$500 Million Ammo Factory Delivered Nothing in Two Years, Military Never Asked for a Penny Back
General Dynamics' Turkish-sourced equipment produced not a single compliant shell in two years. After halting two production lines, the military kept paying progress installments, demanded no compensation, terminated no contract, and instead awarded the company new deals.
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Only one supplier exists; the military has no bargaining power
The U.S. was producing 14,000 shells monthly and needed 100,000; General Dynamics was the only company capable of manufacturing this artillery shell casing. The reporter explains this reflects a structural reality of the entire defense industry: massive consolidation has left suppliers few and nearly monopolistic, while the customer is just the Pentagon. Both parties are locked in deep mutual dependence—a General Dynamics failure would be catastrophic for the Pentagon, leaving the military with no choice but to keep awarding contracts to the same company.
— Jesse CoburnUnproven technology was approved as the solution anyway
General Dynamics did not replicate the century-old methodology from existing plants. Instead, it adopted a completely new ‘flow forming’ system from Turkish company Repcon, claimed to be flexible enough to adjust like clay pottery for different shell calibers. Yet Repcon had never produced this specific shell type with this machine anywhere, and it refused to let the military observe a successful demonstration, citing protection of other customers' privacy. These were known red flags on the table before approval—and the contract was greenlit anyway.
— Jesse CoburnWork started before contract details were negotiated
2022 legislation allowed the Pentagon to skip competitive bidding and select suppliers directly. The military used ‘undefinitized contracting action’—companies could start working while contract specifics were hammered out later. A defense industry executive described it as building the plane while flying it. Internal military objections existed, but pressure to move fast cascaded from the White House through the Pentagon to the military command. With $500 million being rounding error in a trillion-dollar budget, the risk was deemed an acceptable cost.
— Jesse CoburnRobots drenched in flammable oil caught fire regularly
From day one, workers discovered the entire production line was systematically broken. Enormous robotic arms would suddenly thrash, smashing other equipment, and they were constantly sprayed with flammable lubricant. Workers stopped being surprised when robots caught fire—they privately called that period ‘the summer of burning robots.’ Stamping machine components seized; workers had to pound them with sledgehammers each night. A supposedly precision piece of expensive equipment was maintained by a rotating crew swinging sledges.
— Jesse CoburnThe factory building itself appeared to be sinking
The facility's most basic infrastructure—conveyor belts, automated carts—failed constantly. The workshop ran year-round above 100 degrees Fahrenheit. More disturbing was the building itself: cracks appeared in walls, daylight showed through window frames, doors dragged on the floor and wouldn't open. Multiple workers eventually realized the factory's foundation was shifting, even subsiding, as if the earth itself was pulling the malfunctioning plant down.
— Jesse CoburnThe core machine cracked shells; mutual suspicion deepened
The much-hyped flow forming machine regularly fractured shells into scrap. Only Repcon's Turkish operators could touch it; they were secretive with General Dynamics' workers, who could only infer problems from metal shavings on the floor. More unsettling: General Dynamics workers discovered the machine was moving on its own—Repcon was controlling it remotely from Turkey. General Dynamics' response was to physically disable remote access. Suspicion and rumors of ‘sabotage’ spread through the plant, though the reporter found no evidence of actual sabotage.
— Jesse CoburnLeadership's public story diverged completely from factory reality
While the factory was producing nothing and workers were hiding chairs to prevent sleeping, General Dynamics' CEO told investors in an earnings call that the facility was ‘rapidly ramping ammunition production.’ Military procurement officials publicly said delays were ‘measured in weeks, not months or years.’ Not until June 2025, when industry media exposed internal military correspondence threatening contract termination, did the public learn that the military had long known the plant was a disaster—they just had not said so.
— Jesse CoburnAfter shutdown, the military kept paying without accountability
In August 2025, the military halted two of three production lines—lines that had not produced a single usable shell. That December, the military still paid General Dynamics over $20 million in progress installments. The final settlement: General Dynamics would spend $200 million to fix equipment, trivial for a company with $50 billion prior-year revenue. The military demanded no repayment of the initial $500 million. The unit that established this facility later received $2.5 billion in new contracts. Former military officials acknowledge the structural bind: neither party could afford to let the other fail.
— Jesse CoburnA new partner arrives with a familiar script
General Dynamics announced a startup called Deterrence as Repcon's replacement. The press release brimmed with ‘AI-enabled,’ ‘intelligent connectivity,’ and other tech jargon, promising production would resume in the next year or two at 20,000 shells per month. Multiple former plant workers found this familiar—once again, an unproven new technology partner was being asked to solve everything. Only this time, ‘flow forming’ had been swapped for ‘AI.’
— Jesse CoburnIn their own words · checked verbatim
like stepping into a time machine and going back in time to like the Korean War, basically.
Jesse Coburn7:24
One defense executive described it to me as building the airplane while you're flying it.
Jesse Coburn11:33
oh, the robot's on fire again.
Jesse Coburn14:43
As if the earth was like trying to suck this dysfunctional factory down into it.
Jessica Lessenhop16:45
In the U.S. we are rapidly increasing munitions capacity and production with the opening of our projectile facility in Texas.
Phebe Novakovic22:56
Any delays you've had have been measured in, I would call them weeks, not months, certainly not years.
Doug Bush23:57
they're just sort of bound together permanently, regardless of the results.
Jesse Coburn27:10
Figures
| FY2026 US Defense Budget | $1 trillion | 2:06 |
| Progress payments after shutdown | over $20 million | 27:10 |
| General Dynamics repair funding | $200 million | 27:10 |
| General Dynamics prior-year revenue | $50 billion | 27:10 |
| New contracts to the unit | $2.5 billion | 28:13 |
| Trump-proposed next fiscal year defense budget | $1.5 trillion | 31:35 |
Glossary
- undefinitized contracting action
- Government contracting arrangement allowing companies to begin work before contract terms are finalized.
- flow forming
- Metal-forming process that rotates and extrudes a metal workpiece to elongate and shape it.
How to listen
Those working in defense procurement, tracking national defense budget implementation, and policy researchers studying the structural interdependence of large contractors and government.
The mid-section details about worker phone policies, crossword puzzles, and chairs being removed can be skimmed without affecting understanding of the main narrative.