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A Comparative Analysis of Options for Preserving the Tank Industrial Base Calhoun: The NPS Institutional Archive Theses and Dissertations Thesis Collection 1993-03 A comparative analysis of options for preserving the tank industrial base Hernandez, Juan J. Monterey, California. Naval Postgraduate School http://hdl.handle.net/10945/39862 NAVAL POSTGRADUATE SCHOOL Monterey, California AD-A264 952 DTIC 9 ELECTE l MAY 2 81993 0 E THESIS A COMPARATIVE ANALYSIS OF OPTIONS FOR PRESERVING THE TANK INDUSTRIAL BASE by Juan J. Hernandez March 1993 Principal Advisor: Thomas H. Hoivik Approved for public release; distribution is unlimited 93 5 92' 02 !93-12019 Unclassified SECURITY CLASSIFICATION OF THIS PAGE REPORT DOCUMENTATION PAGE la. REPORT SECURITY CLASSIFICATION l b RESTRICTIVE MARKINGS Unclassified 2a SECURITY CLASSIFICATION AUTHORITY 3 DISTRIBUTION/AVAILABILITY OF REPORT Approved for public release; distribution is unlimited. 2b DECLASSIFICATION'DOWNGRADING SCHEDULE 4 PERFORMING ORGANIZATION REPORT NUMBER(S) S MONITORING ORGANIZATION REPORT NUMBER(S) 6a NAME OF PERFORMING ORGANIZATION 6b OFFICE SYMBOL 7a NAME OF MONITORING ORGANIZATION Naval Postgraduate School (If applicable) Naval Postgraduate School 55 6c aDDRESS (City, State, andZIPCode) 7b ADDRESS (City, State, andZIP Code) Monterey, CA 93943-5000 Monterey, CA 93943-5000 Ba NAME OF FUNDING/SPONSORING 8b OFFICE SYMBOL 9 PROCUREMENT INSTRUMENT IDENTIFICATION NUMBER ORGANIZATION (if applicable) 8c. ADDRESS (City, State, andZIPCode) 10. SOURCE OF FUNDING NUMBERS Program Element No Project No TaskNo Work Unit Accession Number 11. TITLE (Include Security Classfication) A Comparative Analysis of Options for Preserving the Tank Industrial Base 12. PERSONAL AUTHOR(S) Hernandez, Juan J. 13a. TYPE OF REPORT 13b TIME COVERED 14 DATE OF REPORT (year,month, day) 15 PAGECOUNT Master's Thesis From To March 1993 168 16 SUPPLEMENTARY NOTATION The views expressed in this thesis are those of the author and do not reflect the official policy or position of the Department of Defense or the U.S Government. 17 COSATI CODES 18 SUBJECT TERMS (continue on reverse if necessary and identify by block number) FIELD GROUP SUBGROUP Combat Vehicles, Production Base, Appropriations, Industrial Mobilization. Ml Tank, Main Battle Tank, Mobilization Planning, Industrial Plants, Industrial Readiness, Production Planning, Armored Vehicles, Tracked Vehicles, M1A2 Tank, Tank-Automotive Command. 19. ABSTRACT (continue on reverse if necessary andidentify by block number) This thesis analyzes the impact of potential closure of the sole tank production facility in the United States, including the effects of closure on future tank production. The analysis is based on the FY93 DOD budget which appropriated funds for upgrades to existing MI Abrams tanks through 1995. Three possible alternatives to preserving the tank industrial base are presented and analyzed with respect to applicable factors currently facing deciaionmakers in DOD, Congress and industry. The three alternatives are: (1) terminate production upon completion of the initial upgrade in 1995, (2) continue the upgrade from 1996 to 1999, or (3) slow down existing production rates to stretch out production and minimize production stoppages. These alternatives are analyzed utilizing factors such as workforce effects, costs, subcontractor base impact, mobilization/surge impact, spare parts requrements, and operational effectiveness. The thesis concludes with a recommendation on how to preserve the tank industrial base with additional recommendations and areas requiring further study. The methodology utilized here can be applied to other DOD systems and programs dependent on a single manufacturer for systems facing a similar predicament. 20 DISTRIBUTION/AVAILABILITY OF ABSTRACT 21. ABSTRACT SECURITY CLASSIFICATION M4JNCLASsIFIEOIUNLIMITED SAMEASREPORT 3 DTICUSERS Unclassified 22a. NAME OF RESPONSIBLE INDIVIDUAL 22b TELEPHONE (Include Area code) 22c OFFICE SYMBOL Thomas H. Hoivik (408)-656-3301 ASIHo DD FORM 1473,84 MAR 83 APR edition may be used until exhausted SECURITY CLASSIFICATION OF THIS PAGE All other editions are obsolete Unclassified Approved for public release; distribution is unlimited. A Comparative Analysis of Options for Preserving the Tank Industrial Base by Juan J. Hernandez Captain, United States Army B.S., United States Military Academy, 1982 Submitted in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE IN MANAGEMENT from the NAVAL POSTGRADUATE SCHOOL March 1993 Author: Juan J. Hernandez Approved by: Thpma&#. Hoivik, Principal Advisor Richard Doyle, Associve Advisor Department of Administrative ces ABSTRACT This thesis analyzes the impact of potential closure of the sole tank production facility in the United States, including the effects of closure on