THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, June 30, 1995 TAG: 9506300460
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
DATELINE: WASHINGTON LENGTH: Medium: 80 lines
Newport News Shipbuilding appears poised to get at least a slice of the Navy's submarine business well into the 21st century, thanks to action Thursday afternoon in a U.S. Senate committee.
A compromise sub-building plan adopted by the Senate Armed Services Committee would funnel $110 million to the giant Peninsula yard next year for preliminary work on an attack submarine to be built beginning in 1999.
Newport News would get an additional $502 million in 1997 for more work on that sub, which is expected to cost about $1.5 billion when it's complete. And the Peninsula builder also would be guaranteed a chance to compete for contracts on subsequent subs.
The deal would promise even more business to Electric Boat of Groton, Conn., a Newport News rival and the Navy's preferred sub builder.
The General Dynamics subsidiary would get $1.5 billion next year to complete a third Seawolf-class sub and $704 million for design and other preliminary work on the first sub in a follow-on class to begin production in 1998.
But the guarantee of a ship in 1999 and competition for sub contracts beginning in 2000 is a major victory for Newport News, which contends it can build the ships for far less than the Connecticut yard can.
``This is one of the most satisfying days in my entire 17-year career in the Senate,'' said U.S. Sen. John W. Warner, a Virginia Republican who was the principal architect of the compromise. ``I really feel like I have delivered a major economic benefit for the state.''
Sen. Joseph I. Lieberman, Democrat of Connecticut and a member of the committee, told The Boston Globe: ``The Seawolf lives to fight another day. From the point of view of Electric Boat, if this package goes through, the yard in Groton will be secure and alive for a long time to come.''
Spokesmen for both shipyards also were pleased, if a bit more restrained.
``We certainly are encouraged that the Senate committee has apparently reaffirmed the need to compete the new attack submarine,'' said Mike Hatfield, a Newport News spokesman. ``But there is very much discussion yet to be had on the details of how this competition would be structured.''
Electric Boat spokesman Neil A. Ruenzel said executives in Groton were encouraged by reports that the committee plan ``includes full funding for the third Seawolf in 1996 and long lead funding for the new attack submarine to be built here at EB in '98.''
Ruenzel was less enthusiastic about the committee's proposal to guarantee Newport News a sub contract in 1999 but added that ``if this is the basis for a plan, it's something we can live with.''
The committee's plan, which faces a vote in the full Senate next month and must compete with a rival House plan later in the summer, was adopted after a contentious and high-profile lobbying campaign by the rival shipyards.
By spreading the financing of the new attack submarine over several years, the committee was able to give work to both yards without spending additional funds now. That feature could prove troublesome later, however, as subsequent Congresses will have to come up with the money to implement it.
``This particular approach involves a fairly high degree of vulnerability down the road,'' said Virginia Sen. Charles S. Robb.
But the deal is ``probably the only way that this situation could be resolved, given the political dynamics,'' Robb added. He would have preferred to have competition now on the new attack sub, the senator said.
Even Electric Boat supporters concede Newport News probably would win any competition today, and with its victory force Electric Boat out of business. While the Groton yard builds only subs, Newport News has contracts to build aircraft carriers for the Navy and assorted other ships for commercial customers. The broader base lets Newport News spread out its overhead costs, lowering the cost of individual ships.
``It will cost more money to keep two yards, but it will cost less than to award both subs to Groton,'' Robb said.
Another question mark is how the plan will be received in the House, which has voted to cancel all funding for the third Seawolf-class sub. But congressional sources suggested that with support from both shipbuilders and a commitment by House Speaker Newt Gingrich to back the third Seawolf, the Senate plan likely will be the framework for whatever sub program finally clears Congress later this summer. by CNB