American Shipbuilding Association

Volume 16, Issue 2                                                                       March-April 2010

National Shipbuilding Budget Policy Act Introduced

On April 15 th, Representative Rob Wittman (R-VA) introduced legislation in support of making recapitalization of America’s Navy and commercial fleets a national priority. The National Shipbuilding Budget Policy Act (HR 5035) calls for funding naval shipbuilding at $20 billion a year from fiscal year 2011 through fiscal year 2015. The legislation also authorizes $60 million annually for the Title XI Ship Loan Guarantee Program to assist U.S. ship owners in rebuilding America’s commercial fleet.

Congressman Wittman authored this legislation in response to a declining fleet of naval and commercial ships to meet America’s security and economic interests.

Today’s naval fleet is at a 93-year low of 286 ships. According to the Navy’s report submitted to Congress in February regarding its annual long-range ship construction plans, the Navy continues to envision a plan for a baseline battle force fleet of 313 ships. However, the Navy report states that future year ship construction budgets will average no more than $15.9 billion annually (in FY 2010 dollars). Representative Wittman issued a press release stating that “unless new ship construction budgets are increased and sustained above the current projected levels, the fleet will continue to shrink and ships will continue to be acquired inefficiently. We’re already well behind in funding for maintenances and acquisition and, we can’t afford inefficiencies in these times of tighter budgets.”

America must also invest in its commercial fleet of ships. Loan guarantees administered under the Title XI Loan Guarantee Program will provide U.S. ship owners with access to affordable financing to recapitalize and expand their fleets to meet America’s energy transportation needs, domestic commerce requirements, and to serve as a military auxiliary fleet in times of emergency. With the tightening of the credit market and hesitancy of lenders to agree to large commercial loans, the federal guarantee provided through Title XI has become even more important to rebuilding America’s transportation infrastructure. An estimated $12 billion is needed to rebuild this country’s commercial fleet. Annual appropriations of $60 million would leverage $1.2 billion in new ship construction each year.

Making a concerted investment in America’s sea services a national priority will create and sustain hundreds of thousands of highly skilled jobs in all fifty states. Predictable and stable budgets will ensure steady rates of ship construction, resulting in cost savings to the taxpayer and ships for America’s national and economic security.

Representative Wittman is the Co-Chair of the Congressional Shipbuilding Caucus and is a member of the House Armed Services Seapower and Expeditionary Forces Subcommittee. HR 5035 has been referred to the House Armed Services Committee for further consideration.

ASA Legislative Priorities Announced

In response to inquiries regarding the American Shipbuilding Association’s ( ASA) legislative priorities for fiscal year 2011, Association President Cynthia L. Brown stated that ASA would work to encourage Congress to:

• Increase the Navy’s shipbuilding budget;
• Appropriate $60 million for the Title XI Ship Loan Guarantee Program;
• End the de facto purchase of foreign-built ships by the Department of Defense; and
• Develop the Marine Highway to expand the shipment of cargo domestically by sea in order to reduce congestion on highways.

Nuclear Posture Review Reaffirms Importance of Maintaining Navy Capabilities

The Department of Defense, in the Nuclear Posture Review (NPR) released on April 6 th, stressed the importance of the U.S. maintaining its strategic missile capability and the vital role naval ships play in maintaining America’s ability to deter nuclear attacks. Particular emphasis was placed on the importance of the country’s ballistic missile submarine (SSBN) force. According to the NPR, “ensuring a survivable U.S. response force requires continuous at-sea deployment of SSBNs in both the Atlantic and Pacific oceans, as well as the ability to surge additional submarines in crisis.”

The U.S. currently has fourteen nuclear capable Ohio class SSBNs. The first Ohio class retirement is planned for 2027. In order to maintain America’s at-sea presence the country must continue to develop the follow-on to the Ohio class submarine. According to the NPR, “Today, there appears to be no credible near or mid-term threats to the survivability of U.S. SSBNs…However, given the stakes involved, the Department of Defense will continue a robust SSBN Security Program that aims to anticipate potential threats and develop appropriate countermeasures to protect current and future SSBNs.” Given the time involved in designing, building, and testing new submarines, the NPR references that the Secretary of Defense has directed the Navy to “begin technology development of an SSBN replacement.”

The Ballistic Missile Defense Review (BMDR) issued by the Department of Defense in February stated that in addition to ballistic missile submarines, surface ships will play an integral role in America’s missile defense strategy. In response to the rapidly expanding regional missile threat, the BMDR noted that the Administration is taking steps to upgrade more Navy ships to incorporate the Aegis ballistic missile defense capability.

