Now that China has surpassed the U.S. to become the world’s largest navy, lawmakers on both sides of the aisle agree that the service must make strides toward building a larger fleet. Reaching the goal, however, is hobbled by a domestic shipbuilding industry that has been in decline since the mid-1990s.
The Navy currently operates just four public shipyards tasked with maintaining the nuclear-powered fleet and roughly 20 private shipyards certified to build and maintain the service’s conventionally powered ships.
“Over the past 25 years, the number of Navy shipbuilding suppliers for nuclear-powered submarines and aircraft carriers dropped by more than two-thirds, and more than 65% of remaining suppliers are the single- or sole-source for their product,” Senate Armed Services Committee Chairman Jack Reed and ranking member, Sen. Jim Inhofe, recently wrote in the U.S. Naval Institute’s periodical Proceedings.
The shipbuilding industry’s decline dates back to the end of the Cold War, which led not only to a reduction in the size of the U.S. military but also the size of the supporting industrial base.
“Now that we’re in a new era of great power competition, and where we recognize that we have a growing threat from China and to a lesser extend, Russia, this consolidation of the industrial base has left us with a lack of scope and scale, in order to sort of dramatically increase shipbuilding, or for that matter dramatically increase ship repair,” said Jerry Hendrix, a retired Navy captain and vice president of Security Consulting firm Telemus Group.
Lawmakers and defense experts say rebuilding the industrial base will require the Navy’s consistent, long-term commitment to growing its fleet.
The Navy has been inching toward a 355-ship goal, up from its current fleet of 297 ships, under the 2018 National Defense Authorization Act that aimed, in part, to counter China‘s growing navy. Chief of Naval Operations Adm. Michael Gilday said at a recent House Armed Services Committee hearing that the 355-ship goal was predicated on an assumption of 4.1% top-line growth in the Navy budget over 10 years.
Faced with a proposed top-line that lags inflation, this year’s proposed budget called for decommissioning 15 ships and reducing procurement by close to 9%, resulting in a net decline. The result, according to Mr. Hendrix, is a signal to the industry that the Navy is not committed to long-term investment.
Mr. Hendrix said that shipbuilders like Huntington Ingalls Industries and Bath Iron Works, which currently can produce about one ship per year, could produce three times that amount in the 1980s and 1990s. Those companies, he said, are not incentivized to increase their output without a strong signal from the Navy that they will continue to invest.
“Neither one of those companies, in looking at the Navy’s budget, is going to make the investment in hiring additional trained workforce to maximize their production capacity,” he said. “There simply isn’t a strong enough signal from the government that the government is serious about growing.”
Messrs. Reed and Inhofe argue that predictability is key to growing and stabilizing the shipbuilding industry.
“It should be no surprise that without orders from the Navy, production lines will be halted, workers will be laid off, suppliers will not receive task orders, and shipyards will shrink or close,” they wrote. “This means the Navy may not be able to reconstitute a production line or reopen a shipyard if and when desired, thereby limiting the ability to build a fleet with the capability and capacity future Defense and Navy leaders will need to deter and defeat adversaries.”
The contraction of the shipbuilding industry after the Cold War impacted both new ship acquisition and the Navy’s ability to service its existing fleet. Brent Sadler, a retired Navy captain and senior fellow for naval warfare and advanced technology at The Heritage Foundation, said in a recent report that 75% of maintenance performed by the Navy’s public shipyards fell more than 30 days behind schedule.
In 2018, the Navy submitted a 20-year, $21 billion plan known as the Shipyard Infrastructure Optimization Plan (SIOP), to bring the four public shipyards up to speed servicing nuclear-powered aircraft carriers and submarines. But the roughly $1 billion per year is not guaranteed and funding holdups have a ripple effect delaying the upgrades.
The issue of predictability, in other words, not only impacts the industry’s ability to produce new ships but also to service the current ships in the fleet.
In response, a bipartisan group of legislators in both the House and Senate have introduced legislation that would fully fund the $21 billion SIOP through the Defense Production Act and allocate an additional $4 billion for construction new private construction and repair shipyards, in a one-time allocation through the Defense Production Act.
The “Supplying Help to Infrastructure in Ports, Yards, and America’s Repair Docs Act” or the “SHIPYARDS Act,” was first introduced in the Senate by Sen. Roger F. Wicker, Mississippi Republican. It has the support of 17 co-sponsors.
Rep. Robert Wittman, Virginia Republican, introduced a similar measure in the House with 15 co-sponsors.
“The importance of our naval assets to our national security and global stability has never been greater, which is why it is so critical that our defense industrial base has the capacity to build and maintain a larger fleet,” said Sen. Susan M. Collins, Maine Republican, one of the co-sponsors of the SHIPYARDS Act. “If we are serious about the United States competing against and deterring China, we have to consider our vital defense infrastructure.”
The legislation recently gained traction as part of Congress’ debate of President Biden’s American Jobs Plan, with many arguing that the investment in the shipyard infrastructure would align with the overall investment in U.S. jobs and infrastructure.
Still, a path forward remains unclear.
Several lawmakers in the Congressional Defense Spending Reduction Caucus, which is led by Rep. Barbara Lee, California Democrat, took aim at the legislation in a letter to Senate Majority Leader Sen. Chuck Schumer and Speaker of the House Rep. Nancy Pelosi.
“While we do not deny that in some cases the need for military infrastructure modernization exists, funding for these projects should be debated and determined through the regular defense budgeting process, as it is every year,” the lawmakers wrote in their letter. “Given that spending on the Pentagon is already at one of its highest levels since World War II, there should be ample funding within the Department’s budget to address any issues with military facilities by cutting waste and eliminating unnecessary weapons systems, without tapping into the administration’s infrastructure plan.”
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