The shape of tactical vehicle modernization impacts on other services and on other procurement choices. We discuss elsewhere the C5M modernization effort: determining what vehicles the lift fleet will carry is an important driver in debates about what to modernize and what to buy in the air and sea lift arena. With the demise of FCS and with a relatively clear determination of what vehicles would be procured, significant strategic uncertainty is now unleashed with regard to the future of the vehicles to be procured and their role within the overall joint force structure.
As the Army “regroups” after the cancellation of the Main Ground Vehicle (MGV) portion of the Future Combat Systems (FCS), other developments in the procurement of future vehicles are combining to paint a picture of increasing austerity in terms of fielding new vehicles. The overriding trends, however, have less to do with technology or procurement developments, and more to do with politics and economics.
Let’s take the overriding trends first. The defense budget, according to nearly every analyst, is heading down – the debate simply is how far and how fast. The downward drift (or some would forecast “plummet”) will be driven by the current Administration’s clear intention (some would claim overwhelming need) to focus upon domestic issues (i.e., the economy and healthcare) first. The remedies being offered already have driven the projected federal budget deficit higher than any in history, and promise to drive it (almost geometrically) higher. The trend clearly is towards a “crowding out” of the defense budget by dramatically increasing domestic obligations.
Moreover, the current Administration also has embarked upon a campaign to redefine the global war on terror as a law enforcement exercise. The equally clear intention here is to change the American public’s perception of the threat. This said, the Administration – if only implicitly – is being characterized (at least by the House of Representative’s leadership) as too militaristic concerning Afghanistan and its consideration of increasing US military force commitments. The fundamental point is that Democrats currently occupying leadership positions in both the legislative and executive branches of the U.S. government have set out to re-shape the American public’s perception of threat in such a way as to lessen the need for military spending.
These trends suggest a dramatic, rather than gradual, dip in defense spending over the next 2-5 years. Many, in fact, already characterize the current Quadrennial Defense Review (QDR) as an exercise designed to establish the basis for significant defense spending cuts. This, in turn, will force the military services into increasingly more difficult choices in terms of investment spending. Given the fact that operational commitments in Iraq and Afghanistan cannot be “turned off” over night, the politics and realities of the environment will tend to protect operations and maintenance (O&M) accounts spending – the effect will be a smoother O&M accounts decline, rather than a more dramatic fall that the investment accounts are likely to experience.
Over the last several years, DoD’s vehicle investment accounts have experienced a dramatic increase in funding – a “spike” attributed to both the resetting and upgrading of legacy (both combat and tactical) vehicles and the procurement of a totally new class of vehicles – Mine Resistant Ambush Protected (MRAP) vehicles. At the same time, development continued on new vehicles, ranging from FCS MGVs to Joint Light Tactical Vehicles (JLTV) to Expeditionary Fighting Vehicles (EFV) to Marine Personnel Carriers (MPC). The Bush Administration was committed to fund both operational requirements as well as development of future classes of vehicles.
The new Administration, however, thus far has not shown the same commitment. Instead, Secretary Gates has been explicit that his first priority will be to fund operational requirements and that the development of new classes of vehicles will then be reconsidered, presumably under the increasingly austere budget environment described above.
The Secretary’s first decision was to cancel the MGV component of the FCS program. While he conceded to the Army leadership the opportunity to develop a replacement combat vehicle – the ground combat vehicle (GCV) – many doubt whether it will survive future budget reviews. A more likely outcome, given a presumed dramatic fall in Army investment accounts, will be the continued use of recently upgraded legacy vehicles within the Army’s Heavy Brigade Combat Team (HBCT) formations.
The upgrading and resetting of legacy vehicles, while still ongoing, have slowed down – a product of a more sustainable rate of vehicle usage in Iraq and Afghanistan, and the fact that the Administration’s clear intent is to withdraw as quickly as feasible from Iraq, if not Afghanistan. Regardless of this slowdown, military vehicles for the next several years will continue to require reset work – if only to address the backlog of equipment awaiting repair and upgrades. Future upgrades to these vehicles have been under design for months, if not years, so the continued use of legacy vehicles within the HBCTs is a given outcome.
As the Army begins to recover/reorient from continuous combat operations over the last six years (and still counting), a debate already emerging – but still muted, given the focus upon FCS MGVs and the GCV — has been the overall number of brigades (also called “force mix”) – HBCTs vs. Stryker brigades vs. Infantry brigades; as well as the proper mix of legacy vehicles within these formations. The fate of the Vietnam-era M113 armored personnel carriers, and its numerous derivatives (currently scheduled, but unfunded, for retirement) – that is, whether they will remain in the force or be replaced by other legacy vehicles (e.g., Strykers or Bradleys) — will be one of its key aspects. The outcome of these debates will be a central driver within the combat vehicle market within the U.S.. The essence of the industrial base implications will be the relative health of the two key players in this market segment – General Dynamics (which produces the Abrams tanks and Stryker combat vehicles) and BAE Systems (which produces Bradleys, M113s, and virtually every other combat vehicle within today’s HBCT – except the Abrams tank).
