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Why are Prisoners Building Patriot Missiles?

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Right now, federal prison inmates in correctional institutions across America are making Patriot missile components. Alarming? Sure. But it could also inform a larger debate currently underway in Washington.

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Right now, federal prison inmates in correctional institutions across America are making parts for Patriot missiles.

They are paid $0.23 an hour to start, and can work their way up to a maximum of $1.15 to manufacture electronics that go into the propulsion, guidance, and targeting systems of Lockheed Martin's (LMT) PAC-3 guided missile, originally made famous in the first Persian Gulf conflict.

Surprised? Me too.

Unicor, known as Federal Prison Industries until a 1977 re-branding, is a network of over 100 factories at 70 penitentiaries within the US; a self-sustaining, self-funding company owned wholly by the government, created by an act of Congress in 1934 to function as a rehabilitative tool to teach real-world work skills to federal inmates. Unicor's mandate dictates that prison work programs not adversely affect private sector businesses.

It has always been fairly well known that prisoners make everything from street signs, park benches -- and yes, license plates -- to office furniture for federal agencies like the VA and DoD (this last example being to the continuing consternation of Representative Pete Hoekstra, R-Michigan, whose district is home to Steelcase (SCS), Herman Miller (MLHR), and Haworth), but the Bureau of Prisons' PAC-3 missile program has gone largely unnoticed -- until now.

For the record, federal prisoners are making more than missile components. Inmates also make cable assemblies for the McDonnell Douglas/Boeing (BA) F-15, the General Dynamics/Lockheed Martin F-16, Bell/Textron's (TXT) Cobra helicopter, as well as electro-optical equipment for the BAE Systems Bradley Fighting Vehicle's laser rangefinder.

Despite repeated requests, Unicor would not disclose how many inmates are currently assigned to defense-related jobs, but public records show Unicor electronics factories located at no fewer than 14 federal correctional institutions.

Here's how the work is described on Unicor's website:
"Unicor supplies numerous electronic components and services for guided missiles, including the Patriot Advanced Capability (PAC-3) missile. We assemble and distribute the Intermediate Frequency Processor (IFP) for the PAC-3s seeker. The IFP receives and filters radio-frequency signals that guide the missile toward its target.

"We are an important supplier of complex electrical harnesses that link initiators, primers and detonators in the guided missile warheads, and connect infrared, radar and electro-optical sensor data that provide essential threat discrimination in high-clutter environments.

"Our RF cable assemblies connect and control antenna mast groups that communicate with remote missile launching stations. We supply grounding cables and shielding to protect antenna arrays from electro-magnetic interference and pulses. In addition, Unicor produces and distributes testing and repair kits that help to ensure that guided missiles and other critical ordnance are deployment ready."
As it turns out, this practice has been hiding in plain sight for two decades; detailed in Unicor's annual report each year, highlighted in its brochures, and explained in depth -- although buried several pages deep -- on Unicor.gov. The missile components made by prisoners are needles in haystacks of thousands of parts, often contracted and subcontracted out endlessly. The organization's annual reports aren't exactly making any New York Times best-seller lists, and the Unicor.gov website receives so few visitors, Quantcast, the Internet metrics firm, is unable to provide traffic data.

With that in mind, the Unicor/Patriot missile connection took some of the top defense analysts in America by surprise.

"It's kind of mind-boggling and hair-raising to find out a major component of a national security system is being made in prisons," says William Hartung, PhD, director of the Arms and Security Initiative at the New America Foundation, member of the Sustainable Defense Task Force, and author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex (Nation Books, 2010).

"For one thing, just the symbolism of it, God forbid, the global publicity -- I don't think using prison labor to build missiles reflects very well not just on Lockheed Martin, but on the United States," he says. "We're supposed to be a beacon of freedom and holding up the values of the free market. I can't think of an example that contrasts that more starkly than doing this kind of thing."

While sourcing components from prisons is perfectly legal, the idea makes Hartung more than a little uncomfortable.

"It just doesn't smell right to me," he continues. "It's really on the cutting-edge of questionable practices. The fact that it does an end-run around organized labor is a problem. There's no greater restriction on a worker's rights than being stuck in prison."

The actual logistical arrangement between Lockheed, Unicor, and the Pentagon is murky. In response to a request for details, Craig Vanbebber, of the Lockheed Martin Missiles and Fire Control division, "did quite a bit of research into… FPI/Unicor's role on the PAC-3 missile system," and it "appears that they are a supplier to the US Government, not a direct supplier to Lockheed Martin." However it shakes out in the Byzantine system of federal procurement, PAC-3s rely on systems made by prisoners.

Christopher Preble, PhD, a former commissioned officer in the US Navy, author of The Power Problem: How American Military Dominance Makes Us Less Safe, Less Prosperous and Less Free (Cornell University Press, 2009), and current director of Foreign Policy Studies at the Cato Institute, was also unaware that prisoners were being used to build weapons parts. For him, the practice raises questions about a much larger policy issue currently being fiercely debated in Washington, DC -- that of maintaining the so-called "defense industrial base."

As Preble explains, the defense industry insists keeping a highly-trained, highly-skilled workforce "warm" is vital to its very existence. But if prisoners are performing apparently vital, mission-critical tasks, it casts some doubt as to the supposed delicacy of the defense industrial base. It also may further the case that a large defense budget is, as former Secretary of Labor Robert Reich wrote in an August, 2010 editorial, "an insane way to keep Americans employed."

