Lynn set to lead CNAS study on U.S. defense industrial base

Inside Defense

April 26, 2016

A new task force, organized by the Center for a New American Security, is set to explore how the next administration can best manage the changing U.S. defense industrial base.

Bill Lynn, the former deputy defense secretary who now leads DRS Technologies, is co-chair of the task force along with Sean O'Keefe, the former NASA administrator who also previously served as CEO of Airbus Group.

 

In an interview with Inside Defense this week, Lynn said the task force is set to weigh the pressures on the defense industry, which he has argued is at an inflection point.

Among the other members of the task force are Ellen Lord, CEO of Textron Systems; Mike Leiter, head of integration at Leidos; Greg Mallory, global leader for aerospace and defense at BCG; and Nate Fick, CEO of Endgame. Lynn said the task force membership is mostly complete.

Lynn has previously made the case that defense spending has hit bottom, and the industry is moving into a fourth era. He argues the first period lasted from the beginnings of the republic until World War II and was characterized by government-owned arsenals and shipyards; the second from World War II until the end of the Cold War, when industrial conglomerates like General Electric had defense divisions; and the third from the early 1990s to present day, when consolidation resulted in the prominence of defense specialists like Lockheed Martin.

Today's defense contractors are seeing an increasingly significant role for commercial technology as well as a more global industrial base. "All of these pressures are going to force some change in the industry structure," Lynn said.

He argued that during past inflection points, the government sought to manage the changes within the defense industry and should do the same this time around.

Still, he said the study isn't meant to make concrete recommendations, but instead to ensure this issue is on the agenda of a new administration.

"The idea is not to push this or that proposal," Lynn said, but instead to get the attention of the next crop of leadership. "This is an important point in time . . . and what they do on this is going to matter."

He said the task force is now setting up working groups to address specific issues. Among the areas that could be considered is how to manage the increasingly commercial origins of technology, consolidation within the industry and the international supply chain.

Lynn noted that current Pentagon leaders are already thinking about many of these issues, pointing to Defense Secretary Ash Carter's focus on Silicon Valley and Deputy Defense Secretary Bob Work's efforts on the Third Offset strategy.

"The same trends that are motivating us to do this are motivating them," he said.

Lynn also rejected concerns that the defense industry might not be easily shifted. "Industry is going to follow the incentives structure," he said.

The task force is part of a larger CNAS project called "Future Foundry: Forging New Industries for Defense."