DEFENSE INDUSTRIAL BASE REPORT: President Trump commissioned the review more than a year ago and today the comprehensive Defense Industrial Base Report will be released identifying 300 weak links in the nation’s supply chain that threaten national security. The report presents “an alarming picture of U.S. industrial decay driven by both domestic and foreign factors,” writes industry analyst Loren Thompson of the Lexington Institute.

Deputy Defense Secretary Pat Shanahan will formally present the report to Trump at the White House at 1:45 this afternoon, and the president is expected to earmark funds available through both the Defense Production Act and a 1939 defense stockpile program to address some of the problems. When he asked for the report in July 2017, Trump noted that America's national security was being threatened by the loss of 60,000 factories and key companies, along with almost 5 million manufacturing jobs since 2000.

The issues identified are largely at small and midsize firms that have supplied top-line U.S. contractors such as Boeing and Lockheed Martin. These small firms have been harmed more than their larger customers by cuts in U.S. government spending and unfair foreign competition, a senior administration official said yesterday.

The report supports Trump’s view that economic security is inextricably intertwined with national security. His imposition of double-digit tariffs on steel and aluminum this year reflects his desire to revitalize U.S. manufacturing.

“This report paints a sobering picture of the current state of our defense industrial base by identifying more than 250 areas where the base and its supply chain face critical risks,” said Hawk Carlisle, who heads the National Defense Industrial Association, an association of defense industrial base members. “Reliance on single producers within the supply chain, dependence on unstable or unfriendly foreign suppliers for critical components, and misplaced presumption of continued preeminence of American military superiority are examples of findings that should be immediately addressed.”

THE VILLAINS: Congressionally-mandated spending caps strangled some struggling companies by preventing the Pentagon from making long-term deals that would justify investment in new plants and production lines. But the report also targets China, which has built its own industrial base at the expense of its competitors, especially the United States.

“The Chinese Communist Party has used an arsenal of policies inconsistent with free and fair trade, including tariffs, quotas, currency manipulation, forced technology transfer, intellectual property theft, and industrial subsidies that are handed out like candy to foreign investment,” Vice President Mike Pence said in a speech yesterday.

“Beijing now requires many American businesses to hand over their trade secrets as the cost of doing business in China. It also coordinates and sponsors the acquisition of American firms to gain ownership of their creations,” Pence said. “Worst of all, Chinese security agencies have masterminded the wholesale theft of American technology –- including cutting-edge military blueprints. And using that stolen technology, the Chinese Communist Party is turning plowshares into swords on a massive scale.”

AMERICA’S ‘MARGINAL’ MILITARY: The weakness in the defense industrial base is being highlighted one day after the Heritage Foundation’s 2019 Index of U.S. Military Strength gave the world’s best-trained, best-equipped military an overall rating of “marginal.”

“The Heritage Foundation’s report clearly shows that while recent increases in defense spending have started repairing the military, we have not yet undone almost a decade's worth of underinvestment and overuse,” said Armed Services Committee Chairman Sen. James Inhofe. “The key takeaway — the U.S., at only ‘marginal’ strength, can only fight in a single major regional conflict and would be unable to deter an opportunistic adversary in another region. As we look to implement the president’s National Defense Strategy, which names both China and Russia as near-peer adversaries, we cannot afford to continue to be marginal.”

Inhofe warns that the budget battles over defense spending are far from over, despite the fact that this year’s budget was fully funded and passed on time. “Congress delivered adequate, on-time funding for the military this year. We must make that the rule — not the exception,” Inhofe said in a statement yesterday. “Failure to do so would be putting at risk our position, our role in the world, and the lives of our men and women in uniform.”

Good Friday morning and welcome to Jamie McIntyre’s Daily on Defense, compiled by Washington Examiner National Security Senior Writer Jamie McIntyre (@jamiejmcintyre), National Security Writer Travis J. Tritten (@travis_tritten) and Senior Editor David Brown (@dave_brown24). Email us here for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list. And be sure to follow us on Twitter @dailyondefense.

TRUMP REPORTEDLY IRKED WITH AF SEC: The president is weighing whether to fire Air Force Secretary Heather Wilson after the midterm elections, Foreign Policy is reporting. The secretary is reportedly in the crosshairs after angering Trump and Shanahan with what was seen as an attempt to slow-walk the president’s Space Force military service, according to the news site. Wilson, who initially opposed a separate space service, sent Shanahan a letter last month estimating that the Space Force initiative would cost $13 billion over five years.

The Pentagon has still not settled on a cost estimate or a legislative proposal for Congress. Rep. Mike Rogers, a House Armed Services subcommittee chairman, said the $13 billion estimate was an effort to “gold-plate” and scuttle the Space Force initiative. Todd Harrison, the director of defense budget analysis at the Center for Strategic and International Studies, said the inflated number is an example of “malicious compliance.”  

