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Posted: 5/11/2004 3:35:09 AM EST
Losing our manufacturing base (generally a Republican policy) has finally impacted our national security.

Army Bullets in Short Supply

America searches for 2nd firm to make enough ammunition

By Edmond Lococo / Bloomberg News

EDINA, Minn. — Alliant Techsystems Inc., the U.S. Army’s sole supplier of bullets, said it can’t keep up with demand that is rising to its highest level since the Vietnam war as the United States fights terrorism and conflicts in Iraq and Afghanistan.

The Army is looking for a second ammunitions source, Alliant Chief Executive Daniel Murphy said on an earnings conference call. The service wants 2 billion rounds of bullets and Alliant will make 1.2 billion this year, up from 1 billion last year, he said.

Alliant is in talks to expand its Army-owned Lake City facility to produce another 300 million rounds and the Army is seeking a supplier of 500 million more. Demand could be this high for five years, Murphy said.

U.S. Army spokesman Major Gary Tallman didn’t immediately return calls seeking comment.

Alliant is boosting its work force 6 percent to 14,000 this year to handle orders for products including M-16 rifle ammunition.

The U.S.-led coalition in Iraq is struggling to control rising violence that in April alone killed more U.S. soldiers than during last year’s war, which lasted about six weeks.

The Army could have difficulty meeting its demand as there are few producers outside of Alliant or General Dynamics Corp. capable of producing military ammunition on the scale required, said Loren Thompson, an analyst at Arlington, Va.-based Lexington Institute, which studies national security issues.

“The Army’s industrial base is busted,” Thompson said. “A wide range of consumables from ammunition to armor simply can’t be produced at an adequate rate during wartime. There is almost no surge capacity.”

The Army tries to make up for its lack of surge capacity by stockpiling material before conflicts, Thompson said. The strategy works in conflicts of short duration, but is becoming a problem as the Iraq war enters its second year, he said.
Link Posted: 5/11/2004 3:42:49 AM EST
We are going to see more and more of this as the 'war' continues. I was discussing this with a co-worker just yesterday. We have a minimal manufacturing capacity here in America today.

We just installed a new Mass Spec in one of the labs, it is over 75% made in china, and this is from a homegrown lab instruments company. Used to be that you could only get these kind of instruments from here.

People should be very afraid.
Link Posted: 5/11/2004 3:43:20 AM EST
Link Posted: 5/11/2004 3:46:09 AM EST
NAFTA is the poster child for offshoring our manufacturing.
Link Posted: 5/11/2004 3:54:04 AM EST
[Last Edit: 5/11/2004 3:56:01 AM EST by rn45]
NAFTA certainly has a lot to do with this problem. The Chinese are using their dirt cheap labor to take the world's manufacturing capability. At first they just made a lot of junk, then they started improving their quality. No one can touch their labor cost. Manufacturers just look at the dollar signs in the short term and forget that soon people won't be able to buy their products without jobs. NAFTA opened up our job market to the world. Perot wasn't quite right when he talked about a giant sucking sound, but he was right on as far a his NAFTA predictions. I don't know how we're going to reverse this, but we will have to find a way.
Link Posted: 5/11/2004 3:55:01 AM EST
[Last Edit: 5/11/2004 3:57:28 AM EST by Sweep]
Link Posted: 5/11/2004 3:56:06 AM EST
NAFTA has absolutely NOTHING to due with the Ammo problem. This problem stems back decades, as we closed the other ammo plants, Congress/Big Brass haven't paid attention to, and haven't upgraded Lake City IIRC since Vietnam!
Link Posted: 5/11/2004 3:56:13 AM EST
"Finally??" Nafta bit a long time ago, and has been chewing.
Link Posted: 5/11/2004 3:57:13 AM EST

Originally Posted By BenDover:
NAFTA is the poster child for offshoring our manufacturing.



I agree!

NAFTA and GATT was just the "permission slip" for our manufacturing capacity to BAIL OUT of America!

But.........for the right "Deal"...I'll sell FedGov some of my .5.56mm!!!
Link Posted: 5/11/2004 3:57:47 AM EST
N-o
A-merican
F-actories
T-aking
A-pplications

NAFTA means that Americas manufacturing base is in China,Mexico,Korea,Vietnam,Malasia,Singapore,­It is called "Outsourcing".Why pay an American worker $6.00 per hour when you can pay a slave nearly nothing.

