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Textron Ship-to-Shore Connector Production Contract Expected Later This Year

LCAC 100, Textron’s first-in-class Ship-to-Shore Connector (SSC), conducts its first on-water test outside of the company’s facility in Louisiana on April 10, 2018. Textron photo.

Textron executives expect by the end of 2019 to win a production contract for the Navy’s much-anticipated new Ship-to-Shore Connector.

The first SSC is about halfway through builder’s trials, and delivery to the Navy is expected by the end of summer, said Scott Donnelly, Textron’s chief executive. Donnelly was speaking to analysts during a conference call Wednesday morning to discuss the company’s financial results from its recently completed second quarter.

Production of the rest of Textron’s initial developmental units is also progressing as planned, Donnelly said. The company is currently negotiating with the Navy a contract that will take the program from development to production. Textron first started developing the vessel in 2012.

“We’re in negotiations; I expect we’ll get that under contract in the third, fourth quarter latest,” Donnelly said.

Three months ago, when Donnelly spoke with analysts, it wasn’t clear how soon the Navy would be committing to a contract. At the time, Donnelly said the Navy’s Fiscal Year 2020 budget request didn’t include any funding for the program.

During the April call, Donnelly explained the Navy wanted to see progress with the program before committing more money. The Navy had already awarded Textron contracts to purchase long-lead-time materials.

“I don’t think there is anything sinister here,” Donnelly said during the April call. “It’s just the Navy’s perspective was, you guys have a whole bunch of craft that are already appropriated in 2017, 2018, 2019. We’ve got to get those under contract and get going here before we add on additional appropriated volumes.”

Textron’s Ship-to-Shore Connector looks like the existing Landing Craft Air Cushion (LCAC) currently used by the Navy and Marine Corps to deliver personnel and equipment ashore. However, Textron’s new vessel has a fly-by-wire control system, a new drive and propulsion system and more powerful engines, USNI News previously reported. Textron’s vessel is built with fewer parts, which is supposed to make manufacturing and maintenance easier.

According to service budget documents, the Navy requested two Ship-to-Shore Connectors for $128 million in the FY 2017 budget, three for $212 million in the FY 2018 budget and five craft for $325 million in the FY 2019 budget.

Since the April call, the House put $84.8 million in its version of the FY 2020 National Defense Authorization Act for SSCs. The Senate authorized $40.4 million. A conference committee will determine the final funding level.

As the program moves from being in a developmental stage to being in production, Donnelly said analysts would quickly see results reflected in Textron’s financial reports.

“You will see the impact of that as it starts to ramp up and generate revenue, where it will be a 2020 story,” Donnelly said.