Here’s an excerpt from the War Production Board’s history of industrial mobilization for World War II, Industrial Mobilization For War: Volume 1 Program and Administration. In terms of stockpiling critical minerals, the board found that “Before the actual entrance of the United States into the war, the stated military requirements for raw materials tended to be too low rather than too high.” But action was taken in advance of Germany’s invasion of Poland, not to mention Pearl Harbor more than two years later:
The Strategic Materials Act of June 7, 1939. authorized the appropriation of $100,000,000 between that date and June 30, 1943, to purchase, move, and store stocks of strategic and critical materials. An immediate appropriation of $10,000,000 was made for that purpose, and in March 1940 another $12,500,000 was added. A further appropriation of $47,500,000 in June brought total funds available for stock-piling to $70,000,000 of which about $13,000,000 had already been spent or obligated. However, the terms of the Strategic Materials Act, which required advertised bidding, prohibited negotiation, and allowed up to a year for production and delivery from domestic sources, made the building of stock piles a slow and cumbersome process.
The War Production Board repeatedly referenced that critical minerals and industrial tools/facilities were the binding constraints to ramping up production. But $100 million in June 1939 was not an insignificant commitment. Just adjusting for inflation, $100 million in 1939 would equate to roughly $1.4 billion today. And that is likely an underestimate because commodity prices for minerals have grown faster than inflation at large.
Today’s Inadequacies
By contrast, DoD recently announced a $24.8 million award for critical minerals and a $35 million award for rare earths. That is woefully inadequate. Over the last year since Executive Order 14017, DoD invested $316 million across all challenges facing supply chains, industrial workforce, microelectronics, and critical materials.
As the World War II experience showed, it is not just a commitment of funding but also the contracting and sourcing process to speed up the accumulation that really matters. A large DoD competitive contract can take two years to get awarded, and then production and delivery will get started. That will be unacceptable even if Congress finds the will-power to fund the effort.
Decline of Stockpiles
In 1962, DoD accumulated $7.7 billion in then-year dollars of stockpiled material, but after the end of the Cold War, the 1992 Stockpile Requirement Report argued the requirement had fallen to just $3.3 billion (from $7.1 billion). Congress agreed to dispose of large quantities of critical minerals in FY 1993. $5.9 billion were sold by FY 2005, and still with that reduced quantity, the next year Congress argued that 95 percent of remaining stockpiles were excess. [Source]
Folks, the situation is dire. The United States pacing challenge is not terrorism or local insurgencies. It is Great Powers including Russia and most dangerously China. #Make Industrial Mobilization Cool Again.
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