Skip to comments.U.S. Navy Is Removing Life Support For Shipbuilding Industry
Posted on 07/11/2005 10:19:47 AM PDT by mr_hammer
Manufacturing News July 8, 2005 Vol. 12, No. 13 812 Words Page 1
U.S. Navy Is Removing Life Support For Shipbuilding Industry
The United States shipbuilding industry is on the verge of losing most of its component suppliers due to severe cuts in naval shipbuilding budgets and Department of Defense procurement rules that encourage acquisition managers to buy products from the lowest-cost commercial suppliers overseas, claims the American Shipbuilding Association.
Next year's proposed budget for naval ships is $3.2 billion less than the amount appropriated in 2005, says Cynthia Brown, president of the American Shipbuilding Association. Since 2001, defense spending has increased by 28 percent, which does not include supplemental appropriations, yet the naval ship procurement budget has declined by 33 percent. If present budgetary trends continue, the U.S. naval fleet will drop from 288 ships today to fewer than 200 ships by 2015.
The situation is becoming increasingly difficult for the six major shipyards, but it is even worse for U.S. equipment suppliers. "The Department of Defense has been working to repeal and weaken laws that require ships and certain ship components to be manufactured in the United States," said Brown in prepared testimony to the U.S.-China Economic and Security Review Commission. "The reliance on U.S. manufactured equipment is dissipating in response to pressure from DOD to open competition to foreign sources and to lower military specifications in an effort to reduce costs. DOD has been urging defense contractors to rely more on commercial off-the-shelf systems rather than systems built to military specifications. This emphasis on contracting with the lowest-cost producer is forcing all member companies of the defense shipbuilding industry base to source more of its material, components and systems foreign."
In most naval ship subsystem and component categories there is only one U.S. manufacturer remaining, Brown notes. Eighty-percent of the components manufactured for the Virginia Class submarine come from sole sources. "Production rates are not high enough to sustain more than one company and the companies left are struggling to stay in business," says Brown, whose membership includes the six major shipyards and 70 suppliers.
The U.S. industry, which employs 350,000 people, is producing six ships per year. (Market leader, Hyundai Heavy Industries of South Korea, produced 60 ships last year.) U.S. production is set to decline to four next year, due in part to the high cost of steel, a result of booming demand in China. The Navy says nine or 10 ships need to be built each year in order to have a 300-ship armada.
While the direction of the U.S. naval shipbuilding industry remains on a downward slope, the situation is the opposite in China. China is aggressively investing in its shipbuilding capacity. It is expected to have a submarine fleet that is twice the size of the U.S. fleet of 33 subs by 2010. It has started building a new class of destroyer that is "believed to match the air defense capability of the DDG-51 class," says Brown. "In 1989, China had essentially no shipbuilding industry or market share. In a little over a decade, China has invested in its shipbuilding industry to become the third largest builder of commercial ships behind South Korea and Japan."
China now has the capacity to produce 16-million deadweight tons a year. Its China State Shipbuilding Corporation recently announced a $3.6-billion shipyard construction project on Changxing Island. "Once completed, the shipyard is expected to have the capacity to produce more than 4.5-million deadweight tons a year, making it the largest shipyard in the world," says Brown.
China is also investing heavily in its component suppliers. It has stated that it wants 100 percent of all systems, components and materials to be produced in China.
"More and more manufacturing of ship components and systems will migrate to China as DOD encourages foreign sourcing in its efforts to find the cheapest sources," says Brown. "This has already begun with regard to materials for naval components. The manufacture of entire components and systems will migrate to China in the next several years under current DOD policy with respect to outsourcing."
The United States needs to address China's naval security challenge, Brown asserts. "If the industry is reduced further, the U.S. will have to reconstitute the industry if it is to counter the threat from China," she says. "Reconstitution of facilities and the skilled workforce, if possible, will be extremely costly and will take a decade."
She recommends that DOD's shipbuilding budget be sustained at between $15 billion and $16 billion a year, and that 12 combatant and logistics support vessels be built each year. At current rates, China will surpass the U.S. in naval vessels in 2015, based on the conservative estimate of China adding 12 ships per year. By 2024, China is projected to have more than 300 naval vessels, to about 180 for the United States.
The U.S. Congress should also require that naval ships and their components be manufactured in the United States, says Brown. "This action will ensure America's independence in determining its own destiny."
