Shipyards Not At Risk, Despite DoD Warning It Needs $$ To Save Them

A DoD paper for Congress suggests COVID could shut down shipyards, but Navy officials and analysts say there is little risk.

By PAUL MCLEARYon August 12, 2020 at 4:04 PM

WASHINGTON: A top Navy official today tried to clarify a Pentagon information paper leaked last week which warned that “at least one” of the seven shipyards that churns out ships for the Navy could close unless Congress handed over billions more to the service.

As part of an $11 billion package the Pentagon is requesting from Congress to mitigate the impact of COVID-19 on the defense industry, the Navy is requesting $4.7 billion in part to ward off the chances “at least one” of the big seven shipyards shutting down. The paper, which has been delivered to lawmakers on Capitol Hill, also warned of over 100,000 lost jobs across shipyards and factories that make aircraft and other weapons for the military.

But the Navy's top acquisition executive told reporters today that the wording continued in the paper might leave too much out.

“The words could be taken out of context,” James Geurts said. “There probably should be the word ‘temporarily' in there.” If a shipyard started to see a significant portion of its workforce test positive for COVID, “we might have to temporarily close down the shipyard for a period of time until we got it under control. Not that we would have to shut down a shipyard permanently.”

The memo contains no such caveats, however. It flatly states a shipyard could close unless the Navy gets the funding boost.

Asked where the paper came from, and who it was intended for, DoD spokesman Christopher Sherwood told me via email the department “provided informational material to our oversight committees when asked about the impacts COVID-19 has had on the Defense Industrial Base and our suppliers.”

The Navy has gone to great lengths to help its shipyards weather the COVID storm, pumping $130 billion into its supplier base this year in upfront payments, spending that is 25% higher than at this point last year.

But some yards have experienced pain keeping to schedule, with uncertain futures ahead as the Navy looks to change its fleet mix in the coming years to better compete with China and Russia.

Mark Cancian, a defense expert at the Center for Strategic and International Studies, acknowledged that all Navy shipyards “have a backlog of work, including Bath Iron Works, which was the subject of speculation about closing.” Bath, already six months behind on building seven destroyers in dock, is stumbling to the conclusion of a six-week strike by 4,300 shipbuilders which will likely make those delays even longer.

Likewise, the Mississippi-based Austal is looking at the end of the road for its contract to build dozens of aluminum Littoral Combat Ships in a few years, which would likely mark the end of the Navy's interest in buying aluminum hulls. That shipyard “would be at more risk” Cancian said.

Neither shipyard is any worse off than the others due to COVID-related shutdowns, however, making the Pentagon's point that yards could shut and require COVID relief funds to keep going, an argument that finds few adherents.

There's little doubt COVID is slowing down both ship construction and repair, “but that doesn't mean the Navy doesn't need the ships anymore,” said Bryan Clark of the Hudson Institute. “It just means everything takes longer, but it doesn't necessarily mean that the shipyards are going to close.”

Clark noted that while Bath is in a bad spot with delays to its destroyer work that will be compounded by the strike, the Navy still needs it to build destroyers in the future, since relying on Huntington Ingalls as the nation's only shipyard that can build the ships is too risky.

Add to that the likelihood that the Navy will move toward buying more numerous small cruisers, unmanned ships, and smaller platforms for Marines and away from small numbers of large destroyers and amphibious ships in the future, means there will be more contracts, and work to go around later this decade.

The service is still on track to deliver its much-delayed 30 year shipbuilding plan and force structure assessment this fall, in which several options like a new class of destroyers, a new class of smaller frigates, and smaller hospital ships will all likely find their way into the plans.

https://breakingdefense.com/2020/08/shipyards-not-at-risk-despite-dod-warning-it-needs-money-to-save-them/