Great article, thank you for sharing. I agree about reduced volatility / more predictability allowing / enabling great investment and ultimately, efficiency.
One thing to say - as a scientist who uses large and noisy datasets to make predictions, I think the graph actually does a pretty good job of predicting a very complicated process. Again - agree it should/could be much more predictable and more efficient. But I would say I think you and the Navy planners have done an admirable job of making predictions that provide a strong bound to the actual outcomes.
It seems our form of government is plagued with this problem, I remember a period when the US joined and left ITER an international fusion energy research consortium every 2-3 years. Not an effective way to build one of the most complicated scientific instruments in the world!
Yes, the Navy have been far too inconsistent with projecting and then committing to shipbuilders what ships are actually bought and when.
HOWEVER, shipbuilders - looking at you EB!! - are very late with Block 4 (let alone B5) Va Class Submarines. Years late. That’s unacceptable.
Also, first ship of class are always late due to the level of DD/NRE as the scribe points out, but a lot of $B was invested in Columbia (along with a rarely given CR exception to begin on time in that FY), with $B that didn’t go to other Navy POM/BES priorities, and it is still 12-16 months behind. Likely will be longer as time goes forward. EB is not performing in spite many risk reduction dollars already been spent. And both EB and HII/NN are also unacceptably performing on VA Class, despite Navy block buys. Current focus on Columbia will continue to impact VA Class construction. EB and HII have over promised and seriously under delivered.
While I agree stability across the ship building demand signal would improve long-term investment to achieve required / desired production capacity. When we look at just the undersea maintenance and production capacity in the form of existing SSNs, new construction SSN (VA BLK IV and V) and SSBN recap -- there is no more stable demand signal across our industrial defense complex. We have been talking about the submarine bathtub for 20 years and that, as soon as the industrial base can produce 2 SSNs a year, we will start buying them -- a strong signal. The SSBN recap has been a 20 year odyssey and now, after funding the first SSBN, we find that capacity doesn't exist and we are delayed years -- not months -- but years. And of course the very predictable submarine maintenance is so backlogged we are contemplating retiring SSNs instead of fixing them... Not how we should be thinking about the environment "West of Wake".
Pardon my rant, but the submarine industrial base doesn't need stability -- perhaps it needs competition to incentivize better business practices. Where that competition comes from, I don't know but I have always advocated for some diesel submarine capacity to keep the current submarine industrial base honest...
The competition are what can UUVs do. The problem with that is he current competition is the train wreck known as Boeing. We could have competition with Andurill in that market as they work on the Australian UUV already.
Forgot to mention earlier. I'm also fairly unimpressed with their chart of delays that only accounts for the large ships. The problem lies throughout.
OUSV-3 Late (Austal, who got moved from Swiftships)
MUSV prototype - Late and I question if any piece of it exists (Swiftships) This is real fun since the yard who built all the sister ships effectively has slips open waiting for work. Thank you big government.
LCU-1700 - Navy and Swiftships casting shade at one another, Austal picking up that work too.
SSC - We have stopped buying until Textron catches up to those already ordered.
It also makes no discussion on how to avoid issues in the future. Anyone looking at the plan had to see the risk in getting FFG on time via Marinette. Fulll order book, need to remodel the entire yard, need to grow the workforce where there are literally almost no people at this point.
Austal, opening a steel line, expanding into San Diego, has an order book numerically greater than most of the rest of the country put together. Subs, carriers now tied to their success on top of everything else those programs need to get right. Of the horde of Offshore aluminum yards hanging on with the downturn in offshore oil, those elevators could be getting built many places where any work would be welcome.
I’ve been the one going big on the block buy extreme. 8 year 3 cvn buys switching to Fords faster. Launch every 32 months. Shoot for 10 cvns no rcoh or grow down the road w rcoh. We are already building 2 in the graving dock which was oart of the plan.
I didn't get far down the assay, when I looked at the first chart, into the pea brain popped up BOEING!!!! Boeing was flogging boosting deliveries and then someone forgot to install the door bolts. I want all of our shipbuilder to use Bath Iron Works motto: "We Build Good Ships No Matter What".
