Defense consolidation spells trouble for America’s missile deterrent

OPINION:

Events on the world stage have underscored the need for a reliable and credible strategic missile deterrent. For the first time in history, according to Stratcom Commander Adm. Charles A. Richard, the United States is now facing “two nuclear-capable strategic peer competitors at the same time.”

This rise of China and reemergence of Russia pose the greatest risk to American hegemony since the end of the Cold War. Of great concern is also the fact that while these competitors are on par with the United States with regards to nuclear capabilities, they have surpassed us with other key military technologies. Specifically, advances made by China and Russia with regards to hypersonic missiles have been unmatched by the U.S. military to date.

While the United States is still in the process of testing hypersonic weapons, both of our near peer competitors have already fielded such weapons. The Chinese DF-17 hypersonic glide missile provides the People’s Liberation Army with a conventional ground launched capability and an air launched hypersonic glide vehicle is also reportedly under development in the country. Russia’s Vladimir Putin meanwhile has boasted that two hypersonic weapons are already fielded within Russia’s troops. Immediate steps must be taken to correct this deficiency before the United States loses further ground to its near peer competitors.

Congress has recognized the gravity of the threat and in a rare moment of bipartisanship recently passed the United States Innovation and Competition Act into law. The $250 billion bill makes a major investment in our research and development and targets key Chinese individuals and institutions with a fresh round of sanctions, all in an attempt to counter the growing economic and military might of the Communist County.

Unfortunately, current trends in the defense industry threaten to undermine the progress the bill hopes to make and hamper our ability to close the “hypersonics gap.” Years of consolidation has reduced competition and narrowed the industrial capabilities and technology necessary to maintain American military superiority. In particular, the proposed merger between Lockheed Martin and Aerojet Rocketdyne threatens to stagnate innovation and competitiveness in the hypersonics space at the time when it is needed most.

Lockheed, through a series of strategic acquisitions is within reach of cornering the hypersonics market. The company’s recent acquisition of the hypersonic portfolio of Integration Innovation Inc. (i3) has given it total control over i3’s hypersonic technology, facilities, and expertise. Couple that with the proposed Aerojet merger, which would provide Lockheed with full control the critical propulsion technology for hypersonic missiles, and the company would essentially, wipe out any competition amongst defense contractors for second-generation hypersonics technology.

We have seen what happens when one company is granted monopoly control over a critical part of the defense sector. Historical precedent shows that prices go up and the taxpayer and the Pentagon end up bearing the costs. 

United Launch Alliance, for example, was a joint venture created by two former competitors to support medium-to-heavy space launches by the United States government. In the few short years that followed, two Nunn-McCurdy cost breach notifications were triggered and costs increased 100 percent. It was not until SpaceX emerged some years later to reintroduce competition that costs started to decrease, but as Politico reports, taxpayers will still “be paying the price for ULA’s contracts for years to come.” In short, we should be cautious to put our nation’s defense in the hands of a single company, especially when recent history shows the unintended consequences of such mergers.

The proposed Lockheed-Aerojet merger also goes beyond just hypersonics. After Orbital ATK was acquired in 2018, Aerojet remained as the last independent provider of propulsion technology. Aerojet now plays a critical role in helping to foster competition for missile contracts between America’s prime defense contractors. Acquiring Aerojet will change this dynamic and place a company that produces critical propulsion technology for current and future Missile Defense Agency interceptors under Lockheed’s full control.

It will also leave defense contractors that have not vertically integrated propulsion capabilities with the unenviable choice of relying on a competitor for key components or having to source such parts from overseas. None of this would likely benefit the industry in the long term.

Officials at the Department of Defense and Federal Trade Commission who are currently reviewing Lockheed-Aerojet deal will ultimately decide the fate of this proposed merger. Rather than accept this decision outright, these officials must at the least take a very hard look at the consequences that would result from approving this acquisition. American competitiveness and national security are at stake.

• George Nethercutt was a member of Congress from 1995-2005 and served on the House Appropriations Committee, Defense and National Security Subcommittees as well as the House Science Committee, Space and Aeronautics subcommittee.