Army Paid General Dynamics $533 Million for Artillery Plant That Never Produced a Single Shell

There is a persistent assumption in Washington that the U.S. defense industrial base can seamlessly surge to wartime production simply by injecting enough capital into established prime contractors. The reality, exposed by a half-billion-dollar failure in Texas, is far more brittle.[1]

In May 2024, the Army and General Dynamics Ordnance and Tactical Systems opened a sprawling new ammunition facility in Mesquite, Texas. Funded by $533 million in emergency supplemental spending, the plant was designed to be the cornerstone of a national effort to replenish 155mm artillery stockpiles depleted by the war in Ukraine.[1][4]

The facility was contracted to forge 30,000 steel projectile bodies every month. This output was critical to the Pentagon's broader objective of ramping up U.S. artillery production from a pre-war baseline of 14,000 rounds a month to a massive 100,000 rounds by late 2025.[3][4]

Yet, more than two years after it opened, the Mesquite plant has not produced a single usable shell casing. A scathing Department of Defense Inspector General report, corroborated by a sweeping ProPublica investigation in August 2026, revealed that the facility's production lines remain completely paralyzed by catastrophic equipment failures.[1][2][4]

The root of the failure lies in a high-risk procurement gamble. Rather than purchasing modern manufacturing systems, General Dynamics and a Turkish subcontractor, Repkon, attempted to adapt outdated machinery salvaged from a discontinued production line. That older equipment was originally designed to forge the M107, a shorter-range shell made from different steel.[1][3]

When tasked with shaping the harder steel required for the modern M795 shell, the repurposed machinery violently rejected the process. Former workers described a chaotic factory floor where robotic arms regularly caught fire, 1,800-degree steel blocks were dropped from the air, and giant presses had to be beaten with sledgehammers to function.[1][2]

Instead of precisely stretching the steel into aerodynamic casings, the machines routinely cracked the metal beyond repair or mangled it into twisted shapes. The facility repeatedly failed its first article testing, a mandatory milestone to prove it could meet military specifications.[1][4]

Recognizing the insurmountable technical hurdles, the Army ordered a complete work stoppage on two of the plant's three production lines in August 2025. Despite blowing eight consecutive deadlines, the third line continued to operate into 2026 without ever yielding a battle-ready component.[1][4]

The financial fallout has drawn intense scrutiny from government watchdogs. Despite delivering zero usable parts, General Dynamics was never formally penalized. The company retained the $533 million, received an additional $26.3 million in progress payments in December 2025, and has since been awarded $2.5 billion in unrelated defense contracts.[1][2]

This localized failure has created a severe bottleneck in the broader U.S. munitions supply chain. Because the Texas plant was responsible solely for forging the hollow steel tubes, its failure means downstream Army facilities in Iowa and Arkansas have no casings to fill with explosives.[3]

Without the 30,000 shells per month from Mesquite, the U.S. Army is currently stuck producing roughly 36,000 rounds a month—falling 71% short of its production capacity goals. This shortfall directly impacts the Pentagon's ability to supply allied forces in Europe and maintain its own deterrence posture in the Middle East and the Indo-Pacific.[3][4]

The Mesquite debacle illustrates the systemic fragility of a consolidated defense industry. When a single point of failure in a hollow steel tube can derail a national security imperative, it forces a reckoning over how the military balances the urgent need for speed against the rigorous oversight required for unproven manufacturing gambles.[1][4]