March 16, 2010

CONTINUED FROM THE FRONT PAGEDelegation, Navy discuss BIW's future Delegation tries to get handle on BIW's ffuture

MATT WICKENHEISER

— By

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20080723_BIW

Gordon Chibroski

Staff Writer

Navy officials held a series of meetings with Maine's congressional delegation Wednesday to explain the decision to cut the DDG 1000 next-generation destroyer program -- and to detail how Bath Iron Works would survive the abrupt change in shipbuilding plans.

The delegation announced Tuesday evening that the Navy would buy just two of the Zumwalt-class destroyers, now under construction at BIW and at Northrop Grumman Ship Systems in Pascagoula, Miss.

The Navy now plans to have the two yards build nine more ships in the current class of destroyer, the DDG 51, also known as the Arleigh Burke, instead of discontinuing that program.

Though the Navy hasn't officially confirmed plans to cut the DDG 1000 program, it appears that escalating costs and an almost-always uncertain future have finally caught up with the troubled ship class.

The DDG 1000, known previously as DD(X), called early on for at least 32 ships, a target that dropped to 11, and then to seven.

The Navy initially estimated costs at $1.2 billion to $1.4 billion for each ship -- not much more than an Arleigh Burke. Today, defense industry analysts peg the cost of building a DDG 1000 at about $3 billion.

''I don't think this thing was a shock because fundamentally the whole program was a big fat target for many years,'' said Jay Korman, defense analyst at The Avascent Group.

Maine Sens. Susan Collins and Olympia Snowe met with BIW President Dugan Shipway early Wednesday morning to determine what the shipyard needed for destroyer orders to keep its 5,880 employees working.

''Bath needs to construct two of the old-style destroyers each year in order to maintain its work force,'' said Collins, ''and it needs to be able to build seven of the nine, at least.''

Collins met with Navy Secretary Donald Winter and Chief of Naval Operations Gary Roughead following her meeting with Shipway.

''What I heard was disquieting. The Navy plans to give Bath the majority of the nine new destroyers, but at a rate of one a year and not as many as seven,'' said Collins. ''I'm very, very concerned about what the implications are going to be.''

Following his own meeting with Winter and Roughead, U.S. Rep. Tom Allen said he expects BIW to get most of the contracts for the DDG 51s. A number of details need to be nailed down, he said, including a clear plan from the Navy spelling out the exact number of ships, a timetable and other factors.

''This is essentially a change from a program with significant risks to an established program that we have been the lead yard on for years,'' said Allen. ''The DDG 51 program, which has been the base program for Bath Iron Works for years, is going to continue to be the base program for several more years.''

Snowe said BIW's work force has proved countless times that the yard can build ships more efficiently than any other yard, and on time.

''The men and women at the shipyard have achieved phenomenal success in efficiency and reducing the cost of building these ships,'' she said. ''The Navy recognizes that. They realize they have to maintain Bath; they need Bath for the future. Bath really is on the front lines.''

U.S. Rep. Mike Michaud said he was going to push the Navy to give two DDG 51 orders a year to BIW, and wants to see multiyear contracts to help stabilize the work force.

He said he's already talked with U.S. Rep. Gene Taylor, D-Miss., chairman of the House Armed Services' Seapower Subcommittee, toward that end.

The entire Maine delegation must come together for BIW's future, said Michaud.

''We're a small delegation, and we're going to have to work closely together in this matter,'' he said.

BIW currently has five Arleigh Burkes under construction, with the last scheduled for delivery in 2011.

Neither shipyard had been officially briefed as of Wednesday.

''One thing is for sure, we stand ready to build it, whatever it is,'' Nicholas Chabraja, CEO of General Dynamics, said Wednesday in a conference call. General Dynamics is BIW's parent company.

Northrop Grumman expressed a similar sentiment.

''We are positioned to support the U.S. Navy to execute the shipbuilding plan which they identify as best meeting their operational requirements and addressing the needs of our nation,'' spokeswoman Jerri Dickseski said in a statement.

According to Allen, the plan for BIW beyond the DDG 51 extension would likely involve construction of the next-generation cruiser, now called the CG(X), a ship under development. And the yard has some possibilities for smaller warships as well, he said.

The reasons for the Navy's decision are complex, and generally speculative.

Collins noted that the Navy was touting the need for the DDG 1000s as late as April, during a Senate Armed Services Seapower Committee hearing.

The Senate's Defense Authorization Bill included $2.6 billion for a third DDG 1000, to be built at BIW. But the program met resistance in the House, and the version of the bill coming out of the House Armed Services Committee didn't include funding for the third Zumwalt.

''There's no doubt that the Navy has been concerned about controlling costs on the DDG 1000 -- with a new class of ships, costs are always a concern,'' said Collins. ''When the House cut the funding, that, in my view, triggered a (Navy) reassessment of the program.

''It's up to the Navy to decide what it needs and what the military requirements are, but it's very difficult to understand, for me, what could have changed in just a few months' time between when the Navy strongly testified in favor of the DDG 1000 before the Senate Armed Services Committee in April versus where we are today.''

Allen said the House's action reflected Pentagon concerns about cost overruns and whether the ships are needed. And the Navy's needs have changed, he said.

''The DDG 1000 really doesn't meet the national security needs of the country,'' said Allen. ''In particular, given the evolution of anti-ship missiles around the globe, the Navy needs ships with missile defense capabilities, which the DDG 1000 lacks and the DDG 51 has.''

Snowe said Roughead and Winter told her that the change in direction was largely based on shifting war-fighting requirements in terms of possible threats from China and ''non-state actors'' in the Persian Gulf.

Allen said Winter told him the Navy had to decide whether to include a budget request for a fourth DDG 1000 in its Fiscal Year 2010 budget, and that also forced a decision on the program's future.

There has been an ongoing internal Navy debate over whether to continue the DDG 1000 program or scrap it, said Robert Work, a defense analyst Center for Strategic and Budgetary Assessments in Washington.

''I believe that some time ago, the Navy side came to the conclusion that the DDG 1000 was not the right ship to pursue,'' said Work. ''The guys who have to put together the Navy budget became increasingly worried about the impact that DDG 1000 would have on the entire Navy shipbuilding plan because of its uncertain costs.''

Loren Thompson, a defense analyst with the Lexington Institute, said the Navy can't afford the DDG 1000 but it can't afford to stop building ships, either.

Winslow Wheeler of the Center for Defense Information said the ship's demise was because of ''cost, complexity and irrelevance.''

''Please tell me what this thing would do today, if it were available in Iraq or Afghanistan?'' Wheeler said. ''Talk about something that's totally

out of control. This thing is a national embarrassment, that's what it is.''

The Associated Press contributed to this report.

Staff Writer Matt Wickenheiser can be contacted at 791-6316 or at:

mwickenheiser@pressherald.com

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