American Shipbuilding Association

Administration Budget Calls for Seven New Ships in FY 2004

In response to concerns expressed by Members of Congress regarding the decline in naval shipbuilding, the Administration’s $379.9 billion defense budget includes $9.2 billion to purchase seven new ships. This is up from the $7.4 billion budgeted in FY 2003 for the purchase of five ships. Among the ships included in the budget are three DDG-51 destroyers, one Virginia-class submarine, one LPD-17, and two T-AKE cargo ships, which are funded in the National Defense Sealift Fund. Additionally, research and development funding of $1.5 billion for a new aircraft carrier, $1.2 billion for the DD(X) future surface combatant ship, and $158 million for littoral combat ship are requested.

Though this increase is applauded, the Administration’s proposal “still falls well short of the number of ships required to meet our force structure needs”, stated Cynthia Brown, President of the American Shipbuilding Association. The Navy, which had 590 ships during the 1991 Persian Gulf War and 15 aircraft carriers, will soon drop below its current fleet level of 301 to 290 ships.

As the Fleet shrinks below 300 ships, Chief of Naval Operations ADM Vern Clark states 375 ships are needed to meet present and emerging threats to our homeland.

Because operation tempos are extremely high, and given the potential conflicts and threats emerging around the world, substantial increases to naval shipbuilding accounts are imperative. Yet despite increased deployments and mobilizations, Administration budgets continue to remain well below the 12 ships a year procurement rate necessary to rebuild toward a 375-ship Navy.

In the coming months, Congress will begin working on the Defense Authorization and Appropriation legislation for FY 2004. Though seven ships is an improvement from five ships in FY 2003, naval ship procurement must continue to increase to meet the Nation’s security requirements.

Working Together: Shipbuilding Industry and Navy Discuss How to Rebuild U.S. Fleet

With a focus on this country’s steadily shrinking naval fleet and the increasing demands placed on America’s Navy and Marine Corps forces, the first of this year’s American Sea Power Forums, held on February 25th, addressed ways the shipbuilding industry, the Administration, Navy, and Congress can work together to respond to the crisis facing the United States.

ADM Skip Bowman, Director Naval Nuclear Propulsion, commented that our forward deployed and highly mobile Navy demands nuclear power and discussed how our warships are needed in more places around the world than there are available warships. According to ADM Bowman, "our nuclear ships help bridge the gap between what we need and what we have. Delivering not only mobility, but the endurance that goes along with it, a nuclear Navy is essential in today’s world and far into the future."

Congresswoman Jo Ann Davis (R-VA) commented that past and present naval budgets have not addressed our current needs, much less adequately budgeted for future technology. Applauding the increase in the Administration’s FY 2004 budget request for the procurement of seven ships, the Congresswoman discussed how we cannot continue to reduce the number of ships, particularly since we cannot have one ship in more than once place at a time. According to the Congresswoman, “The Navy’s budget and growth is determined years in advance, and does not always reflect the true needs of our naval force… and the Navy has been consistent in arguing that it requires more ships.” In an effort to bring attention to this serious situation, Congresswoman Davis discussed legislation that she has introduced, HR 375, that will declare that it is the policy of the United States to rebuild our naval forces to a fleet of 375 ships.

Echoing the Congresswoman’s concerns, ADM Bowman stated that the country has done a poor job of planning and paying for capital assets and purchasing ships smartly. Procurement has followed cost, not need, and as a result, the buy rate has gone down. ADM Bowman stressed that in order to make an increase a reality, we need to make these ships less expensive to the taxpayer and Navy budget. He briefly discussed how buying ships in one year no longer works, outlining the Navy’s proposal of split funding for aircraft carriers and multi-year procurement of submarines. He noted that this country “must keep ship production continuous.”

