Critical materials for both American economies, the military and the consumer

0
image_print

Today’s demand for critical technologies that make materials possible was originally caused by (industrial) politically driven military procurement during, after and since the Second World War. The continuous production of these relatively scarce materials is now only made possible economically by the additional and much greater demand from the consumer economy, which is not based on an industrial policy but on the (regulated) free market model of capitalism. The Pentagon’s procurement of its critical materials needs through politics can but cannot break the law of supply and demand. The demands of the free market economy (in the USA) are driving the creation of its critical material supply. The current (2021) requirement of the US Department of Defense (DoD) for rare earths, for example mainly as permanent magnets, is “classified”, but is around 3,000 tons, measured as magnets per year. This is not enough demand for private capital to invest in a project that requires (re) building an entire supply chain.

The American consumer market, which accounts for more than 80% of domestic rare earth demand, has well-established supply chains and has not experienced credible, policy-driven supply bottlenecks. The largest single user of rare earth permanent magnets in the US, the domestic OEM automotive industry, is faced with the need to fundamentally change its capital investment in attempting to restore an entire domestic rare earth permanent magnet supply chain to meet its needs. The best way to do this would be through vertical integration, the antithesis of today’s just-in-time component sourcing system. For every single automotive OEM the costs would be prohibitive and not only would the in-house know-how not be available, but the lack of suitable local staff to carry out, manage or design such a project is also noticeable.

The US government’s recent announcement of how it will address the supply chain “crisis” is false and misguided. The related bill in the US Senate to encourage “innovation” is another misguided use of taxpayers’ creditworthiness. This “borrowing ability” is actually how the US government is funded; its debts far exceed its earnings, so when you talk about spending in Congress you are describing Moneyholics who are drunk with their power and who put the future on the table.

Washington’s aging and seemingly permanent lawmakers like Senator (D-New York) gush about innovation as science from their Jejune staff, which of course means funding university and internal government “grant mills”. The urgent need in America is to manufacture “technology,” the engineering of science, to modernize, rebuild, and use specialized legacy technologies. We don’t do endless lab work trying to find new ways to do things that the industry can already do as efficiently as possible while remaining competitive. This is especially true in capital-intensive industries such as mining, automobiles, and electronics.

The manufacture of lithium-ion batteries is a good example of something completely misunderstood by Washington’s isolated, isolated, and commercially illiterate mandarins. From Xanadu on the Potomac, the Biden administration orders the production of lithium-ion batteries to be brought to the US by aiming a money rocket with a $ 19 billion warhead on the “problem”.

But investment funds are not the problem in commercializing science; It is the projection of positive returns on investment that drives new consumer industries, not innovation alone. A good example is the American OEM automotive industry. The dominance of this industry peaked in the 1950s when a fully vertically integrated General Motors was the world’s leading industrial company. It wasn’t “innovation” that drove GM to the fore; it was superior management that knew how to make, fund, and deliver the company’s products to the consumer who either wanted that product or could be manipulated into wanting it. The position of chief engineer of a successful OEM automotive company, once held by Henry Ford in his own company, grew to become vice president, engineering, perhaps the second most senior position on the executive board of a manufacturing company and the only person in any company who needs to know to do this the limits of his company in the development and manufacture of his products.

Today’s so-called “tech” companies deliver specialized software (computer programs) as brainless toys to adult children based on the throwaway model of consumer capitalism. Apple, for example, is subconsciously mimicking the marketing ploy developed by GM to differentiate itself from Ford, releasing a new iPhone and Mac every year with “innovations” that only fit into their existing manufacturing supply chains. In order to maintain sales, existing customers have to discard their existing products and buy the “new” ones. GM’s marketers decided in the early 1920s that the next Chevrolet would be called the 1922 Chevrolet and that thereafter all GM cars would be named after the year they were produced. Other automakers continued to name models like Ford’s Model T, but the success of naming for the model year soon caught on. The automobile manufacturers were fixated on the external appearance and the passenger compartment of the car and experimented with powertrains and powertrains mostly outside the field of view of the buyers, so that the enormous research, development and manufacturing processes that take time to develop powertrains were carried out and tested before it goes on sale.

Safety regulations have done much in the demise of the American OEM auto industry to its present state, where all (both) domestic American OEMs have a smaller market cap than just a few of the current no-profit Wall Street “tech” companies never will.

In order to sell a car or a truck in the US, it has to meet strict safety standards that have forced automakers to make much more robust and therefore more durable products. In 1970, GM forecast that the domestic auto market would be 26 million units per year in 2000 and that it would need 28 domestic assembly plants to fill its share of that market. The result is a “mature” (aka, saturated) car market in which there is a vehicle for every American citizen. The prediction of 26 million units per year has long been forgotten and the total number of assembly plants in North America does not match what GM has predicted for its own model year 2000.

The Department of Defense investments were the father and mother of the American tech boom that took place between 1941 and 1973 (the initial funding of the Manhattan “district” and the abolition of the space shuttle). Thereafter, innovation slowed significantly as private industry resumed its internal funding of science and technology prior to World War II, which brought with it the rise of American consumer capitalism and global military dominance. Industries created before World War II and without government support included the telegraph, the mass production of steel and aluminum of uniform quality, the telephone, the light bulb, the radio, the automobile, the airplane, the television, the mechanical Computer (OK, adding machine). , miniaturized electronics, mechanical electrical cooling, and many others in the life sciences, such as x-rays, insulin, and originally penicillin. Although we pay lip service to the inventors of the above “technologies” as conscious promoters of a higher standard of living, their driving motive has almost always been profit. The scientists whose discoveries led to the technologies listed above are long forgotten or only known to historians; they seldom looked for fame or fortune.

It was Franklin D. Roosevelt who ushered in the great age of American innovation in 1941, not just by approving the Manhattan Project, but more importantly by engaging the CEOs of GM, Chrysler, Ford, GE and Westinghouse to transform the American free enterprise and innovative product development to the industrial policy-driven global power center that shattered Nazi Germany, fascist Italy and imperial Japan, all of which started a war to conquer the raw materials and the land their society desperately needed to save the Manufacture weapons of war and feed their armies.

After World War II, a subgroup of American manufacturers soon to be known as the “Military Industrial Complex” created themselves to manufacture products required by industrial policy and the power to make them that was given during the war by the War Department (now Department of Defense ) was created. The civil economy, soon to be known as the consumer economy, decoupled and followed the free enterprise of capitalism. which sparked a consumer product revolution, the basis of which was further inspired by the rare earth permanent magnet, the development of which was itself inspired by stylists in the OEM automotive industry who wanted slimmer doors on cars with power windows.

The Ford Scientific Laboratory worked on a sodium-sulfur battery in 1964. I was a “helper” on this project. I didn’t work for Ford, but I was recruited by Ford Scientific to join their materials science group. I have been working on the electronic properties of lithium and its salts since 1962 at Energy Conversion Devices, my first employer, where we manufactured a molten salt version of today’s lithium-ion battery in 1963. These molten salt powertrain batteries proved extremely unsuitable for automotive use, but my point is that there isn’t much new under the sun except in different ways to make desired things like energy storage more efficient and safer. And these are more technical problems than scientific ones today.

The US Department of Defense alone and without subsidies cannot catalyze the reshoring of an entire domestic American supply chain for lithium, cobalt, or rare earth permanent magnets. It is time for the White House to call in the managers of the manufacturing part of the domestic consumer goods industry to discuss the creation and implementation of a national industrial policy.

Leave A Reply

Your email address will not be published.