RUSSIA ON NOTICE, AGAIN: At a news conference at NATO headquarters yesterday, Defense Secretary Jim Mattis warned Russia that U.S. patience is wearing thin over Moscow's continued violation of the Intermediate-Range Nuclear Forces Treaty with its covert development of land-based cruise missiles that could threaten Europe. “Make no mistake: The current situation with Russia in blatant violation of this treaty is untenable,” Mattis said. “Russia must return to compliance with the INF Treaty, or the U.S. will need to respond to its cavalier disregard of the treaty's specific limits.”

But Mattis stopped short of threatening military action, something U.S. NATO Ambassador Kay Bailey Hutchison did briefly this week, before walking back her provocative remarks. “We are trying to bring them still back into compliance. And now is the time; it's gone on long enough,” Mattis said.

Ultimately it will be up to Trump to decide on a course of action, and Mattis said he’ll take the input he received from other NATO defense ministers back to Washington. “I prefer not to say how we'll respond. We have, again, a host of ways that we can respond,” he said. “We will respond as we think is appropriate.”

AFGHANISTAN SAYS ‘NO’ TO MERCENARIES: The Afghanistan government is unequivocally rejecting the idea of replacing U.S. and other international troops assisting in the fight against the Taliban with private contractors, an idea promoted by Blackwater founder Erik Prince.

“Under no circumstances will the Afghan government and people allow the counterterrorism fight to become a private, for-profit business,” said the statement released by Afghanistan’s Office of National Security Council. Prince, in a series of interviews with the BBC and other media outlets, has continued to argue that with a few thousand contract security forces, he could help the Afghan military turn the tide on the Taliban.

“I absolutely do not agree,” said Gen. Joseph Votel, head of the U.S. Central Command, at a Pentagon briefing yesterday. Votel pointed out that the bilateral defense agreement with Afghanistan specifically bars the use of mercenaries or private contractors. “The most significant downside is that we turn our national interest over to contractors. And as the secretary of defense has said, I don't think this is a very good strategy. We have vital interests here and we are pursuing them with legitimate forces that can do that.”

SHOWING UP IS 90 PERCENT OF THE JOB: In his audio briefing from Tampa, Votel described a low impact way of countering Iran in Syria that he said didn’t involve any “specific military tasks.” Just being there helping locals build security forces after the defeat of the Islamic State will help keep Iranian forces in check. “By our presence, we offer a deterrent effect,” Votel said. “I think we do place an indirect role in supporting our broader pressure campaign against Iran.”

Votel said there are no plans for the U.S. to withdraw from Syria once the last of the ISIS-held territory is liberated because the U.S. mission will simply change from supporting “major combat operations” to help establish “wide area security.”

The U.S. troops will stay, although perhaps not the entire 2,000 there now. “Along the way we will make the appropriate assessment on the forces that we need,” Votel said. “What I would tell you is that we will not keep unnecessary things on the ground.”

IRAQ BUYS HELICOPTERS: Iraq has been approved to buy five Bell 407GX helicopters armed with M240 machine guns. The helicopters will help compensate for Baghdad’s combat loss of seven IA407 helicopters in recent years and increase the Iraqi Security Forces’ combat effectiveness against ISIS and other terrorist groups in Iraq, according to the Defense Security Cooperation Agency. The sale is worth $83 million.

BAHRAIN BUYS MISSILES: Bahrain has gotten the green light from the State Department to buy 120 Guided Multiple Launch Rocket System unitary rocket pods and 110 Army Tactical Missile Systems, known as ATACMS, unitary missiles for $300 million. The weapons will help the ally provide greater security for its oil and gas infrastructure and significant national events, DSCA announced.

CANADA BUYS AIRPLANES: The State Department has cleared Canada to buy three King Air 350ER extended range aircraft, which will be modified for intelligence, surveillance and reconnaissance. The sale of the Beechcraft and Textron Aviation aircraft is worth an estimated $300 million.

KURTA WITHDRAWS: The White House has quietly notified lawmakers that Tony Kurta withdrew his nomination to be principal deputy undersecretary of defense for personnel and readiness. His nomination languished in the Senate for nearly a year, apparently under a confidential hold by a senator. The Senate received official word of the withdrawal on Friday, though it appears the White House made no public announcement.

Sen. Jack Reed, the Senate Armed Services ranking member, declined to comment on Kurta when asked Wednesday. “We have not had any reluctance on the committee” toward Kurta’s nomination, Sen. Jim Inhofe, the Senate Armed Services chairman, told the Washington Examiner just days before Kurta withdrew. The committee advanced his nomination to the full Senate after Kurta testified at a hearing in November.

JOB STATUS UNCERTAIN: Kurta was named deputy assistant secretary for military personnel policy in 2014 and had been performing the duties of undersecretary of defense for personnel and readiness while his nomination was being considered. The Pentagon said Thursday he is no longer in either position but could not immediately confirm Kurta’s job status.

His was one of two Pentagon nominations that have sat in the Senate for over a year. Charles “Cully” Stimson, who has been picked to be the Navy’s general counsel, was nominated in June 2017 and was approved by the Armed Services committee about a month later. Stimson has yet to receive a floor vote even as other Pentagon nominees have been approved.

