Thursday, December 11, 2008

Defense Industry Needs U.S. Auto Manufacturing

Gentlemen:  Per our invigorating discussion at the Scotch Club hosted by Mr. Grause, I am posting a link to an article by a Politico reporter.  Ms. Dimascio references the link between the U.S. big three and the defense industry.  One of the arguments that I had suggested rationalizing the bailout was the potential ramifcations on where the defense industry gets its vehicles.  The two key points to take away are:

1) Although most U.S. military vehicles are no longer built by the big three, those that do (Lockheed Martin, Northrup Grumman, etc) purchase rely on the same supply chain for parts and supplies.  A disruption in the supply chains primary client (the Big Three) has ramifications for their viability to exist to supply to the others driving up cost
2) If the U.S. is ever faced with another WWII-style materiel production drive, where will we turn if the U.S. industrial base no longer exists?

Just some more food for thought in the multi-faceted and on-going debate.

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