THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, March 17, 1995 TAG: 9503170560
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
DATELINE: WASHINGTON LENGTH: Medium: 85 lines
The Navy could buy all the submarines it needs and save taxpayers at least $2 billion in the bargain by shifting construction to Newport News Shipbuilding, a yard executive told a House subcommittee on Thursday.
In making the bid for the new generation of subs, yard president W.P. ``Bill'' Fricks challenged competitor Electric Boat Co. of Groton, Conn., as well as his biggest customer - the Navy. By sending all sub work to Groton and all aircraft-carrier work to Newport News, the service wants to make sure both yards stay open.
The $2 billion savings Fricks promised Thursday would jump to $3.5 billion, spread over six years, if Congress were to cancel construction of a third Seawolf submarine at Electric Boat. The Navy's 1996 budget proposal calls for a $1.5 billion outlay to complete that boat, the last in the Seawolf class.
Navy officials and an Electric Boat executive immediately questioned Fricks' claims as they joined him and two independent analysts at the subcommittee hearing. The Navy wants to do all future submarine construction at Electric Boat, cutting Newport News out of a chance to compete on a new generation of attack subs now slated to go into production in 1998.
Nora Slatkin, an assistant secretary of the Navy, said that because Electric Boat already is working on the design of the new sub, a decision to permit competition now would cost the Navy up to $400 million. Competition now also could delay construction for several years, she said.
``We're very interested - the Navy's always interested - in any proposal that will save the taxpayers' money,'' said Cmdr. Steve Pietropaoli, a Navy spokesman.
``We haven't seen any facts that would support'' Fricks' claim of a $2 billion savings, he added.
Prodded by the subcommittee's chairman, California Republican Duncan Hunter, Fricks promised to provide the panel with a detailed breakdown of the savings.
Newport News claims it can do the work more cheaply because it builds a variety of ships, for the Navy as well as private clients. Those customers share the fixed costs of the yard's workforce and equipment; Electric Boat can't match that because it builds only subs, Fricks argued.
Slatkin acknowledged that the decision to give all sub work to Electric Boat will add to the cost of new boats in the long run. The administration believes that's a proper investment, she said, because it permits the nation to maintain two nuclear-capable shipbuilders.
Hanging in the balance in the multi-billion-dollar debate, which will come to a head this summer when Congress adopts a new defense budget, is the future of Electric Boat. The Groton yard now employs more than 15,000 New Englanders but plans to cut its work force to around 6,000 by 1998 even if it gets the Seawolf and corners the market on future Navy subs.
Newport News has about 19,500 workers and is on a schedule to cut back to about 15,000, Fricks said.
Two independent analysts, Ron O'Rourke of the Congressional Research Service and Richard Davis of the General Accounting Office, said sufficient data to prove or refute Fricks' claims of savings are not publicly available.
Considering the money and jobs at stake, ``that is sad and tragic,'' responded Rep. Ronald V. Dellums, the National Security Committee's senior Democrat.
The importance of Thursday's hearing to Hampton Roads was underscored by the presence of three local congressmen, Republican Herbert H. Bateman and Democrat Norman Sisisky and Robert C. Scott. Only Sisisky sits on the subcommittee. Another nonmember, Rhode Island Democrat Patrick J. Kennedy, was on hand to look out for Electric Boat's interests.
Electric Boat, a division of General Dynamics, decided to limit itself to submarine construction in order to ``focus on what we do best,'' explained James E. Turner Jr., the yard's president.
In recent years, he added, the yard's workers have moved aggressively to cut costs and streamline designs for new subs. The first sub in the Seawolf line is on schedule for delivery next year, he said. The Seawolf has been plagued by cost overruns and the size of the class was slashed, though Turner insisted Thursday that the first ship will come in below a congressional cost ceiling.
Turner said his workers are moving aggressively to cut costs and streamline designs for the new subs. ``We have moved beyond the obsolete production programs of the past,'' he said.
Newport News is now building the last of the Los Angeles class of submarines, as well as all the Navy's carriers, but has no new orders for subs. by CNB