Building Ships in Foreign Nations Threatened Nassco
A Pentagon proposal that would have torpedoed a major portion of a local shipyard’s business died a quick death last week.
Facing congressional opposition, the Pentagon said it would withdraw a plan that would have opened the door for foreign shipyards to build Navy support vessels, according to a report published in the Washington Times.
The idea “would have very devastating consequences on U.S. shipbuilders , the few of us that remain,” said Jim Scott, vice president of marketing at National Steel and Shipbuilding Co.
Navy support ship construction makes up a significant part of Nassco’s business. The proposal could have put the company out of the new construction business, Scott acknowledged.
Nassco is a wholly owned subsidiary of General Dynamics of Falls Church, Va.
“Their lifeblood is Navy auxiliary ships,” said Cynthia L. Brown, president of the American Shipbuilding Association in Washington, D.C. She added the proposal would have also hit hard at Avondale Industries, Inc. of New Orleans, which specializes in the same thing.
Four other commercial U.S. shipyards capable of designing and building Navy ships would have been affected as well, she said, since there is “so much teaming and subcontracting” between them all.
The proposal would not have affected combat ship construction. It would have waived U.S. manufacturing requirements for strategic sealift ships, special support ships, research ships, Coast Guard vessels and combat logistics ships.
The idea put thousands of San Diego jobs as well as national security at risk, said Rep. Duncan Hunter, R-El Cajon, who worked to kill the proposal.
“With the Pentagon building on average only six ships per year for the past eight years, our six remaining shipyards are operating well below their production capability,” Hunter wrote in a letter to Sen. John Warner, R-Virginia, chairman of the Senate Committee on Armed Services.
“Allowing naval support vessels to be built overseas would likely result in additional shipyard clo-sures. I believe a further erosion of our shipbuilding industrial base is a clear threat to our national security,” he wrote.
Sending work overseas would have created a “death spiral” for American shipyards, Hunter said in a subsequent interview. The shipyards would have less work yet the same fixed costs, and as a result, remaining ships would be more expensive, he said.
Apparently someone in the Pentagon thought the government could save money by sending Navy supply ship work overseas, he said.
Nassco’s Scott said the proposal could have affected a large Navy contract the shipyard is pursuing for construction of the Navy’s new TADCX auxiliary dry cargo carriers. Nassco was scheduled to submit its bid for the contract Friday.
Scott declined to comment on how Nassco proposes to divide the work with other shipyards, and how much of the $4 billion contract would go to Nassco if it is successful in getting it. The contract, for an initial ship with 11 options, calls for deliveries through 2008.
Had it passed during the 1990s, the foreign-manufacture proposal could have shut Nassco down, said the shipbuilding association’s Brown.
Brown credited Hunter for his work killing the measure. The Washington Times also said Sen. Charles S. Robb, D-Virginia, and Rep. David Vitter, R-Louisiana, wrote Secretary of Defense William S. Cohen to urge him to kill the idea.
Hunter wrote the chairmen of the House and Senate armed services committees last week, asking for a statement in the pending defense authorization bill affirming U.S. manufacture of military ships. He also asked for a statement saying Congress opposes the Pentagon moving forward with the idea.
The foreign-manufacture proposal would have needed approval in separate legislation, and may have been part of the 2002 federal budget.
Hunter’s office will still seek the addition to the upcoming authorization bill even though the Pentagon has withdrawn the idea, said Hunter Press Secretary Michael Harrison.