We are rapidly becoming a Nation of Have nots and very wealthy people.
Link Posted: 5/11/2004 3:58:20 AM EST
Link Posted: 5/11/2004 3:59:13 AM EST
I heard a funny editorial on NPR a while back about how Mexico is now experiencing massive layoffs in the manufacturing sector. The economic green grass they thought was there to stay has now been replaced by.... China. So all these plants that migrated south of the border are now being closed and the production moved, leaving broken promises of a better economic tomorrow.

The only solution that I have come up with is pretty radical, but it's nutty enough to work.

Make Mexico the 51st state.

You think I am kidding. No, I am deadly serious.

Create massive corporate tax incentives to invest in manufacturing in Mexico after they apply for and receive statehood.

Think about it.
Link Posted: 5/11/2004 4:00:32 AM EST
Maybe I just don't know shit, but Why doesn't Olin(Win) pick up some of the business?

Link Posted: 5/11/2004 4:02:31 AM EST
[Last Edit: 5/11/2004 4:03:02 AM EST by osprey21]
More heedless and irresponsible behavior by the gubmint in the midst of crisis.


Anyone else hear Nero fiddling....
Link Posted: 5/11/2004 4:03:57 AM EST
The ARMY doesn't like WOLF ammo?

This isn't NAFTA, this is poor planning.
Link Posted: 5/11/2004 4:06:18 AM EST
NAFTA and moving companies overseas has really hurt us. But have any US based ammo plants moved overseas?
Link Posted: 5/11/2004 4:07:20 AM EST
Dupe topic. I posted this article a few days ago. www.startribune.com/stories/535/4763567.html

Last update: May 6, 2004 at 11:57 PM
Edina bullet maker can't meet Army demand
Staff and wire reports
May 7, 2004ATK0507
Here's a new measure of the intensity of the fighting by the U.S. military.

Alliant Techsystems Inc., the Edina-based munitions maker that is the U.S. Army's sole supplier of bullets, said Thursday it can't keep up with demand from the Army, which is rising to its highest level since the Vietnam War.

Alliant made 1 billion rounds of small-caliber ammunition last year for the Army and will make 1.2 billion rounds this year. But the Army intends to set its annual requirement significantly higher, possibly as high as 2 billion rounds a year, and plans to look for a second supplier, Alliant Chief Executive Officer Daniel Murphy said.

Alliant's ammunition group "last year achieved the largest sales in its history," Murphy said in an earnings conference call with stock analysts. "At our Lake City, Mo., facility, we executed the greatest ramp-up in small-caliber ammunition since the Vietnam War." The higher bullet sales helped boost Alliant's fourth-quarter earnings, which increased 44 percent, the company said.

ATK ammunitionGlen StubbeStar TribuneMurphy said that the Army's ammo demand could remain elevated for five years as the U.S. military, currently engaged in conflicts in Iraq and Afghanistan, continues to fight terrorism.

Boosting bullet production won't be easy, however.

The streamlining of military contractors not only has left Alliant as the sole small-caliber ammo producer, it has also left General Dynamics Corp. as the sole gunpowder supplier for making those bullets.

Gail Wilson, spokeswoman for General Dynamics, said the Falls Church, Va.-based company lacks production lines to make small-caliber ammunition and couldn't build a plant quickly enough to meet immediate demand.

There are few producers outside of Alliant or General Dynamics still capable of producing military ammunition on the scale required, said Loren Thompson, an analyst at the Arlington, Va.-based Lexington Institute, which studies national security issues.

"The Army's industrial base is busted," Thompson said. "A wide range of consumables from ammunition to armor simply can't be produced at an adequate rate during wartime. There is almost no surge capacity."

The Army tries to make up for the limited production capability by stockpiling material during peacetime, Thompson said. The strategy works when the nation enters into conflicts that turn out to be of short duration, but is becoming a problem as the war in Iraq enters its second year, he said.

Army spokesman Major Gary Tallman didn't return calls seeking comment.

Alliant could be the Army's best hope for replenishing its small-caliber firepower.

The company said it is in talks to expand its capacity by another 300 million rounds and will submit a proposal to the Army to become the supplier of the other 500 million the Army needs to reach 2 billion a year.

The Army has committed about $31 million to expand the Missouri plant and increase capacity, Murphy said.

Alliant also is evaluating the possibility of adding small-caliber ammunition production capacity to its Federal Cartridge plant in Anoka, according to company spokesman Bryce Hallowell. The plant employs about 750 people and mostly makes ammunition for hunting and other sports shooting, Hallowell said.

