Navy seeks to issue a new order: Abandon shipyards

With Navy leaders envisioning a fleet of smaller, faster and more agile ships, the future of the country's large shipbuilders is sinking fast.

Last month, Navy leaders pulled the plug on a plan to subsidize the United States' two large shipyards -- Maine's Bath Iron Works and Northrop Grumman's Ingalls shipyard in Pascagoula, Miss. -- through alternating construction of a new class of surface destroyers at each yard.

Instead, the Navy proposed an all-or-nothing approach in a new DD(X) competition, pitting the yards against one another in a move staunchly opposed by Washington's shipbuilding lobby.

"We need two shipyards," said Cynthia Brown, president of the American Shipbuilding Association. "If we lose the two yards, the Department of Defense will say they can't tolerate a sole source [of shipbuilding], and that we must go foreign. So if the American people want to have the ability to defend their own future destiny by building the most capable warships in the world, we'd better keep both shipyards engaged."

But the destroyer competition is only one of several shifts in the Navy's future shipbuilding plans that service leaders, including outgoing Chief of Naval Operations Vernon Clark and Navy Secretary Gordon England, are defending this month on Capitol Hill.

Lawmakers from shipbuilding states are coming under a bevy of lobbying activity from shipbuilding advocates. Those advocates have been gearing up to fight the Navy's proposed shipbuilding cuts ever since service leaders last year threatened to scrap their shipbuilding plans through a series of funding cuts that are now fleshed out in President Bush's fiscal 2006 $419.3 billion budget.

One of their biggest arguments is based on Clark's suggestion that the reduction in planned warships is driven by budgetary concerns, not the Navy's true needs. This confirms for them the need for Congress to shift priorities within the Defense budget to preserve the fragile U.S. shipbuilding industrial base. The shipbuilding lobby also warns that the United States does not have enough ships to fight the global war on terrorism, let alone respond to the potential emerging threat of China.

Given the lengthy construction time for naval ships, the United States does not have the luxury of time to rebuild the Navy, Brown says. In addition, the fiscal 2006 budget puts national security and tens of thousands of highly skilled jobs and specialized manufacturing companies across the country at risk, Brown said in a statement on her organization's Web site.

But others assert that many of the problems affecting shipbuilding have little to do with the shipyards' production rates, and concern their inability to be competitive globally. During testimony before the House Armed Services Committee last month, Clark said one of the Navy's top priorities should be to help the shipyards compete internationally because keeping them competitive "is vital to our future security."

"That's the bigger issue here: Those shipyards have been protected for so long that they don't even know how to build ships anymore," said one Pentagon official familiar with Navy shipbuilding. "That's the problem when you protect an industry from competition; there is no competition, your workforce atrophies, the technology becomes stagnant and the prices spiral upward."

That is not exactly what lawmakers like Senate Armed Services Committee Chairman John Warner, R-Va., and Senate Homeland Security and Governmental Affairs Committee Chairwoman Susan Collins, R-Maine, want to hear. Instead, their answer to the rising cost of shipbuilding is to offer paying for more large ships on the installment plan, a suggestion that England and other Navy leaders -- and the shipyards -- welcomed.

While many lawmakers have been averse to applying such budget gimmicks to contracts for new ships, current fiscal constraints might leave no alternative.

But while England welcomed the installment suggestion during a Senate Armed Services hearing last week, he was quick to point out that such budget techniques won't necessarily translate into more ships without additional money above and beyond the Navy's current means.

"Alternate funding mechanisms don't really buy us more ships; I think they allow us to buy them better and on a better schedule and better for the industrial base, but they don't provide added funds," England said.

According to Brown, that is why the Navy needs to add more money to its budget. "The issue is there is a big hole in the shipbuilding budget," she said, asserting that Congress needs to restore $874 million in fiscal 2006 alone to get the Navy's shipbuilding plan back on track.

Brown is suggesting using $743 million in proposed 2006 funds budgeted in the Navy Sealift Fund to buy 13 of the maritime pre-positioning ships. "There is no need to purchase these ships at this time," she said, noting that the current pre-positioning fleet has a lot of life left in it.

But others say the Navy is simply headed in a different direction, away from large quantities of large ships. More money and new funding mechanisms are "not going to change the direction of the Navy, or the fact that there are other kinds of ships that we need to be building," the official said.

So while lawmakers might be coming around to the idea of taking a gradual funding approach to building ships like DD(X), "this is not going to mean you build 10 ships per year; it means you build five-and-a-half, instead of five," the Pentagon official said.