Republicans know they must have Ohio on their side to win the White House. That’s what happened in 2004, when Republican presidential candidate George W. Bush carried the Buckeye State with 50.8% of the popular vote and thus secured the electoral-college majority needed for reelection. So of course the Romney campaign is looking for any angle that will help it win the state. President Obama’s biggest advantage there is that he bailed out General Motors and Chrysler, thereby saving thousands of local jobs. But now the Republicans have found an industrial issue of their own in Ohio, courtesy of the U.S. Army — which is why Romney running-mate Paul Ryan kicked off a swing through the state last Monday at a veterans hall in the town of Lima.
Lima is the place where the Army operates the last tank plant in America. The plant mainly upgrades Abrams tanks for U.S. and overseas customers while it awaits the outcome of several competitions that could lead to renewed demand for new armored vehicles. It wasn’t supposed to be this way, but first the Army delayed its armored-vehicle modernization plans, and then a much-needed amphibious landing vehicle for the Marines was canceled. Both changes occurred on Obama’s watch, so they play into the Romney campaign’s complaint that defense spending is being cut too much. But what really brought Ryan to Lima was a boneheaded plan by Army industrial managers to spend hundreds of millions of dollars shutting down the last tank plant in America so that they could spend hundreds of millions more three years later to re-open it.
The service thinks it can save money during the intervening period if the plant is closed, even though it knows the facility will be needed for new production later in the decade. So it wants to throw thousands of workers out of their jobs in Ohio — not to mention at subcontractor facilities in Florida and Pennsylvania — and then call them back to work when they are needed. This plan is a case study in how the Pentagon’s annual budgeting process encourages bad choices and wastes money under the guise of pursuing efficiency. The reason the Army thinks it can save money by shutting the plant for three years is that it has grossly underestimated the cost of reopening the facility, reconstituting the workforce, and requalifying hundreds of suppliers. The budget process encourages planners to ignore those costs because they are incurred in 2015 and beyond, whereas the “savings” from a plant shutdown can be booked starting next year.
This kind of myopia occurs constantly in the military bureaucracies. It is the main reason why the Army killed a next-generation air defense system that would have cost much less to operate than the system it already has, but requires up-front money to produce. In the case of the Lima tank plant, though, it has handed Republicans a political issue in a key swing state because so many local workers would be hurt to generate make-believe savings in Washington. Prime contractor General Dynamics says that when all the costs of shutdown and restart are included, it’s cheaper to keep the plant running at a low rate of production until demand ramps up again around 2017. Going that route would buy the military several hundred of the latest tanks (configured to deal with the kinds of threats faced in places like Afghanistan and Iraq) and also retain a surge capability for unforeseen emergencies, while actually saving money over the long run. But the Army isn’t listening — which is how Paul Ryan found his way to Lima this week.
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