Tom Schievelbein, President of Newport News Shipbuilding, and John Welch, Senior Vice-President of General Dynamics Marine Systems, outlined how shipyards are working on solutions for cost savings. Both discussed the teaming agreement for the first group of Virginia class submarines in which Newport News Shipbuilding and Electric Boat are currently engaged. This teaming effort is proving to be very successful. Commenting on the lessons learned, sharing of information, and cooperative partnership, the first ship is on track to be delivered to the Navy ahead of schedule. However, no amount of teaming will save an industry if ships are simply not procured in sufficient numbers and at a steady rate. Low procurement rates result in escalation in the cost of materials, harms suppliers, and forces companies to lay off highly skilled craftsmen. According to John Welch, “the shipbuilding industry must have a self sustaining level of work – that is where cost savings will start and any benefits will grow from there.”

The risks posed by our shrinking fleet, national security, and economic prosperity are very real. Only by working together can we be prepared to defend our lives and deter threats to our way of life.

Appropriations and House Armed Services Committees Announce Reorganization

House Appropriations Chairman Bill Young (R-FL) announced a major restructuring of his committee in order to create a new Homeland Security Subcommittee. Chaired by Rep. Harold Rogers (R-KY), the new subcommittee will include one of the largest components of Homeland Security, the Coast Guard. A new Subcommittee on Transportation and Treasury, chaired by Rep. Ernest Istook (R-OK), will have jurisdiction over all non-homeland security related Department of Transportation accounts. The Maritime Administration, which administers the Title XI Ship Loan Guarantee Program, will come under this subcommittee’s jurisdiction.

Sen. Ted Stevens (R-AK), Chairman of the Senate Appropriations Committee, reorganized along a similar format. Sen. Thad Cochran (R-MS) will chair the Homeland Security Subcommittee and Sen. Richard Shelby (R-AL) will chair the Transportation/Treasury Subcommittee.

Chairman of the House Armed Services Committee, Duncan Hunter (R-CA), also reorganized his committee to better address and support Department of Defense needs. According to Chairman Hunter “These subcommittees will allow the [full] committee to focus more intently on the diverse mission areas presently facing the Department of Defense.” Reorganizing the committee into six subcommittees, the Chairman created the Projection Forces Subcommittee, to be chaired by Rep. Roscoe Bartlett (R-MD) with Rep. Gene Taylor (D-MS) serving as the ranking member. This new subcommittee will be responsible for Navy and Marine Corps programs, deep strike bombers, strategic lift programs and naval reserve equipment.

Zero Funding in FY 03 for Title XI

On February 20, 2003, the President signed into law the FY 2003 Omnibus Appropriations bill. The legislation contained the eleven remaining appropriations bills that Congress failed to pass prior to adjourning the 107th Congress. The Title XI Ship Loan Guarantee Program, which was part of the Commerce, Justice, State Appropriations section received no funds for new loan guarantees in FY 2003.

According to the Maritime Administration (MARAD), which administers the account, less than $1 million is left for new loan guarantees. The Administration’s FY 2004 budget request, as in previous years, provides no funds for new loan guarantees. Funding must be restored for this program or commercial shipbuilding in the U.S. will cease, and further harm America’s ability to build naval ships.  

ASA Welcomes Three New Companies

The American Shipbuilding Association would like to welcome three new partners: General Atomics in San Diego, California, International Paint in Houston, Texas, and L3 Communications in Philadelphia, Pennsylvania.

General Atomics develops and manufactures advanced electric power technologies and systems for naval ships. International Paint is the world's leading supplier of high performance marine coatings. L3 supplies the Navy with subsystems that manage electrical power in surface ships and submarines

ASA welcomes these companies and looks forward to a productive and successful working relationship.

Well Said!

“One thing we should not forget during this time is the fact that our Sailors and Marines might well be going into combat in the near future. They are the strength of our nation, and the best we have to offer. To under-fund the Navy is to under-fund them. They are the men and women we are concerned about… We should give them the best, and set a new course that steers us to a stronger, safer Navy, and a resurgent America.”

Congresswoman Jo Ann Davis (R-VA)
At the American Sea Power in the 21st Century Forum
February 25, 2003