Shipyard Exec Addresses A Grim Prospect: Three Fewer Carriers

Huntington Ingalls CEO says keeping fleet at 11 ‘makes the most sense for the nation’


NEWPORT NEWS – Last week, Defense Secretary Chuck Hagel raised the prospect of mothballing three aircraft carriers as part of a larger plan to cut military spending.

It didn’t take long for that scenario to come up Wednesday as Huntington Ingalls Industries held a conference call to discuss its second quarter financial results and take questions.

Huntington Ingalls, the world’s sole builder of nuclear-powered aircraft carriers through its Newport News Shipbuilding division, has a preferred approach to deal with that unwelcome possibility.

But the best idea is to keep the fleet where it stands, said Mike Petters, the company’s president and chief executive officer. “That makes the most sense for the nation, not just the company,” he said when asked about Hagel’s comments.

However, should the fleet be chopped from 11 to eight, Petters said the best strategy would be to inactivate the next three carriers scheduled to arrive at the shipyard for mid-life refuelings. Petters said it is probably too late to target the USS Abraham Lincoln, which recently came to Newport News for what is formally known as a Refueling and Complex Overhaul, or RCOH.

The next in line would be the USS George Washington, due for its mid-life refit a few years down the road.

Converting tune-ups to inactivations would be best way “to keep the construction process and capability alive,” he said.

“I think the challenge is, you don’t want to walk away from that,” he said. “If we ever stop building the carriers, we’ll never really start building them back again. We need to always preserve our ability to build them.”

He added: “You start talking about taking the fleet down by two or three at a time, that’s a real tough situation for the Navy to work its way through.”

There are currently 10 active nuclear-powered aircraft carriers in the U.S. fleet, but the number will grow to 11 when the shipyard completes the Gerald R. Ford.

Petters suggested that the public is getting a peek at a discussion that routinely takes place among policymakers and industry leaders.

“The tight fiscal environment that we find ourselves navigating through,” he said, “probably exposes more of that discussion than you might be used to.”

Hagel, in discussing the possibility last week, said the military essentially has two options to meet mandatory across-the-board budget cuts unless Congress agrees on an alternative. The Pentagon could slash personnel and equipment, or it could cut research and development and slow technological growth.

He said he is not sure which way the Defense Department would go: a small force, or one without a technological edge.

Hagel’s Talk ‘Irresponsible’

Hagel’s comments are high on the radar of two defense-minded congressmen from Hampton Roads – Republicans Rob Wittman of Westmoreland County and Randy Forbes of Chesapeake. Both chair subcommittees on the House Armed Services panel and are heavily involved in the nation’s shipbuilding plans and budgets.

Forbes said Hagel appears more interested in dismantling the U.S. military than building it up, and that it was “irresponsible” to talk of dire consequences like mothballing carriers when America’s allies, its industrial base and its potential enemies are analyzing every word.

He said the ripple effect would be devastating for carrier air wings and surface ships that make up a carrier strike group. But it would take a number of years for the Navy to sideline three carriers, “and I think that would afford us the opportunity to stop that activity,” he said.

Wittman said that ripple effect would affect more than 18,000 sailors spread among destroyers, cruisers and aircraft squadrons.

“A short-sighted proposal such as this would receive nothing less than strong resistance from the House Armed Services Committee, those who understand the critical importance of maintaining a strong Navy and fulfilling our constitutional duty of a strong defense,” Wittman said in a statement.

Finances ‘Right In Line’

Huntington Ingalls reported net earnings of $57 million for the second quarter, up from $50 million in the same quarter a year ago. Second-quarter revenues of $1.68 billion were off slightly from a year ago, a 2.2 percent drop.

Newport News Shipbuilding revenues for the second quarter increased $52 million, or 5.3 percent, from the same period last year.

Petters said he expects the USS Theodore Roosevelt to be re-delivered to the Navy in the third quarter of this year. The shipyard is completing work on the ship’s mid-life refueling and overhaul. The Ford remains on track for christening in November, and Newport News continues to do advance work for the next Ford-class carrier, the John F. Kennedy.

“Our financial results for the first half of the year are right in line with our expectations,” Petters said, referring to Newport News. “Our long term outlook remains unchanged.”

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