Can't possibly see any good to this given China's recent Naval build up. Not good, not good at all!
You mean like we did to the Soviet oil pipeline industry?
This is great news! We'll be able to save a bundle by buying warships on the cheap from the Chi-Coms. Maybe if we offer a bonus package, they'll deliver our new ships before the war breaks out.
There is no US ship building industry.
There was even a lame effort to build two US built cruise ships but that fell flat due to corruption and union thugs.
In the end US ship building has gone the way of the US merchant marine.
It just costs too much to flag a ship with a US flag. The navy deals were just a way to keep the knowledge if not the capacity alive.
The union thugs and the Democratic legislators they got elected created what they thought was the "ideal" laws and regulations. Now their actions are coming back to bite them in the a**.
The unions, socialists all, are responsible for this decay.
I was thinking the exact same thing.
It's just plain murder!!! Someone ping the Terri activists!
Why don't we just outsource our entire military overseas?
I'm sure the Chinese would be willing to provide us an Army to fight themselves.
Why not ask the Clintons?
and oddly the american merchant marine union sits on a pension fund of several hundreds of millions.
Unions are never about workers or jobs, unions are about controling and profiting from the administration of pension monies.
Don't forget Bill Clinton crowing that America isn't "the big dog on the block" anymore.
The Navy League is a good organization to join if you want to do something to stop the decline of the maritime industries in the United States.
They are very concerned about the Merchant Marine,ship building capacity in the US and the shortage of American mariners and seafarers. They have a strong caucus and are working with Congress to correct some of these deficiencies.
But China is no threat to us! Just ask President Bush and all the senators who voted for normalizing trade relations with the Chicoms.
I am quite afraid you are right!
Who needs a Navy anyway, certainly not the free traders that have destroyed US industries. Keep shooping at Wal-mart folks. Go Free Trade Go! And don't forget to keep voting GOP too.
"(The level of sarcasm contained in this comment would ordinarilly involve the use of language inappropriate to these forums)"
Sarcasm is the coolest thing ever.
Can you believe some people don't like it?
Reminds of me of the Soviet Union's waining days. We're falling apart.
How soon before someone suggests nuking China...?
We only have 33 submarines?
".....due to corruption and union thugs."
Anything to back this up?
Hey...lets nuke China...lol
It starts in 5 minutes.
I still don't understand why we're so afraid of China. So what if they build up their military ? So did the Soviet Union, and look what happened to them. Let them waste their money.
So long as China has a communist government, they will forever experience internal difficulties and never be able to focus totally on external issues. China will never attack us, because they could never sustain their supply lines. History tells us that.
Don't you think the threat of not being able to sell us stuff will shape their foreign policy ? We've lived a long time without Chinese goods. We can live without them in the future if we want. Without our trade they have major problems (as do we, but that's another discussion). Why should we build up our military to match them ? Does anyone here ever think we'd go to war with a nuclear China (thank you bill clinton) ?
I trust that Rumsfeld is just working to implement a sensible policy that uses off the shelf components where they can be used reliably and with a major cost reduction. I would bet that we're generally avoiding Chinese sources and buying overseas from suppliers in Japan, Singapore, Malaysia, Taiwan, etc. (Obvious reason is that the Chinese would cut off supplies in the event of a military conflict with them.)
Somebody find Milton Friedman and have him explain why this is a good idea. He did so well with the volunteer army...
You are correct. Off the shelf works fine for field rations and oil filters. The more technical/capability specific, the fewer suppliers. It will be interesting to see the cost that foriegners will be charging us to move military freight oversease once the vessels are getting attacked.
I've been a sarcastic SOB all my life. I even throw in a dollop of cynicism!
I also like to tell outlandish lies to gullible people.
I trust that his judgement has not improved much since he supported Ford over Reagan in 1976. He's done nothing to clean out the Clinton era bureaucrats that were installed in the Pentagon. Apparently, he is sold on send/sailing the gals into combat as well. The US will pay a price for this someday, but likely it will be nobody in his family paying the price.
We don't need a navy when we can fly 60 year old Buffalos out of Kansas. Right?
I think out sourcing out military to china is a thought, china could fight the war on terror, and we could have our troops here patrolling our borders...
Last American Flag Steamship Line
Purchases American Built Container Ships
Perhaps ships and the shipbuilding industry are going the way of horse-drawn carts and buggy-whip manufacturers.
