U.S. Defense Secretary Lloyd Austin announced that that the government was signing off on a $6 billion long-term support plan for Ukraine that involved producing new artillery and missile units and not drawing down on existing stocks. This represents an important change in the way that the U.S. sees military production over the next several years.
Secretary of Defense Lloyd Austin announced on April 26 that the U.S. was putting together a $6 billion military aid package for Ukraine. In contrast to previous aid packages, especially the $1 billion package announced the day before, this is a long-term aid package.
Problems of timing
The $1 billion package was designed to send military equipment as soon as possible. President Joe Biden also stated shortly after signing the $95 billion foreign aid package for Ukraine, Israel, and Taiwan, that equipment would start going to Ukraine “within hours”, according to CNN.
The new package serves a different purpose. The $6 billion will be used to assure U.S. defense industry companies that the government is serious about ramping up arms production and that companies can plan accordingly. This package, while it comes under the Ukraine Security Assistance Initiative (USAI), serves as a platform for American armaments manufacturers over the long term.
Securing the U.S. armaments manufacturing base has been an ongoing issue for the Biden administration. Even though the political wrangling that led to the passage of the $61 billion of aid for Ukraine took months, the slowness with which the government was moving had been noted far earlier. The lack of a firm commitment to ensure artillery shell orders in particular has caused grief on both ends of the supply chain, as Ukrainian artillery stocks plummeted and manufacturers have been unwilling to begin investing without a contracted buyer.
At the Paris Air Show in July 2023, Raytheon CEO Wes Kremer told Breaking Defense that:
“…whether it’s co-production in Europe, or whether it’s shortages in the supply base, or whether it’s capacity within our factories, but at the end of the day, it doesn’t really make sense for us to go invest or solve those problems until we have a contract.”
Furthermore, calls for a “WWII-style” ramp-up of American manufacturing ignored the details of that increase. Speaking about production in the 1940s, Assistant Secretary of the Army for Acquisition, Logistics, and Technology Doug Bush told reporters in August 2023 that, “They, of course, were making more simple equipment – that also took about a year to 18 months to hit the ramp-up,” Janes reports.
Sullivan on the offensive
On the day before Secretary Austin announced the aid package, National Security Advisor Jake Sullivan told reporters that contractors had been overly cautious in not investing in production capacity even before the orders had been placed. Even if the invasion of Ukraine ended tomorrow, he claimed, the need for the systems produced, and especially the munitions, would still be there for years to come.
Sullivan told reporters, “Look, there is such a gap between where the collective West is and where it needs to be in terms of munition stockpiles, that this is not going to be a problem for a long time. There is a need for replenishment on all of these systems that extends out years ... If anything, I believe that our defense industry is still underestimating, rather than “overestimating” demand.
“Patriot missile batteries are a great example. There are going to be orders piling up for Patriot missile batteries out the door, regardless of what happens.”
