Ammo Makers Prepare for Drop in Demand

This 2004 handout photo provided by ATK Corporate Communications, shows an assembly line at the Lake City Army Ammunition Plant in Independence, Mo. The plant produces nearly 1.4 billion bullets a year, a dizzying figure driven by war demands. Although no one knows when the conflicts in Iraq and Afghanistan will end, the ammunition industry is preparing for a downturn in business, hoping to avoid a post-Cold War style drop-off that forced some to close doors. (AP Photo/ATK Corporate Communications) (AP)

WASHINGTON -- The Lake City Army Ammunition Plant in Independence, Mo., produces nearly 1.4 billion bullets a year, a dizzying figure driven by the demands of war. "It's actually mind-boggling," said Karen Davies, Lake City's general manager.

The question is, for how long? Although no one knows when the conflicts in Iraq and Afghanistan will end, Davies and other ammunition industry executives understand the heavy orders won't last forever.

So as they churn out the military's most essential pieces of hardware _ and millions hope for an end to the war _ ammunition makers are preparing for a downturn in business.

They worry about a return to the post-Cold War period when the Pentagon slashed spending for small-caliber rifle rounds and other munitions, forcing suppliers to cut payrolls, mothball manufacturing equipment and lose hard-to-get environmental permits. Some closed their doors.

"The demand is fast when it comes, and then it can drop off very quickly," Davies said.

After the Sept. 11 attacks, when the need for ammunition spiked, the Pentagon scrambled to meet requirements. Nearly $93 million in taxpayer money was spent overhauling domestic facilities. Foreign suppliers, including one from Israel, were called in to fill the gaps.

Military officials now talk about a need to protect the industrial base, but they also say it makes no sense to spend money for bullets and bombs the troops might not need.

"We have to recognize we aren't producing ammunition for the sake of producing ammunition," said Bob Kowalski, business manager for maneuver ammunition systems at the Army's Picatinny Arsenal in northwest New Jersey.

President Bush is under pressure to begin withdrawing U.S. troops from Iraq early next year. The 2008 elections, which could result in Democrats running both the White House and Congress, add to the uncertainty.

"You don't want to go down to nothing and then say, 'Oh my gosh! We've got to ramp up again,'" said Davies.

While high-profile weapon systems such as tanks, jet fighters and aircraft carriers dominate the public's attention, the U.S. military would be unable to fight without rifle cartridges, grenades, mortars and other explosives lacking the cachet of their costlier cousins.

Producing this firepower is a network of public and private facilities that has changed dramatically over the past three decades.