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Stackley: NASSCO Will Be ‘In Peril’ Absent New Contracts

The first Mobile Landing Platform at the General Dynamics NASSCO shipyard in San Diego, Calif. NASSCO Photo

The first Mobile Landing Platform at the General Dynamics NASSCO shipyard in San Diego, Calif. NASSCO Photo

WASHINGTON, D.C. — The California shipyard the U.S. Navy relies on to build its auxiliary ships and some potential future amphibious warships is “one contract away,” from “peril,” the Navy’s top shipbuilder told a Senate panel on Wednesday.

Sean Stackley — Assistant Secretary of the Navy for Research, Development & Acquisition (RDA) — said preserving General Dynamics NASSCO was a key component of the service’s current plan to combine the Navy’s new fleet replacement oiler (TAO(X)) and amphibious warships contracts into one competition.

“NASSCO is a contract away,” he said at a hearing of the Senate Armed Services Seapower Subcommittee.
“They’re in peril and that’s why this [deal] is an important aspect of NASSCO’s viability.”

The deal, first floated as part of the service’s Fiscal Year 2016 budget, will have NASSCO and Huntington Ingalls Industries (HII) Ingalls Shipbuilding compete for contracts for TAO(X), the follow-on big deck amphib to the America-class (LHA-7) and the next generation amphibious warship LX(R).

The Navy crafted a competition “with what we believe to be about the same in terms of man hours of work and about the same in horizon of time so that industry has some assurity that ‘ok, we understand how much work is coming our way and we can build this into our business base and sharpen our pencils in terms of competition’,“ Stackley said.

Currently, the U.S. Navy relies on eight shipyards to build its about $15 billion a year in ships — arguably much more capacity than the service needs for the nine to ten ships a year the Navy builds.

However, Stackley and the service are keen on preserving the industrial base as a strategic asset as part of a larger national security context that leads to deals like the current oiler-amphib contract and the prior teaming agreement between HII’s Newport News Shipbuilding and General Dynamic Electric Boat in which each manufacturer builds part of the Virginia-class (SSN-774) submarine.

“The strategy that we have put forward does a couple of things. It sends a signal to our industrial base that we’re going to limit competition to the two shipbuilders that we believe are absolutely essential to our industrial base,” Stackley told the panel.
“Today, Ingalls builds four different ship classes. Today, NASSCO builds one Navy ship-class and commercial work. We view them both as critical to our industrial base.”

Though Stackley indicated that NASSCO was most vulnerable “if Ingalls doesn’t get one of those two major programs, they are at risk,” he said.

The acquisition for the first-in-class TAO(X) is set to begin in 2016 while LHA-8 is a 2017 ship with early procurement set to begin in in 2016.

LX(R) is set to start construction in 2020.

NASSCO is currently building the Afloat Forward Staging Base (AFSB) variant of the Mobile Landing Platform (MLP) for the U.S. Military Sealift Command.

Ingalls builds the current America-class big deck amphibs, Arleigh Burke-class (DDG-51) destroyers, San Antonio-class (LPD-17) amphibious warship and the Legend-class National Security Cutter for the Coast Guard.

  • Tony

    Build more MLPs, especially the AFSB variant.

  • Gary Warren

    Not surprised. A bit more evidence of how the Obama administration is permanently damaging the infrastructure behind the American military.

    • On Dre

      In Lt. Smash’s mind the children, dancing in unison, turn into soldiers
      marching in formation. They do battle with hippies riding a giant
      praying mantis. The hippies, shouting anti-American slogans, fire
      flowers back at the soldiers. One man takes a hit.

      One of Smash’s superior officers jolts him back to reality.

      Admiral: Lieutenant! Lt. Smash!
      Smash: Oh, Admiral.
      Admiral: That hippie fantasy again?
      Smash: They’re getting less frequent, sir.

