By Geoff Fein
The Navy will look to move up production of its planned double-hulled oilers from 2017 to 2014 to provide stability and greater competition for the shipbuilding industry, according to the service’s acquisition chief.
Additionally, the service will invest $16 million to sustain education to support the maritime industry as well as infrastructure improvements to keep Louisiana shipyards competitive, following the July announcement from Northrop Grumman that it will close its Avondale facility upon completion of LPD-25, Sean Stackley, the Navy’s acquisition chief, told reporters Friday.
The Navy has proposed to accelerate production of the double-hulled fleet of oiler T-AO(X) from 2017 to 2014 in its fiscal year 2012 budget submission. This would enable the Navy to acquire the capability three years earlier than previously planned, he added.
The Navy and Northrop Grumman [NOC] are also working to make sure the last two LPDs slated for Avondale are built according to plan.
“For Avondale and the state of Louisiana, the Navy is committed to ensuring that Northrop Grumman efficiently and affordably completes LPD-23 and -25 in order to maintain a skilled workforce for any potential buyers,” Stackley said. “The Navy will work with Northrop Grumman and the State of Louisiana in preserving the current Avondale facilities and preserve plans to upgrade these facilities should a future owner compete for and win future Navy work.”
Avondale is a fully facilitized shipyard with 5,000 employees, Stackley said. “We need to understand the future of these skilled workers.”
In July, Wes Bush, Northrop Grumman’s president and CEO, said the company would consolidate its Gulf Coast ship work into its Pascagoula, Miss., facility and close out operations at its facility in Avondale in 2013 as work there winds down (Defense Daily, July 14).
Bush also announced at the time that Northrop Grumman is exploring strategic alternatives for its shipbuilding business that could include selling off the sector.
On Friday, Stackley said in the event Avondale transfers to a different owner the Navy is prepared to provide an agreement in accordance with the Shipbuilding Capabilities Preservation Act that would assist in making the yard more competitive for commercial shipbuilding work.
Additionally, Stackley noted that Northrop Grumman’s other shipyards–Ingalls in Pascagoula, Miss., and its nuclear shipyard in Newport News, Va.– likely wouldn’t be pursued by a foreign company.
“Newport News is so fundamental to our national defense that I do not foresee a foreign buyer,” he said.
These initiatives proposed by the Navy look to enhance the capability, affordability and competition for future shipbuilding programs including the second Littoral Combat Ship builder in 2012, T-AO(X) in 2014 and LSD(X) in 2017, he added.
“The acceleration of TAO(X) from FY ’17 to FY ’14 that is being announced today meets the full spirit and intent of the 1990 Oil Pollution Act while also addressing this particular industrial base concern, while also in concert with the CNO’s 313-ship force structure requirement,” Stackley said. “To be clear, absolutely clear, we will compete this program and we are in the process of kicking off the Analysis of Alternatives to frame those requirements.”
The Navy has 19 oilers and Stackley said the service seeks to replace them at a rate of one-to-one.
The plan is to begin replacing the current oilers at one a year beginning in FY ’14, Stackley said.
He also made it clear that other shipyards will likely bid for the T-AO(X) work including General Dynamics‘ [GD] NASSCO yard in San Diego.
Moving the timeline for T-AO(X) would not only be beneficial to NASSCO but to a potential future buyer of Avondale, Stackley added.
If after everything the Navy has done, Avondale were still to close, Stackley noted it would have a significant impact on the future of Navy auxiliary shipbuilding competition.
NASSCO and Avondale are the only yards competing to build auxiliary ships, he noted. Closure of Avondale would result in the Navy losing that competition and everything that comes with it.
Stackley’s comments on Friday follow those made last week by Navy Secretary Ray Mabus to Louisiana lawmakers that the service will do what it can to maintain the state’s skilled work force.
Stackley noted it is critical that the nation maintain a healthy shipbuilding industrial base that can meet the needs of the Navy as the service ramps up construction this decade.
“A skilled workforce, modern facilities, workload and competition are the cornerstones of all affordability in shipbuilding,” he said.
The three initiatives Stackley highlighted Friday are meant to support the shipbuilding industrial base in Louisiana, to help preserve the skilled workforce, to improve shipbuilding facilities across the Gulf state and to provide greater opportunity to compete for future Navy work.
“If we can maintain the skilled workforce, it’s in everyone’s best interest,” he added.
The Navy will invest up to $10 million to help sustain apprentice training and higher education in support of the maritime industry. The service will work with the University of New Orleans, New Orleans Metal Trades Association and Delgado Community College.
The Navy will also use Katrina funds to award contracts totaling $6 million toward infrastructure improvements at Textron [TXT], Swiftship and MetalShark shipbuilding facilities to increase productivity and competitiveness at those shipyards, Stackley said.