In the ever-evolving world of aerospace and defense, where cutting-edge technology meets the harsh realities of global geopolitics, a recent gathering of industry heavyweights has sounded the alarm: our supply chains are still teetering on the edge, even as the world inches toward post-pandemic normalcy. Hosted by the prestigious Atlantic Council in Washington, D.C., this eye-opening discussion brought together executives from major players like Samsung Electronics, RENK America, and Acutec Precision Aerospace. Their message was clear and urgent—despite some progress, the vulnerabilities baked into these critical networks continue to hamstring production across key U.S. and allied defense programs. As nations ramp up their military capabilities in response to rising threats, this fragility could have far-reaching implications for national security.
The event, part of the Atlantic Council’s ongoing deep dive into defense-industrial matters, painted a sobering picture of an industry that’s been battered by years of disruptions. Tresa Guenov, who leads programs and operations at the Scowcroft Center for Strategy and Security, put it bluntly: supply chain resilience isn’t just a buzzword—it’s a litmus test for industrial might and national fortitude. She highlighted how the COVID-19 era exposed deep-seated issues stemming from decades of globalization and outsourcing. Think about it: for years, companies chased cost savings by spreading production across the globe, but when the pandemic hit, those far-flung dependencies turned into choke points. Now, even as recovery efforts gain traction, the U.S. defense sector finds itself grappling with lingering weaknesses that could undermine everything from fighter jets to assault aircraft.
Diving deeper into the conversation, moderator Steve Grundman—a senior fellow at the Atlantic Council’s Forward Defense Initiative—referenced a fresh report from consulting firm Roland Berger. The study showed that while the intensity of supply chain disruptions has dipped from its peak, the improvement is marginal at best—just a four-point drop in severity in some cases. It’s like patching a leaky roof during a storm; you’re making headway, but the rain keeps coming. Panelists didn’t mince words about the culprits: tariffs that inflate costs, escalating trade tensions that disrupt flows, a shrinking pool of skilled labor, and ever-tightening rules on sourcing components. Ian Pain, CEO of RENK America, which specializes in defense drivetrains and transmissions, added another layer— the surge in European demand for military gear since Russia’s invasion of Ukraine in 2022 has piled even more pressure on these already strained systems. It’s a classic case of demand outstripping supply, with ripple effects felt across the Atlantic.
Elizabeth Smith, president and CEO of Acutec Precision Aerospace, brought a frontline perspective to the table. Her company supplies vital components for programs like the U.S. Army’s Future Long-Range Assault Aircraft (FLRAA), and she emphasized that these problems didn’t start with COVID—they’ve been simmering for years. Political instability, breakdowns in communication along the supply chain, and repeated delays in both commercial and defense projects have created a perfect storm. Smith described her firm’s journey as one of sheer “endurance,” underscoring how vulnerable the entire ecosystem remains. Even as defense budgets swell and production ramps up, companies like hers are walking a tightrope, where one misstep could cascade into major setbacks.
Take the FLRAA program as a prime example. The Army is pushing hard to fast-track this next-generation helicopter, with Bell aiming to deliver the first MV-75 prototype by Fiscal Year 2027. But as reported earlier this fall, supply chain hurdles are the biggest roadblock. Brig. Gen. David Phillips, the Army’s Program Executive Officer for Aviation, didn’t sugarcoat it in a recent interview with Defense News: these issues represent the “highest risk” to hitting timelines and getting the aircraft into the field. Efforts to mitigate this include close collaboration with suppliers and subcontractors to curb delays and cost overruns, but it’s an uphill battle in an industry where precision and reliability are non-negotiable.
This isn’t an isolated case. Look at the Air Force’s KC-46 Pegasus tanker, a lifeline for aerial refueling operations. Production and deliveries have hit snag after snag due to supplier woes. Back in February, the service paused acceptances entirely after discovering cracks in the ailerons, prompting a full fleet inspection. And that’s just the latest in a string of headaches—past problems with component quality and labor shortages have slowed things down repeatedly. Then there’s the Remote Vision System 2.0 (RVS 2.0), meant to fix the tanker’s flawed refueling setup; supply chain bottlenecks have delayed its rollout by years. A 2024 report from the Pentagon’s Director of Operational Test and Evaluation drove the point home, noting “prolonged maintenance repair times due to supply issues with parts.” It’s frustrating for operators who rely on these aircraft to keep missions airborne.
Another high-profile victim is Lockheed Martin’s F-35 Lightning II, the crown jewel of fifth-generation fighters. A September report from the Government Accountability Office (GAO) laid bare the extent of the damage: deliveries are lagging by an average of over seven months, and the Block 4 modernization effort is five years behind schedule with a whopping $6 billion in extra costs. The culprits? You guessed it—supply chain snarls tied to the TR-3 software upgrades and the F135 engines from Pratt & Whitney. These delays don’t just affect timelines; they ripple through training, deployment, and overall readiness, leaving pilots and commanders in limbo.
But it’s not all doom and gloom. The industry is fighting back with innovative adaptations. Some companies are reshoring operations, moving manufacturing back to the U.S. or to reliable allies to dodge geopolitical risks. Cordell Hull, Executive Vice President and Head of U.S. Public Affairs at Samsung Electronics America, spotlighted his firm’s hefty investments in American semiconductor fabs. Chips are the brains behind so many military systems, and by “ally-shoring” production, Samsung is diversifying away from single-point failures. Other strategies include pouring resources into advanced analytics for tracking risks and bolstering workforce training to plug labor gaps. These align neatly with the Pentagon’s playbook, which stresses better info sharing, smarter data tools, and escalating risks up the chain of command.
A particularly bold tactic is vertical integration—bringing critical suppliers in-house to own the risk outright. As Pain put it, “You can’t subcontract your risk; you own it.” This echoes Boeing’s recent move to reacquire Spirit AeroSystems, a key aerostructures supplier it had spun off back in 2005. Spirit’s fingerprints are on programs like the P-8 Poseidon, KC-46, B-21 Raider, and even Airbus jets, but quality lapses and delivery slips—culminating in the infamous 2024 Alaska Airlines 737 MAX 9 door-plug incident—pushed Boeing to reintegrate. Similarly, Bell decided to handle the MV-75 fuselage production internally after the Spirit fallout, a clear sign that companies are taking control to stabilize their chains.
Government isn’t sitting on the sidelines either. Grundman noted a sea change in Washington’s mindset: Congress recently greenlit $4.5 billion to beef up the B-21 Raider’s industrial base and accelerate output. In his days as Deputy Under Secretary of Defense for Industrial Affairs and Installations, such direct funding would have been unthinkable—he joked he’d have been “run out of government” for suggesting it. Today, it’s seen as essential for national security. Grundman wrapped up by framing supply chain resilience as both a moral duty and a business necessity, urging proactive steps to safeguard the U.S. and its allies.
As we look ahead, the aerospace and defense sector’s ability to fortify these lifelines will be crucial. With geopolitical tensions simmering—from Ukraine to the Indo-Pacific—the stakes couldn’t be higher. Industry leaders are adapting, but the road to true resilience is long and fraught. For now, the message from the Atlantic Council is a wake-up call: ignore these vulnerabilities at your peril.
About the Author
