Tracked Combat Vehicle Sector Headed For Total Shutdown In 2014

[Correction: Industry sources say that closure of the Abrams tank line has been delayed by about a year from 2014 to 2015 as a result of additional money provided by Congress. However, the Army is now signaling it may not resume tank upgrades until fiscal 2019 — two years later than its previous plan.]

The U.S. Army has embarked on a risky strategy to save money by shutting down its entire capacity to assemble tracked combat vehicles. The nation’s last remaining tank plant in Lima, Ohio and a second plant near York, Pennsylvania that produces all the other tracked vehicles in its armored brigades are both scheduled to close next year. The service plans to reopen them in 2017 after a three-year hiatus to begin building new and upgraded vehicles, but workers at both sites say that’s a fantasy because they will have taken their specialized skills and gone elsewhere.

I walked through the BAE Systems plant in Pennsylvania last week, which has been producing troop carriers and other tracked vehicles continuously since 1961. Unlike the Ohio tank plant that General Dynamics operates for the government, the York plant is privately owned and thus has to justify its existence to shareholders every quarter. That is getting increasingly hard to do as orders trail off with the winding down of overseas wars. The size of the workforce has fallen from 3,000 personnel to barely 1,200 in the last few years, and the average age of production workers has risen to 54 years.

BAE says its York plant is a unique repository of manufacturing skills, because the various vehicles it assembles and upgrades require working not only with high-strength steel — the main material used at Lima — but also aluminum and titanium. Its numerically-controlled machining center is one of the most advanced in the U.S., and its lean manufacturing techniques have been continuously refined to save time and money. None of this seems to matter to the Army, though, which decided it has better things to do with its money for the next three years. Congress is right to be skeptical about whether the service understands the consequences of its plans.

For starters, you can mothball machines but you can’t mothball workers. The same skills being used to upgrade Bradley infantry vehicles at York can be applied at the Harley-Davidson plant on the other side of town, and any number of other nearby industrial sites. Once workers migrate to those sites, the likelihood they will come back to the BAE plant is small. Many will be on the verge of retirement, and not eager to make an eleventh-hour change in their place of employment. Would you come back to a plant that had laid you off for three years?

And then there’s the separate issue of recertifying skilled workers and suppliers. That can take well over a year, depending on the experience levels of new hires. Once the plant has been closed a couple of years, it could take a long time to rebuild what has been lost. After all, the level of expertise needed to assemble a Harley isn’t quite as imposing as that needed to build a digitized armored vehicle. As for the suppliers, many of them will have simply disappeared because there isn’t much demand for thermal targeting devices and heavy gun tubes elsewhere in the economy; re-qualifying those that are still around to reenter the combat vehicle market could be quite time-consuming.

What we’re looking at in the Army’s plans to shutter both the Pennsylvania plant and its Ohio counterpart is the destruction of any surge capability for coping with unexpected emergencies requiring tracked combat vehicles. Once the plants close, it will be years before they come back on line, if ever. How the Army expects BAE Systems and General Dynamics to build prototypes for next-generation combat systems without their principal tracked-vehicle industrial facilities is a question that doesn’t seem to have gotten much attention. Another question worth raising is why it makes sense to shut a site for three years if it takes two years to re-qualify all the people providing production inputs.

Rather than ginning up a bunch of college boys at think tanks to generate problematic answers to these questions, it would make a lot more sense to simply avoid all the risks by providing bridge funding to keep the workforce and supplier base intact over the next three years. There are multiple gaps in the armored-vehicle force that could be filled by funding low-rate production of upgraded troop carriers, tanks and other vehicles at the plants. In fact, Congress has already provided much of the funding needed to keep the sites running at a reduced level of activity. Is it really sensible military planning to shut down the entire tracked-vehicle industrial base for years, when there are inexpensive alternatives?