Secretary of the Navy Meets with the Congressional Shipbuilding Caucus  

The Congressional Shipbuilding Caucus, co-chaired by Representatives Gene Taylor (D-MS) and Rob Wittman (R-VA), hosted a meeting with Secretary of the Navy Ray Mabus on March 18 th to discuss the Navy’s fiscal year 2011 budget request and shipbuilding plan. Other Members of the Caucus in attendance were Representatives Roscoe Bartlett (R-MD), Travis Childers (D-MS), Joe Courtney (D-CT), Susan Davis (D-CA), Gregg Harper (R-MS), and Steve Scalise (R-LA). Distinguished guests included Commandant of the Coast Guard Admiral Thad Allen; Lieutenant General George J. Flynn, Deputy Commandant of the Marine Corps for Combat Development and Integration; Brigadier General Timothy C. Hanifen, Deputy Commanding General, Marine Corps Combat Development Command; and Brigadier General Richard L. Simcock, Legislative Assistant to the Commandant of the Marine Corps.

In his opening remarks, Secretary Mabus characterized the Navy’s shipbuilding plan as “realistic,” with the future years defense plan balancing how much ships will cost and how much the Navy could budget for new ships. The Secretary stated that with the procurement of an average of ten ships a year in the next five years, the fleet will be on a path of growth up until the mid 2020’s. However, once procurement for of the replacement of the Ohio class of ballistic missile submarines (SSBN) starts, it will place extreme pressure on the rest of the shipbuilding budget and reduce the amount available for the procurement of other ship classes by half until that program is complete. “We need to look at the next five to ten years to have an impact,” said Mabus, “past 2020 the plan becomes notional since circumstances will cause the fleet numbers to change. We need to balance the future years in terms of missions, budgets, and the industrial base. We need to put in [the budget] what the Navy thinks it can afford and what we need to do our job.”

Secretary Mabus stated the need for the U.S. to maintain a “global fleet” capable of reaching every part of the world. He praised the U.S. Navy’s capability to engage in conventional and irregular warfare, partner with navies of other countries to build cooperative relationships, and provide humanitarian assistance and disaster relief. The Secretary applauded the Navy and Marine Corps recent response to the Haiti earthquake. With the port destroyed and the airport congested, U.S. Marines were able to get ashore and begin delivering aid to the Haitians and airlifting quake victims. The arrival of the naval ships, including the aircraft carrier USS Carl Vinson and USS Bataan Amphibious Ready Group, provided critical platforms in the days immediately following the earthquake, and the Ready Group remains on station in the waters off Haiti providing continued humanitarian relief and support. The Secretary stressed that America must continue to have the ability to “project force, discourage peer competitors, and build relationships with other countries to deter aggression. American cannot do without its Navy.”

Regarding the shipbuilding industrial base, Secretary Mabus praised the businesses and the highly skilled men and women who build the nation’s fleet. The Secretary noted that if the industrial base is not protected, the unique and specialized skills will be lost and would be “difficult to get back, if ever.” He described the Navy and shipbuilding industry’s relationship as a partnership, stating that while the industry has the responsibility to invest in its facilities and train its workers, the Navy has the responsibility to provide certainty as to the type of ships it wants and when the Navy wants them.

Established in January 2005, the Congressional Shipbuilding Caucus seeks to educate lawmakers about the U.S. shipbuilding industry and works for the enactment of budgets and policies to rebuild America’s sea services and shipbuilding industrial base. The Caucus currently numbers 114 members of the House of Representatives. It is one of the largest and most proactive caucuses in the House.

New Partners

The American Shipbuilding Association welcomes the following new member companies:

Marmetal Industries, LLC  

A leading manufacturer, supplier and distributor of metal products, Marmetal Industries is headquartered in Horsham, Pennsylvania.

Pacific Ship Repair & Fabrication, Inc.

With locations in San Diego, California, and Port Orchard, Washington, Pacific Ship manufactures structural and ballistic doors, hatches, and scuttles; manholes; ladders; and deck fittings.

Potter Electric, Inc.

Potter Electric of National City, California, is a distributor of marine electrical supplies and components.

Sales Systems Limited – Fastener Division

A supplier of industrial fasteners, Sales Systems Limited, is located in Portsmouth, VA.

SSS Clutch Company, Inc.

Located in New Castle, Delaware, SSS Clutch Company is a manufacturer of clutches for marine propulsion.

Well Said!

“For in this modern world, the instruments of warfare are not solely for waging war.

Far more importantly, they are the means for controlling peace.”

Admiral Arleigh Burke

1961