Lack of specificity in navy shipbuilding plans irks the industry.

• Author: Tiron, Roxana

Frustrated by perpetual fluctuations in U.S. Navy shipbuilding budgets, industry leaders are asking for funding stability.

The Navy, for years, has said it would to nine new ships a year in its goal of a 300-vessel fleet and to keep key U.S. shipyards from going out of business. In recent months, however, the rhetoric has shifted away from numbers of ships toward vague notions of "capabilities."

Although the Navy has not backed away from its official requirement of 300 ships, the service already has forecast it will be down to 290 ships by 2006 before the numbers crawl back up again. Senior Navy officials, meanwhile, repeatedly have said that numbers tend to be artificial measures, and that the service intends to focus on what capabilities it needs to meet the nation's defense strategy, which may or may not require a 300-ship Navy.

This new approach is creating problems for shipbuilding executives, whose business is based entirely on numbers and who depend on predictable orders to keep a steady workforce and numerous subcontractors employed.

Philip Dur, chief executive officer of Northrop Grumman's Shipbuilding Systems, argued that the Navy's concept of "capabilities versus numbers" not only would hurt the service's operations, but decimate the industry.

If the Navy decides it cannot afford 300 ships, it should come up with a smaller number and set new ship construction plans based on that number, Dur said.

It also would be helpful, he added, if both the Navy and the Coast Guard jointly planned their long-term shipbuilding buys. "I do not know that either service takes the other service's capabilities into account," he said. If both services set their shipbuilding goals collectively, "then the shipbuilders can lay out an investment plan, a hiring plan [and] a training plan that was predicated on the assumption that we would competing for an X-number of platforms per year on a going-forward basis," Dur said.

Northrop Grumman has about 61 percent of the Navy's surface shipbuilding programs and shares the market with General Dynamics' Bath Iron Works. Northrop also is a prime contractor for the Coast Guard Deepwarer program.

If the Department of Defense can frame a requirement for ships and defend it, the industry would make the necessary adjustments to either scale down or ramp up, Dur told reporters during a recent tour of the company's shipyards in Louisiana and Mississippi.

The Navy faces a tough problem, because it has global...