US May Nationalize Warplane Industry ‘to Maintain Competition’

Air Force worries not enough companies can make huge, costly planes

With the US the world’s largest military, by far, it makes sense that their own armsmakers often have a level of capacity far beyond overseas competitors. The Air Force is finding this is limiting to the competition for US business.

Air Force acquisition head Will Roper has suggested the solution for this may ultimately be having the US nationalize chunks of the military aviation industry outright, to ensure that a few different armsmakers survive.

And yet they’d survive only nominally. The nationalization would give the government an effective monopoly on those parts of the industry, but the US might spare the expense to prop up multiple design and construct facilities just for the sake of “competition.”

The nature of these many billion dollar plane projects means only a few could ever compete to begin with. Many have responded to the mounting cost by merging to share expenses. The Pentagon wants more than one contractor to choose from, even if they have to own them all.

Yet doing this necessarily will lead to consequences for state-run monopolies, replacing the profit motive at the company level with a new layer of bureaucracy. The companies traditionally seek Pentagon deals with lobbyists, and by hiring former Pentagon figures to gaudy contracts. It isn’t clear how well the military will be able to sustain this if they nationalize the companies.

The legality of nationalizing US industries remains shaky, with President Truman’s failed bid to nationalize the steel industry in the 1950s. The Obama Administration, however, did successfully nationalize General Motors, temporarily, under the guise of saving jobs.

Nationalizing to ensure competition is a very unusual notion, and that’s going to make advancing the case all the more difficult. Expect the big armsmakers to resist, as these huge plane deals tend to be wildly profitable.

Author: Jason Ditz

Jason Ditz is news editor of Antiwar.com.