The United States Marine Corps (USMC), on the other hand, has a true dilemma. Their new amphibious assault vehicle, the EFV, continues to languish as a program. Despite years of significant funding, price escalation and technological shortcomings have delayed and halved the production run of the vehicles. Today, it remains not ready for production. This has led to a relatively new, updated USMC vehicle strategy which emphasizes three new vehicle programs – the EFV (being developed by General Dynamics), the MPC (development contract not yet advertised), and the JLTV (competing development contracts currently held by the following three teams: Lockheed Martin-BAE Systems, General Dynamics-AM General, and BAE Systems-Navistar).
Meanwhile, Secretary Gates has directed an amphibious requirements study which some suspect is a review of the amphibious mission itself. Whatever the outcome, the Marines will need combat vehicles capable of supporting their mission, however defined. There will need to be either a continuation of the current programs, new procurement program(s), or a transfer of legacy vehicles to enable their combat forces to perform operations. In the austere budget environment forecast, the likelihood of the Marines fulfilling their vehicle strategy with three new vehicle procurement programs seems highly unlikely.
Tactical vehicles, with the exception of the light family of vehicles, seem fairly set to continue with the legacy vehicle programs. The two big issues within this category of vehicles are: 1) what contractor will manufacture the Family of Medium-weight Tactical Vehicles (FMTV), and 2) whether JLTV will survive as a program and, if so, who will build it.
Heavy tactical vehicles are produced by Oshkosh, who appears set to continue producing these legacy vehicles for the foreseeable future. Medium weight vehicles – the Family of Medium-weight Vehicles (FMTV) – over the last several years have been built by BAE Systems at the legacy Stewart & Stephenson plant in Sealy, Texas.
In a recent government contract award decision, however, Oshkosh appears to have taken the FMTV contract from BAE Systems. The decision is under protest, by both BAE Systems and Navistar, so the outcome remains unclear until the end of this year. If the government’s decision is upheld by the General Accounting Office, then Oshkosh – which also recently won the latest version of MRAP contracts, the MRAP – All Terrain vehicles (M-ATV) for Afghanistan – will be producing two-thirds of the military’s tactical vehicle families of vehicles. The industrial base implications for this may prove significant, given that M-ATV in some quarters is considered a possible replacement for what many consider to be an unaffordable program – JLTV.
The JLTV is a joint Army-Marine program designed to replace High Mobility Multipurpose Wheeled Vehicle (HMMWV or Humvee) with a new family of light tactical vehicles – the third leg of the three families of tactical vehicles. While it offers a leap in capabilities from the current fleet of HMMWVs, the unit cost of the JLTV (which averages over $400k per copy), is significantly higher than what the military has paid (~$250k) in the past for light tactical vehicles. Given the austere budget environment forecast, the JLTV program clearly will receive increasing scrutiny in terms of its fiscal feasibility.
AM General, the manufacturer of HMMWVs, has offered upgrades to the HMMWVs clearly designed to close at least a major portion of the capability gap while maintaining a cost profile more in line with what the budgetary environment will allow. M-ATV, in that it represents a version of MRAPs that are lighter and capable of off-road mobility, also could be considered a replacement for the heavier versions of the JLTV.
This leads to one last component to the future US military vehicle puzzle – the future role of MRAPs. While the services have strongly resisted the incorporation of MRAPs as an integral component of standing tactical formations, Secretary Gates has directed yet another review of this issue. Ultimately, it appears likely that, as the investment accounts shrink and the procurement cycle of MRAPs conclude, the services will be forced to consider and implement the integration of various classes of legacy MRAPs into tactical formations at a level previously not preferred. This, in turn, will lead to significant industry opportunities to upgrade and reset MRAPs, all of which were hastily designed and built to respond to an urgent operational requirement. Many have noted that such haste has led to a fleet of MRAPs that could greatly benefit from a concerted upgrade effort.
In summary, the U.S. military vehicle market over the next 2-5 years will be shaped by two fundamental drivers. First, continuing upgrade and reset programs of legacy vehicles will provide selected manufacturers with a steady stream of revenues. Secondly, the outcomes of three key programs (i.e., whether they are funded and which manufacturers are selected to produce them) – the GCV, EFV, and JLTV – will determine the overall health and the future major players of the industrial base.
Robert Johnson is President, National Security Division of RAPC, and is a West Point graduate, retired Army officer, and a defense industry executive. Most recently, he was VP, Strategy of BAE Systems’ Ground Systems Division, which produces Army combat vehicles such as the Bradley, MRAPs, and Amphibious Assault Vehicles. R. Johnson provides an assessment of the strategic context within which tactical vehicle decisions are being made and a forecast of likely paths forward.