THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, June 28, 1995 TAG: 9506280443
SECTION: FRONT PAGE: A4 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
DATELINE: WASHINGTON LENGTH: Medium: 68 lines
Key senators appeared to agree in principle Tuesday on a plan to let Newport News Shipbuilding and Electric Boat of Groton, Conn., divide the Navy's submarine business through the 1990s, then battle it out for contracts beginning in 2000.
Congressional sources said the tentative deal, first outlined by Virginia Sen. John W. Warner, would let Electric Boat complete work on a third and last sub in the Seawolf class, then build the lead ship in a new class that would begin production in 1998.
Newport News would be guaranteed the second ship in the new class, with construction to start in 1999. After that, the two yards would compete for contracts.
The seapower subcommittee of the Senate Armed Services Committee discussed the Warner plan and other shipbuilding issues in a private, 75-minute meeting Tuesday afternoon. Warner, a senior member, said the panel made progress toward resolving a battle between the two shipyards but he declined to discuss specifics.
``We're not supposed to talk, but I'm smiling,'' said Sen. Joseph I. Lieberman, D-Conn., who has been Electric Boat's most prominent advocate on the subcommittee. The full Armed Services Committee is to complete work later this week on the submarine issue and other elements of a defense spending plan for 1996; members indicated they'll have more to say when the job is done.
Electric Boat and the Navy argue that completion of the third Seawolf, at a cost of $1.5 billion, is vital to keeping the Groton yard in business. They also want at least the first ship in the post-Seawolf class directed to Electric Boat, which already is designing that boat.
Electric Boat builds only submarines, while the larger Newport News yard builds both subs and aircraft carriers for the Navy. Newport News is to deliver its last sub, the Cheyenne, next year.
While the loss of sub work does not threaten the Virginia yard's survival, officials say that unless they get more sub contracts they'll be forced to lay off workers and close production lines.
``We feel very positive about anything that will result in true competition, and this apparently has the potential for doing that,'' Mike Hatfield, a Newport News spokesman, said of Tuesday's developments.
President Clinton's budget proposal includes the money needed for the third Seawolf, along with about $700 million for preliminary work on the new sub class. But the House voted last month to stop the Seawolf program at two ships, let Electric Boat build the first ship in the post-Seawolf class and permit competition on subsequent subs.
That shifted the battle to the Senate, where the third Seawolf barely survived a floor vote two years ago. The boat's support apparently has increased since then, however, most notably in the person of Senate Majority Leader Bob Dole, a former opponent of completing the ship.
But while supporting Electric Boat on the Seawolf, Dole on Tuesday put himself in Newport News' camp on the competition issue. He believes post-Seawolf sub contracts should be competed, Dole said in a letter to Rep. Herbert H. Bateman of Newport News.
Unclear after Tuesday's meeting is how the senators intend to pay for the compromise plan, which calls for one more submarine during this decade than the Navy had projected. The ships, substantially smaller than the Seawolfs, are expected to cost about $1.5 billion apiece.
The most likely scenario, sources suggested, is for some sort of partial financing this year of the first two ships in the post-Seawolf class, with subsequent Congresses left to come up with the funds needed to complete the ships. by CNB