Amidst a boisterous storm of criticism from lawmakers and shipbuilding
industry advocates, Navy officials confirmed in recent weeks what
had become increasingly obvious: The nation’s naval force
is drifting towards an unknown future.
War-strained Pentagon budgets, rising shipbuilding costs and inconsistent
messages by the Navy’s leadership are conspiring to bring
about what could be a dramatic downsizing in the Navy, a turn of
events that would force yet more consolidation and shrinkage in
the U.S. shipbuilding industry.
The Navy’s 2006-2011 budget, which calls for cutbacks in
various ship programs, sparked a heated debate in Washington about
the future of a Navy that already has seen its size drop by more
than half since the end of the Cold War. The official explanation
from senior leaders is that the number of ships is not what really
counts, but rather the “capabilities” of each ship.
But lawmakers, industry insiders and even many Navy officers are
not buying that rhetoric.
Numbers clearly matter to shipbuilders. Phillip Dur, president
of Northrop Grumman Ship Systems, for many months, has called for
the Navy and the Coast Guard to determine how many ships they need
to meet national security requirements. Once that number is set,
the industry can “right-size” itself, says Dur. With
only two major private shipbuilding firms remaining—Northrop
Grumman and General Dynamics—any form of right-sizing would
lead to politically unpalatable shipyard closings and layoffs.
Only a year ago, Chief of Naval Operations Adm. Vernon Clark said
the Navy needed 375 ships to meet its required missions. Later,
he backed away from that number when it became clear that the Pentagon
leadership would not support an expansion of the fleet.
Last month, Navy Secretary Gordon England sent to Congress an “interim”
long-range shipbuilding plan. The proposal has lots of numbers,
but they are far from reassuring to shipbuilders. The blueprint
shows a Navy that could, during the next three decades, be as small
as 260 ships (compared to 290 ships today) and as large as 325.
Ideally, that range should be much narrower, but that is the best
the Navy can do right now, says Vice Adm. Joseph A. Sestak Jr.,
deputy chief of naval operations for warfare requirements and programs.
“What I can’t do, or I don’t think anybody can,
is predict with pinpoint accuracy how many ships we’ll need
in 35 years,” he tells reporters. These decisions, he adds,
are “driven by the vagaries of the strategic environment.”
To get more productivity out of its ships, the Navy is banking
on the success of a crew-swap program that keeps vessels deployed
for two years, with sailors rotating every six months. Another factor
driving the decisions to shrink the size of the Navy is a new posture
that does not require the fleet to be constantly forward-deployed,
but to rather be capable of surging when called upon. The so-called
“fleet response plan” has been touted as an efficient
way to do business.
Sestak says he recognizes the quandary in which the shipbuilding
industry finds itself, but he stresses that the Navy needs a flexible
plan that can accommodate emerging needs. “But that does not
mean we shouldn’t have more stability” in the budget,
he says. “That is what is most important to industry.”
Shipbuilders, meanwhile, continue to fear getting caught in the
dreaded “death spiral” that often haunts big-ticket
Pentagon programs. As the Navy buys fewer ships, the cost of each
vessel rises, leading to yet more cutbacks. At that rate, even one
shipyard will be too many, industry insiders lament.
The Government Accountability Office estimated that between 2001
and 2005, 5 to 14 percent of the Navy’s annual ship construction
budget, which totaled about $52 billion over the five-year period,
went to pay for cost growth for ships funded in prior years. At
a time when the Navy is in the early stages of buying the Virginia-class
submarine, DD(X) destroyer, CVN 21 aircraft carrier and Littoral
Combat Ship, its ability to acquire these ships as scheduled, says
GAO, will depend on controlling costs.
Robert Work, a naval analyst at the Center for Strategic and Budgetary
Assessments, says the average cost of a Navy ship today is $1.4
billion. At those prices, it’s no wonder the Navy is buying
only four ships next year, he says. “Unless we change that,
you are in a spiral that is impossible to get out.”
Even if the Navy’s shipbuilding budget soars, as projected,
from $6.3 billion this year to $10 billion in the coming years,
the fleet will go down to 210-225 ships, Work says. But truth be
told, he adds, the United States has such overwhelming naval power
that it’s unlikely that any other country will challenge that
spot even if the U.S. Navy dropped to 200 ships.
Shipyard officials say they are hopeful that the $1.4 billion price
tag will come down as a result of corporate efficiencies they’ve
introduced in recent years. But those cost reductions would be marginal,
unless the Navy increased production. “In shipbuilding, when
you do things in a repetitive way, you can do them more efficiently,
and you can lower costs,” says C. Michael Petters, president
of Northrop Grumman Newport News Shipbuilding.
He says it is premature to try to predict what will happen to the
industry. “We are at a time when it’s not clear to anyone,
I don’t think even to the Navy, exactly what the way ahead
is,” Petters says. “If you ask people at the Pentagon
what the Navy of the future will look like, you’ll get a different
answer from everyone.”
The Pentagon’s senior leadership, for the most part, has
remained silent on the shipbuilding issue. This month, the office
of the deputy undersecretary of defense for industrial policy is
scheduled to issue a report on the global shipbuilding industrial
base. The study compares U.S. shipyards against the world’s
best, in an effort to identify “areas of concern,” according
to a Pentagon spokesman.
The Navy, to be sure, is not in any near-term danger of becoming
a paper tiger. Still, supporters of a strong naval posture are hopeful
that the Pentagon’s civilian leaders will take heed of the
writings of famed 19th century naval historian Rear Adm. Alfred
Thayer Mahan, who argued that the nation that controls the seas
holds the decisive factor in war.