Major Submarine Contractor Drops Navy Missile Tube Biz

The disclosure comes as the Pentagon has been looking for ways to backstop key parts of its industrial base as supply chains slowed due to the COVID epidemic.

By PAUL MCLEARY

WASHINGTON: One of the Navy's primary suppliers of missile tubes for its nuclear submarines is planning to walk away from the military business, a move that will drop the number of domestic companies capable of doing the work to two at a time when the service is in a scramble to ramp up its sub-building efforts.

BWX Technologies President Rex Geveden says that the company is “not likely to pursue” any more Navy business and will repurpose a factory in Indiana that makes the components once the next set of deliveries of missile tubes wrap up in 2022. The Navy work “just doesn't have the margin profile that we want to see in the business,” Geveden said in a Tuesday investor call.

BWX was slated to build the missile tubes for the new Columbia subs, but prime contractor Electric Boat says it has options to replace the company in coming years.

The company “works with multiple suppliers to ensure we can meet the Navy's schedule requirements on these important programs,” a spokesperson emailed. “These are Babcock Marine, BAE Systems, Precision Custom Components and BWX Technologies. BWX Technologies will complete all currently contracted work for EB by 2022.”

This comes as the Pentagon has been looking for ways to bolster key parts of its industrial base as communities shut down and workers are told not to report to work or take time off, due to the COVID epidemic.

In a call with reporters late last month, Navy acquisition chief James Geurts acknowledged that the service is deeply worried that such closures and slowdowns could have wide-ranging impacts on shipbuilding. “I am absolutely interested in ensuring that we don't lose large chunks of the industrial base,” he said. “Restarting an industrial base that you lose is really hard, really painful, and takes a long time. We are absolutely focused on ensuring we do not lose an industrial base because we don't have the time or resources to re-generate it later when we need it.”

The winnowing of such a key part of the industrial base will place more pressure on the handful of other companies who can do this sort of work, something to which Pentagon leadership is particularly sensitive.

Overall, the Navy plans to buy 12 Columbia-class submarines between 2021 and 2035, with 10 of those coming 2026 and after. In the near-term, it plans two Virginia-class subs per year between 2021 and 2026, meaning shipyards will have to pump out two to four submarines a year in the mid-2020s.

The new Columbia submarines will begin being delivered to the Navy in 2030, just in time to begin replacing the Cold War-era Ohio-class subs as the Navy's leg of the nation's nuclear triad. The subs will carry 70 percent of the nation's stockpile of warheads allowed by the New Start treaty with Russia.

Falling in to replace the Ohio's on time would be a critical failure for the nation's nuclear triad, as the aging ships will have next to no life left in them by the end of the decade, and leaving the sea leg of the nuclear enterprise in some jeopardy.

Babcock Marine is a UK-based company, but does work on some components that are used for both the Columbia program and the UK's Dreadnaught submarines, which shares similar missile tubes with the Columbia effort.

In 2018, Virginia-based BWX was forced to pay $27 million to fix welding problems on the Columbia tubes, after issues were found on a total of 44 tubes. So far, 21 of those have been fixed and 11 delivered to the Navy.

Navy officials have closely tied the modernizing of the current Virginia-class subs with the building of new Columbia's, warning that since they share a base of companies who can make precision parts for nuclear-powered submarines. So any problem with one program will have knock-on effects to the other. Geurts and others have said the Navy would prioritize the health of the Columbia effort over Virginia if they had to.

If the House of Representatives gets its way, however, billions more will flow into the Virginia program than the White House has called for. Last week, the House voted to fund the construction of a second Virginia-class submarine in the 2021 budget request, after the White House dropped the planned buy to one submarine in its submission.

The push was led by Rep. Joe Courtney, chairman of the Seapower Subcommittee who represents the Connecticut district that's home to Electric Boat. The bill now includes $6.8 billion to produce two Virginia-class attack submarines, approximately $2.5 billion more than the White House's own request, and $2.2 billion more than the Senate's.

“The budget request we received from the White House flew in the face of testimony that we've heard from Navy leaders, experts, and combatant commanders,” Courtney said in a statement. “It requested the fewest ships in over a decade, and it eliminated construction of the second Virginia-class submarine in 2021—a vessel that the Navy quickly listed as its most important unfunded priority in 2021.”

https://breakingdefense.com/2020/08/major-submarine-contractor-drops-navy-missile-tube-biz