White House Report Warns 'All Facets' of U.S. Defense Industrial Base are at Risk
(Source: Forbes magazine; issued Oct 04, 2018)
By Loren Thompson
A long-awaited White House report on the state of the U.S. industrial base finds that "all facets of the manufacturing and defense industrial base are currently under threat," and warns that entire industries vital to national security are facing "domestic extinction."

The report, which was directed by an executive order that President Donald Trump signed on July 21, 2017, took a year to complete, involving a dozen federal agencies and 300 workers. Its findings were distilled down to 50 pages plus appendices summarizing the stresses eroding U.S. industrial strength. Many of the recommendations derived from the analysis are contained in a classified (secret) annex -- some of which are already being implemented.

The White House decided to release the report after financial markets had closed on Thursday evening. (In fact, it will be released Friday, Oct. 5 at 13:00 EST by President Donald Trump at the White House—Ed.) Although its findings are not likely to move markets, they present an alarming picture of U.S. industrial decay driven by both domestic and foreign factors.

The report begins by identifying five "macro forces" causing weakness in industries important to national security: unpredictable federal funding, poor government business practices, predatory behavior of other nations, erosion in traditional manufacturing industries and inadequate investment in critical skills. It then lays out ten "archetypal" risks caused by the macro forces, such as diminished industrial capacity, declining competition and dependence on offshore sources for key items.

Over 300 specific impacts are described across the traditional defense industry and "cross-cutting sectors" such as electronics and machine tools, all of them potentially injurious to the economic strength and security of the United States. Recommendations for reversing the nation's industrial decline are organized into four categories: investment, policy, regulation and legislation. (end of excerpt)

Click here for the full story, on the Forbes magazine website.


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