Lake City expanding

Posted: 5/7/2004 2:28:51 PM EDT

www.startribune.com/stories/535/4763567.html

(Not sure how to hot link any more.)

From the Red Star Tribune:

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.

For a summary chart of Alliant Techsystems' quarterly earnings report, turn to the Business section, Page D2.

Staff writer Susan Feyder and Bloomberg News contributed to this report.

Posted: 5/7/2004 2:33:02 PM EDT

[#1]

Still .8 billion rounds short! It's been known for years that Lake City could not make enough ammo and Clinton years ammo was always short too!

Posted: 5/7/2004 2:36:20 PM EDT

[#2]

Where is Winchester/Remington etc? Aren't they bidding? WTF?

Posted: 5/7/2004 2:41:11 PM EDT

[#3]

Quoted:
Still .8 billion rounds short! It's been known for years that Lake City could not make enough ammo andClinton years ammo was always short too!

I left UPS in 1989 to go to work for Honeywell Defense/Marine Div Now AlliantTech Systems.
The only reason ammo was short back then is Because Clinton cut most of the DoD contracts.
We were laid off shortly after Comrade Clinton took office. Back then I belive it was Olin Corp making all the small arms ammo, Alliant and Federal Cartridge would have some small contracts with them so they could keep up.

During Gulf War I we could get all the overtime we wanted in 7.62 and 5.56 working Saturdays and Sundays.

Lake City is a old acient plant and needs some serious modernizing to be considered effective

Posted: 5/7/2004 2:55:59 PM EDT

[#4]

[snipped] Alliant Techsystems Inc., the Edina-based munitions maker that is the U.S. Army's sole supplier of bullets [snipped]

Why only make bullets? Might as well manufacture the entire cartridge at the same time.

Posted: 5/7/2004 2:56:54 PM EDT

[#5]

I heard somewhere that Slick Willie tried to contract our ammo to China. I wouldnt doubt it but Id like to know for sure. What a fucked up idea, asking a very likely adversary to make your ammo. I can hear it now,"time out, Im out of ammo sell me some more so we can fight" .

Posted: 5/7/2004 3:05:24 PM EDT

[#6]

Damn... are they still expending that much over there, or is there just that much more practice? Where's all the once-fireds going?

Posted: 5/7/2004 3:05:52 PM EDT

[#7]

I will gladly try to help out by loading some ammo on my Lee1000 pro.

Posted: 5/7/2004 6:28:33 PM EDT

[#8]

My (limited) understanding is that they are buying off-the-shelf commercial M193 spec ammo from Winchester and Federal to make up for shortages. I have been trying in vain to get a large lot M193 for some upcoming training we are running, and ALL of our normal LE suppliers are telling me that Q3131A and Federal XM193 are pretty much non-available because of rush military orders. Lake City does need to expand capacity.

Posted: 5/7/2004 6:39:43 PM EDT

[#9]

No problem.

I am sure Wolf can make up the shortage.

Posted: 5/7/2004 6:42:06 PM EDT

[#10]

Maybe I should call the US Army and see if they want to take my stash of 2 cases of Winchester 556 white box, I would gladly donate it if it would help the war effort.?

Posted: 5/7/2004 6:50:01 PM EDT

[#11]

How the hell are we shooting THAT many rounds in IRAQ?

2 billion a year? Please.

This has to be to make up for what Herr Klinton burned.

Posted: 5/7/2004 6:56:00 PM EDT

[#12]

Quoted:
How the hell are we shooting THAT many rounds in IRAQ?

2 billion a year? Please.

This has to be to make up for what Herr Klinton burned.

You can be sure that 99.99% of that figure is due to increased training of future combat marksmen.

Posted: 5/7/2004 6:56:15 PM EDT

[#13]

Quoted:
I heard somewhere that Slick Willie tried to contract our ammo to China. I wouldnt doubt it but Id like to know for sure. What a fucked up idea, asking a very likely adversary to make your ammo. I can hear it now,"time out, Im out of ammo sell me some more so we can fight" .

HaHa! That was my first reaction too. I was going to type a sarcastic "I'm sure the Chinese would be happy to sell us some ammo."

Hey, what about those nice Russians, hg112? Maybe you're on to something!

Posted: 5/7/2004 7:04:14 PM EDT

[#14]

Just think, when the war is over, there will be a buffet of surplus ammo on the market for us to eat.

Yummy.

CMOS

Posted: 5/7/2004 7:20:21 PM EDT

[#15]

I think I recall reading something in the investor relations booklet about ATK having just completed a rebuild of the link line at Lake City. As far as I can tell, they are still only running the plant two shifts, six days a week, so there is still unused capacity.

Posted: 5/7/2004 7:31:41 PM EDT

[#16]

Posted: 5/7/2004 8:10:51 PM EDT

[#17]

Quoted:
Just think, when the war is over, there will be a buffet of surplus ammo on the market for us to eat.

Yummy.

CMOS

I thought klinton signed an exec order that forbid the sale of surplus mititary ammo to citizens.

Posted: 5/7/2004 8:25:37 PM EDT

[#18]

Quoted:

I thought klinton signed an exec order that forbid the sale of surplus mititary ammo to citizens.

I don't think that prevents Alliant (AKA Federal) from selling overruns, by contract.

Posted: 5/7/2004 8:33:34 PM EDT

[#19]

Yet another reason to back-hand Clinton upside the head. If we'd just encourage LC to sell ammo commercially too, they'd already have the production capacity to divert to wartime stocks.

[ARCHIVED THREAD] - Lake City expanding

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