Posted on 05/09/2003 8:33:09 AM PDT by Stand Watch Listen
Bush administration efforts to build and sell eight diesel-electric submarines to Taiwan are finally beginning to show signs of progress. But there's almost no chance that the surveillance subs will be built in Newport News.
Northrop Grumman, which hoped to land what it is calling a "significantly sized" Taiwanese contract, has been swapping ideas with the U.S. Navy in recent weeks in anticipation that the Navy will soon move ahead with coordination of the project, said company spokesman Randy Belote. "Things are moving forward," he said.
But in a presentation to Wall Street analysts Tuesday, Northrop Chief Executive Officer Ronald D. Sugar made clear that if Northrop won the contract, it would build the subs at its Ship Systems division in Pascagoula, Miss.
"We would probably make them in our Gulf [of Mexico] region, probably in partnership with a company that produces submarines now," Sugar said, referring to a handful of foreign companies with experience building diesel-electric subs that U.S. contractors now lack.
Until Sugar's remarks, Northrop's Newport News shipyard - one of the Navy's two sources for nuclear submarines - seemingly had an outside shot at best at winning the Taiwan contract.
When the administration first announced its goal of providing submarines to Taiwan in 2001, any involvement by the local shipyard appeared remote. Navy officials have long kept tight reins on the country's nuclear shipyards, fearing that making subs for foreign countries could spread technological secrets, such as advanced techniques to make the large nuclear-driven ships move quietly in the water.
And that led industry observers to doubt that the Navy would allow its nuclear shipyards, Newport News and Electric Boat in Groton, Conn., to join in the bidding.
But then the plan to build the ships at one of its non-nuclear yards hit severe snags in mid 2002.
Because it had been decades since an American firm had built a diesel-driven sub, Northrop Grumman's initial plan was to build the subs at its Mississippi yard with a foreign company's design. The Pascagoula shipyard currently builds destroyers and other smaller Navy ships. Several foreign firms have built diesel ships in recent years.
But that became a problem when foreign countries, Germany in particular, feared their relationship with the mainland People's Republic of China would be severely damaged if they were to allow their companies to design subs for Taiwan.
That threatened Bush's entire Taiwanese sub program, and some speculated that the Navy might rethink its prior stance against allowing its nuclear yards, such as Newport News, to take an active role in the Taiwan sub program.
In recent months, however, the program has been revived. Belote said that five months ago, Northrop submitted several draft concepts for what the submarine would look like and how the company might approach the project.
In the last two weeks, he said, the No. 2 U.S. defense contractor provided formal comment to Navy questions about the proposed project. Among the issues: whether cost estimates for the Taiwanese submarines are realistic.
Meanwhile, Northrop is still trying to come up with partners who would help to build the ships, Belote said.
"We're talking about a submarine that hasn't been built in this country in decades," he said.
"We're either going to have to find a way to work together with the German company, or find another international partner, or build it ourselves."
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