Ingalls Shipbuilding shipyard in Pascagoula, Mississippi
As the Navy calls for a larger fleet, shipbuilders are looking toward new contracts and ramping up their yards to full capacity.
In December, the sea service released a new force structure assessment that said the Navy’s new goal was to reach a 355-ship fleet — a bump of 47 ships over the previous FSA. This would include a mix of additional attack submarines, an aircraft carrier, numerous large surface combatants and amphibious ships.
In a recent Congressional Research Service report, naval analyst Ronald O’Rourke found that getting to 355 ships would actually require more than 47 additional vessels.
“Achieving and maintaining the 355-ship fleet could require adding 57 to 67 ships, including 19 attack submarines and 23 large surface combatants, to the Navy’s FY 2017 30-year shipbuilding plan, unless the Navy extends the service lives of existing ships beyond currently planned figures and/or reactivates recently retired ships,” he said.
Procuring that number of vessels — which averages to about 1.9 to 2.2 additional ships per year over the 30-year period — could cost an average of $4.6 billion to $5.1 billion per year, he added.
However, “these additional shipbuilding funds are only a fraction of the total additional cost that would be needed to achieve and maintain a 355-ship fleet instead of 308-ship fleet,” he said. Crew and maintenance requirements would also cause costs to swell.
Sen. John McCain, R-Ariz., the chairman of the Senate Armed Services Committee, in a defense white paper, said: “Whatever the right fleet size ultimately is, one key objective for the next five years is the same: The Navy must ramp up shipbuilding. It is unrealistic to deliver 81 ships by 2022.”
Previous defense plans under President Barack Obama called for the procurement of 41 ships over the next five years, he said.
“However, with sufficient funding, the Navy could procure 59 ships in this timeframe,” he said. That would include five fast attack submarines, five fleet oilers, three destroyers, two amphibious ships, two afloat forward staging bases, two undersea surveillance ships, two survey ships, two patrol ships, one aircraft carrier and one new small surface combatant.
Even more important than expanding the fleet is buying the right kinds of ships, he said.
“The Navy should be optimized for deterring conflict against increasingly capable great power competitors,” he said. “Given the time limitations of shipbuilding, the Navy must seek to add new capabilities incrementally and make a series of strategic choices.”
The Navy is confident that U.S. shipbuilders will be able to meet an increased demand, said Ray Mabus, then-secretary of the Navy, during a speech at the Surface Navy Association’s annual conference in Arlington, Virginia.
They have the capacity to “get there because of the ships we are building today,” Mabus said. “I don’t think we could have seven years ago.”
Shipbuilders around the United States have “hot” production lines and are manufacturing vessels on multi-year or block buy contracts, he added. The yards have made investments in infrastructure and in the training of their workers.
“We now have the basis ... [to] get to that much larger fleet,” he said.
The need for the 355-ship Navy is based on an increased demand signal from combatant commanders around the world, he noted.
“The world has gotten more complex in the years since 2012 and the demand for naval assets has gone up,” he said. “The reason for the difference is in 2012 we didn’t have a resurgent Russia. In 2012 we didn’t have an increasingly aggressive China. In 2012 ISIS … didn’t exist. In 2012 North Korea was not doing the range of things it’s doing.”
It will be critical for the Trump administration to continue to increase the Navy’s fleet, Mabus said.
“There are consequences to not having enough ships. There are consequences to a shrinking fleet,” he said. “If you miss a year building a ship, you never get it back. If you miss a year, that neglect will reverberate for decades.”
Trump has previously called for an expanded Navy and put the number around 350 vessels.
Rep. Rob Wittman, R-Va., said he was “confident” that the 355-ship goal could be met by working with the Navy and the industrial base. Getting there would require a 60 percent increase in ship construction funding, or almost $25 billion over the long term, he said.
“I believe that Congress needs to make a commitment in the shipbuilding budget of at least $5 billion annually,” he said. “I believe $5 billion a year is something that we can integrate into the current shipbuilding programs, integrate into the Navy force structure assessment, and realistically and efficiently … apply those numbers to grow the fleet to where it needs to be.”
