Inside The Army - www.InsideDefense.com - 8 Aug 2005
Alliant Techsystems will not reach its goal of building 1.5 billion small-caliber rounds for the Army this year, the company’s chief executive officer told Wall Street analysts last week.
Five years ago, when ATK won an Army contract to make small-caliber ammunition, production was set at 350 million rounds per year, Inside the Army reported in April. Since then, the Lake City Army Ammunition plant operated by ATK in Independence, MO, which produces 5.56 mm, 7.62 mm and 50 caliber rounds, has been manufacturing 1.2 billion rounds per year and has been attempting to reach an annual rate of 1.5 billion rounds. “We actually will exceed that 1.2 billion but not by the 300 million,” Daniel Murphy said Aug. 4 during a conference call on his company’s quarterly earnings.
A Government Accountability Office report released late last month found that even if new modernization efforts at Lake City and other ammo plants stretch existing sources to their limit, the increased capacity will be insufficient to meet DOD requirements without help from more sources (DefenseAlert, Aug. 1). Murphy said the Army this month would announce the name of the vendor that will manufacture an additional 300 million rounds of small-caliber ammunition, above and beyond the 1.5 billion rounds ATK has sought to produce.
“We were told yesterday that there will be an announcement on the 18th of August,” Murphy said. “That’s flipped a couple times [in the past], though, but that’s as of yesterday.” Officials at the Army’s Picatinny Arsenal, NJ, were unavailable for comment by press time. Murphy said 95 percent of the small-caliber rounds being manufactured are earmarked for training purposes, with the rest going to troops in combat in Iraq and Afghanistan. With U.S. troops -- regardless of whether they are infantry or any other occupational specialty -- under daily attack by insurgents in Iraq, Defense Department officials have mandated that all personnel deployed to Iraq be qualified in the use of small arms, he said.
Strong small-caliber ammo sales were one of the factors that helped propel ATK’s overall sales growth by 17 percent over the same quarter the year before, according to the company’s earnings statement. Ammunition group sales grew by 24 percent at $247 million, compared to $200 million the year before.