Profits Versus Performance
This is an updated version of a previous post about the objectives of the defense industry. I’ve recently seen a steady stream of offerings and advice from industry and they all have a common theme: they’re good for industry. Here’s a small sampling.
- Boeing is pitching upgrades to – surprise! – its F-18E/F Super Hornet.
- Boeing is pitching upgrades to – surprise! – its F-15, referred to as the F-15X (1).
- Lockheed is proposing a new frigate based on – surprise! – its LCS.
- Austal is proposing a new frigate based on – surprise! – its LCS.
- Bell Boeing has proposed variants of – surprise! - its V-22 Osprey for
- the Navy’s carrier delivery aircraft, CMV-22B
- airborne early warning and control, EV-22
- combat search and rescue, HV-22
- anti-submarine warfare, SV-22
- Northrop Grumman Ship Systems has proposed variants of – surprise! - its LPD-17 for
- ballistic missile defense
- a hospital ship
- the future amphibious ship LX(R)
- Raytheon has proposed upgrading – surprise! – its Tomahawk missile for the anti-ship missile role.
So, what’s wrong with upgrades and new variants? Nothing, per se. The problem lies in the fact that these companies are not suggesting the best military solution – they’re suggesting the best corporate profit solution.
Is the V-22 the best military solution for an airborne early warning and control aircraft? Almost certainly not. Is the EV-22 the best corporate profit solution for Bell Boeing? Absolutely!
Is the LPD-17 the best military solution for the LX(R)? Almost certainly not. Is it the best corporate profit solution for Northrop Grumman Ship Systems? Absolutely!
Of course, it’s quite possible that a proposed upgrade/variant IS the best military solution in which case the military benefits to the maximum degree possible and the corporation profits. Win-win. Unfortunately, the instances of the military and corporate needs meshing like that are few and far between.
The problem is not just limited to upgrades. New equipment is being proposed that follows the same model of maximum profits for the corporation.
For example, Raytheon is proposing a new concept in “Multi Domain Battle Management” for the military (2). This would be a massive, integrated software decision making/assistance tool for military combat leaders. The problem is that it’s highly likely that the proposed tool is not the best tool for the military but, instead, it’s the most profitable tool for Raytheon.
So, what does this all mean?
First, it means that the military needs to firmly understand that when industry proposes something, that something is, first and foremost, in the corporation’s best interests. There’s nothing wrong with this. In our free market system, attempting to maximize profits is what corporations are supposed to do. As long as the military recognizes this they can make intelligent decisions about whether they want the proposed item.
Second, it means that the best military solution may never be offered by industry if it isn’t in some corporation’s best interest. Thus, the military needs to understand what the best solution is before they entertain corporate proposals. This is one of our major failings. Having allowed so much of our in-house engineering expertise to lapse, the military often lacks the ability to know what the best solution is and depends on industry to tell them. Of course, as we’ve just discussed, industry won’t provide the best solution, they’ll provide the most profitable solution. The abandonment of in-house expertise is a major mistake and needs to be reversed.
For example, no one inside the Navy had the engineering expertise to recognize that the combining gear on the LCS was far too complex to be reliable or to be safely and reliably operated by standard crews. As a result, the first several LCS’s all suffered very similar breakdowns related to the combining gear.
For example, no one in the Navy had the expertise to recognize that the Ford’s EMALS catapult was inherently flawed since, by design, the catapults could not be repaired individually. Instead, the entire system has to be electrically “wound down” in order to service any one of the cats. This is a major flaw in a combat system.
For example, no in the Navy had the expertise to recognize that the Zumwalt’s LRLAP munition for its gun was heavy on promises and very light on technical feasibility.
And so on.
To repeat, the Navy has to enter into industry discussions already knowing the best answer. Anything less is heading down the path to failure.
CNO Greenert once stated that he was excited and couldn’t wait to see what industry would give the Navy in the future. What an idiot! You should know what you want and you should be telling industry what you want, not accepting whatever they’ll give you based on their bottom line.
We have got to stop depending on industry to lead our military development. This means that we need to re-establish in-house technology and design expertise. Failure to do so means we’ll be doomed to an unending succession of sub-par weapon systems.
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(1)DoDBuzz website, “Boeing Pitches 'F-15X' Fighter Concept to US Air Force: Report”, Oriana Pawlyk, 19-Jul-2018 ,
(2)Breaking Defense website, “EXCLUSIVE: What Multi Domain C2 May Look Like: Raytheon’s Rick Yuse”, Colin Clark 19-Jul-2018 ,
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