DoD Buzz

The next big carrier question

Virginians have been fighting for years to keep their aircraft carriers in Hampton Roads, and now they're fighting to keep them in existence. As Peter Frost of the Daily Press reported this week, the mega-shipyard that builds the nuclear-powered giants is doing all right these days; it's turning a profit, as compared with the loss it posted this time last year. But all that could change if the Navy, DoD, Congress and the Obama administration decide to delay construction on a planned ship, the new USS John F. Kennedy, company officials warn.

Wrote Frost:

[Huntington-Ingalls Industries boss Mike] Petters also addressed the looming uncertainty over the Navy's future budgets, which includes consideration of delaying the purchase of the John F. Kennedy aircraft carrier by up to two years and altering its long-term carrier construction plan. Each time a multibillion-dollar carrier comes up for budget approval, the program tends "to come under a lot of scrutiny … and the Kennedy is no different," he said.

Petters warned that such a delay would have a wide-ranging impact on the Navy, the 20,000-worker Newport News shipyard and its stable of suppliers. "Extending the carrier-build cycle to six or seven years not only increases the overall cost of the ship but would also have a severe and far-reaching impact nationwide," he said, noting that the shipyard buys up to $3 billion of materials from suppliers across the country.

The Navy remains in closely held budget deliberations, and likely won't make a final decision on what to do with regard to the Kennedy until later this year.

The Navy is in a bind here. It needs and wants the new ship, but you can only stretch out a project even this major by so much. So should it absorb the upfront budget hit of building the new JFK under a normal schedule and try to make sacrifices elsewhere, or should it try to get the savings in the near term but risk ultimately paying more under a prolonged, French-style shipbuilding cycle? You can almost hear the admiral saying, "well we're looking at all our options here, and we'd like to wait for the results of the comprehensive strategic review before we make any final decisions" -- but that doesn't change the fact that the Navy's current ships will eventually wear out, and that it needs to keep the Newport News shipyard in business and functioning well.

Bottom line: The odds seem good that the Navy could opt for a delay. Service officials may bet that Congress has no choice but to fund new aircraft carriers no matter how much they cost or how long they take, given their importance to U.S. power projection. In the meantime, the Navy can free up cash for near-term priorities and cross its fingers that the nation's fiscal health improves.

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