WASHINGTON — The nation’s Navy ship and submarine builders decried proposed Pentagon spending cuts in a congressional hearing Wednesday, but competition between them showed through their united front.
Lawmakers and witnesses at the House hearing on the nation’s defense industrial base agreed on broad points: that cuts in defense spending could cripple an already dwindling shipbuilding industry; that civilian projects can’t substitute for Pentagon contracts; and that replacing laid-off workers years from now and tooling up mothballed shipyards may be impossible.
“The shipbuilding industry is solely reliant upon the Defense Department for its survival since foreign shipyards have systematically taken all the domestic shipbuilding business from the United States,” said Rep. David McCurdy, D-Okla., chairman of the industrial base panel.
John Stocker, president of the Shipbuilders Council of America, predicted that the shipbuilding industry and its supporting subcontractors would lose some 180,000 jobs by late in the 1990s.
Executives from three shipyards — Bath Iron Works in Maine, the Electric Boat Division of General Dynamics Corp. in Groton, Conn., and Virginia’s Newport News Shipbuilding & Dry Dock Co. — all said they face lean years.
With about 10,000 workers, Bath Iron Works is the largest private employer in Maine. The shipyard got a boost from the Bush administration budget, which contains funding for more Arleigh Burke-class destroyers.
Despite the relative success, Bath President Duane Fitzgerald said his yard would be cutting its work force by about 1,500 over the next 18 months.
Newport News and Electric Boat will deliver the last of their current backlog of about a dozen submarines each by 1997 at the latest. If Congress accepts the president’s budget plan, the Navy would go from 1990 through 1998 without ordering any new submarines.
But the degree of pain expected at the shipyards varies widely and the strategies of the companies are not necessarily in sync.
Roger E. Tetrault, general manager of the Electric Boat submarine shipyard, said the current employment base of 21,000 in Connecticut and Rhode Island would dwindle to about 8,000 in the late 1990s even under the best of circumstances.
Electric Boat is fighting to save from the budget ax two Seawolf attack submarines funded by Congress in past years but cut out of the administration’s spending plan.
Without the Seawolf, Tetrault said, the yard would squeak by from 1997 to 2000 with about 5,000 employees. By 1998, the Navy is expected to put into production a new submarine, the Centurion. Electric Boat could barely bridge the gap, Tetrault said, if it received contracts to repair and overhaul existing submarines.
The head of the rival Newport News yard, which competes with Electric Boat for submarine contracts and also builds aircraft carriers, presented a dramatically different picture.
“Newport News…has a unique capacity,” said Newport News President W.R. Phillips Jr. “It can retain the ability to reconstitute its nuclear submarine new construction capability after its last scheduled delivery if — and only if — aircraft carrier construction continues.”
The Bush budget continues to fund new aircraft carrier construction, which represents more than half of the work force of 27,000 at Newport News.
“It’s clear what the Newport News strategy is,” said Rep. Ronald Machtley, R-R.I. “Keep the carrier contracts going and drive Electric Boat out of business.”
The Newport News position essentially splits what once was a strong pro-submarine lobbying bloc. Where once Virginia, Connecticut and Rhode Island were united in promoting submarine funding, now the powerful Virginia congressional delegation is pushing to protect its aircraft carrier funding. That leaves Connecticut and Rhode Island alone to fight for submarines.
Electric Boat, on the other hand, is essentially proposing to be the Navy’s sole supplier of submarines, given the sharp reduction in orders in recent years. That would effectively take Newport News out of the submarine-building business.
Both Bath and Newport News favor changes in U.S. maritime law that would make domestic shipyards more competitive with foreign builders. Electric Boat, while not opposed to those changes, would not benefit from them because the yard builds only submarines. And because nuclear technology is highly classified, the yard cannot replace Pentagon cuts with foreign sales.
Tetrault noted that Electric Boat has won a contract to provide sewage tanks to the Massachusetts Water Resources Authority. But contracts of that type represent only a tiny fraction of the money and manpower involved in even one submarine contract.
The Seawolf, priced at about $2 billion per vessel, is the most expensive submarine ever ordered by the Navy.
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