Manufacturing

Key Takeaways The deliberate choice: After the Cold War, the Pentagon explicitly directed defense industry consolidation, reducing 51 prime contractors to 5 and eliminating thousands of sub-tier suppliers. The efficiency trap: "Just-in-time" manufacturing and minimal inventories worked brilliantly in peacetime—and created catastrophic vulnerabilities for wartime surge. The foreign dependency: Cost optimization led to offshoring critical production, creating dependencies on potential adversaries for components essential to U.S. weapons systems. The structural mismatch: The current defense industrial base is optimized for producing small quantities of complex weapons in peacetime. It cannot support the attrition rates of high-intensity conflict. The Dinner That Changed Everything In the spring of 1993, newly appointed Deputy Secretary of Defense William Perry convened a dinner meeting with the CEOs of America’s major defense contractors. What happened that evening—known ever after as “the Last Supper”—would reshape American defense production for decades. ...

In 1967, Lotus engineers faced a problem. Colin Chapman, their famously demanding boss, insisted the new Europa achieve a drag coefficient of 0.30—an ambitious target for the era. After exhaustive wind tunnel testing, they realized it was physically impossible. Their solution? They changed the frontal area measurement on the paperwork until the math produced the number Chapman wanted. 0.30 The Europa's 'official' drag coefficient Oliver Winterbottom memoir Welcome to the real world of car design. ...

In 2014, while Tesla sold 35,000 cars and the world debated whether electric vehicles would ever go mainstream, China quietly achieved something extraordinary: 200 million electric two-wheelers on its roads. No subsidies. No government mandates. No involvement from any major automaker. The traditional car industry didn’t notice. They were too busy perfecting a business model that hadn’t fundamentally changed since 1914. That blind spot tells you everything about why the automotive industry’s $3 trillion transformation might fail. ...