"We shall build good ships here. At a profit—if we can. At a loss—if we must. But always good ships.” — Collis P. Huntington of Newport News Shipbuilding
Corrected!!!! Here is Bath Iron Works: Bath Built Is Best Built.” Our mission is to design, build and support the highest-quality ships for the United States Navy.
Correct. Investment decision lags demand signal. If demand signal fluctuates investment never happens due to uncertainty. Presidential will over 8 years can help moderate uncertainty. Just like in ship repair.
It’s a great summary of known. This is in fact shipbuilding ( industry) 101, and it is also fleet size vs procurement and policy 101. Same discussions in my Navy and now Commercial non-Navy lifetime through 80s until today. But I think the reason this is a great article is that the Administration has chose to put people in charge that don’t know or understand these truths. Weak leaders. And as Bryan points out, that starts with the President, and poor cabinet choices that advise him. Because there are three budget cycles running at once, constant attention must be paid to following good business rules and insuring best practice procurement in contracts in the near-term cycle to protect steady demand signal tied to to need. Industry will respond if that were the case. Read Adam Smith.
I am a kindergarten student in this discussion, so let me ask a basic question. Isn't the problem that the U.S. has no viable shipbuilding industry that competes commercially? Wouldn't the problem of investing solely for national defense needs be lessened if we did? I would guess that there is a high level of commonality in shipyard facilities. Wouldn't a viable shipbuilding industry lessen the cost and probably reduce the timeframe?
If we are talking about industrial policy, is this a better target, or am I naive?
"Although Europe remains a crucial market for the production of cruise vessels, the East Asian region dominates shipbuilding with China, South Korea, Japan being the largest shipbuilding nations in the world. China alone received 49 percent of all shipbuilding orders in 2021, making it a global shipbuilding powerhouse."
Interesting question, very Mahanian of you. The answer is (or my answer at least) is that the lack of a viable commercial shipbuilding industry is not THE problem, but it is problematic. Here's what I mean. We broke the tie between commercial shipbuilding and military shipbuilding four decades ago. In the interim, we built an amazing array of the world's most capable warships. So my point is, we CAN do it. It is harder, but we showed we could do it. What we CAN'T do is have both no real commercial shipbuilding and INSUFFICIENT naval shipbuilding if you wish to maintain a naval shipbuilding industrial base. That's where we have gotten ourselves, and now when we want to grow naval shipbuilding (or at least this year we want to), the capacity isn't there.
Thanks, Bryan. I'm not sure I understand why we broke the connection, and I'm sure that's a long discussion with pros and cons. I wonder if China has a similar approach. Unfortunately, this lack of capacity for defense isn't just limited to ships.
Commercial shipbuilding as an industrial base would be best. The problem is government has to subsidize because that’s what other governments do. Either way, the taxpayer pays a “subsidy” to shipbuilding. If the government subsidizes commercial shipbuilding to share overhead with military shipbuilding, we pay. If no commercial industrial base, then all overhead is on the military program, we pay for that. But Bryan’s point, you can’t stop doing both with unpredictable or hidden demand signals
A foreign yard would have to be subsidized to the tune of 80 percent of the cost to match our deficiencies. Our labor is actually cheaper than all but China and they're going to get close soon -- our hours and management are worse, as are our processes. The real solution is to bring in more foreign workers, train them up, make them citizens and keep them here. Retraining a guy who wants to work would be better than trying to retrain a workforce used to Navy contracts.
Yeah. Like many people, I struggle with industrial policy. However, we have had a managed economy in times of war. It seems to me that we are already at war.
All terrific points. These problems have been clear for two decades but as CDR Salamander has stated in separate postings, they have been ignored. Maybe it's also time for reform at NAVSEA.
Concur. He has helped me in the past with some of my thesis writings. Great person to collaborate with. BTW, really good panel at SAS. I was in the audience.
Time to make Navy shipbuilding a regulated industry?
