American Shipbuilding Association

House Merchant Marine Panel Unanimously Supports
Title XI Funding Increase

On April 13th during the panel mark-up of H.R. 4502, “The National Defense Authorization Act for FY2001,” Chairman Herb Bateman (R-VA) proposed and received unanimous consent to increase the authorization for Title XI Ship Loan Guarantee program from $10 million to $50 million.  “This increase is justified by the revised estimates from MARAD on the amount of guarantees that could be executed in fiscal year 2001,” stated Chairman Bateman.  

Also, the panel rejected a MARAD request to waive the thee year waiting periods before foreign built ships would be eligible to carry U.S. government food aid, known as P.L. 480.  By rejecting the waiver request, the subcommittee continued to support the cornerstone of U.S.-built, U.S.-flagged, and U.S.-crewed ships that has been critical to supporting American national security interests. 

Finally, the panel approved an extension to September 2006 for disposal of obsolete National Defense Reserve Feet vessels, and added a requirement for the Secretary of Transportation to utilize overseas ship disposal facilities to expedite the required disposals.  Chairman Bateman noted, “Many of the obsolete vessels are in very poor material condition and their timely disposal is essential to avoid the potential for environmental contamination and expensive maintenance cost.”  The provision also requires the Secretary to provide a plan detailing how MARAD will complete the required disposal by the revised date and the resources necessary to accomplish the requirement. 

Voting unanimously to the amended Chairman’s mark and referred the bill to the full House Armed Services Committee: Chairman Herb Bateman (R-VA), Ranking Member Robert Underwood (D-GU), Duncan Hunter (R-CA), Gene Taylor (D-MS), Curt Weldon (R-PA), Neil Abercrombie (D-HI), Jim Saxton (R-NJ), Thomas Allen (D-ME), Joe Scarborough (R-FL), James Maloney (D-CT), Walter Jones (R-NC), Steven Kuykendall (R-CA)  

Support Grows for $50 Million Appropriation for
Title XI Ship Loan Guarantee Program

On April 6th a bipartisan group of Members of Congress sent an additional letter echoing the concerns of their colleagues for increased Title XI funding to Commerce Justice, State, and the Judiciary, Appropriations Subcommittee Chairman Harold Rogers (R-KY) and Ranking Member Jose Serrano (D-NY).  Representative Jack Metcalf sponsored the letter and cosponsors included Representatives: Chris John (D-LA), James Oberstar (DFL-MN), Shelly Berkley (D-NV), Billy Tauzin (R-LA), Peter DeFazio (D-OR), Lane Evans (D-IL), Nick Rahall (D-WV), Eliot Engle (D-NY), Christopher Smith (R-NJ), James Moran (D-VA), James Maloney (D-CT), William Delahunt (D-MA), Jennifer Dunn (R-WA), Debbie Stabenow (D-MI), Dale Kildee (D-MI), Frank LoBiondo (R-NJ), John Larson (D-CT), Ed Pastor (D-AZ), Steve Rothman (D-NJ), Brian Baird (D-WA), Loretta Sanchez (D-CA), Peter Deutsch (D-FL), Karen Thurman (D-FL), Jerrold Nadler (D-NY), and Robert Weygand (D-RI).

SUBPAC Commander Calls for 350 to 360-Ship Fleet

RADM Al Konetzni, Commander of submarine forces in the Pacific, called for a 350 to 360-ship Navy at the “American Sea Power in the 21st Century” forum this past March.  “Real world experiences are reinforcing what those of us in the force providing business have been saying for several years – that a fleet larger than 300 ships is required to satisfy our current and projected war fighting and overseas presence requirements,” RADM Konetzni stated.  The admiral went on to say that, “A more realistic requirement for naval forces is one that would be sized at 15 carrier battle groups, 14 amphibious ready groups, 68 attack submarines, 134 surface combatants and supporting ships that more closely approximate a 350 to 360-ship Navy, rather than a 300-ship Navy. Yet, at the same time we see a future where this gap between reality and requirements may be widening, not shrinking.”  

Reinforcing Senator Charles Robb’s (D-VA) call at the forum for Congress to fund a minimal ship construction rate of ten-plus ships per year to provide for a bare bones minimal 300-ship Navy, RADM Al Konetzni, noted that during the 1970’s and 80’s 15 ships were being built a year and these same ships will retire at the same rate between the years 2005 and 2020 and stated, “Years of drastically reduced shipbuilding have complicated this country’s ability to sustain even a 300-ship inventory into the next decade…We cannot maintain a 300-ship Navy if we only build 8 [ships] per year as replacements.”   