Alliant, which also makes a variety of larger military munitions and rocket boosters for NASA, said that for its fiscal fourth quarter ended March 31, it posted net profit of $50.9 million, or $1.31 per share, compared with $35.2 million, or 90 cents per share, a year earlier. The results included 43 cents from a tax benefit and a 13-cent restructuring charge.

Alliant said it expects to earn between $3.85 and $3.95 a share in fiscal 2005.

-------------------------------

WTF does this have to do with NAFTA? I agree that NAFTA is bad for the US economy, but I don't see what that has to do with this story.

Is US bullet making capacity moving out of the US? Have US bullets ever been made outside the US?
Link Posted: 5/11/2004 4:09:20 AM EST
No shit. I have done environmental clean-up on at least 4 former ammunition plants and know of many more that are closed.
Link Posted: 5/11/2004 4:20:06 AM EST
"Losing our manufacturing base (generally a Republican policy) has finally impacted our national security"

Its a good thing as long as it increases shareholder wealth.

Right?
Link Posted: 5/11/2004 4:29:13 AM EST
It's not just limited to ammo, if you read the section I bolded, THE ARMY'S INDUSTRIAL BASE IS BUSTED. A WIDE RANGE OF CONSUMABLES.....

To all of you guys who inquired about what ammo has to do with NAFTA, please go back and finished Hooked on Phonics so you can finally learn to read.
Link Posted: 5/11/2004 4:31:59 AM EST
Doesn't have a thing to do with NAFTA. It all has to do with Clinton getting rid of most procurement contracts and making Alliant the single source for small arms ammo.

GunLvr
Link Posted: 5/11/2004 4:41:24 AM EST

Originally Posted By BenDover:
Make Mexico the 51st state.



NO THANKS!.......
Link Posted: 5/11/2004 4:46:56 AM EST
Fuc<ing Unions...






-LS
Link Posted: 5/11/2004 4:47:34 AM EST
Why not? You're already paying for a lot of people in that country to receive entitlement benefits. So much so, they opened a SS Administration office in Mexico City.

Why pay them economic support and not receive tax revenue back? Why not just eliminate the costly border patrolling that doesn't work now?
Link Posted: 5/11/2004 5:00:52 AM EST

Originally Posted By BenDover:
Why not? You're already paying for a lot of people in that country to receive entitlement benefits. So much so, they opened a SS Administration office in Mexico City.

Why pay them economic support and not receive tax revenue back? Why not just eliminate the costly border patrolling that doesn't work now?




One of my problems would be that they would all get to vote. We may end up senators and reps from there that make NY and CA look good. Also in a pres election how much swing would Mexico the state have?
Link Posted: 5/11/2004 5:04:38 AM EST
[Last Edit: 5/11/2004 5:05:30 AM EST by stator]
NAFTA is not the cause of this. Congress is with their budgeting for the military as in too many dollars for the F-22 and not enough for bullets over the years. Bullet factories don't produce high-paying jobs like the F-22 program. Neither does it produce lobbyist dollars either.

Edited to add that I don't believe in NAFTA either... but let's be real here.
Link Posted: 5/11/2004 5:17:34 AM EST
[Last Edit: 5/11/2004 5:24:07 AM EST by anothergene]
Link Posted: 5/11/2004 5:20:44 AM EST
Funny, that you all talk about factories all moving to China. You're a little late on that one. BUT, China is also facing a manufacturing crisis, or at least they may be soon. China will be just like Mexico. Many factories are already moving to the Philipenes, Malaysia, etc, because it's even cheaper and they are doing a pretty good job of keeping up with China in quality.
Link Posted: 5/11/2004 6:24:06 AM EST
NAFTA? The North American free trade agreement between Canada, US and Mexico is moving jobs to China? How?
The General Agreement on Tarrifs and Trade was around along time before NAFTA and NAFTA was suppossed to remove those tariffs. GATT was protectionism.
Link Posted: 5/11/2004 6:32:33 AM EST

Originally Posted By BenDover:
Why pay them economic support and not receive tax revenue back? Why not just eliminate the costly border patrolling that doesn't work now?



Revenue back?........Do you really think Mexico will PAY more then they receive?

The Border Patrol IS NOT meant to succeed!......only to appear as an effort!
Link Posted: 5/11/2004 6:40:10 AM EST
I don't see this as a NAFTA issue, but poor planning on the part of Congress and the last president.
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