American Shipbuilding Association

ASA Announces Legislative Priorities for the 109th Congress

America’s naval fleet numbers 288 ships and will continue to dive in the face of anemic shipbuilding budgets.  While America’s Navy sinks, China’s navy is on the rise.  In an effort to correct the largest deficiencies in the budget, the American Shipbuilding Association unveils its legislative priorities for the year. 

Increase the Navy’s FY 2006 Shipbuilding Budget

Congress is in the process of examining the FY 2006 $2.5 trillion budget submitted by the Administration in early February.  Contained in this request is a Defense Budget of $419.3 billion.  However, within this growing Defense Budget is a historically low request of $6.2 billion for only four new ships, a decrease of $3.2 billion from the amount appropriated last year for eight ships.  While the Defense Budget has increased by 28% since 2001, the Navy’s shipbuilding budget has been cut by 31%. 

For FY 2006, the budget proposes delaying the construction of the CVN-21 and the early retirement of the USS John F. Kennedy.  This proposal will drop the U.S. aircraft carrier fleet from 12 to 10.  Naval leaders have previously testified before Congress that up to 15 carriers may be needed.  $86.7 million is needed to ensure CVN-21 stays on schedule. 

The Future Years Defense Plan cuts the number of DDX destroyers from 11 to 5, and does not request additional DDG-51 destroyers.  If allowed to stand, the resulting production gap will lead to job loss and potential facility closure, in addition to cost increases throughout the surface combatant industrial base.  Additionally, DOD is considering a “winner take all” procurement strategy for the five DDX ships, creating a sole source environment for the next generation of surface combatants.  This proposal directly contradicts long-standing DOD policy against sole sourcing.  Congress is urged to add $100 million for detailed design and procurement of long lead items for the second DDX. 

Last year Congress appropriated $150 million to begin construction of the new class of large deck amphibious ships, LHA(R).  However, the FY 2006 budget does not provide adequate dollars to keep LHA(R) on schedule.  $417 million is needed to keep this program on track.  Additionally, the Defense Department cut funding for T-AKE, the new class of Combat Logistics Force Ship presently under construction.  This move reduces the number of ships initially planned for FY 2006 from two to one.  Since the price of T-AKE was based on a specific quantity of production over a specific schedule, the cut will lead to increased costs of the vessels. 

If the budget is enacted in its present form, the estimated job loss through the shipyards and manufacturing base will exceed 70,000 over the next five years.  Congress is urged to appropriate an additional $984 million for naval shipbuilding in FY 2006 to avoid unnecessary cost growth and major upheaval in the industrial base.     

Limit DOD’s Long-Term Leasing of Foreign-Built Ships

The Department of Defense continues to engage in the leasing of foreign-built ships to satisfy long-term military requirements.  These long term leases amount to de facto purchases which would be in violation of U.S. acquisition laws requiring vessels purchased by the U.S. military to be built in this country.  In testimony before the House Appropriations Committee in February of this year, Secretary of Defense Donald Rumsfeld acknowledged leasing of twelve to thirteen ships to satisfy DOD’s long-term sealift and special purpose needs.  Additional leases of up to ten foreign-built ships are anticipated.   

The ships under long-term charter by DOD are being leased for 59 months.  At the end of the 59-month lease, the DOD can lease the same ship for another 59 months.  These 59-month leases are evidence of a long-term military requirement, and the continued leasing practice is in contravention of the intent of the Budget Enforcement Act of 1990, which sought to encourage DOD to buy rather than lease capital assets because of the higher cost of leasing versus purchasing. 

The majority of the ships presently being leased are of South Korean manufacture, having been converted to meet DOD requirements.  China is devoting its resources to control the world’s shipbuilding market, both naval and commercial, and is currently building cargo vessels similar to the South Korean modified ships being leased by this country.  Is the United States comfortable furthering a policy of leasing foreign-built ships to the detriment of the U.S. defense shipbuilding industrial base?

