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Navy Secretary Winter Tells Industry To Look Overseas for Best Practices

By PETER ATKINSON, Deputy Editor and OTTO KREISHER, Special Correspondent

Navy Secretary Donald C. Winter presented what he described as "an assessment of the landscape of the Navy-industry partnership" during his keynote speech at the Secretary of the Navy Luncheon at the conclusion of the Navy League's Sea-Air-Space exposition March 20.

Winter challenged the U.S. shipbuilding industry to match the ongoing changes the Navy is making to shore up its acquisition practices through better oversight, cooperation and the increased engagement of senior service leadership in the hopes of avoiding the cost increases and production delays that have plagued recent programs, notably the Littoral Combat Ship.

Warning that it would be "neither prudent nor wise" to expect the current level of budget support for shipbuilding programs under "future administrations and Congresses," he urged U.S. shipbuilders to strive for greater efficiency in their development and production processes as a means of improving affordability and deliverability.

Describing shipbuilding as "fundamentally different" than other industries providing equipment to the U.S. military - aircraft, land vehicles, etc., - in that "the world-class standard is typically found overseas," Winter said. "U.S. shipbuilders need to adapt the best practices of the world's shipbuilders."

The Navy secretary cited as examples some of technological and production process improvements he'd seen during tours of foreign shipyards in the last two years, including the common design principles and construction techniques that allowed Danish shipyards to remain competitive in the face of high labor costs, and the highly automated production lines at VT Shipyard in England.

"The ability to manage costs in shipbuilding will determine how many ships we build and what our fleet will look like in the future," Winter said. "I don't want our leaders to decide that we cannot afford a modern Navy."

Though noting "there is no silver bullet, no single-point solution," Winter said he remained confident that "together we can build a 313-ship Navy" with an affordable budget for the Navy and a reasonable return on investment to industry.

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Speaking to reporters after his speech, Winter said his comments about the superior technology used in some foreign shipyards was not a signal that the Navy might buy its ships overseas.

"That will never happen," he said. But, he repeated his view that U.S. yards needed to invest in those kind of efficient production technologies to help the Navy buy the ships it needs.

"We need to make significant improvements" in efficiency, Winter said. After 40 years in aerospace production, in which American manufacturers led the world, he said "it pains me" to see so much better processes overseas.

Asked about the demands by Rep. Gene Taylor, D-Miss., chairman of the House Armed Services Seapower subcommittee, that future surface combatants be nuclear powered, Winter said "any factor that increases the cost of ships will increase the difficulty" in meeting the goal of a 313-ship fleet. He would not provide a figure on what nuclear power would add to the cost of future ships, noting that a study is being conducted to weigh up-front construction costs against possible life-cycle savings due to the soaring cost of oil.

However, Winter noted that, unlike private industry that could get a loan for upfront costs on the basis of a break-even point somewhere in the future, the services have to rely on annual funding.