies still worry that all that money will not necessarily buy them a lasting advantage, given their problems with procurement.
China still has vastly more industrial capacity.
It accounts for just over a third of global manufacturing, double America’s share.
So as well as spending on their armies, governments are also spending billions on subsidies for industry in the name of national security.
The imf estimates that 20% of all industrial policies worldwide in 2023 were in industries subsidised, at least in part, for that reason.
Donald Trump has also justified his tariffs on certain imports, including aluminium, steel and cars (so-called Section 232 tariffs), as bolstering America’s ability to defend itself.
The idea underpinning this largesse is that the bigger and more varied a country’s industries, the lower the cost of converting them to wartime production.
This was true in the past: in the second world war, for instance, it was relatively easy to use a Ford car factory in Detroit to build b-24 Liberator bombers, because much of what went into both machines was similar.
America’s civilian industrial strength allowed its factories to churn out weapons faster, more cheaply and in bigger quantities.
Yet the correlation between industrial might in peace and war may no longer be so close.
In recent decades the technology involved in any form of most manufacturing has become more specialised.
According to an estimate by researchers at the London School of Economics, the ratio of labour to capital equipment in rich-world manufacturing halved from 1995 to 2017.
“Decades ago, factories were filled with skilled labourers operating standard machines,” says a manufacturing executive.
“Now not much doubles.”
Manufactured goods have become more complex and diverse.
Advances in automation and precision machinery have helped to tailor assembly lines to the goods they produce.
(Some modern manufacturing equipment is more versatile: 3d printers play a big part in makeshift factories in Ukraine.)
“Can you imagine repurposing a Ford production line to build b-21s now?” asks Mr Brose.
“It would be impossible.”
Hadrian, an American firm, builds defence factories that are flexible in meeting military shortfalls.
“We’re not talking about shifting products, we’re talking about modifying the head of a cruise missile,” says one employee.
And even that, they say, requires filling a factory with machines that are rare in America.
Ukraine provides a glaring example of the difficulty in adapting existing industry—even arms-making—to the demands of modern warfare.
Though the country was part of the industrial heartland of the Soviet Union, and still has lots of disused military factories, Ukrainian officials found this legacy of limited use when Russia invaded in 2022.
Officials say 82% of Ukraine’s tiny arms industry was then state-owned, which at least reduced administrative obstacles to ramping up production.
By the end of the year the state accounted for 89% of military output, as existing factories beefed up their production.
Much faster growth came the following year, however, thanks to nimbler private firms.
“After the first year, the private sector began to grow much faster [than state-owned defence firms],” says an ex-official.
By 2024, 58% of Ukraine’s rapidly growing arms industry was in private hands.
Neither public nor private firms made any use of mothballed Soviet weapons factories, although there are plans in the works to do so.
It simply turned out to be quicker and more effective to build lots of small new factories than to convert existing facilities.
Some weapons have been easy to scale up.
Ukraine’s output of artillery shells rose from 50,000 in 2022 to 2.4m last year.
Its armoured-vehicle production tripled in 2024.
It has been making home-grown howitzers for barely a year, but is now producing more than ten a month.
Drones are a particular speciality.
They are far cheaper and easier to make than the sophisticated weapons favoured by richer countries, though the most advanced ones are now made with expertise and specialist components from America and Europe.
In 2024 Ukrainian firms produced some 2.2m drones, roughly 95% of the total deployed by Ukrainian forces.
The aim is to produce millions more this year.
“Anything small and unmanned, we can make,” says a former minister.
Uncrewed systems can be simpler and less robust because they do not need to keep people safe.
They also reduce demand for scarce manpower.
The components for small weapons are less likely to be made with specialised machines, so are easier to make or buy.
Some are 3d-printed in cavernous underground halls filled with hundreds of machines.
Others are easy to import.
In 2022 Ukraine’s arms industry produced $1bn-worth of weapons.
Last year its capacity reached $35bn, says Herman Smetanin, Ukraine’s 32-year-old minister for strategic industries, who ran a tank factory before the war.
That was $20bn more than the government could afford to buy, says one official, who adds that 40% of Ukraine’s weapons were still home-made.
The day of the drone
So successful have both sides become at manufacturing drones that they have begun to shape the battlefield.
“We started this as the first world war with drones,” says Oleksandr Kamyshin, an adviser to the Ukrainian government.
“We’re now in the first drone war.”
The trenches that used to define the front lines are disappearing, since they were too vulnerable to drone attacks. Instead, soldiers have scattered into foxholes in groups of two or three.
By the same token, drones with bigger payloads have made tanks too vulnerable to lead assaults or venture within 10km of the frontline.
And then there are the naval drones that have neutered the Russian fleet.
A manufacturer likens the war’s evolution to the plot of “Home Alone”, a film in which a child protects his family’s house from thieves using improvised gadgets made of toys and other household items.
Ukrainian forces’ goal has been to fix problems fast with equipment readily at hand.
Many drones are designed to be small enough to be transported by car.
Estimating the damage done by drones is tricky, and operators rely on conventional artillery and military vehicles for support.
Nonetheless, they appear to be getting more lethal.
In 2022 drones were responsible for around 10% of casualties on both sides, according to the Ukrainian government.
The Royal United Services Institute, a British think-tank, estimated in March that drones are now responsible for up to 70% of the damage done to Russian installations and about half of all casualties.
Ukraine’s arms industry cannot make all it needs, however.
Ships, missiles and big weapons are not easy to mass-produce at short notice.
These are the sorts of weapons that nato countries fear running short of in a protracted conflict.
China’s civilian shipbuilding industry makes three in five of the world’s ships, and produces warships much faster than America.
Yet fostering a set of civilian industries in the West in case they could become useful in wartime would be expensive, with an uncertain pay-off.
Labour costs for building a ship in South Korea, the Western ally with the next-biggest industry, are much higher than in China.
Western governments would have to bear that extra cost.
Industrial subsidies are often intended to be temporary, to help producers reach a degree of efficiency or scale to be able to compete without handouts.
But maintaining dual-use excess capacity in case it is needed in wartime does not work like that.
It is an open-ended commitment.
It may also be pointless.
The locations and conditions in which a war will be fought are inherently unpredictable.
Arms-makers must adapt to the specifics of the conflict and the innovations of the enemy.
It is hard to know what will be needed.
The fact that Ukraine has become adept at drone production has allowed it to offset its relative lack of ships, tanks and other large platforms where Russia has an advantage and which it would struggle to manufacture at scale.
Industrial might is not completely useless.
Ukrainian officials have found that the most fungible industrial resource is skilled workers.
It takes two years to train an oil-and-gas engineer in aerospace.
America may have fewer manufacturers than China, but it still has many engineers and an innovative private sector.
But wartime innovation leaves peacetime industries behind.
jsmc sent 31 Abrams tanks to Ukraine in 2023.
It took three months for Russia to destroy 20 machines, after which the rest were largely withdrawn from the front line.
American officials later admitted that the tanks were vulnerable to Russian artillery and kamikaze drones.
The assembly lines continue to creak forward.
But America does not necessarily need more of them.
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