Industrial Hubris
Breaking Defense website had an article that just infuriated ComNavOps. Apparently, Boeing has warned the Pentagon about pausing or reconsidering acquisition programs. Boeing has threatened to spend less of their own money on military projects unless the military continues along Boeing’s designated path. Read the relevant quotes for yourself,
“The Pentagon’s decision to pause as it reconsiders what path to pursue with the drone fighter known as UCLASS prompted Boeing to send a warning note today that the US military had better keep its commiitments if it wants companies to invest their own money in new technologies."
“Asked about the program today, Boeing’s Chris Raymond noted pointedly that his company ‘had spent a lot of time, and frankly, a lot of money on UCLASS over the years. We were — in our minds — in a great place,’ he told reporters at a briefing in the company’s headquarters … ‘It was disappointing to see them pause.’”
Where to start?
Well, first, the US military does not exist to ensure the profitability of Boeing or any other company.
Second, any company is free to spend their money on whatever internal projects they deem most likely to be of benefit TO THEMSELVES. If spending money on potential military projects is helpful to Boeing then they’re free to do so. If spending money would not be helpful, they’re equally free to refrain from doing so. How they spend their money is of no concern to the US military. Let’s be very clear, here. Boeing does not spend money on internal projects out of a sense of patriotism or civic duty – Boeing spends money on internal projects because they believe it will give them a competitive advantage and enable them to make more money.
Third, the military needs to break the cycle of taking whatever new product that industry gives them rather than clearly defining a product and then asking industry to build it. Boeing (and every other company, to be fair) offers the military products that are financially beneficial to Boeing. That the product may or may not suit US defense needs is a side issue to Boeing. Make no mistake, they would sell a useless product to the military if the military would buy it (anyone want an LCS or F-35?).
Fourth, the military issues untold millions of dollars to companies to conduct DIRECTED research. If private companies opt to conduct research on their own, it’s on their own heads whether it ever pays off.
Fifth, this is a blatant example of precisely the type of unwarranted influence by the Military-Industrial-Congressional Complex that Eisenhower warned us about. When companies feel free to dictate to the military how to run their acquisition programs then those companies have become too powerful and need to be slapped down. Perhaps the military should start focusing on smaller companies and let the larger ones die?
Sixth, the military should instantly stop issuing contracts to Boeing. There are other companies that can do the same job. Sure, the other companies are, undoubtedly, just as bad but they have at least had the good sense not to publicly demonstrate their hubris.
This demonstrates a very sad state of affairs. Now, to be fair, the military is hardly blameless in this, having willingly gone along with the entire situation. Unfortunately, the practice of Generals and Admirals retiring and then taking seats of the Boards of these companies precludes any attempt to break the stranglehold of industry on the military.
Well, this is all very unfortunate and ComNavOps has every right to be upset but does he have anything to offer other than handwringing? Yes!
The military needs to immediately reestablish its own internal design competency. For the Navy, that means reestablishing the General Board and BuShips (see, General Board and BuShips). Breaking the stranglehold of industry starts with being able to generate internal designs rather than depend on industry to give us what best serves their needs rather than the military’s needs. Once we can generate our own requirements and designs, we can then parcel out the actual building under much smaller, separate contracts rather than the single, massive contracts that are issue today. This approach offers the ability to break the project into smaller packages and opens up competition to many other, smaller, specialized companies.
Now, before I get the usual bilgewater from industry apologists who insist that we can’t risk losing the industrial base or upsetting our industrial “partners” or losing our technical expertise, let me remind you of the example of Gates and Microsoft. IBM wouldn’t, or couldn’t, respond to a market need so Gates simply started what would become a new giant of industry. Similarly, if Boeing is no longer responsive to the military’s needs, let’s find the next up and coming Microsoft and start funneling contracts to them.
Jobs (and expertise) are neither created nor destroyed, they simply move. If Boeing dies, all their personnel and expertise will simply move to the new company(s) that takes their place. Sometimes drastic change is good. Most of us agree that Microsoft was a good thing. Perhaps it’s time for some drastic change in the defense industry.
(1)Breaking Defense, “Boeing To Pentagon: Be Careful When You Pause IRAD Programs”, Colin Clark, June 14, 2015,
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