The munitions industrial base is in the process of adjusting to changes in the strategic environment. Reductions in munitions procurement are threatening the United States's ability to meet national security objectives. The reduced demand for munitions worldwide cannot maintain the current industrial base. The U.S. industrial base continues to shrink as a result of low production requirements. An increase in global competition is eroding the U.S. competitive advantage. Global partnerships and cooperative arrangements will become the mainstay of industrial survival strategies. New relationships between government and industry must emerge to allow for new cooperation and partnership agreements. The current stockpile of "preferred" precision-guided munitions (PGM) may not support a strategy based on two major regional contingencies (MRC) in the near term. No major government intervention is required at this time to bolster the U.S. munitions industry.
ICAF Industry Studies 1996