Producers of munitions know the drill: Voters get tired of wars and big expenses, during the elections kick out of power the party, running them, and the money goes again to pensions and other social needs. Producers of munitions are left holding useless bag of factories that are getting obsolete quickly. This is the basis of their hesitation during a war.
The scenario described—where munitions producers hesitate to rapidly expand capacity due to the cyclical "boom and bust" nature of defense procurement—is accurate and documented as a major factor in the defense industrial base, particularly in the United States and NATO allies.
The Basis of Hesitation: "Boom and Bust" Cycles
Volatile Demand: During high-intensity conflicts, demand for weapons spikes, but during peacetime, only a small fraction of capacity is needed for training and maintenance.
Risk of Stranded Assets: Manufacturers are reluctant to invest in new, expensive factories or increase production lines if they believe the demand will vanish after a conflict, leaving them with, as mentioned above, "useless bags of factories".
Specialized Workforce: The industry relies on highly specialized labor that is difficult to retain during down cycles.
Post-Cold War Habits: Following the Cold War, the defense industry, particularly in the U.S., prioritized "just-in-time" efficiency over "just-in-case" surge capacity, creating a system that cannot quickly adapt to large-scale, prolonged wars.
Current Evidence
Production Lags: During the conflict in Ukraine, major ammunition producers in the U.S. and Europe were slow to ramp up production of 155mm artillery shells, largely because they awaited long-term, guaranteed government contracts before committing to investments.
Stockpile Depletion: Because of this hesitation to maintain excess capacity, NATO allies were forced to draw down their own stockpiles, creating a "munitions gap".
Industry Viewpoint: The captains of the defense industry are constantly weighing the immediate, intense need for weapons against the long-term risk of overbuilding capacity.
Counter-Trends in 2025-2026
Long-Term Contracts: Due to the persistence of conflict (e.g., Ukraine, potential tensions in Asia), governments are now offering more long-term, multi-year contracts to encourage investment, shifting toward a "security supercycle" where, for some companies, this volatility is being mitigated.
Rapid Innovation: The industry is focusing more on AI and drone technology, which might make some older, traditional manufacturing plants obsolete faster, shifting the focus of investment.
While manufacturers do hesitate, the current, prolonged nature of recent conflicts has forced a shift toward rebuilding capacity, though the fear of a rapid "peace dividend" return still looms, as we see below:
“Pentagon officials are drawing up plans to replenish U.S. munitions expended fighting Iran over the past week, according to people familiar with the matter, a step in the Trump administration's efforts to drastically increase the number of missiles made each year.
Lawmakers in Congress and defense-industry officials are expecting a funding request from the Pentagon to pay for costs associated with the war. The funding would support the purchase of Patriot, Tomahawk and Thaad missile systems, which have been in heavy use since the U.S. and Israel began their strikes, the people said.
Recent fighting in the Middle East burned through stockpiles for some of those weapons. That added a new challenge for the Defense Department, which is wrestling with how to pay for a war with an indefinite end date.
It is also facing an industrial base that was stretched to meet current demand and potential threats from China.
The conflict in the Middle East continued to escalate on Thursday, with Israel saying it started another wave of large-scale strikes on Tehran and struck Hezbollah command centers in Beirut, while Iran fired more missiles toward Israel and hit its northern neighbor, Azerbaijan, the latest nation to be dragged into the war. Azerbaijan promised a response.
Admiral Brad Cooper, the Central Command chief, said U.S. forces attacked the headquarters of the regime militia that is "targeting the protesters" and urged Iranians to stay inside.
Meanwhile the State Department closed the U.S. Embassy in Kuwait on Thursday, after suspending operations on Tuesday and previously advising Americans in Kuwait to shelter in place. The embassy on Thursday urged U.S. citizens to leave the country if possible to do so safely. Nearly 20,000 Americans have returned to the U.S. from the Middle East since the conflict began, according to State Department spokesman Dylan Johnson. In a statement on Thursday, Johnson said those figures don't include U.S. citizens who fled to other countries or are in transit.
President Trump pledged in January that the next defense budget would reach $1.5 trillion, a roughly $500 billion increase from current levels.
"The U.S. military has more than enough munitions, ammo, and weapons stockpiles to achieve the goals of Operation Epic Fury laid out by President Trump -- and beyond," White House spokeswoman Karoline Leavitt said. She said that the president "will continue to call on defense contractors to more speedily build American-made weapons, which are the best in the world."
A Defense Department spokesman declined to comment, and referred questions about a spending request to the White House Office of Management and Budget.
Trump administration officials spent months pressuring big defense contractors like Lockheed Martin and RTX to triple or quadruple their annual production of their most advanced missiles.
The Pentagon launched an effort last year to accelerate production of missiles and other equipment to boost thin domestic stockpiles. Officials in June summoned more than a dozen top weapons makers to urge them to invest early in production increases. Steve Feinberg, deputy defense secretary, held weekly calls with some company chief executives for several months to drive the point home.
Executives responded with new investments but warned that production isn't as simple as building more factories. The asked-for production boosts depend on smaller contractors within the supply chain.
"We've been working this problem set on munitions supply long before this conflict," said Michael Duffey, the Pentagon's top official for procuring missiles and other weapons, in a House committee hearing on Wednesday. "We're going as fast as we possibly can."
The White House summoned top defense-industry executives from companies including Boeing, Lockheed Martin and RTX to a meeting on Friday, people familiar with the plans said. Feinberg hosted a call with company leaders in advance of the meeting with Trump, some of the people said.
The first four days of strikes against Iran are estimated to have cost nearly $11 billion, according to an analysis by Elaine McCusker, a top Pentagon budget official under the first Trump administration. The estimate for Operation Epic Fury includes the cost to position more than a dozen ships and 100 aircraft in the Middle East from bases in the U.S. and Europe since late December.
The Pentagon has likely fired about $5.7 billion of interceptors to shoot down Iranian ballistic missiles and drones and $3.4 billion for bombs and other types of missiles, McCusker said. The cost estimate doesn't include pay, training or the use of national assets in the region.
Top government officials have acknowledged the strain the Iran conflict has put on critical resources, like interceptors used to shoot down missiles. In a social-media post on Monday, Trump called U.S. stockpiles of medium- and upper-medium-grade weaponry "virtually unlimited" but acknowledged the most expensive hardware is in high demand. "At the highest end, we have a good supply, but are not where we want to be," Trump wrote.
Late last year, Pentagon officials asked Congress for a $28 billion funding surge to pay for the future weapons contracts. Appropriators bristled at the last-minute request and only provided about $8 billion in supplemental funding, leaving a roughly $20 billion gap.” [1]
1. Pentagon Races to Secure Cash For Iran Operations, Munitions --- Requests to Congress and push to boost weapons production explored. Weisgerber, Marcus; FitzGerald, Drew. Wall Street Journal, Eastern edition; New York, N.Y.. 06 Mar 2026: A1.
