House Panel Leader: Fate of U.S. Shipyards Uncertain

Friday, April 07, 2006
The chairman of a key House subcommittee rang alarm bells on April 5 over the state of the U.S. shipbuilding industry, saying there are too many shipyards chasing too little work. With an estimated 40 percent reduction in workload since the end of the Cold War, the nation's six major private shipyards have been forced to operate inefficiently at abnormally low rates of production. As a result, the Navy has proposed a new shipbuilding plan aimed at stabilizing the industry and increasing the size of the fleet. Annual shipbuilding funding would roughly double by 2011, reaching $17.4b. But many lawmakers have expressed deep skepticism that a major funding boost is feasible in light of soaring war costs, mounting budget deficits and pressing domestic issues. Without a huge budget increase, the Daily Press reported, the shipyards will have little new work for underused facilities. The result will be excessive overhead costs that drive up the price of ships and hinder the Navy's effort to enlarge the fleet. At a subcommittee hearing on the state of the shipbuilding industry, Navy officials dismissed consolidation as politically impractical and a potential national security concern. The Navy, officials noted, had proposed a winner-take-all competition last year to build a next-generation destroyer. But Congress blocked the plan amid concerns that the losing yard would be shut out of the destroyer business and face closure. (Source: Daily Press)

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