It echoed many of the same points laid out by Preble and Hartung in a 2009 Washington Times op-ed, which argued, "The defense budget is not a jobs program, nor should it be. Decisions on how many Humvees to buy, or how many bases to refurbish, should rest on military necessity, not economic expedience subject to political chicanery. When military procurement becomes nothing more than a series of thinly veiled pork- barrel projects, it risks exposing our troops to unnecessary risks, and ultimately undermines our security."

Preble says, "When you talk about reductions in defense spending -- and I encounter this almost daily -- you have a certain set of people with a vested interest in making the argument that there is a unique defense industrial base that will be destroyed if any funding is cut; that there will be structural damage, it will not rebuild, that it must be subsidized at extremely high cost, ad infinitum, or it will disappear forever. It comes up in the context, oftentimes, when a particular weapons system is nearing the end of its previously agreed-to production cycle."

Hartung wonders if maintaining an "efficient" industrial base by keeping production levels high for systems we do not need now but one day might; isn't, by definition, inefficient?

"How does one square building missile components using prison labor with the notion that you need to keep a large, very expensive workforce at the ready at all times," he says. "Maybe this means you keep technical teams together, scientists, engineers working on R&D, but that the assembly process is perhaps more fungible. It calls into question the entire industrial base argument."

Preble says the theory "never really sat well with me" and that "the global economy is such that US manufacturers have capitalized on our comparative advantages, which are design and marketing -- the beginning of the process and the end of it, which is the hard part. Everything in the middle is where we don't have that advantage, which is why things get made elsewhere."

"You tend to assume that weapons manufacturing requires a certain set of specialized skills," he says. "When I hear about PAC-3 components being built by prisoners, for a guy who was always skeptical about 'preserving the industrial base,' it certainly doesn't do much to assuage my doubts. If anything, it feeds into them. If you can train inmates to put together wiring harnesses for Patriot missiles, you can probably train people to do other, related jobs -- and fairly quickly. When you need people, you go get them."

John O. Noonan, defense policy advisor at the Foreign Policy Initiative and former US Air Force nuclear missile combat crew commander, sees little, if any, downside to procuring military hardware from prisons. He wrote in an email message:

"As long as proper security protocols are followed, [it] looks fine. If using prison labor helps keep defense systems costs down, with minimal security risk and a clean bill of ethical health, then more power to Lockheed and sub-contracting agencies."

There is no lack of debate among the various interested parties on the ethics of prison labor; no consensus has ever been reached on what constitutes "ethical" regarding FPI since it opened for business almost 80 years ago.

Regarding cost, the current Unicor "Electronic Capabilities" brochure claims that the prison labor can reduce certain expenditures by as much as 40%. "These cost savings have saved the Navy more than a million dollars," says one statement [PDF].

The security protocols Noonan mentions don't bother the Heritage Foundation's Mackenzie Eaglen, a policy expert with a focus on the defense industrial base and the size and structure of the nation's armed forces.

"Building one piece of one part of one missile is not going to give away the nation's crown jewels," she says.

However, Eaglen dismisses the idea that the defense industry may be overplaying its need to avoid budget cuts by any means necessary.

"My assumption is, this program is confined to basic manufacturing. There's a big difference between a highly-skilled worker and someone who inserts a widget," she says.

In fact, it appears that prison labor capabilities are becoming, if anything, more and more advanced. Unicor literature points out:

  • Our in-house prototyping, engineering, manufacturing and distribution capabilities allow us to streamline the entire design-through-delivery process, providing highly integrated services and overall time and cost savings for our customers.

  • Our team of electrical engineers and technicians are skilled in Computer-Aided Design (CAD) and can produce production-ready designs and high-quality prototypes to exacting military and commercial specifications. We recently designed, prototyped and engineered specialized lighting kits for the Army and Air Force and land mine sweepers for use in the Middle East.

  • Our engineering services include developing mechanical designs and documentation, machining and fabrication requirements, and quality assurance specifications. Our leading-edge coordinate measuring systems allow us to perform fast, accurate tolerance-checking to ensure the precision of our prototyping services.
As the very definition of war continues to evolve, Chris Preble wonders how to even accurately define "the defense industry."

"What exactly are we talking about in preserving our 'unique' industrial base," Preble says. "What exactly is that set of unique skills that, as a matter of national security, we continue to subsidize and absolutely must maintain at all costs -- including the opportunity cost -- of dictating that certain people be employed in certain areas, short-circuiting the market for presumably long-term objectives?

"Our ability to design militarily relevant, even revolutionary, technologies is the best in the world. Does that make every engineering school in America part of the military industrial base? Michael Dell (DELL) and Bill Gates (MSFT) dropped out of college. Where in the value chain, or as they call it in the military, the 'development cycle,' do you draw the line?"

On a more philosophical level, Preble is concerned that all the panic over maintaining the defense industrial base indicates a deeper problem.

"Our strength as a country is our ingenuity, our dynamism," he says. "I get the feeling that there is a sort of lack of confidence in America's adaptability and flexibility. I worry about locking in to a certain concept, maintaining certain platforms, certain people, certain jobs, because we somehow know for certain that those pieces of metal and electronics will the determinant factor in warfare 20 years from now. We have no idea what will be happening in the world 20 years from now. I'm concerned that we will preclude what has always been our real strong suit -- our ability to succeed."
No positions in stocks mentioned.
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