The U.S. Navy's Missile Production Problem Looks Dire

A classic tale of the Pentagon acquisition “doom loop” goes something like this: take 20 years to finally get a product delivered to the warfighter and a humming manufacturing line up and running, then cancel the existing weapons system—typically in favor of some better technology coming along in the pipeline but not yet ready for production prime time, attempt to start a new replacement program that gets bogged down in requirements debates, design and engineering delays, and itself eventually gets axed for the next-next program that also never arrives on time or at scale for the 1.3-million person active duty military.

In the meantime, everything gets older, more expensive to maintain, and the fleets and inventories of all the services shrink to the point where missions are no longer achievable due to lack of munitions or platforms.

The latest case-in-point is the U.S. Navy’s standard missile, a workhorse of current global operations. Amidst high mission tempo to keep global sea-lanes open against Houthi attacks and ongoing exercises to deter aggression elsewhere, the Navy is facing a critical shortfall in air defense missiles.

The Navy’s Standard Missile (SM) program forms the backbone of its air and missile defenses, providing advanced capabilities to protect ships and support joint military operations. The missile program includes several variants, each with specific roles, including:

Standard Missile-2: Missile capable of defending the fleet by intercepting enemy aircraft and missiles, introduced in 1981.

Standard Missile-3 Block IB: An improved missile with better accuracy and capability to hit ballistic missiles.

Standard Missile-3 Block IIA: Enhanced missile with a larger warhead and advanced seeker, offering greater range and effectiveness against advanced missile threats.

Standard Missile-6: The newest variant of the Standard Missile, designed to be next workhorse for Navy cruise and ballistic missile defense and is better able to defend against hypersonic threats.

Given the spending constraints of President Biden’s proposed fiscal year (FY) 2025 budget, however, the Pentagon moved to terminate SM-3 Block IB production in order to “favor” production of the SM-3 Block IIA.

But the only sure bet is the cancelation of the older missile without that promised increase in purchases of the newer one.

Pentagon budget documents highlight the inaccuracy of this tall tale whose consequences will fall squarely on those in uniform. The FY 2025 defense budget proposal does not include any increase in planned SM-3 Block IIA interceptors to offset the SM-3 Block IB reductions.

Compared to the previous year’s projections, the 2025 White House defense budget cuts previously planned procurement of SM-3 IB over the next five years from 153 to zero—saving $1.9 billion. However, these savings are not reinvested in SM-3 Block IIA production, of which quantities remain stagnant at 12 missiles annually over the next five years.

Twelve missiles. Per year.

According to recent press reports, planned purchasing quantities of the Block IIA are just a third of what was planned for the Block IB—meaning that the Navy’s future interceptor stockpile will be much smaller than originally anticipated. 

This inadequate order of a dozen missiles per annum is slightly rectified by a projected ramp up in SM-6 procurement, of which the Navy has requested 125 for next year. Though SM-6 procurement is expected to increase to 300 missiles by 2029, these procurement quantities still pale in comparison to those of the past. For example, in 1985 alone, President Reagan requested 1,380 SM-2s—over 10 times this administration’s Standard Missile request.

Additionally, projections are one thing; money down on contracts is another. If the Pentagon wants to send the right signal to industry to invest and ramp up production—changing planned buys of the SM-3 Block IIAs is the wrong move to make. This chronic preference for smaller procurement quantities based off faulty munitions requirements have resulted in a less than adequate stockpile of these crucial air defense missiles.

While Washington is slowly waking up, dollars don’t match words. In a recent hearing discussing the Navy’s munition shortage, Secretary Del Toro emphasized that “Given the future threat and our deterrence mission… we are going to need more SM-3s in the future.” Additionally, Missile Defense Agency Director Lt. Gen. Collins spoke recently on the Navy’s ability to deal with forecasted threats, emphasizing his concern “…with the capacity and our ability to support with enough SM-3 Block IIAs in the moving forward.”

Short-sighted efforts to cut weapons and munitions procurement are often threatened in Washington by the time-honored tradition that the enemy gets a vote. The Houthis do not adhere to the Pentagon’s purchasing timetables. Iran’s recent massive missile barrage on Israel, which American Navy SM-3 missiles blunted, has woefully illustrated that modern wars require deep stockpiles.

If Pentagon leaders are aware of these essential missile shortfalls, so are our enemies. Nowhere is this more evident than China’s rapid expansion and investment in its missile forces. According to the Defense Department, China now fields the largest rocket force in the world and has stockpiles of thousands of missiles in reserve, all as part of a strategy to mass fires and overwhelm U.S. warships in a potential conflict.

Nor does it take a sophisticated peer enemy to rapidly deplete America’s stockpiles and war reserves. As recently demonstrated by its attack against Israel, Iran is estimated to have over 3,000 ballistic missiles at its disposal for strikes against American military assets and allies across the Middle East.

To rectify chronic shortfalls and bolster our interceptor stockpile, Congress must act to reverse the Navy’s decision and fully restore SM-3 Block IB production to levels called for last year until the missile can be adequately replaced by alternatives. Additionally, policymakers must work to continue bolstering current funding efforts to maximize production on existing SM-3 IIA and SM-6 production. An outgunned Navy will not be able to deter aggressors and could invite the very wars it seeks to prevent as a result.

About the Author: 

Mackenzie Eaglen is a senior fellow at the American Enterprise Institute (AEI), where she works on defense strategy, defense budgets, and military readiness. She is also a regular guest lecturer at universities, a member of the board of advisers of the Alexander Hamilton Society, and a member of the steering committee of the Leadership Council for Women in National Security.