This site hangs black crepe. Most articles are pessimistic, sky-is-falling stories.
Which may be true. But it's very depressing.
Thanks for the ping!
China has already begun to attack us. The attack is political, so far. China is not your friend.
U.S. Attitude Shifts as Chinas Military Improves
By WILLIAM MATTHEWS, Defense News, July 11th, 2005
In 1991, U.S. precision weapons, night vision, stealth and other technologies dazzled the world by obliterating the Iraqi Army in four days. Among those most profoundly impressed by the U.S. accomplishment was China.
Awed by the power of U.S. technology, the Chinese military launched a sustained effort to modernize and reorganize its military, said David Finkelstein, an Asia expert at the Center for Naval Analysis.
A decade and a half later, its Americans who are beginning to be awed by what China has achieved.
The Chinese military has acquired an assortment of new weapons: Russian submarines and jet fighters, destroyers with state-of-the-art phased-array radar, airborne early warning aircraft, cruise missiles and wake-homing torpedoes, among others.
Stressing quality over quantity, China has cut the size of its military, yet increased its capability, Finkelstein said. It has developed new command-and-control doctrines and new standards for training troops.
Chinese military leaders know whats broken and what has to be fixed to make themselves a more capable, professional institution, Finkelstein said July 7 during a discussion on the Chinese military at the Heritage Foundation, a Washington think tank.
Chinas Ultimate Goal?
The question for the U.S. military is: What does China plan to do with its improving military power?
For U.S. military planners, who are conducting the Defense Departments Quadrennial Defense Review (QDR), Finkelstein said,it would be prudent to assume that China will continue to improve its military.
But it would be a mistake to assume that China inevitably harbors hostile intent toward the United States, he said.
That seems to be the assumption President George W. Bush and his administration are making, another expert said.
As recently as December, former Secretary of State Colin Powell referred to the U.S. relationship with China as the best in 30 years. But since then, there has been a noticeable shift in the way top administration officials discuss China, said John Tkacik, a research fellow in China policy at the Heritage Foundation.
In June, for example, Defense Secretary Donald Rumsfeld questioned continued increases in Chinese military spending.
Since no nation threatens China, one must wonder: Why this growing investment? Rumsfeld said.
Finkelstein contends that China perceives that it has legitimate defense needs. China fears Japan, wants to protect the access of its burgeoning industries to shipping lanes, and has reasons to worry about the aspirations of Asian neighbors such as India.
Tkacik offers this answer: China is preparing for a major war over Taiwan.
The U.S. military should pay attention to Chinas military advances, said Daniel Gouré, vice president of the Lexington Institute, a defense research center in Arlington, Va. There arent many uses for these advanced weapons except against an equally large and capable foe, he said
Gouré cautioned against those who have advised that the QDR focus on the war against terrorism. China and its role as a rising world power are at least as important as the war on terrorism, he said.
The forces needed to check the military power that China may become are substantially different from those optimized for the global war on terrorism.
Among the U.S. capabilities that have a clear impression on China is the ability to go downtown, Gouré said. China is pursuing defenses against the capabilities that enabled the United States to strike with impunity in Belgrade and Baghdad, he said.
If the Chinese succeed, the United States will be unable to operate aircraft other than stealth planes anywhere near China, Gouré said.
For the U.S. military, that creates a clear role for planes like the F/A-22, the B-2 bomber and a B-2 follow-on, he said. It also could increase the requirement for electronic warfare capabilities and very high-speed or hypersonic strike aircraft, he said.
In response to the Chinese military buildup, Gouré said U.S. planners conducting the QDR should give consideration to:
Maintaining a strong nuclear attack submarine fleet. Talk of reducing the fleet raises questions about how the Navy would maintain an adequate undersea presence in Asia.
Equipping aircraft carriers with better early warning aircraft, long-range unmanned aerial vehicles and stealthy F-35 fighters.
Keeping ship-based ballistic missile defenses in the region.
And we need a ground force capable of taking the war to China if that becomes necessary, he said. It may not be necessary or possible to march the U.S. Armys 3rd Infantry Division into Beijing, Gouré said. But U.S. military planners should consider putting U.S. troops on Chinese soil in ways that are persuasive.
Theres another threat the United States has yet to address: cyber defense.
Theres a lot of talk these days about the terrorist cyber threat. That pales in comparison to the ability of countries like China to put 10,000 or 20,000 trained people on the hacking circuit if they want to do so, he said. That is something you simply cannot ignore.