RADM Konetzni explained to the forum that submarines are the nation’s eyes and ears where other intelligence collection assets cannot see, and the dwindling numbers are beginning to affect our war fighting capabilities, “Since the end of the cold war, missions tasked at the national level to Pacific submarines have nearly doubled.  At the same time our total submarine force declined almost in half.  We are now at 26 attack submarines in the pacific.”  RADM Konetzni illustrated the demands on the submarine fleet by noting that 68% of the deployed time is involved in national tasking and crossing the vast distances in the Pacific and Indian oceans.  Leaving very little time for engagements, quality of life port visits, CINC Tasking or important maintenance.  

Furthermore, the admiral made clear to the forum that, “In 1998, this mission tasking was reduced, not because there was a lessening of requirements, but because we don’t have enough submarines to get the job done!  This is the start of a continuing death spiral of asset limitation driving requirements vice requirements driving force structure.” To cover the increased demand the Navy has traded off time spent at home for submarines and their crews between deployments, and increased the time spent underway while deployed, specifically underway time has increased from 65% in 1995 to 77% in 1999.  

RADM Konetzni also pointed out that starting in 1992 with the Submarine Forces for the Future Study to the 1999 Joint Chiefs of Staff Attack Submarine Study, the submarine force size has been studied more frequently and in more detail than any other military component in the past decade and, “They all come up with the same answer.  This nation needs 68 attack submarines … anything below that is not sufficient.”  

“My question to you is this: Are we as a Nation mortgaging our collective future for the sake of immediate savings?  In my position as commander of the submarine forces in the Pacific, the answer is yes.  We can no longer do more with less; we are doing less with less.  The nation’s appetite for forces afloat mandates we sufficiently invest in the Navy’s future – and it starts with a commensurate number of ships and submarines.  To maintain a 300-ship Navy, we need to build 10 ships per year.  Without a change to the DOD top line or how funds are divided amongst the different branches of the military, we can’t get there. I’m a steward of the taxpayers’ trust.  And that means a great deal to me.  In truth, we in this room are all stewards of the public trust – and they are counting on us.” RADM Konetzni concluded.

SeaAmerica and Ingalls Shipbuilding Sign
Memorandum of Agreement

On March 27 SeaAmerica Cruise Line and Litton Ingalls Shipbuilding announced a Memorandum of Agreement that will lead to additional U.S.-Built, U.S.-flagged, and U.S.-crewed cruise ships for the domestic markets.  The agreement between SeaAmerica and Ingalls Shipbuilding calls for cruise ship design and then negotiation of a construction contract for two 45,000 ton, 1,012-passnger ships, with an option for two additional ships.   

“We have advanced the development of an American cruise product and industry. We are proving that we can build in America, operate in America, and when the time arrives, deliver a quality American product to our passengers,” said David W. Turner, Chairman and CEO of SeaAmerica.  SeaAmerica plans to offer itineraries along the East, Gulf and West coasts.  

Jerry St.Pe’, Chairman of the American Shipbuilding Association and COO of Litton Ship Systems, added, “This new opportunity clearly validates Litton’s assessment of the growth potential of the U.S. cruse ship market and this program presents an opportunity to grow this segment of our company’s business beyond the ships already under contract.”  In July 2000, Ingalls Shipbuilding will begin construction of two large U.S.-flagged cruise ships to be operated in the Hawaiian Islands by Untied States Line, a unit of American Classic Voyages Inc.   

The SeaAmerica project is financed privately thought American Marine Advisors of New York, one of the world’s leading ship financing firms. Northeast Capital of West Virginia has also provided additional initial funding for SeaAmerica.  SeaAmerica intends to apply for a shipbuilding loan guarantee from the Maritime Administration under Title XI of the 1936 Merchant Marine Act.  Title XI guarantees make commercial ship construction credit easier to obtain.

Industry News

  Avondale Industries Delivers Third Navy Sealift Ship, USNS SEAY  

On March 28th Avondale Industries delivered the USNS SEAY (T-ARK 302) ahead of schedule.   The USNS SEAY is the third of seven Bob Hope Class of strategic sealift ships Avondale is building for the Navy.  The medium-speed, roll-on/roll-off (LSMR) ships are designed to support and deploy military supplies quickly to U.S. troops around the world, as well as meet propositioning and surge sealift contingencies.

Dr. Lawrence J. Cavaiola Named President
of the New Litton Ship Systems Full Service Center

  Dr. Lawrence J. Cavaiola was named President of the new Litton Ship Systems Full Service Center on March 2, 2000.  Dr. Cavaiola previously served as Litton Ship Systems Vice President for Strategic and Business Development.  The new center will offer its customers a full range of research and development, design, analysis, and life cycle support services in conjunction with Litton Ship Systems two shipyards, Ingalls Shipbuilding and Avondale Industries.  

Well Said!

  “I want to say to your readers that sea power is going to remain critical to our nations survival, success, prosperity, and a prosperous future.  We are by birth an island nation, and we’re going to have to depend upon those sea lines of communication.  That means we must maintain the dominance of U.S. Sea power.”

  William Cohen, Secretary of Defense - Interview with Sea Power Magazine, 2000