AFGHAN COMBAT DEATH: A U.S. service member was killed in action in Afghanistan on Thursday, NATO Resolute Support mission announced. It’s the eighth U.S. death in Afghanistan this year — seven in combat and one in a non-combat incident.

The name of the service member will be released today, after family notifications are complete.

THE RUNDOWN

New York Times: As Afghanistan Frays, Blackwater Founder Erik Prince Is Everywhere

Defense News: Missile Defense Review complete, Shanahan says

Air Force Times: Secret US base in Somalia is getting some ‘emergency runway repairs’

Defense One: A Missile-Defense Layer in Space Is Affordable and Makes Sense

Politico: Q&A: Joe Heck, chairman of the National Commission on Military, National and Public Service

Reuters: Address of Russian hacking suspect is a spy agency unit - records show

Daily Beast: Russian Official Linked to Natalia Veselnitskaya, the Trump Tower Lawyer, Is Dead

Roll Call: Trump Counterterrorism Plan Drops Obama Climate Change Focus

Business Insider: Step inside the newly commissioned USS Indiana, one of the US Navy's most lethal submarines ever built

Air Force Magazine: F-22s, F-35s to Fly Faster on Long-Distance Deployments to Reduce Fuel Consumption

FRIDAY | OCT. 5

9 a.m. 901 17th St. NW. The Next Battle of the Atlantic? A Conversation with Adm. James Foggo, Commander of US Naval Forces Europe. atlanticcouncil.org

10 a.m. 1616 Rhode Island Ave. NW. Maritime Security Dialogue: Naval Aviation and Readiness Recovery for Combat with Vice Adm. DeWolfe Miller, Commander of Naval Air Forces, and Lt. Gen. Steven Rudder, Deputy Commandant for Marine Corps Aviation. Csis.org

1:30 p.m. Pentagon Briefing Room. Adm. James Foggo commander, Allied Joint Force Command Naples; commander, U.S. Naval Forces Europe; and commander, U.S. Forces Africa, briefs the media on upcoming Exercise Trident Juncture 18. Streamed live on www.defense.gov/live.

1:30 p.m. 1616 Rhode Island Ave. NW. LikeWar: Book Discussion of LikeWar: The Weaponization of Social Media with Author Peter Singer. csis.org

6 p.m. 529 14th St. NW. 2018 Defence Media Awards. defencemediadinner.com

MONDAY | OCT. 8

6:30 a.m. 801 Mt Vernon Pl. NW. 2018 AUSA Annual Meeting and Exposition with Army Secretary Mark Esper; Dan Coats, Director of National Intelligence; Gen. Mark Milley, Army Chief of Staff; and others. ausameetings.org

TUESDAY | OCT. 9

7:30 a.m. 801 Mt Vernon Pl. NW. 2018 AUSA Annual Meeting and Exposition with Army Secretary Mark Esper; Gen. Mark Milley, Army Chief of Staff; Director of Homeland Security Kirstjen Nielsen; and others. ausameetings.org

9 a.m. 1030 15th St. NW. The Arc of Crisis in the MENA Region. atlanticcouncil.org

5 p.m. 901 Massachusetts Ave. NW. Cocktails and Conversation: Army Futures, Near and Far with Gen. Gary Volesky, Commanding General of Army iCorps. defenseone.org

WEDNESDAY | OCT. 10

7 a.m. 14750 Conference Dr. NDIA TRIAD Meeting. ndia.org

7 a.m. 801 Mt Vernon Pl. NW. 2018 AUSA Annual Meeting and Exposition with Deputy Defense Secretary Pat Shanahan and others. ausameetings.org

8 a.m. 2401 M St. NW. Defense Writers Group Breakfast with Marine Corps Commandant Gen. Robert Neller.

8:30 a.m. Dirksen 342. Full Committee Hearing on Threats to the Homeland. hsgac.senate.gov

9:30 a.m. Russell 222. Subcommittee Hearing on United States Air Force Readiness with Air Force Secretary Heather Wilson; Gen. Stephen Wilson, Air Force Vice Chief of Staff; and John Pendleton, Director of Force Structure and Readiness Issues at the Government Accountability Office. armed-services.senate.gov

1 p.m. 214 Massachusetts Ave. NW. Identifying – and Isolating – Jihadi-Salafists through their Ideology, Practices, and Methodology. heritage.org

THURSDAY | OCT. 11

1 p.m. 929 Long Bridge Dr. U.S.-ROK Defense Industry Consultative Committee (DICC). ndia.org

FRIDAY | OCT. 12

8 a.m. 300 1st St. SE. Space Threats to the US:  A Discussion with Jeff Gossel, Senior Intelligence Engineer with the Space and Missiles Analysis Group at the National Air and Space Intelligence Center. mitchellaerospacepower.org

12 noon. 214 Massachusetts Ave. NE. The Perfect Weapon: War, Sabotage, and Fear in the Cyber Age with David Sanger. heritage.org