future tank production. The analysis is based on the FY93 DOD budget which appropriated funds for upgrades to existing MI Abrams tanks through 1995. Three possible alternatives to preserving the tank industrial base are presented and analyzed with respect to applicable factors currently facing decisionmakers in DOD, Congress and industry. The three alternatives are: (1) terminate production upon completion of the initial upgrade in 1995, (2) continue the upgrade from 1996 to 1999, or (3) slow down existing production rates to stretch out production and minimize production stoppages. These alternatives are analyzed utilizing factors such as workforce effects, costs, subcontractor base impact, mobilization/surge impact, spare parts requirements, and operational effectiveness. The thesis concludes with a recommendation on how to preserve the tank industrial base with additional recommendations and areas requiring further study. The methodology utilized here can be applied to other DOD systems and programs dependent on a single manufacturer for systems facing a similar predicament. -____ Accesion For NTIS CRA&i DTIC TAB Unannounced iDTIC Q'iT U.P=CW-TED 5 Justification ............ By...... Distribution I Availability Codes Avail and/or ... Special TABLE OF CONTENTS I. INTRODUCTION ..................................... I A. PURPOSE .................................... 1 B. BACKGROUND ................................ I C. THESIS OBJECTIVES ............................. 3 D. RESEARCH QUESTIONS .......................... 3 E. RESEARCH SCOPE AND LIMITATIONS .................. 4 F. METHODOLOGY ............................... 4 G. LITERATURE REVIEW ........................... 5 II. BACKGROUND ..................................... 6 A. THE INDUSTRIAL BASE .......................... 6 B. THE TANK INDUSTRIAL BASE, 1917-1945 ................ 7 C. THE TANK INDUSTRIAL BASE, 1945-1980 ................ 9 D. THE M1 ABRAMS TANK PROGRAM .................... 16 E. THE ASM PROGRAM ............................ 19 F. THE FY93 BUDGET ............................. 22 G. ACQUISITION STRATEGY AND INDUSTRIAL BASE POLICY TODAY ...................................... 26 iv H. OTHER INDUSTRIAL BASE ISSUES ..................... 33 I. CURRENT STATE AND STRUCTURE OF THE TANK INDUSTRY ................................... 36 J. OPTIONS AVAILABLE TO DOD, CONGRESS AND INDUSTRY . 39 M. THE TANK INDUSTRIAL BASE WORKFORCE .................. 43 A. INTRODUCTION ............................... 43 B. WORKFORCE ISSUES ............................ 43 C. WORKFORCE ANALYSIS .......................... 47 D. SUMM ARY ................................... 56 IV . COSTS .......................................... 57 A. hNTRODUCTION ............................... 57 B. COST ANALYSIS FACTORS ........................ 57 C. COST ANALYSIS ............................... 65 D. SUMMARY ................................... 75 V. THE SUBCONTRACTOR BASE ........................... 76 A. INTRODUCTION ............................... 76 B. OVERVIEW ................................... 76 C. SUBCONTRACTOR ANALYSIS ........................ 79 D. SUMMARY OF THE TANK SUBCONTRACTOR BASE ....... 102 v VI. MOBILIZATION AND SPARE PARTS ...................... 108 A. INTRODUCTION ............................... 108 B. MOBILIZATION OVERVIEW ....................... 108 C. SPARE PARTS OVERVIEW ......................... 113 D. ANALYSIS .................................... 115 E. SUMMARY ................................... 120 VII. OPERATIONAL EFFECTIVENESS CONSIDERATIONS .......... 122 A. INTRODUCTION ............................... 122 B. EFFECTIVENESS ANALYSIS ....................... 122 C. SUMMTIARY ................................... 132 VIII. CONCLUSIONS AND RECOMMENDATIONS .................. 134 A. GENERAL CONCLUSIONS ......................... 134 B. SPECIFIC CONCLUSIONS ......................... 135 C. RECOMMENDATIONS ............................ 145 APPENDIX A: ABRAMS TANK PRODUCTION, 1980-1993 ........... 148 APPENDIX B: DEFINITIONS .............................. 149 APPENDIX C: MIA2 TANK COSTS .......................... 151 vi BIBLIOGRAPHY ....................................... 152 INITIAL DISTRIBUTION LIST .............................. 158 vii I. INTRODUC HON A. PURPOSE The purpose of this thesis is to analyze the impact of the potential closure of the only tank production facility in the United States. Additionally, three possible alternatives to preserving the tank industrial base will be presented ane analyzed with respect to applicable factors facing DOD, Congress and industry. B. BACKGROUND The tank industrial base is unique and essential to the readiness of the U.S. Army. There is no commercial counterpart. The world is becoming more unstable and the need for U.S. peacekeeping strength is greater than ever.
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