Post by ferryfast admin on Apr 5, 2006 8:02:45 GMT -5
Navy chief challenges shipbuilders
As the fleet dwindles, a new leader urges the industry and the Navy to reform their relationship.
BY DAVID LERMAN
Daily Press-Hampton Roads
www.dailypress.com/
(202) 824-8224
April 5, 2006
WASHINGTON -- The Navy's new civilian leader expressed frustration Tuesday with the state of shipbuilding, saying relations between the Navy and industry are "beginning to fray."
After three months on the job, Navy Secretary Donald C. Winter said the shipbuilding industry may need a new business model to operate more efficiently and work more closely and cooperatively with the Navy.
While offering few details, Winter - a former Northrop Grumman Corp. executive - urged the industry to look beyond short-term profits to focus on the long-term restructuring that he suggested would be required to rebuild the fleet affordably.
"There must be a balance between short-term financial goals and long-term considerations," Winter told hundreds of active-duty and retired Navy officials at a Navy League conference.
For too long, he said, the Navy and industry have been locked in a vicious cycle in which military requirements for new ships are increased, construction costs rise, fewer ships can be bought, and then costs rise again - often to prohibitive levels.
"Where we are today is unacceptable," Winter said.
Hoping to enlarge the fleet after years of decline, the Navy has unveiled a 30-year shipbuilding plan aimed at providing the industry with a predictable and stable workload and funding. The plan is designed to increase the fleet from today's 281 ships to an average annual size of 313 ships.
Many naval analysts and lawmakers, however, have expressed deep skepticism in recent weeks that the plan is affordable or realistic. They said the Navy has underestimated the cost of new ships and assumed a huge funding spike that appears out of reach. The Navy has proposed roughly doubling annual shipbuilding money by 2011, despite soaring war costs and mounting budget deficits.
Winter defended the plan, but said industry must do its part by reassessing everything from the composition of its work force to the facilities needed for efficient ship construction.
Asked later if he favored consolidating the nation's six privately run shipyards, Winter said, "I do not want to specify the solution. What the Navy should do, and what we have done, is specify the conditions. There are multiple solutions."
But Winter also made clear he expects the industry to take greater steps to economize as the Navy transforms from a 600-ship Cold War force to a more agile and capable fleet half that size.
"We're not going to be building a 600-ship Navy," he told reporters at a later news conference. "Accept that. I'm looking for industry to come back to us with executable options, not just options focused on their own self-interests."
Tensions between the Navy and industry have been evident in recent years as each side blames the other for a dwindling fleet.
Perhaps nowhere is the tit-for-tat more apparent than in the Virginia-class submarine program, built jointly by Northrop Grumman Newport News and General Dynamics Electric Boat Corp.
As costs continue to rise for submarines, the Navy's hopes of doubling submarine production have become unaffordable. The Navy has said it can't begin buying two submarines a year until the price of each submarine comes down. Industry has said it can't lower the price until production increases so the vessels can be built more economically.
As the standoff continues, the date for doubling production continues to slip. What was once supposed to happen in 2002 is now scheduled for 2012.
Cynthia Brown, president of the American Shipbuilding Association, acknowledged past tensions, but expressed hope for improved relations as a new Navy leadership comes to the fore.
"We have been in a crisis response for several years," said Brown, who did not attend Winter's speech. "With a new secretary coming on board, it's an opportunity for a fresh start."
Asked if industry was prepared to reform itself, Brown said, "We are always looking for new ways to do business. But the most fundamental piece of that equation is higher rates of ship production."
Winter, in a briefing with reporters, applauded what he described as some small steps industry has taken to become more efficient.
"There are some good initiatives that have been started," he said. "But do I believe they're complete? No way."
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AMERICAN SHIPBUILDING ASSOCIATION
www.americanshipbuilding.com/
As the fleet dwindles, a new leader urges the industry and the Navy to reform their relationship.
BY DAVID LERMAN
Daily Press-Hampton Roads
www.dailypress.com/
(202) 824-8224
April 5, 2006
WASHINGTON -- The Navy's new civilian leader expressed frustration Tuesday with the state of shipbuilding, saying relations between the Navy and industry are "beginning to fray."
After three months on the job, Navy Secretary Donald C. Winter said the shipbuilding industry may need a new business model to operate more efficiently and work more closely and cooperatively with the Navy.
While offering few details, Winter - a former Northrop Grumman Corp. executive - urged the industry to look beyond short-term profits to focus on the long-term restructuring that he suggested would be required to rebuild the fleet affordably.
"There must be a balance between short-term financial goals and long-term considerations," Winter told hundreds of active-duty and retired Navy officials at a Navy League conference.
For too long, he said, the Navy and industry have been locked in a vicious cycle in which military requirements for new ships are increased, construction costs rise, fewer ships can be bought, and then costs rise again - often to prohibitive levels.
"Where we are today is unacceptable," Winter said.
Hoping to enlarge the fleet after years of decline, the Navy has unveiled a 30-year shipbuilding plan aimed at providing the industry with a predictable and stable workload and funding. The plan is designed to increase the fleet from today's 281 ships to an average annual size of 313 ships.
Many naval analysts and lawmakers, however, have expressed deep skepticism in recent weeks that the plan is affordable or realistic. They said the Navy has underestimated the cost of new ships and assumed a huge funding spike that appears out of reach. The Navy has proposed roughly doubling annual shipbuilding money by 2011, despite soaring war costs and mounting budget deficits.
Winter defended the plan, but said industry must do its part by reassessing everything from the composition of its work force to the facilities needed for efficient ship construction.
Asked later if he favored consolidating the nation's six privately run shipyards, Winter said, "I do not want to specify the solution. What the Navy should do, and what we have done, is specify the conditions. There are multiple solutions."
But Winter also made clear he expects the industry to take greater steps to economize as the Navy transforms from a 600-ship Cold War force to a more agile and capable fleet half that size.
"We're not going to be building a 600-ship Navy," he told reporters at a later news conference. "Accept that. I'm looking for industry to come back to us with executable options, not just options focused on their own self-interests."
Tensions between the Navy and industry have been evident in recent years as each side blames the other for a dwindling fleet.
Perhaps nowhere is the tit-for-tat more apparent than in the Virginia-class submarine program, built jointly by Northrop Grumman Newport News and General Dynamics Electric Boat Corp.
As costs continue to rise for submarines, the Navy's hopes of doubling submarine production have become unaffordable. The Navy has said it can't begin buying two submarines a year until the price of each submarine comes down. Industry has said it can't lower the price until production increases so the vessels can be built more economically.
As the standoff continues, the date for doubling production continues to slip. What was once supposed to happen in 2002 is now scheduled for 2012.
Cynthia Brown, president of the American Shipbuilding Association, acknowledged past tensions, but expressed hope for improved relations as a new Navy leadership comes to the fore.
"We have been in a crisis response for several years," said Brown, who did not attend Winter's speech. "With a new secretary coming on board, it's an opportunity for a fresh start."
Asked if industry was prepared to reform itself, Brown said, "We are always looking for new ways to do business. But the most fundamental piece of that equation is higher rates of ship production."
Winter, in a briefing with reporters, applauded what he described as some small steps industry has taken to become more efficient.
"There are some good initiatives that have been started," he said. "But do I believe they're complete? No way."
@@@@@@@@@@@@@
AMERICAN SHIPBUILDING ASSOCIATION
www.americanshipbuilding.com/