Anders Fogh Rasmussen: The West Needs a War Footing

If Western allies don’t immediately ramp up the supply of weapons and ammunition to Ukraine, the future will be bleak. If Mr. Putin isn’t stopped in Ukraine, it will mean decades of instability and conflict in Europe. We need to wake up to that danger and put our economies on a war footing.

Turning the tide requires political decisions. Congress must approve the stalled $60 billion in aid for Ukraine—with haste. Yet such change also requires leadership from industry. If we are to defend freedom and democracy, CEOs must step up as they did during World War II.

In the late 1930s, Western democracies were dangerously unprepared for the threats posed by the rapidly arming autocracies of Germany and Japan. In May 1940, this complacency was brutally exposed. Nazi forces stormed into the Netherlands, Belgium and France, soon leaving Britain alone in the fight for democracy in Europe. In the White House, President Franklin D. Roosevelt recognized that the U.S. urgently needed to ramp up military production and put the economy on a war footing. To do so, he knew the man to call: William S. Knudsen.

Knudsen was CEO of General Motors, a man with vast experience in the automobile industry and one of the best-paid business leaders in the U.S. Roosevelt tasked him with transforming America’s industrial production, making it the arsenal of democracy. For his efforts, Knudsen would receive the token sum of $1 a year.

Knudsen threw himself into the task. He made lists of the required weapons and ammunition: 50,000 planes, 13,000 mortar shells, 33 million artillery shells, 300,000 machine guns with ammunition, 1.3 million rifles with ammunition, 380 warships. He then traveled across the country to meet with industry leaders, visit factories and sign contracts.

Knudsen recognized that speed was crucial. In meetings with company and union leaders, he applied maximum pressure to ramp up production. His message was clear: “We are here to help you, and all we ask in return is that you give us speed and more speed. We need every machine running at full speed. . . . We must outproduce Hitler.” Within five months, Knudsen had signed 920 contracts with some 500 companies.

All of American society was mobilized to fight, and within a year the economy was on a war footing. Knudsen’s methods were controversial, and his direct style often led to confrontation with politicians and unions. But thanks to his network, his understanding of factory-floor conditions, and his ability to organize workers and machines, he got his way. He was pivotal in turning the tide against Germany and Japan.

If we could do it once, we can do it again. In the face of the renewed threat from a militarized autocracy, we must replicate Knudsen’s achievement and put our economies on a war footing. This will require action from politicians, industry and labor unions—as well as leaders who can cut through endless discussions, red tape and long delivery times.

Here are five ideas to get the ball rolling:

First, governments should enter into long-term contracts with the arms industry, to ensure that companies have the necessary capital to expand capacity swiftly.

Second, the contracting process should be simplified and shortened. A signed letter of intent should be enough to get production up and running quickly, leaving legal details to be sorted along the way.

Third, we should temporarily relax the rules on tendering defense contracts, so that production can begin with direct orders to companies that are able to deliver weapons or ammunition immediately.

Fourth, the defense industry should be allowed to depreciate investments in new production facilities faster than normal, to reflect the hopefully shorter horizon for war and conflict.

Fifth, sovereign wealth funds, as well as private pension and investment funds, should set up special pools for defense-industry investments. This will attract the private capital needed for rapid expansion of our defense industries.

We need to embrace a new mind-set. We need politicians who dare to tell the truth—including that defense and military-equipment investments are an essential element in the defense of freedom and peace. We need business and labor leaders prepared to take responsibility beyond the interests of their individual companies. Ultimately, we need a new William S. Knudsen.

Mr. Anders Fogh Rasmussen served as secretary general of the North Atlantic Treaty Organization (2009-14) and prime minister of Denmark (2001-09). To host him for a speaking engagement, contact Worldwide Speakers Group.