Prioritizing missile production: how can the US build back stockpiles quickly?

So I wanted to start by quoting the opening of a piece co-authored by Dr. Matisik at the Foreign Policy Research Institute earlier this year that really outlines well the scope of the challenge we're facing pretty sharply

It says, on April 10th, after coalition forces had fired at least 1700 patriots in just five weeks, the Pentagon announced a $4.76 billion contract to accelerate production

While a seemingly forceful response, the move only highlighted the core problem

At the current build rate of 600 missiles per year, it would take three years to replace what was used in a little over a month

Replenishment runs on an industrial clock, and that clock is measured in years, not days

And if you've been following the tallies over at the Center for Strategic and International Studies, you know that it's not just Patriot missiles we're talking about

As of April, stockpiles across key munitions were depleted anywhere from 30 to 80%

So the article that I quoted from proposes a three-part solution to dig out of the crisis

You buy time through dependable multi-year production contracts, by redundancy and subordinate production pipelines to reduce bottlenecks

and by efficiency to get away from overkill and overuse of these exquisite systems

So I wanted to kick off by asking for each of you, which of these pieces would you prioritize

as most pressing and urgent and why? And if there's a fourth proposal that you'd put over the top of all these, feel free to

make the case for that as well. Let's go ahead and start with Dr. Matasek for this one

Thanks for bringing that up. So the reason why I think this is really important to discuss is because we kind of took production

for granted and especially like the supply chains for like the minerals and the parts and unfortunately

due to chinese export controls on various types of minerals it's becoming more difficult for

american companies to source the minerals and parts needed to actually make these weapons systems And then you combine that with all of the requirements and processes and safety that is required to make every aspect of any type of missile

It becomes a very difficult compounding process. It becomes more and more expensive

and you know it's easy in the short term to make these announcements about buying more but it was

sort of you know too little too late and now the entire defense industrial base not just in the

united states but like across the west is really having to play catch up in a way that is very

uncomfortable not to mention again the difficulties have been imposed by china in terms of trying to

source a lot of these important minerals like gallium for example uh which trying to basically

control 100 of the world uh supply of that that's important for actuators for radars and other sort

of uh components of any type of missile and so uh that's why it is actually important you guys have

put together this this panel and discussion about this is because uh you're going to hear more and

more announcements i i can guarantee you that of of companies in the united states and across the

the West that are going to say, you know, they got a, you know, a big purchase order

or some guaranteed funding. And while that sounds great, it's still too little too late. And so

a lot of companies now are, at least from my perspective, seem to be trying to find innovative

and cheaper ways to produce any type of interceptor. And it isn't just going to be

Patriot missiles. There's going to be a host of different types of systems from actual missiles

to lasers or microwave guns to try and create a better type of layered air defense, because

it is sort of unsustainable firing multimillion dollar missiles multiple times against one

missile, say from Iran, that costs half a million dollars or less, and not to mention

all the cheap $30,000 Shihid drones. So again, this is a really important discussion that we're having today

Yeah kudos to Dr Marisek for writing the paper having the courage to kind of raise this up for public awareness I think it an important topic And I think you know happy to be on this with you and my colleagues here to show the stage I think if you look at the three things that he highlighted in his paper the you know the stability afforded by a multi procurement contract is probably the most important thing for Lockheed Martin

Right. Because we, you know, can basically scale and produce today. We're willing to invest

You know, our CEO has gone on record. We invest or plan to invest by 2030 between eight to nine billion dollars, you know, in the defense industrial base and all the suppliers that support things like the critical munitions that you're hearing about in the press

You know, PAC-3 MSC is the most capable air defense effector on the planet

We're happy to provide that. You know, there's talk about the proper weapons target pairing

that's absolutely critical, right? You shouldn't be shooting a PAC-3 MSC at a drone

but if that's all you have and that drone has an effect

and it's going against a critical asset, it's well worth the price to shoot the PAC-3 MSC at the drone

to defend what matters most. That said, you know, Lockheed is, as well as others in the industry

at cheaper effectors. So, you know, you need the PAC-3 to shoot down highly capable

highly maneuvering ballistic and hypersonic threats. So you can't have a lower cost effector

going against a highly capable threat. Conversely, if you shoot all your highly capable effectors

against low cost threats, you have the risk of running out of them or not having them when you

need them. So I do think that having a multi-year procurement is a great first step. And then having

things like redundancy and supply and efficiencies that we're going to gain by the increased volumes

all of those will fall out. But I think first step is having a good forecast of what you need

flowing that to the prime and then to the various subs. And then the competition is good for

everybody. We're happy to compete with other providers so that the US government, as well

as the partners and allies around the world can get the best price for the most capable effector that they can Thank you Let go next to Jason Merida and then Jeff after that

Thank you, Hope. It's great to be with you here today and appreciate the opportunity to

talk with my distinguished colleagues on this panel. I do want to follow up on your question

of what's the, I'll say, highest priority element of what Dr. Matasek said in his paper there

For me, it's a little bit hard to say that there's one priority over another because I think they all

work hand in hand and are really need to be worked in parallel. I do agree with what Jason said just

a moment ago that multi-year deals are very, very important. But I think if we look back and use a

little bit of the lens of history to see where we have gotten, how we have gotten to this place

Decades ago, three, four decades ago, we had many, many suppliers, not only at the prime level

but also at the sub-component provider level that provided us that resiliency. And over a time of

relative, I know this sounds a little bit hard for those of us that went through 9-11 and the

the war on terror, global war on terror, but relatively peaceful time from a standpoint of

firing large weapon systems. But the demand for missile systems in general was very, very low

And so as a government, we decided to reduce the number of, allow the reduction of the number of

suppliers at multiple levels. And that demand in just a free market scenario, reduced the amount

of supply that was there to support the demand. And so what we now see, as has been mentioned by

several of my colleagues, is that the demand has risen again very, very rapidly. And so industry is

looking forward to investing. There's a lot of investment that's happening to try and bring back

additional capacity at the current suppliers, such as Lockheed and Boeing and others. But it's also

incentivizing other companies to come forward to provide additional resiliency and