If all that sounds daunting to the United States, it may be more daunting to the Chinese, according to Finkelstein.
Chinas military modernization is occurring amid extraordinary economic growth, modernization and change in its society. In recent weeks, for example, riots have erupted among farmers over land disputes, students over rising university fees and peasants over the growing gap between rich and poor.
For Chinese government officials, the biggest problems lie not beyond the waters edge, but right at their doorstep, Finkelstein said.
The big story is about whether the Chinese Communist Party will succeed or fail in managing the rise of China at home, he said.
BAE Chief: Lower U.S. Tech Transfer Rules
By WILLIAM MATTHEWS , Defense News, July 11, 2005
The chief of Europes largest defense company is urging the U.S. government to ease rules that restrict foreign access to defense U.S. technology.
Dick Olver, chairman of London-based BAE SYSTEMS, said export controls imposed by the State Department are hindering the development of high-tech weapons such as the Joint Strike Fighter and data fusion technology that promises to improve battlefield situational awareness.
In addition, buy American sentiment in the House of Representatives in recent years threatens to further limit the ability of foreign companies to sell to the U.S. military. Olver called it misguided.
If buy American legislation prevails, it would impair the United States defense capabilities because it would prevent the U.S. taking full advantage of the global market, Olver said in a July 12 address at the Woodrow Wilson Center, a public policy research institute.
BAE has a particular interest in lowering the barriers that inhibit technology transfers and buying from foreign defense suppliers. Since 1999, the company has bought about a dozen U.S. defense firms. In March, BAE paid $4.2 billion to buy United Defense Industries, the maker of Bradley fighting and Marine Corps amphibious vehicles, naval guns, missile launchers and precision munitions.
BAE employs 35,000 American workers and expects to keep expanding in the United States, Olver said.
But even a trans-Atlantic company like BAE must get State Department approval before an American branch of the company can share sensitive technology with a British branch.
One result, Olver said, is that the United States has a hard time getting access to expertise it needs on short take-off and vertical landing a key feature in one version of the JSF.
We have been asked to lead the testing of this technology and to carry out operational modeling of mixed short takeoff and conventional takeoff options. But we can only do this if we receive the right approvals, Olver said.
BAE has hit a similar roadblock with data fusion technology. The company has developed ways to combine data from multiple sources to create a detailed picture of a threat, he said. Combined with U.S. capability, we believe we would be cutting-edge. But we are waiting for approval to contribute what we know in order to develop more capable, interoperable solutions.
One of the big losers because of U.S. export controls is the United States, Olver said.
Controls deny the United States access to tens of thousands of skilled engineers, scientists, companies and technology, he said.
One aim of U.S. technology transfer restrictions is to deny militarily important technology to U.S. enemies and potential adversaries. But Olver said strict British prohibitions mean there is no possibility that critical U.S. technology would be re-exported to prohibited countries such as China.
Sigh. This is such GARBAGE. We have more, and better skilled aerospace and electronics engineers now selling real estate and insurance for lack of employment BY OUR OWN DEFENSE INDUSTRY!!!!!!
And the "Global Market" is most assuredly not a good reason for furthering this abomination any further. The plane is either built entirely so as to DEFEND AMERICA...or it shouldn't be built.
If it's solely a flying pig farm, for the benefit of our allies, or merely to stymie the french fighter (much as I like to embarass them that's not a good enough reason to spend $220 billion U.S.), then it badly needs termination.
Put the money into the F-22...which is mostly American at least. And a TRUE air superiority machine. It rocks. Restored funding would let Lockheed get the economies of scale needed to really optimize our investment in this plane. The numbers would be there...
True. Many have chosen to not apply leather to pavement over and over looking for the next engineering position and have settled for the job security and continuity of working in a coal mine or driving a cab.
This guy has no idea how gaping is his knowledge deficit. He doesn't know what he doesn't know.
Very disturbing. My conclusion: He must be a product of a very recent public education...
A factoid: The transcontinental and spur railroads of the mid to late 1800s were partially funded by European investment. There was a huge crash in railroads four years after the continent was spanned when business didn't go quite right and European investment dried up. It wasn't all bad, but it was dislocating for a few years while the American economy reoriented itself.
I think the number is 55 at the moment. The 33 is a 2010 projection.
Thanks for the ping!