Shipbuilders have said they are prepared for more work.
At Ingalls Shipbuilding — a subsidiary of Huntington Ingalls Industries — 10 ships are under construction at its Pascagoula, Mississippi, yard, but it is under capacity, said Brian Cuccias, the company’s president.
The shipbuilder is currently constructing five guided-missile destroyers, the latest San Antonio-class amphibious transport dock ship, and two national security cutters for the Coast Guard.
“Ingalls is a very successful production line right now, but it has the ability to actually produce a lot more in the future,” he said during a briefing with reporters in January.
The company’s facility is currently operating at 75 percent capacity, he noted.
Austal USA shipyard in Mobile, Alabama
Austal USA — the builder of the Independence-variant of the littoral combat ship and the expeditionary fast transport vessel — is also ready to increase its capacity should the Navy require it, said Craig Perciavalle, the company’s president.
The latest discussions are “certainly something that a shipbuilder wants to hear,” he said. “We do have the capability of increasing throughput if the need and demand were to arise, and then we also have the ability with the present workforce and facility to meet a different mix that could arise as well.”
Austal could build fewer expeditionary fast transport vessels and more littoral combat ships, or vice versa, he added.
“The key thing for us is to keep the manufacturing lines hot and really leverage the momentum that we’ve gained on both of the programs,” he said.
The company — which has a 164-acre yard in Mobile, Alabama — is focused on the extension of the LCS and expeditionary fast transport ship program, but Perciavalle noted that it could look into manufacturing other types of vessels.
“We do have excess capacity to even build smaller vessels … if that opportunity were to arise and we’re pursuing that,” he said.
Bryan Clark, a naval analyst at the Center for Strategic and Budgetary Assessments, a Washington, D.C.-based think tank, said shipbuilders are on average running between 70 and 80 percent capacity. While they may be ready to meet an increased demand for ships, it would take time to ramp up their workforces.
However, the bigger challenge is the supplier industrial base, he said.
“Shipyards may be able to build ships but the supplier base that builds the pumps … and the radars and the radios and all those other things, they don’t necessarily have that ability to ramp up,” he said. “You would need to put some money into building up their capacity.”
That has to happen now, he added.
Rear Adm. William Gallinis, program manager for program executive office ships, said what the Navy must be “mindful of is probably our vendor base that support the shipyards.”
Smaller companies that supply power electronics and switchboards could be challenged, he said.
“Do we need to re-sequence some of the funding to provide some of the facility improvements for some of the vendors that may be challenged? My sense is that the industrial base will size to the demand signal. We just need to be mindful of how we transition to that increased demand signal,” he said.
The acquisition workforce may also see an increased amount of stress, Gallinis noted. “It takes a fair amount of experience and training to get a good contracting officer to the point to be [able to] manage contracts or procure contracts.”
“But I don’t see anything that is insurmountable,” he added.
The biggest concern for the Shipbuilders Council of America is sequestration, said its president Matthew Paxton.
Sequestration is “the law of the land and we have got to resolve that. It’s that type of uncertainty that can really create some concerns within an industry like ours,” he said.
While the Trump administration seems keen to build up the Navy, Congress must work to remove spending caps, said Ashley Godwin, the council’s senior defense adviser.
“Only Congress can undo sequestration,” she said. “Trump has consistently said he wants sequestration gone. He wants the Budget Control Act caps removed, but only Congress can do that and it looks like there is a willingness in Congress to do that.”
Unless defense spending is increased above the caps established in the BCA, reaching the 355-ship fleet would require the Pentagon to cut funding for other programs, O’Rourke said.
Overall, there is a sense of anticipation throughout the U.S. shipyards, Paxton said.
“As much as folks who are building for the Navy are excited, you see commercial yards, yards in other areas who are very excited as well just because of what it means overall for the industrial base,” he said. “There’s a lot of excitement and hopefulness that this comes to pass.”
Based on a 2015 economic impact study, the Shipbuilders Council of America believes that a 355-ship Navy could add more than 50,000 jobs nationwide.— Vivienne Machi contributed to this story
Photos: Huntington Ingalls, Austal