Canada

Here's the definition...

https://thedecisionlab.com/biases/the-sunk-cost-fallacy

By all means...read it. You are ridiculous.

And yes...as I said, I have worked in manufacturing for over 30 years. The machines you are talking about are great. I've done lots of 5-axis work...at jobber shops, where you are constantly switching between different jobs. At shops that are dedicated to specific production, the machines are task specific. That means they only run one type of part, but they make a lot of them, very quickly.

Most weapons manufacturers use both kinds of machines. If they're tooled for ammunition, they are almost all task specific...and you'll see rows of the same style of machine all producing the same parts in a variety of sizes. Your customers will typically buy as many units as you are capable of making. If they want more than that...you buy more of those machines. You don't use fancy, multi-ourpose CNCs for dedicated production. Ever. They're too expensive to operate and maintain, and it's a total waste of their capabilities to use them for just one task. If you had ever spent time in an actual factory, you would know this.

And you know that 30 years ago, they didn't even have 5-axis machines? Do you think that all shops everywhere all started out with those capabilities? Or, do you understand that companies upgraded their machines over time. You start out with old-school knee and column manual mills. Then you upgrade to your first 3-axis CNC mill. Eventually you add an indexer to it, giving it a 4th-axis. Eventually you upgrade to a 5-axis. All those upgrades require investment, and every time you make those investments, you are capable of producing more. More quantities. Higher quality. That's how it works. In another 30 years, they'll have all upgraded to newer technology that makes the current 5-axis machines look like drill presses.

Literally nobody is saying an automotive plant or a defense contractor needs to pivot to running a hospital or framing residential houses. The argument is that a heavy industry conglomerate with billions in capital equipment and engineers can pivot to building civilian infrastructure or commercial aerospace components.

Except that's literally what you are saying with that whole statement. Your 2nd sentence contradicts your 1st.

As for your argument that companies can just reallocate their resources if they lose a major contract, that is not true. Manufacturing is incredibly lean. Even losing 10-20% of your revenue stream for a short time can cripple even the largest company. If your operating costs exceed your revenue, you cannot operate. That's just math.

And no, it's not just as easy as flagging down new customers and selling them whatever you were already making. There's a transition process for all new projects. R&D takes time and money. Fixturing needs to be made, and processes need to be proven out and then refined. And until you are up to full production, your company is effectively hemorrhaging cash. Major transitions are the number one reason companies go under. Sometimes losing one big contract is all it takes.

Even claiming that they can just reallocate their capital is bullshit. You can't just cruise on credit indefinitely. You would need so much surplus cash laying around that you can afford to operate at a loss for an extended amount of time, while you make the transition.

And no...the government doesn't "force" transitions like this all the time. Name any industry that's been "forced" to transition like that. You're back to making the argument that the government even has that kind of control. They don't.