America Is Running Out of Weapons

By Wilbur L. Ross

Saturday, May 02, 2026

 

The wars in Iran and Ukraine are exposing a fundamental flaw in how the United States equips its military. Many of our most advanced systems — precision munitions, missile defenses, and large unmanned aircraft — are highly effective against our targets, but poorly suited to counter the cheaper, more numerous threats that now define modern conflict. Recent U.S. operations in Iran have expended high-end weapons (like the MQ-9 Reaper drone) at unsustainable rates, leaving Ukraine with a shortage of scalable air defense. Each Reaper costs between $16 million and $30 million — a high price to pay compared to Iran’s Shahed drones, which cost roughly $20,000 to $50,000, meaning the U.S. is routinely risking assets worth hundreds of times more than the threats they are designed to counter. We are fielding exquisite, expensive systems in a battlespace increasingly shaped by scale, attrition, and cost.

 

The urgency of this problem is underscored by two recent developments. President Trump has proposed a defense budget approaching $1.5 trillion for fiscal year 2027 — an unprecedented increase intended to strengthen U.S. military readiness. Yet at the same time, reports from the war in Iran indicate that the U.S. has already expended more than 1,000 Tomahawk cruise missiles, raising concerns within the Pentagon about how quickly these precision weapons can be replenished. Even as spending rises, our capacity for effecting modern warfare remains in question.

 

This uncertainty is because of inordinately high cost-to-kill ratios and long manufacturing cycles. Our current strategy is defense by sophistication — at a time when modern conflicts are increasingly defined by volume, as evidenced by Ukraine’s rapid decentralization of drone production — where small workshops and civilian networks have scaled output in real time. A volume strategy necessitates deep magazines, the ability to reload rapidly, and production lines that take weeks — rather than years — to accelerate. The problem with the incumbent industrial base is as much one of factory design as it is a procurement problem. Purpose-built, automation-first production lines permit newcomers to avoid the slow, labor-intensive model of the legacy Primes.

 

We have very few 75-millimeter solid-fuel rockets that could be just as effective against​ drones, but at a fraction of the cost. As a result, the Department of Defense is now scrambling to​ find new contractors capable of quickly ramping up mass production of these smaller, lower-​cost interceptors.

 

There are several causes for this predicament.​ First, inadequate defense budgets under prior administrations limited funding for​ advanced war-fighting technologies. Second, the Department of Defense’s weapons acquisition​ process has historically been extremely slow-moving, and the high-risk investment required for​ a new entrant to become qualified to bid has been prohibitive for small companies.​ Third, prior administrations permitted consolidation among defense contractors. As a​ result, there are now only a handful receiving most contracts — and in some sectors, effectively only one supplier. Fourth, many contractors have entered into co-production agreements with allied countries that purchase our weapons systems, creating highly complex global supply chains. Fifth, our defense strategy has focused primarily on thwarting the major threat of​ intercontinental ballistic missile attacks while largely ignoring the danger posed by drones​ launched from submarines near our shores or from aircraft.

 

Finally, limiting annual procurement quantities — and total quantities overall — has​ discouraged contractors from investing capital in advanced manufacturing facilities equipped​ with robotics, artificial intelligence, and other productivity-enhancing technologies. Such investments could have reduced production times and costs while benefiting from learning-curve efficiencies. The same dynamic is evident in unmanned aviation, where procurement has favored small numbers of large, high-cost platforms over scalable fleets of smaller systems, reinforcing a force design that is expensive to sustain and difficult to adapt. Worse yet, an exclusive contractor producing a $500,000 product is unlikely to innovate a $50,000 replacement. A similar dynamic existed in satellite launch technology until SpaceX, a newcomer, reduced​ costs by developing launch vehicles whose lower sections could be reused — cutting almost half​ the cost of launch.

 

Incumbent defense contractors are more accustomed to meeting the specifications of​ requests for proposals than to pioneering innovative weaponry of their own invention.​ Defense contracts are often structured on a cost-plus-fixed-fee basis, which virtually assures that contractors will not substitute capital for labor. Other contracts are subject to escalation​ through change orders — whether inspired by the contractor or the procuring agency. Most such​ changes add little to the quality of the product but typically increase costs and delay​ completion.

 

In cases where a new product is put out for bidding, incumbent contractors typically take​ little or no risk. By contrast, innovative companies in the private sector routinely accept the​ risks of new product introduction as a means of gaining market share. The good news is that the Golden Dome initiative and several other current procurement programs are actively seeking new entrepreneurs to become bidders. The Department of Defense has already notified many of them that they qualify to participate and now need only specific item contracts. The early results are promising.

 

For example, General Dynamics has long been a primary supplier of inexpensive, but bottlenecked 2.75-inch diameter APKWS solid-fuel rockets that can be effective against drones. However, these​ rockets are largely manufactured by hand, making production slow and costly and scaling up output difficult because new workers must be hired and trained. Instead of using $500,000 or​ $4,000,000 missiles to intercept drones that cost $10,000–$20,000, the APKWS could be​ highly effective against the Iranian Shahed drones in the Middle East and against the Russian​ drones in Ukraine.

 

A newcomer, iRocket — of which I am a board member — developed a lower-cost version in​ just ten weeks from a standing start. The system has already completed five successful​ launches. Major rocket manufacturers typically require one to three years before achieving a​ first launch, which often fails. In contrast, iRocket’s CEO, Asad Malik, took a different approach. Even before winning a​ contract, the company invested in 3D printing and robotics and sourced many components​ from inexpensive, commercially available suppliers. The resulting cost savings led an​ established contractor, Moog, to award iRocket a substantial subcontract for rocket motors.​

 

Other success stories will soon emerge, of that I am confident. Hopefully, major contractors​ will also become more nimble and innovative in terms of cost and production speed.​ One potential example lies in shipbuilding. Highly efficient Korean shipbuilders have​ agreed to help the United​ States develop shipyards capable of producing a high-quality vessel​ in less than one year, compared with the current U.S. timeline of more than three years for a​ single vessel. Shipbuilding requires a highly skilled and carefully managed workforce, as well​ as a consistently large flow of orders, in order to benefit from economies of scale and learning-​curve cost reductions.

 

I am optimistic that recent revisions to military procurement will enable the​ U.S. to meet its growing defense needs far more rapidly and economically than​ before. With geopolitical tensions accelerating, it is essential that the Department of Defense​ succeed in implementing these new initiatives.