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Another U.S. Shipyard to Close?

Posted By Claude Berube On July 16, 2010 @ 4:00 pm In Security | Comments Disabled

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Can it get any worse for the workers of Louisiana? In just a few short years, Hurricane Katrina devastated New Orleans and the region; BP’s oil spill wrecked havoc with the fishing and tourism industry; and the government’s drilling moratorium [2] is about to impact a significant segment of the Louisiana economy. Adding to all this, earlier this week Northrop Grumman stated that it would close its Avondale shipyard [3] in Louisiana.

In the past decade, the Avondale shipyard built the San Antonio-class amphibious transport docks [4] which has experienced construction and maintenance issues [5]. In announcing its decision, Northrop Grumman cited “shipbuilding overcapacity” as one of the reasons for the closing.

The decision to close the Avondale shipyard raises two issues that Congress needs to address.

First, the lack of appropriate investment in Navy and Coast Guard shipbuilding has led to overcapacity. The Navy’s goal for a 313-ship floor [6] to up to 323-ship fleet is unlikely given the current rate of procurement. According to a May 2010 Congressional Budget Office study [7]:

The Navy needs to purchase an average of 9.2 ships per year to maintain a 322- or 323-ship fleet. Over the past 18 years, however, the Navy has acquired ships at the rate of 6.4 per year, which would result in a fleet of 224 ships at the end of 35 years. Thus, after 18 years, the Navy is now 51 ships short of being able to sustain a 322- or 323-ship fleet.

If Congress adopted the proposals suggested by the Sustainable Defense Task Force [8] the Navy would be reduced to 230 ships including only nine aircraft carriers. How many more shipyards would need to close as a result of such reductions? What maritime missions would the nation have to sacrifice based on limited assets?

Second, current laws, regulations, and policies are preventing U.S. shipyards from remaining competitive on the world market. Stephen Moret, Louisiana’s Secretary of Economic Development, speaking on Avondale’s future, suggested [9] that, “there’s no other apparent ship program that would fit.”

According to Moret this means 5,000 direct and up to 7,000 indirect jobs lost in the region.

Both issues need to be addressed by Congress because of their inherent value to national security and economic prosperity. In the 21st century, with international crises not likely to diminish, the nation will need a larger Navy and Coast Guard to respond to those challenges. The nation also needs to reinvigorate its [10]expertise and competitive spirit in challenging world markets.


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URL to article: http://blog.heritage.org/2010/07/16/another-u-s-shipyard-to-close/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/AvondalShipyard.jpg

[2] the government’s drilling moratorium: http://www.foundry.org/2010/07/15/live-from-the-gulf-remember-the-gulf-video/

[3] close its Avondale shipyard: http://www.defensenews.com/story.php?i=4707436

[4] the San Antonio-class amphibious transport docks: http://www.navy.mil/navydata/fact_display.asp?cid=4200&tid=600&ct=4

[5] construction and maintenance issues: http://www.defenseindustrydaily.com/lpd17-reliability-issues-surface-again-03235/

[6] a 313-ship floor: http://online.wsj.com/article/SB10001424052748704569204575329191658022572.html?KEYWORDS=future+force

[7] Congressional Budget Office study: http://www.cbo.gov/ftpdocs/115xx/doc11527/05-25-NavyShipbuilding.pdf

[8] Sustainable Defense Task Force: http://www.comw.org/pda/fulltext/1006SDTFreport.pdf

[9] suggested: http://www.nola.com/business/index.ssf/2010/07/state_local_officials_scrambli.html

[10] o diminish, the nation will need a larger Navy and Coast Guard to respond to those challenges. The nation also needs to reinvigorate its : http://www.heritage.org/Research/Commentary/2010/06/The-Jones-Act-Lost-at-Sea

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