ASA supports amendments in this year’s Defense Authorization and Appropriations bills to close the long-term lease loophole that exports United States shipbuilding jobs, and weakens our national security that is dependent upon our defense shipbuilding industrial base.      

Aircraft Carrier End Strength Legislation

(S 145 & HR 304)

Amid the proposed delay in funding the construction of the CVN-21 aircraft carrier and the premature retirement of the USS John F. Kennedy, Members of Congress have introduced legislation to ensure the Nation maintains an aircraft carrier end strength adequate to ensure the protection of national security interests.  Senators Bill Nelson (D-FL) and Mel Martinez (D-FL) and Representative Ander Crenshaw have introduced the Aircraft Carrier End Strength bill (S 145 and HR 304).  The legislation would require that “the naval combat forces of the Navy shall include not less than 12 operational aircraft carriers…”  Both bills have been referred to the respective Armed Services Committees in the House and Senate. 

Aircraft carriers are in constant demand around the world.  Fewer carriers mean fewer places the United States can be in the world, either as a moveable tactical platform or as a peaceful presence to stem hostilities that may otherwise lead to war.  The decision to reduce the number of carriers in the fleet to satisfy budget constraints exposes the United States to an unnecessary national security risk. 

Shipbuilding Caucus Holds First Meeting

In its inaugural meeting on March 2nd, Members of the Congressional Shipbuilding Caucus, led by Reps. Jo Ann Davis (R-VA) and Gene Taylor (D-MS), visited with the Chief of Naval Operations (CNO), ADM Vern Clark to discuss the FY 2006 naval shipbuilding budget and the future health of the Navy and U.S. shipbuilding industrial base. 

In a press release issued by Rep. Gene Taylor following the meeting, the Congressman declared that the first Caucus meeting was a “huge success”.  According to Taylor, "we had a very substantive and successful first meeting. There was frank and honest discussion about the potentially devastating effects that the FY06 budget may have on the nation's ability to build ships. I'd like to thank Admiral Clark for his directness and making himself available to address the Shipbuilding Caucus."  According to the press release, Taylor expressed his concern to the CNO that the current 290-ship fleet is well-below the Navy's recommended requirements. "If enacted, the proposed FY06 Navy shipbuilding budget doesn't fix the situation. In fact, this budget would only undercut our ability to fight the Global War on Terror and meet the national security challenges of the future," said Taylor.

Representatives Taylor and Davis founded the Congressional Shipbuilding Caucus in January 2005 as a forum for members of Congress to discuss shipbuilding issues that impact their districts. The Caucus will enable members to work together in a unified effort to support increased shipbuilding efforts for a strong Navy capable of protecting America's vital national interests for years to come.

Industry News 

ASA Welcomes Four New Partners

ALSTOM Power Conversion, Inc. of Pittsburgh, PA, is a leading supplier of electrical power and propulsion systems for commercial and naval ships.  Oil States Industries-Aerospace Products Division of Arlington, TX, is a premier supplier of noise control, pressure containment, and shock/vibration isolation products used in the Sea Wolf and Virginia class submarines.  Purolator-Facet, Inc. of Greensboro, NC, is a leading manufacturer of fluid mechanics and porous metal technology.  SAUER Compressors USA, Inc., of Stevensville, MD, is an industry leader in the development of high pressure compressors for U.S. naval submarines and surface combatants.   

EPA Gives Special Recognition to Bath Iron Works

EPA has accepted Bath Iron Works into its National Performance Track Program.  This Program recognizes private companies that demonstrate a sustained level of environmental compliance and performance that exceeds all the legal requirements; have an active community outreach program; have a documented record of past environmental achievements; and have a corporate ethos and commitment to continue to be an exemplary steward of the environment.  BIW is the first shipyard in the United States to be so recognized.

Well Said!

“We must deal with the crisis in shipbuilding…
What happened to Ronald Reagan’s 600-ship Navy?
Our ships may be getting more capable,
but the oceans aren’t getting any smaller.”

Representative Ike Skelton (D-MO)
Ranking Member of the House Armed Services Committee
February 16, 2005