CAVASSHIPS Podcast [Mar 01, ’24] Ep: 134 The Tough Business of Ship Repair


Welcome to the CavasShips Podcast with Christopher P. Cavas and Chris Servello…a weekly podcast looking at naval and maritime events and issues of the day – in the US, across the seas and around the world. This week…Ship repair is a tough business, particularly when your primary customer is the US Navy. Changing business structures, shifts in homeport and potential workloads, variations in policy can make it a challenging prospect indeed. We sat down with BAE Systems San Diego Vice President and General Manager Eric Icke for his take on the ins and outs – and the ups and downs – of navigating a difficult business.

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This Week’s Naval Round Up:

Taiwan launched its first domestically-built submarine on February 27. The HAI KUN (SS 711) is being built at the CSBC Shipyard in Kaohsiung, where it has been under construction since 2021. Taiwan has said little about the submarine’s design origins, but externally it appears to be an evolution of the Dutch Navy’s Walrus-class of non-nuclear subs. And while the HAI KUN  shows openings for six torpedo tubes forward, few details, including the vessel’s displacement or length, have been released.

The Chinese Navy’s 46th Escort Force is en route to the Gulf of Aden region to relieve the 45th Escort Force. The 46th left the Southern Fleet’s base at Zhanjiang on February 21 with the Type 52D destroyer JIAOZUO 163, Type 05A frigate XUCHANG 536 and Type 903 replenishment ship HONGHU 906, the standard makeup for the anti-piracy escort forces, which began their deployments in 2008.

Initial sea trials of the new Virginia-class submarine NEW JERSEY (SSN 796) were completed on February 29, shipbuilder Newport News Shipbuilding announced. Further sea trials will be carried out both by the shipbuilder and the US Navy before the submarine is delivered later this year. NEW JERSEY is the 11th Virginia-class attack submarine that will be delivered from Newport News and overall is the 23rd Virginia-class sub to be built.

A few days earlier, on February 23, Newport News received a $1.173 billion contract modification from the Navy to complete refit and restoration work on the Los Angeles-class submarine USS BOISE SSN 764, which has been out of service since 2016. A series of issues, ranging from scheduling problems to funding issues to shipyard capacity, have made the BOISE one of the poster cases for ships in dire need of repairs. With the latest contract modification the Navy will have spent well over $1.6 billion to reactivate the BOISE, which first entered service in 1992. According to the contract announcement, the work is to be completed in September 2029.

The US Navy’s expeditionary sea base ship HERSHEL WOODY WILLIAMS ESB 4 left Rota, Spain February 29 to begin a deployment around Africa and in the US Sixth Fleet. The ship will engage in multiple bilateral and multilateral exercises during the cruise. Various teams of US Marines also are likely to be embarked on board the ship, including combat engineers.

Servello Squawk:

This week Secretary of the Navy Carlos Del Toro met with shipbuilding industry executives in the Republic of Korea. According to press reports, discussions were very productive and centered on attracting Korean investment in integrated commercial and naval shipbuilding facilities in the United States.

SECNAV was quoted as saying “in addition to our currently active shipyards, there are numerous former shipyard sites around the country which are largely intact and dormant.” He went on to emphasize the economic value of revitalizing such sites, saying “Investment in dual-use shipyards in the United States will create good paying, blue collar and new-collar American jobs building the advanced ships that will protect and power the economy of tomorrow.”

This message of encouragement and congeniality was in stark contrast to the message delivered to US shipbuilders and members of industry at the recent WEST 2024 Conference in San Diego.

During his Keynote address at WEST Del Toro sent a stark warning to US industry telling them there would be consequences if they prioritize profits over delivering what was promised to the Navy and Marine Corps–telling the crowd “while I am very happy for you, you can’t be asking for the American taxpayer to make greater public investments while you continue in some cases to goose your stock prices through stock buybacks, deferring promised capital investments, and other accounting maneuvers that — to some — seem to prioritize stock prices that drive executive compensation rather than making the needed, fundamental investments in the industrial base and your own companies at a time when our nation needs us to be all ahead flank.”

I love that the Secretary is encouraging new players to enter the shipbuilding and repair market and I love that he seeks to hold companies accountable for unreliable work or priorities that don’t mesh well with national security. Where I have questions is in the transmission of his message.

At this point SECNAV’s Maritime Statecraft initiative deserves an A for effort and D for delivery.

Instead of running around from speech to speech doling out half-baked bits and pieces or publicly posturing and slapping around his industry allies, I’d encourage a more methodical approach.

He should meet in private with American industry leaders and lay out his goals, concerns and overall vision. Then aggressively work to gain support from members of Congress who can help with authorization language and appropriated dollars to speed up the process. Finally, it would be wise to sit down with the media to explain who fits where and how the plan can live longer than his term as the 78th Secretary of the Navy.

The Secretary is on to something with his maritime statecraft ideas…but unless he and his staff put in the hard work and engagement necessary to gain support and third party validation this idea will be another in a long list of “could of” and “should of been” strategies that fall short and don’t make it from one term to the next.

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