Defense Contractors and General Motors

I work in DC and live in Alexandria. Consequently, when I take the Metro into work, I pass by the Crystal City, Pentagon City and the Pentagon Metro stations. For those not familiar, at each of these stops are a plethora of signs from defense contractors - each saying how they save soldiers lives in the field, or how the particular item they are hawking is essential to the fight against terrorism, Iraqi insurgents, the next enemy, etc.

As I ride past them, I never fail to get angry. Really angry. Because I see them in the same light I have come to see General Motors - a company I fully expect to fail or be bought within the next 10 years, bailout or not. Because both groups are building products the customers don't really want. GM is moving its 8 mpg only because GMAC has received bailout money and can offer these gas hogs at 0 percent interest. The defense sector is the same. The argument is the companies are too crucial to national security to fail... or their products are the latest segment of the revolution in military affairs... or vital to the "next war."

GM will fail because it builds substandard products with poor maintenance records at too high a cost. Our defense industry is in trouble for exactly the same reasons. Exactly when the US should be leading the world in the supply of defense equipment (to reputable allies...), we are on the cusp of losing the entire market. The reason is we have priced ourselves out of the market. When we accept that a single warship (or single airplane like the B2) can or should cost over $1 Billion, we have lost the battle for pocketbooks. If that is the cost of their products, we are all doomed.

And yet, there is also the side that pisses me off. Because the words I see used I have heard before, when I was in Iraq. There, more than anywhere else, I gained my disparagement of defense contractors. As a measure of disclaimer, there are many good contractors - good people trying to do their best for their country. Then there is KBR (Kellog, Brown and Root - formerly "owned" by Halliburton, the company with which VPres Cheney was associated) and L3 Communications. KBR has allowed soldiers to die because they have held fast to the letter - not the spirit - of their contract, which does not require them to be certain Iraqi-built structures are electically safe. They may argue it is a matter of money - they can't afford to fix everything. And yet, while being paid to hire Americans, they hire Ugandans, Romanians, Hungarians, Ukrainians, Philippinos, Malays, Indonesians, etc. I do not say there is anything necessarily wrong with foreign nationals are hired - my concern is they are being exploited. And then there is L3... they are requested to supply trained, experienced analysts, and they provide untrained, inexperienced junior personnel whose only qualification is their security clearance. Many have never written a report before, and most lack the ability to write coherently.

Then I see advertisements about how bad guys aren't waiting for some integrated network to be built, or how some project is crucial to US security. And yet, I have been at the tip of the spear - indeed, I have spent most of my career there - and what these companies are offering, is usually not what the actual "warfighter" really wants. One more piece of software, one more piece of unecessary (expensive) gear... I have come to believe many of these companies are only in the game for the profit. I see no difference between them and GM - the Chevy Corvette I once had was a beautiful machine, but cheaply built and succombed by problems from the day I took possession of my custom-built vehicle.

We have come to expect our defense equipment to be expensive, but the day is soon coming where neither us - nor our many allies - will be able to afford US manufactured equipment. Not even GM would refuse to fix the tire of a car being driven off a lot. Yet frequently, that is the case with US built equipment. For example, with the LPD program, the ships were built, but any required repairs identified during acceptance trials had to be paid for by the Navy.''

Unless we are careful, our defense industries will go the way of GM. But if an equivalent product can be bought for a fraction of the price, maybe that isn't such a bad thing.