We noted yesterday where Secretary Rumsfeld claimed the DoD was producing as fast as it can and supply is dictated by “a matter of physics, not a matter of money.” Via Julia at American Street comes this Bloomberg story:
Armor Holdings Inc., the sole supplier of protective plates for the Humvee military vehicles used in Iraq, said it could increase output by as much as 22 percent per month with no investment and is awaiting an order from the Army.
Julia suggests Armor Holdings is at 75% capacity. The U.S. capacity utilization rate – total industry – was reported at 77.7% for October 2004. I guess this is why this White House is not more concerned about getting back to full employment.
But if it is not a matter of money, I have a question: why is DoD using only one supplier for these vital parts?