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April 7, 2009

DDG-51 restart and DDG-1000 cut a prepackaged deal?

Some of the defense budget cuts proposed yesterday by Secretary of Defense Robert Gates are likely to face fierce Congressional opposition. And it is Congress that has the last word, as was made clear yesterday by House Armed Services Committee Chairman Ike Skelton (D-MO) who released the following statement:

"Secretary Gates has set out major changes to the defense budget based on changed assumptions about the wars our military must be prepared to fight. This is a good faith effort, and I appreciate the hard work and thoughtful consideration Secretary Gates and his staff put into these proposals.

"However, the buck stops with Congress, which has the critical Constitutional responsibility to decide whether to support these proposals. In the weeks ahead, my colleagues and I will carefully consider these proposals and look forward to working with Secretary Gates and Admiral Mullen as we prepare the Fiscal Year 2010 defense authorization act."

So far as Navy shipbuilding is concerned, what might once have seemed a tough sell for Secretary Gates might not be.

Today, Rep. Gene Taylor (D. Miss.) Chairman of the Armed Services Committee's Subcommittee on Seapower and Expeditionary Forces provided some background on plans to cut production of the DDG-1000 program and restart the DDG-51. Rep. Taylorsays that it was the CNO, Admiral Gary Roughead, who proposed the switch "in order to meet the Navy's requirement for a 313 ship fleet."

The Navy, says Rep. Taylor, has been working with Northrop Grumman and General Dynamics, the two builders of the Navy's destroyer fleet, to reach an agreement on future surface combatant workload within the shipbuilding industry.

Under the agreement, the Navy would restart construction of DDG-51s at Northrop Grumman's Ingalls shipyard in Pascagoula, and General Dynamics would build three DDG-1000 Zumwalt class destroyers at its shipyard in Bath, Maine.

The Navy's decision to reduce the number of Zumwalts is based on affordability and the ship's vulnerability to emerging threats, says Rep. Taylor, adding that the DDG-1000 is estimated to cost $5 billion per ship and the cost per DDG-51 is estimated to be $1.3 billion. Therefore, the Navy could get three DDG-51s for the cost of one DDG-1000.

The Navy will realize additional cost savings through economies of scale in constructing larger numbers of DDG-51s in series production, rather than three or less DDG-1000s, notes Rep. Taylor. The Navy will also realize savings in leveraging its existing training and logistics pipelines for its current and future DDG-51s.

"The reason that this is good news for the state of Mississippi," says Rep. Taylor, "is that Northrop Grumman will begin building the first two DDG-51 restart ships beginning in 2010 and they will continue building these ships over the next decade. Whereas, General Dynamics will build two or three DDG-1000s at most, stop production, and then restart their DDG-51 line."

"I think Northrop Grumman made the right decision," says Rep. Taylor. "They will continue to build the world's most capable destroyer at a fair price to our citizens for many years to come. By agreeing to the DDG-1000-DDG-51 swap, Northrop Grumman is aligned with where the Navy sees its future."

Meantime, Senator Susan Collins, (R. Me.) is putting a slightly different spin on things.

Noting that "Bath Iron Works is slated to build all three DDG-1000 Zumwalt-class destroyers according to [proposals announced by] Secretary of Defense Robert Gates, she said: "This is incredibly welcome news for Maine and is a testament to the highly skilled, hard-working men and women at Bath Iron Works."

"My goal has always been to help ensure a steady work flow at BIW and a strong industrial base for shipbuilding," she declared. "That is why I worked hard to convince the President and the Navy to include full funding for a third DDG-1000 in the budget, and I am delighted that they have agreed. The Pentagon's preference to have BIW build all three of the DDG-1000's demonstrates confidence in BIW and should also stabilize production costs for the Navy."

"While this strategy depends on the completion of negotiations between BIW and Northrop Grumman as well as congressional approval, this budget is a giant step toward a stable workload for BIW," said Senator Collins.

As a result of Senator Collins' work, says her office, the Senate Armed Services Committee and the Senate Appropriations Committee demonstrated strong support for the procurement of the third DDG-1000. However, as the result of a lack of support on the House Armed Services Committee, the FY 09 Department of Defense Appropriations Act only provided partial funding for the third ship. Just last month, Senator Collins wrote to Defense Secretary Robert Gates reiterating her strong support for full funding of the third DDG-1000.

Whether the Navy winds up building three Zumwalts or just one, BIW is now looking further ahead and planning to compete for the Coast Guard's upcoming Offshore Patrol Cutter. Today, Senator Collins was touring BIW with Coast Guard Commandant Admiral Thad Allen.

Meantime, among the biggest losers from a curtailment of the Zumwalt program would be Raytheon. It has emerged that it is funding a lot of promotional efforts aimed at keeping the DDG-1000 alive, including the website Zumwaltfacts.info.


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