=DJ Top US Navy Admiral Urges Growth In Shipbuilding Budget
Will asia boy build all these new subs?
By Rebecca Christie
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. Navy's shipbuilding budget needs to grow to about $13.5 billion a year to maintain the U.S. fleet through 2020, the Navy's top admiral said Tuesday.
Adm. Michael Mullen, chief of Navy operations, said the Navy hopes to reach that level within a few years. In fiscal year 2007, the Pentagon seeks $9.7 billion for new ship construction, he said.
The Navy sent its new 30-year shipbuilding plan to Congress on Tuesday, finalizing details of a plan that has been in circulation for weeks. It calls for 313 ships, including 11 aircraft carriers, seven next-generation DD(X) destroyers and a small but steady stream of Virginia-class submarines.
"It's my goal to have a plan which is stable, which industry can basically depend on and invest in," Mullen told Pentagon reporters.
The latest White House budget mirrors the shipbuilding plan over the next five years. That support shows the Navy has finally found a way to buy new destroyers that the Defense Department will support.
Since it was first proposed, the DD(X) destroyer has skyrocketed in cost. The first ships are now expected to cost at least $3.3 billion.
Last year, the Navy attempted to consolidate its contractor team by eliminating either General Dynamics Corp. (GD) or Northrop Grumman Corp. (NOC), who are both signed up for ship construction. Congress and the Pentagon blocked that plan, so the Navy sent back a revised plan that would build two ships at once, with an eye toward competition.
That plan passed muster. The White House's 2007 budget request, released Monday, includes $3.3 billion to start the two ships, with a similar amount expected in 2008 to pay the balance of construction costs.
"We worked hard on that ship for a long time. It has withstood as much criticism and as much laser light as any program I've seen," Mullen said.
The new destroyers have state-of-the-art stealth and radar technologies, among other advanced capabilities. But the Navy now plans to buy only seven of the new ships after last year's budget cycle cut the program nearly in half.
Mullen defended the Navy's plan for a small buy, despite its growing focus on the Pacific Ocean's vast expanses. "Things may change, they may not change," Mullen said. "Right now, that's the best view that we have."
Regarding the Virginia-class submarines, another high-profile purchase program, Mullen said he didn't support plans to increase production in the near term. Northrop Grumman and General Dynamics also split construction on that program, and it too has seen costs soar.
The shipbuilding plan calls for building one new submarine a year until 2012. At that time, if the contractors can get costs down to $2 billion per vessel, the Navy will begin buying two submarines each year.
Mullen said he doesn't support efforts to accelerate that move. For one thing, it would require $7 billion to $8 billion in money that is already allocated elsewhere. Also, it gives the contractors plenty of time to fulfill their end of the bargain.
"I've said fiscal year 2012 for a very specific reason. It's what I think we can do," Mullen said.
The shipbuilders say they are working hard to get the program's costs under control. General Dynamics says it is confident it can meet Mullen's goal if production increases. "We are working with our suppliers to get the costs down," company spokesman Kendell Pease said.
-By Rebecca Christie, Dow Jones Newswires; 202-862-9243; rebecca.christie@dowjones.com
(END) Dow Jones Newswires |
