From the
article in my post above, I was interested in why ammunition factories received $24 billion of the $40 billion Congress appropriated last year. That's about 7% of total discretionary expenditures on the military last year. Specifically, Lake City Army Ammunitions Plant (LCAAP) in Missouri received one third ($8 billion) of that $24 billion. That's a huge chunk of money. The results may be illuminating.
LCAAP has existed since Harry Truman's presidency and manufactures four types of ammunition are manufactured on a 4,000 acre site – 5.56mm, 7.62mm, .50 BMG and 20mm. The site is owned by the Army and operated by Alliance Technology (ATK) until recently. LCAAP recently received a $52 million upgrade their facilities. In total, upgrades to "
ATK and the Army amount to $400 million to increase the plant’s efficiency in producing ammunition of various calibers."
Some current production facts:
- 6.5 million rounds of .50 BMG ammunition produced per month.
- 3.5 million rounds of 5.56mm ammunition produced per day.
- Each 5.56mm machine loading can produce 1200 rounds of 5.56 per minute
- 1.6 billion rounds of ammunition are manufactured on site per year.
- 8 million rounds are test fired as part of quality control, research, and development per year.
In 2013, Alliance announced they were laying off 2,600 workers due to “recent drawdowns in military actions.” A vast majority of their local workers are hired on a temporary basis by Alliance with few government workers.
After the $400 million on upgrades, the layoffs of 2,600 workers, and the recent $8 billion from Congress, Alliance (ATK) merged with Orbital Sciences, which is primarily an aerospace industry company. ATK had received a $2.3 billion 10-year contract to manufacture small-caliber ammunition for the U.S. Army. (part of the $8 billion?) Orbital Science is part of the privatization of space contracts, providing rockets to resupply the Space Station. (One - an Antares - blew up soon after takeoff years ago.) Orbital's stock had been skyrocketing, until their accountants determined the $2.3 billion contract Alliance had would end up losing money. Orbital announced a restatement of projected earnings, lost hundreds of millions due stock price decreases. The combined company is called Orbital ATK, undoubtedly has Congressional ties, a large lobbying segment, and now encompasses small arms manufacturing and space rocket industries.
Link for Orbital ATK's systems/divisions.
So, Congress makes huge financial investments of tax dollars in these military industries even when wars are being drawn down. Liabilities rest with the government as owners of ammunition sites, in this case, the Army. Employees benefit for periods of time and then are layed off.
-- Are we gearing up for continuing wars?
-- Are tax dollars being used wisely?
-- Do these munitions expenditures make sense in overall military spending?
-- In the overall economic picture?
-- Like other industries, military/defense companies are consolidating with benefit of more leverage with decreased competition. How do we reduce our national debt with these type of expenditures?
-- How much of this commitment to these industries determine future foreign policy?
-- Where is the fat we can reduce?
I have only looked at Lake City Army Ammunitions Plant. The Army and our government also has liabilities which cost the taxpayers hundreds of millions of dollars with LCAAP, but I'll touch on those with another post.