DATE: Wednesday, April 30, 1997             TAG: 9704300489

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY DALE EISMAN, STAFF WRITER 

DATELINE: WASHINGTON                        LENGTH:   90 lines

SENATE LEADER PUSHES TO SHIFT SHIPYARD WORK TO MISSISSIPPI

A powerful lawmaker's determination to advance the cause of a home state shipyard threatens to transform the Navy's shipbuilding program for decades to come.

Senate Majority Leader Trent Lott is making a bare-knuckled push to secure more work for Ingalls Shipbuilding of Pascagoula, Miss. Essentially, he is demanding that the Navy compensate Ingalls, with substantial interest, for rejecting the yard's bid last year to build a new class of amphibious transport ships.

Analysts say Lott's demands could trigger changes to other Navy shipbuilding plans, particularly those that send work to the three yards that build most of the nation's surface ships. The impact of Lott's drive also could be felt at Newport News Shipbuilding, the service's sole supplier of aircraft carriers, which was Ingalls' partner in the unsuccessful bid for the amphibious transports.

A one-page memo delivered by Lott's staff to Pentagon officials earlier this month, and then leaked to reporters, details billions of dollars worth of Navy work that the majority leader wants directed to Ingalls. It has sent shock waves through the military bureaucracy and alarmed Congressional advocates for other shipyards.

Captioned ``How to make an unhappy man happy,'' the list includes at least two additional Arleigh Burke-class destroyers beyond the six the Navy already plans to build in Pascagoula.

One of those ships apparently would have to be taken away from Bath Iron Works in Maine, home state of former Sen. William S. Cohen, who became defense secretary in January. During his three terms in the Senate, Cohen closely guarded the interests of the Bath shipyard.

The memo says Lott also wants Ingalls to be designated the lead yard for design and construction of a series of ``transition ships'' leading to a next-generation destroyer. In addition, he wants the shipyard to be awarded a ``sole source'' contract to design ballistic missile defense systems for Navy cruisers and destroyers.

Industry analysts said that if fully implemented, the demands in Lott's memo would make Ingalls the nation's preeminent builder of surface ships. And because the Navy is on a tight budget for all shipbuilding programs, the direction of additional work to any yard could impact others, including Newport News Shipbuilding.

``This is going to ripple all through the Navy,'' predicted James R. McCaul, president of International Maritime Associates, a Washington-based shipyard consulting firm.

Though Lott's memo does not threaten reprisals should the Navy reject its suggestions, the majority leader's reputation for toughness has triggered widespread speculation on Captiol Hill that the service will pay a price if it defies him.

And ``what you're dealing with in Sen. Lott's memo is just the beginning,'' McCaul said, as rival yards call on their lawmakers to help them secure enough work to survive in a shrinking market.

Since 1991, the number of Navy ships under construction has dropped from 135 to 39, a 71 percent decline. And if current trends continue, Assistant Navy Secretary John W. Douglass warned last week, the number could drop into the low 20s over the next five years.

``Clearly, the Navy's shipbuilding requirements alone are not enough to sustain a healthy national shipbuilding industry,'' Douglass told a Senate subcommittee.

Against that backdrop, ``you've got some very powerful political figures working on behalf of their clients,'' McCaul observed. The players include Lott; House Appropriations Committee chairman Rep. Robert Livingston of Louisiana; Virginia Sen. John W. Warner, chairman of a Senate subcommittee overseeing shipbuilding programs, and such senior Democrats as Senators Edward M. Kennedy of Massachusetts and Joseph I. Lieberman of Connecticut.

In a hearing convened by Warner last week, Douglass, the Navy's top acquisition executive, said the service so far had no reason to alter plans to equally split a planned multi-year contract for 12 additional Arleigh Burke destroyers between Ingalls and Bath.

After the amphibious ship contract went to Bath and Avondale Industries of New Orleans in December, Douglass ordered a study of whether other work now bound for those yards should be redirected in order to preserve the overall shipbuilding industrial base. The review produced the decision to stay with six Arleigh Burke-class ships going to Bath and six to Ingalls.

But despite relentless questioning from Maine Sen. Olympia Snowe, Douglass refused to rule out the possibility that some of the Burke work might be reapportioned if Congress honors the Navy's request to add a 13th ship to the package.

Snowe apparently is willing to concede the 13th ship to Ingalls, should Congress agree to build it. But she signaled last week that she won't sit quietly if Ingalls and the Navy attempt to use the additional destroyer as an excuse to take work from Bath.

``What we don't want is a political solution,'' a top aide to Snowe said last week. ILLUSTRATION: Color photo

Senate Majority Leader Trent Lott.

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