Land Combat Systems: –
The Land Combat Systems (LCS) industry, as part of the overall defense industry, is critical to the U.S. and partner nation’s defense security. For the purposes of this study, the industry is sub-categorized into two markets: Tactical Wheeled Vehicles (TWV), including Protected Vehicles (PV), and Combat Vehicles (CV). Tactical Wheeled Vehicles include light, medium, and heavy wheeled vehicles carrying personnel and equipment with a limited ability to carry weapons. Combat Vehicles include tracked and wheeled vehicles mainly used in a ground combat role. The purpose of studying the LCS industry is to analyze representative issues and dilemmas faced by firms, the Department of Defense (DoD), and the U.S. Government (USG). The LCS industry consists of a number of key domestic and international firms as well as government depot facilities. Within the TWV market firms often manufacture both commercial and military products, sometimes on the same assembly line. However, most firms in the CV market are solely military suppliers. Cyclic government demand is a key driver in the TWV and CV markets. In addition, government customers control many variables which directly impacts the success or failure of LCS programs and the respective success or failure of individual firms. Given the facts above and based upon the study team observations and analysis, the USG and DoD should consider expanding Foreign Military Sales (FMS) opportunities, updating logistical sustainment plans and practices, revising requirements generation and oversight of Science and Technology (S&T) and innovation, and consolidating efforts within the Defense Industrial Base (DIB). These changes will maximize efficiency, increase competition, incentivize innovation, and minimize cost while maintaining the optimum readiness level for the designated mission requirements.
In the spirit of Bernard Baruch’s goal to “keep in touch with industry,” the purpose of this study is to understand the behavior of the markets and industry participants, as well as the salient issues and dilemmas, associated with a representative industry critical to national security. As such, the Class of 2017 Land Combat Systems (LCS) Industry Study team investigated the development, production, fielding, and sustainment of military vehicles to identify and analyze strengths, challenges, and opportunities inherent in this important industry today. The study team had the privilege of meeting with U.S. Original Equipment Manufacturers (OEM) and defense firms as well as select European-allied partner firms. In addition, the team conducted literature reviews and analyzed firms’ financial, marketing, and corporate structures. Through these meetings, briefings, plant tours, and associated research, common themes and trends emerged and provided a clearer picture of the health of the military vehicle industry.
To better understand and capture the salient points of those themes and trends, the study team used a variety of tools and frameworks such as Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis; Porter’s Five Forces analysis; and Structure, Conduct, and Performance (SCP) analysis. In addition, the team was disciplined in the collection of Key Take-Aways (KTA) from each interaction including analysis of past and current conditions, challenges, and opportunities as well as, where appropriate, recommendations related to U.S. Government (USG) goals and its role in the industry. The resultant themes and trends were then compared with historical assessment products from previous military vehicle industry studies to identify the most important observations, evaluate firm strategy and government policy implications, and offer key overarching recommendations to improve industry performance with respect to national security requirements.
The team conducted a detailed study of firms and government organizations participating in underlying vehicle markets and engaging in political activities to produce military vehicles to the U.S. and international militaries. For the purposes of this study, the underlying market for military vehicles is sub-divided into a Tactical Wheeled Vehicle (TWV) market (which includes protected vehicles (PV)) and a Combat Vehicle (CV) market, illustrated in Appendices B, C, and D. TWVs include light, medium, and heavy wheeled vehicles carrying personnel and equipment with a limited weapons capability, with or without protective armor. CVs include tracked and wheeled vehicles mainly used in a ground combat role and usually equipped with extensive firepower. The military vehicle industry consists of a number of key domestic and international firms, some of which develop and produce commercial vehicles or primary components as their major effort.
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