The Bunker: Enemies, Exports, Business

This week in The Bunker: look who’s guiding missiles into Ukrainian cities; the complications of building weapons with other countries; war is good for (some of) the economy, and more. 

The Bunker, delivered to our subscribers Wednesdays at 7 a.m., is a newsletter from the desk of National Security Analyst Mark Thompson. Sign up here to receive it first thing, or check back Wednesday afternoon for the online version.

This week in The Bunker: look who’s guiding missiles into Ukrainian cities; the complications of building weapons with other countries; war is good for (some of) the economy, and more.


(It is us, with apologies to Walt Kelly’s, um, Pogo)

Turns out, the U.S. is shipping more key military hardware to Ukraine than we knew. Unfortunately, it’s in the form of the brains of North Korean missiles that Russia is using to destroy Ukrainian cities.

That’s the troubling conclusion of some forensic sleuthing by Conflict Armament Research (CAR), a U.K.-based investigative outfit. It’s a complicated quadruple-bank shot involving a missile made in North Korea, with a guidance system relying on U.S. parts, that Russia recently fired into a Ukrainian city. Even more alarming, CAR’s analysis of the missile’s guts indicate its U.S. innards were manufactured within the past three years.

The finding is based on the wreckage of a single short-range ballistic missile recovered in the Ukrainian city of Kharkiv on January 2. “CAR documented electronic components among the missile remnants, primarily forming parts of the navigation system,” the group’s report said. “CAR’s documentation shows that the North Korean missile includes many recently manufactured components bearing the marks of companies mostly based in the United States.”

CAR traced more than 290 of the missile’s components that were supplied by 26 companies. About 75% of the parts were designed and sold by companies incorporated in the U.S. Europe accounted for 16% of the total, and Asia 9%. The group said that because it is working with the companies involved to trace how their parts ended up in the missile — almost surely from a link or two along the supply chain — it did not name them.

Half of the components included dating codes. “More than 75% of those codes indicated production between 2021 and 2023. Based on those production dates, CAR concludes that the missile recovered in Kharkiv could not have been assembled before March 2023,” the report said.

So much for sanctions. “North Korea, just like Iran and the Russian Federation, relies on the global semiconductor industry to acquire components that are critical to its military production,” the inquiry concluded. “CAR’s findings show how difficult it is to effectively control the export of commercial electronic components, but also just how reliant these countries are on non-domestic technology.”


Entangling allied acquisition alliances

More than 40 years ago, when The Bunker was a mere foxhole, he spent a lot of time writing about the F-16 jet fighter. That’s because he was a Washington correspondent for the Fort Worth Star-Telegram, and Fort Worth was where General Dynamics was building the lightweight fighter (GD sold the F-16 business to Lockheed in 1993). One of the F-16’s more interesting story angles was that four European nations would be buying about a third of the first 1,100 built. In exchange for their purchase, Belgium, Denmark, the Netherlands, and Norway would get contracts to build F-16 parts worth $1.6 billion(PDF) in their factories (in the mid-1970s, $1.6 billion was a lot of money — Lockheed bought GD’s fighter-jet-building-biz for $1.5 billion 18 years later).

But things have gotten a lot more complicated with the F-35s that are now rolling out of that same Texas plant. A Dutch appellate court has ordered that the government block all exports to Israel of U.S.-owned F-35 parts from a regional warehouse in the Netherlands. “It is undeniable that there is a clear risk that the exported F-35 parts are used in serious violations of international humanitarian law” during Israel’s war in Gaza, the court ruled February 12. The Netherlands plans to buy 52 F-35s, and produces “composites, bonded assemblies, and aircraft wiring” used aboard every F-35.

In 2019, the U.S. kicked Turkey out of the F-35 coproduction program after it purchased Russian-built S-400 air defense systems designed to defeat the F-35’s radar-eluding capability. The Pentagon projected it would have to spend about a half-billion-dollars to replicate in the U.S. the F-35 work the Turks were to have done.

Such co-production agreements are designed to let allied forces fight more smartly, improving efficiency by sharing weapons and the infrastructure they require. But it doesn’t always work out that way. Rumored cuts in the Pentagon’s 2025 F-35 buy won’t be helped by recent foreign sales of the plane, Air & Space Force Magazinereported February 22. “They have the cashflow planned,” one source said of the overseas buyers. “Most countries don’t have the budget flexibility to just decide to spend…a billion dollars earlier than planned.”

The article’s headline says the cuts “may drive costs higher.” But here’s something you can take to the bank: there’s no “may” about it.


War is good for (some parts of) the economy

As the two above items make clear, war is as much about business as it is about bombs. But no one really likes to talk about it in polite company. Far better — for our mental health, at least — to drape killing in highfalutin bunting about democracy, killing bad guys, and a return to the status quo ante bellum. Yet wars have always been good for business. And as future U.S. military aid for Ukraine hangs in the balance, both the White House and the Pentagon are making that increasingly clear.

“While this bill sends military equipment to Ukraine, it spends the money right here in the United States of America in places like Arizona, where the Patriot missiles are built; and Alabama, where the Javelin missiles are built; and Pennsylvania, Ohio, and Texas, where artillery shells are made,” President Biden said February 13. And the Pentagon has posted a handy-dandy guide to the business-back-home-benefits on its website.

Industrial production in the U.S. defense and space businesses has surged 17.5% since Russia invaded Ukraine two years ago this week. “The U.S. defense industry has experienced a boom in orders for weapons and munitions,” the Wall Street Journalreported February 18.

Good news for some American workers. Just don’t confuse that boom with those made by real bombs.


Here’s what has caught The Bunker’s eye recently

Time for another Truman Committee

War profiteering by U.S. defense contractors is on the rise, Senator Bernie Sanders (I-VT) argued February 27 in The Atlantic. He says it’s time for Congress to create a committee like it did during World War II to curb it.

Troubled ranks

A previously undisclosed Army probe found that 10% of service personnel surveyed “didn’t identify using force, violence, or unlawful means to deprive individuals of their rights under the U.S. Constitution as an extremist activity” that is prohibited by Army rules, Nick Schwellenbach of the Project On Government Oversight reported February 22.

Stop the presses!

The Navy has ordered a defense contractor to halt work building landing craft after “years of challenges and disagreements,” Megan Eckstein of Defense News said February 23. Sure, it’s a small contract involving a small business, but you’ve got to start somewhere.

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