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Navy proposes cutting future production of Bath Iron Works-built destroyers by 40%

General Dynamics Bath Iron Works (Michael Pelletier/Flickr)

The Department of Defense has submitted a proposal to the White House that would cut by about 40 percent the number of planned Arleigh Burke-class destroyers to be built for the Navy over a five-year period starting in late 2020, potentially impacting future work at Maine’s General Dynamics Bath Iron Works.

The Defense Department recommendation is referenced in a response memo from the White House Office of Management and Budget, dated Dec. 16, that was first reported on by defense industry trade publications Defense News and Breaking Defense. It says the Defense Department has recommended reducing the number of destroyers to be built over the five-year period from 12 ships to seven, a proposed shipbuilding budget cut of about $9.4 billion.

BIW and Huntington Ingalls Industries in Mississippi are the only two shipyards that bid on contracts to build the destroyers. BIW spokesman David Hench said the Bath shipyard typically does not comment on early-stage budget proposals such as the one to reduce funds for future Arleigh Burke-class ships.

The OMB memo pertains to what’s known as the Future Years Defense Program, which covers federal fiscal years 2021 through 2025, which begin Oct. 1, 2020 and end Sept. 30, 2025. It says the Navy has proposed buying a total of 42 warships over the five-year period at a cost of $111.8 billion, which would result in a reduction of 12 battle-force ships and $9.4 billion in funding for shipbuilding compared with President Trump’s fiscal year 2020 budget.

The Navy has indicated that it may reduce the shipbuilding budget even further to fund higher-priority efforts, according to the memo. It also says the Navy is considering decommissioning an additional 12 warships to save money, which would result in a 287-warship fleet in fiscal year 2025 – smaller than its existing fleet of 293 ships.

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“This is a significant potential impact on BIW, because the OMB memo implies the Navy is planning in its 2021 budget to cut the construction of 12 ships over the (five-year period) and retire another 12 early,” said defense industry analyst Bryan Clark, senior fellow at the Washington, D.C.-based Center for Strategic and Budgetary Assessments. “The memo also suggests the Navy is moving away from sustaining its previous plan to build two to three (Arleigh Burke-class destroyers) per year and instead buy one to two per year.”

Arleigh Burke-class guided-missile destroyers are the primary type of ship being produced by BIW. The most recently built destroyer, the future USS Daniel Inouye, was christened in June, making it the 37th ship of its class to be built by the shipyard.

The proposal to cut future production of Arleigh Burke-class destroyers is not the final word on the matter. A Navy spokesman told Defense News that the proposal was related to a budget that is still in development and has not been finalized. Ultimately, Congress decides how much money will be spent each year on Navy shipbuilding.

U.S. Sens. Susan Collins, a Republican, and Angus King, an independent, said in a joint statement that the proposal contained in the memo would signify an “abrupt reversal” from the Navy’s previously stated goal of growing its fleet.

“Congress determines the authorization and funding for Navy shipbuilding,” the senators said. “Through our positions on the Defense Appropriations Subcommittee and the Senate Armed Services Committee, we have worked hard to ensure that BIW, (Portsmouth Naval Shipyard), and other defense industry employers in Maine have the resources they need to continue to support our military. That work continues.”

The proposed shift to a smaller Navy fleet would represent a major change from the service’s most recent force structure assessment, which stated a goal of building the fleet up to a total of 355 ships by 2035. A Dec. 20 background report from the Congressional Research Service implied that BIW could be one of the biggest beneficiaries of a surge in Navy ship production.

“The areas where the Navy would likely have to adjust ‘tooling’ to answer demand for a larger fleet would likely be in Virginia-class attack submarines and large surface combatants, the DDG-51 (Arleigh Burke-class) guided missile destroyers – two ship classes likely to surge if the Navy gets funding to build to 355 ships,” it quoted Assistant Secretary of the Navy for Research, Development and Acquisition Sean Stackley as saying.

Stackley said maintaining a skilled workforce would be a key factor in reaching the 355-ship goal, both in terms of the builders in the yards and the critical supply-chain vendors who provide major equipment needed for ship construction. He suggested the shipbuilding surge would help to avoid budget cuts and other events that would force workforce layoffs.

News about the proposed reduction in future shipbuilding comes on the heels of the U.S. Senate’s passage of a defense spending bill for 2020 that includes $5.1 billion to build three Arleigh Burke-class destroyers for the Navy, which BIW can compete for contracts to build.

The Bath shipyard has ongoing contracts for 11 Arleigh Burke-class destroyers and is in the process of building them.

The defense spending bill also provides $156 million to fund the completion of the Zumwalt-class stealth destroyers, which BIW builds. In the early 2000s, the Navy hoped to build 32 highly advanced Zumwalt-class destroyers, which cost $7 billion per ship and are packed full of the latest technology and a redesigned body that makes them appear much smaller on radar.

The Navy later reduced its order to only three ships, citing concerns about cost overruns. The last in the class, the future USS Lyndon B. Johnson, is now under construction at BIW.

Collins and King noted that the recent spending bill also included a $390 million increase in advance procurement to BIW for a down payment on an additional ship next fiscal year, as well as funding for infrastructure investments that will allow the shipyard to prepare for future contracts.

“BIW is home to the best shipbuilders in the world, and this funding will help them stay competitive far into the future,” they said.

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© 2019 the Portland Press Herald