RTX Stock – Australia should be stockpiling missiles instead of making them
The Australian government needs to explain why making guided missiles domestically is better than simply importing and holding a stock of them big enough for war. Until it does, we must wonder whether its policy of building a missile manufacturing establishment is really driven by a desire to buy votes by promising jobs.
Announcing the plan on 31 March, Prime Minister Scott Morrison said: ‘Creating our own sovereign capability on Australian soil is essential to keep Australians safe.’
No, it’s not. Keeping sufficient stocks is the other, conventional way to ensure wartime supply. The government will have to argue that making missiles locally would somehow be cheaper. In fact, stockpiling should be much cheaper than local manufacturing, which cannot conceivably achieve the volumes that foreign suppliers’ factories do. Also, the local manufacturing capability will cost $1 billion up front.
Stockpiling is not only cheaper; it’s more secure, too.
And Australia won’t be giving up on stockpiling, anyway: we’ll still need it because we can’t make all the missile types we use.
Backing the establishment of domestic missile manufacturing, ASPI’s Michael Shoebridge pointed out last year that Australia’s armed forces had run short of munitions in even limited conflicts. But that was just because the government hadn’t bought enough rounds. The mistake is emblematic of the lack of seriousness that crops up again and again in Australian defence procurement: flashy equipment gets the money, while dreary but still critical stuff—mine hunting, base hardening, dispersion of fuel supplies—is largely ignored.
The government doesn’t say what kind of missiles it plans to make. ‘The new enterprise will support missile and guided weapons manufacturing for use across the Australian Defence Force,’ Morrison said.
Defence Minister Peter Dutton said the policy would create ‘a sovereign capability to manufacture a suite of precision weapons that will meet Australia’s growing needs and provide export opportunities as a second source of supply’. So, there will be several types in production, and the government hopes exports will maintain volume and keep costs down.
For any type of missile, Australia’s requirement is likely to be a small fraction of global production and correspondingly uneconomic. Australia’s tiny share of the West’s fighter fleet implies a similarly tiny share of the total need for Western air-to-air missiles. Australia is so far buying 72 F-35 Lightnings, but Lockheed Martin is likely to build more than 2,000 for the global market.
Further, the right to export will be available only if the original manufacturer of a missile and its home government agree to it; the announcement implies that these will be US manufacturers and the US government, which is generally not generous in this area. If exports can be achieved, they will at best be a palliative to the inefficiency of producing in Australia. Export subsidies would probably be needed, meaning Australia would pay foreigners to buy its products so those products could be made more cheaply for Australia. It doesn’t sound promising.
In principle, Australia could save by buying much less than a war stock of domestically produced missiles, relying on factories to surge in wartime. But the greater the production capacity needed for the surge, the higher the cost of the factories.
We might imagine that, when it came to war, Australia just could not rely on imports, because the demand for missiles would far exceed likely availability, especially if our allies were also trying to restock. We might, for example, imagine fighters rising to battle day after day, firing missile after missile in a campaign that lasted several months. For such circumstances, no war requirement seems predictable; continuous production feeding the air bases would be needed.
But the unpleasant reality of loss exchange ratios means that a fighter will be involved in only so many engagements, firing only so many missiles, before it is itself shot down. Just four complete loads of air-to-air missiles per fighter might be enough. For Australia’s 72 F-35s, that would be 1,152 Raytheon AIM-120 AMRAAMs and 576 AIM-9 Sidewinders. So a war stock can be estimated and, in Australia’s case, the volumes are nothing like what would be needed for economical production.
The same considerations apply to other types of missiles. A destroyer isn’t likely to loose off too many loads of surface-to-air missiles before it’s knocked out of the fight.
The result, then, must be Australia paying more for weapons made in Australia than it would pay if it imported and stockpiled them. The excess cost of the weapons and the production facilities is money that could instead be spent on other defence capabilities.
Domestic missile production, previously foreshadowed and now brought forward as a priority, will be a sovereign capability, the government says. ‘Sovereignty’ has become another dreadful defence buzzword; it just means independence, in this case the ability to fight without foreign help. While adequate stockpiling can achieve just that, domestic missile production facilities cannot.
Why? First, Australia cannot conceivably make all missile types it will need in a war. If two types are made in Australia but the war can’t be fought without supplies of all other types, then we will still rely on foreign supplies—unless we have adequate stockpiles.
Second, even missiles said to be manufactured in Australia will be only partly made domestically. These products are just too complicated for the production volume that Australia can support, even if that volume is somehow doubled or tripled with exports. Consider all the bits and pieces in just the seeker of an air-to-air missile. For an AMRAAM and major surface-to-air systems, a missile’s seeker is actually an exquisite miniature radar. And, on that subject, will Raytheon and Lockheed Martin be allowed to send their latest seeker technology to Australia?
Independence from foreign supply won’t be bought by fabricating only part of a weapon in Australia and adding parts bought from abroad—if there are no imported parts, there will be no missile.
Conceivably, foreign parts could be stockpiled for future mating with domestically produced parts, assuring a degree of independent supply. What’s imported and kept in the shed would tend to be the most expensive bits, and the volume would have to meet the full wartime requirement. But that just begs the question: if stockpiling is the solution for some parts, why isn’t it good enough for complete weapons?
Also, so-called sovereignty in munitions supply vanishes in a blinding flash when a few enemy cruise missiles rub out a factory in which some part of the manufacturing chain is concentrated. Stocks, on the other hand, can be dispersed. They can be hidden, too. A missile factory can’t.