Consolidation and mergers in the defense industry puts the country at risk
The inability to adequately replenish weaponry such as missiles and artillery shells for Ukraine is revealing how defense industry consolidation has but the country and our allies at risk. There has been two decades of mergers and acquisitions, M&A, activity that have resulted in just six contractors possessing the lions share of Pentagon military equipment spending in contrast to about 50 firms in the 1990s that would compete for big contracts.
These large defense companies are like auto manufacturers in that they produce few of the things they use and subcontract the bulk of the work out. The defense industry base shank from 69,000 vendors in 2016 to 55,000 in 2021. These small companies form a choke point for the defense industry as they face labor and component shortages.
The Pentagon is increasingly dependent on an ever-shrinking number of contractors for critical equipment. This reliance will hamper any effort to quickly ramp up production. The Pentagon and antitrust officials have been too passive in stopping industry consolidation in the defense sector. There has been little academic analysis of consolidation in the defense industry. The issue with M&A is not price increases from lack of competition, but resupply and production issues.
Works Cited:
https://www.wsj.com/articles/lagging-arms-production-makes-pentagon-wary-of-further-industry-consolidation-11672754128?mod=article_inline
-
2:37
Strategic Geopolitical Chess
1 year agoChina's Strategic Plans for Modernizing its Armed Forces and Developing its Defense Industry
10 -
1:39
Meta Stats
7 months agoTop 20 Defense Companies | Biggest Defense Contractors in the World
7 -
13:57
Project Sentinel
3 years ago $0.03 earnedHow US Bureaucracies Impede National Defense Tech Advancements and Capabilities
158 -
4:24
RT
2 years agoUS arms manufacturers hit jackpot with Ukraine conflict
1.62K36 -
35:56
Grant Stinchfield
10 months ago $0.37 earnedU.S. Tech & Defense Firms Partner with Chinese Military on Weapons that could be used Against us.
2.35K7 -
4:22
Latest News From CFP and INFOWARS
1 year agoUS Weapons Manufacturers Enjoy Soaring Profits Thanks to War in Ukraine
4 -
15:06
pepperpeep
10 months agoThe Monopoly on War: How the Military Industrial Complex is Bankrupting America
2673 -
3:59
The world of politics
1 year agoThe Unexpected Truth Behind The USA Military-Industrial Complex
4 -
0:40
Rumor has it
11 months agoThese are the consequences of fomenting conflicts in other states.
35 -
3:15
InfoWars/Newswars
1 year agoPentagon Signs $1.2 Billion Deal on Air Defense Systems for Ukraine
122