  • AKO

    Sad
    Financialization → Deindustrialization → American military collapse

  • If the yards were more competive they could build civilian ships. There is a shipbuilding boom around the world, Finnish, Korean, Chinese, and even French. The French are building ship’s for the British. Why is the US, an Island nation, along with the British not comptive? Cannot blame benObama, and I am no fan of him, the fact is our commercial shipyards have been in decline since the 60’s. The US built 1000’s of ships during world war two, navy and civilian. Hundreds of liberty ships were laid up and rusted away. If we can build a carrier we could build container ships and cruise ships. All we get from Washington is BS. I want a contract for my state, etc. Let’s start to spend some money training a new generation of shipbuilders. We have to go out and sell ourselves. One way might be to “ask” the Chinese and Koreans to have part of their mega container ship fleets to be built in the US. Yea it is a joke but maybe if they want to trade with us they would agree. Traditionally shipbuilding is a trade that the builders could take pride in. Sorry for the rant but I have sailed on a DDG, a Bath built ship, Goldsborough, and you could see quality and pride that went into her building. The phrase “she is a Bath built ship” meant something.

    • James Bowen

      Good points. I am amazed how under-appreciated it is among our leaders that military power depends on industrial power.

    • Jrggrop

      Most of those other countries heavily subsidize civilian shipbuilding. The US doesn’t, at least directly.

    • El_Sid

      What ships are the French building for the UK? I think you mean the 4 tankers that the UK is having built in Korea for the price on one TAO of similar size, because UK steel trades were too busy with carriers to fit in a civilian build.

      One of the problems both the UK and US has is that they have unique, high-end requirements that aren’t shared by many other potential customers. The US has real expertise in building 100,000t CVNs, but you can’t sell those abroad. The UK dropped out of the Horizon consortium because France and Italy didn’t need the kind of range required to defend the Falklands, they only needed something to fight in the Med.

      Having said that, US shipbuilders make even the British ones look expensive.

  • publius_maximus_III

    It’s very simple: no Oilers, no Navy.

  • James Bowen

    People who are so confident in our military power would do well to think about the fact that industrial power is the foundation upon which military power depends, and that China produces more than five times the steel that the U.S. does.

    If shipyards which are vital to our defense industrial base cannot stay in business without contracts, they should be nationalized.

  • Gill Strong

    If we had more Merchant ship building then haft the problem would be soluved. The US merchant Marine has been going down hill for 50 years or better. We could not come near fighting a major war, no matter what size the Navy is. pedople need to put more pressure on congress to change whatever laws and taxes that are holding the USMM back. Get back to American flag, and crews.

  • SD_NASSCO

    I work for NASSCO in San Diego, a large portion of our work here is Naval Repair work. There is so much work in Repair that there are not enough skilled people in the region to keep up with the manning requirements. Repair keeps NASSCO in the game between New Construction contracts and we have plenty of contracts – NASSCO isn’t going anywhere. I am actually surprised that the author failed to make any mention of the Repair work going on here- Repair is the meat missing from this article. We are close to the largest and defintely the best Repair yard in the country bar none.

  • Jim Valle

    The history of shipbuilding in the United States has always been a matter of “Boom and Bust” When fortunes were to be made in the China and California trades, hundreds of clipper ships were built. That ended with the Civil War, during which we built up a very large Navy. When that ended there was very little activity until World War I when we built some 2,500 ships for the Emergency Fleet program. Most were too late for the war but shipbuilding dwindled while we worked our way through this huge surplus of ships, many of which sat idle for a generation until broken out to serve in World WW II.
    During that conflict we built some 5,000 merchant ships of various classes and a huge Navy, resulting in another huge surplus of ships and another hiatus in shipbuilding. Post war our combination of high wages, union work rules, stringent safety and operating regulations priced us out of the World shipping trades, even with government subsidies exceeding 50% of operating costs. With flags of convenience sheltering virtually all of the Worlds ocean going ships, merchant shipping became an exercise in the purest form of Capitalism, totally unregulated Free Enterprise. International shipbuilding followed suit and there was just no way for the United States to be competitive. If it wasn’t for the Military’s requirements we’d probably only be building coastal craft.