THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Friday, January 10, 1997 TAG: 9701100491
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
DATELINE: WASHINGTON LENGTH: 82 lines
President Clinton has decided to seek a restructuring of the Navy's shipbuilding program that would slow the pace of submarine construction but solidify the administration's commitment to another aircraft carrier, congressional sources suggested Thursday.
A senior lawmaker predicted the plan, which would protect thousands of jobs at Newport News Shipbuilding well into the next century, will be well-received on Capitol Hill once executives of the shipyard and a competing builder in Connecticut have given it their final approval.
The plan hinges on an unprecedented ``team building'' arrangement between Newport News and Electric Boat of Groton, Conn., for submarine construction. Sources said the two yards, bitter longtime rivals, have agreed in principle to a modular construction approach that would have each yard building sections of each ship in a new line of attack subs.
Previously, each yard was to build two subs independently between 1998 and 2001, with competition for subsequent contracts to begin after 2002. The new plan stretches the schedule for those four initial subs over five years.
``I'm confident (Congress) will accept it,'' if the details are finalized by the yards and both Clinton and Defense Secretary-designate William Cohen make clear their endorsement, said U.S. Sen. John W. Warner, R-Va.
Warner; his Democratic counterpart, Sen. Charles S. Robb; Republican Rep. Herbert H. Bateman and Democratic Rep. Robert C. Scott of Newport News were briefed on the proposal late Thursday by Deputy Defense Secretary John White and Navy Secretary John H. Dalton. The Pentagon also was outlining the program to lawmakers from New England who have been advocates for Electric Boat.
Bateman said White offered assurances that the administration will request funds this year for research and technology development earmarked to a new carrier. Though it is expected to be small, that appropriation would put Clinton in line behind a construction schedule calling for a $1 billion outlay in 2000 and a $3 billion to $4 billion final payment in 2002.
The appropriation in 2000 would be for the carrier's nuclear reactor and other components that must be purchased before actual construction of the ship begins.
Carriers are the backbone of Newport News' business. The yard and its 18,000 employees are working on two of the ships now, the Harry S. Truman and the Ronald Reagan. With the latter ship expected to be commissioned around 2002, yard executives are eager to get on track for another carrier now.
Scott and Bateman cast Clinton's commitment to the carrier as critical to securing their support for any change in the submarine program. Robb agreed that the carrier is vital, but said he still wonders if the Pentagon might save even more on its new subs by doing all the work on them at one yard.
With less than one new contract per year, ``there's scarcely enough work for one yard,'' Robb said.
Newport News officials have asserted for years that they can build subs more cheaply than can Electric Boat. The Virginia yard claimed in 1995 that it could beat its rival's overall cost for the 30 ships the Pentagon ultimately intends to buy by $10 billion.
Each sub is now slated to cost about $1.5 billion.
The modular construction approach being discussed reportedly would give the largest share of the submarine program to Electric Boat, which builds only subs, while Newport News would remain the Navy's biggest overall shipbuilder by virtue of its work on carriers.
Though the yards have not reached a final agreement on the team arrangement, sources said Newport News President Bill Fricks, and his counterpart at Electric Boat, John Welch, have signed a memorandum supporting the concept and agreeing that it would generate substantial savings on the subs.
There have been varying estimates on the scope of those savings since word of negotiations between the yards and the Navy began circulating last month. One knowledgeable source said Thursday that the plan endorsed by the Pentagon would produce the four initial ships for about $700 million less than current estimates.
``The budget is extremely tight,'' Scott noted after Thursday's briefing. Navy officials have been warning for more than a year that if Congress continued to insist on a one-sub-per-year schedule through 2001, the service would not have money for other needed ships, including the carrier, a new missile-bearing ``arsenal ship'' and a new generation of amphibious transports, the LPD-17.
The Fricks and Welch memo, one source said, stressed that the yards' involvement in any team approach would require a commitment by the Pentagon to four subs over the next few years. Previously, the Navy had been pressing for a longer delay in one of the subs, effectively reducing the initial buy to three ships.
KEYWORDS: NAVAL SHIPYARDS SUBMARINE CONSTRUCTION