Great article, thank you for sharing. I agree about reduced volatility / more predictability allowing / enabling great investment and ultimately, efficiency.
One thing to say - as a scientist who uses large and noisy datasets to make predictions, I think the graph actually does a pretty good job of predicting a very complicated process. Again - agree it should/could be much more predictable and more efficient. But I would say I think you and the Navy planners have done an admirable job of making predictions that provide a strong bound to the actual outcomes.
It seems our form of government is plagued with this problem, I remember a period when the US joined and left ITER an international fusion energy research consortium every 2-3 years. Not an effective way to build one of the most complicated scientific instruments in the world!
Yes, the Navy have been far too inconsistent with projecting and then committing to shipbuilders what ships are actually bought and when.
HOWEVER, shipbuilders - looking at you EB!! - are very late with Block 4 (let alone B5) Va Class Submarines. Years late. That’s unacceptable.
Also, first ship of class are always late due to the level of DD/NRE as the scribe points out, but a lot of $B was invested in Columbia (along with a rarely given CR exception to begin on time in that FY), with $B that didn’t go to other Navy POM/BES priorities, and it is still 12-16 months behind. Likely will be longer as time goes forward. EB is not performing in spite many risk reduction dollars already been spent. And both EB and HII/NN are also unacceptably performing on VA Class, despite Navy block buys. Current focus on Columbia will continue to impact VA Class construction. EB and HII have over promised and seriously under delivered.
While I agree stability across the ship building demand signal would improve long-term investment to achieve required / desired production capacity. When we look at just the undersea maintenance and production capacity in the form of existing SSNs, new construction SSN (VA BLK IV and V) and SSBN recap -- there is no more stable demand signal across our industrial defense complex. We have been talking about the submarine bathtub for 20 years and that, as soon as the industrial base can produce 2 SSNs a year, we will start buying them -- a strong signal. The SSBN recap has been a 20 year odyssey and now, after funding the first SSBN, we find that capacity doesn't exist and we are delayed years -- not months -- but years. And of course the very predictable submarine maintenance is so backlogged we are contemplating retiring SSNs instead of fixing them... Not how we should be thinking about the environment "West of Wake".
Pardon my rant, but the submarine industrial base doesn't need stability -- perhaps it needs competition to incentivize better business practices. Where that competition comes from, I don't know but I have always advocated for some diesel submarine capacity to keep the current submarine industrial base honest...
The competition are what can UUVs do. The problem with that is he current competition is the train wreck known as Boeing. We could have competition with Andurill in that market as they work on the Australian UUV already.
Good thoughts.
Cadence. I call it cadence. We need to define and decide what we need and we need to buy them annually.
The idea of one DDG this year, three next year is why the industry support is crazy.
Same with boats. 1.3 deliveries per year is really really bad. Give the submarine base consistency.
Forgot to mention earlier. I'm also fairly unimpressed with their chart of delays that only accounts for the large ships. The problem lies throughout.
OUSV-3 Late (Austal, who got moved from Swiftships)
MUSV prototype - Late and I question if any piece of it exists (Swiftships) This is real fun since the yard who built all the sister ships effectively has slips open waiting for work. Thank you big government.
LCU-1700 - Navy and Swiftships casting shade at one another, Austal picking up that work too.
SSC - We have stopped buying until Textron catches up to those already ordered.
It also makes no discussion on how to avoid issues in the future. Anyone looking at the plan had to see the risk in getting FFG on time via Marinette. Fulll order book, need to remodel the entire yard, need to grow the workforce where there are literally almost no people at this point.
Austal, opening a steel line, expanding into San Diego, has an order book numerically greater than most of the rest of the country put together. Subs, carriers now tied to their success on top of everything else those programs need to get right. Of the horde of Offshore aluminum yards hanging on with the downturn in offshore oil, those elevators could be getting built many places where any work would be welcome.
and on and on and on and on........
I’ve been the one going big on the block buy extreme. 8 year 3 cvn buys switching to Fords faster. Launch every 32 months. Shoot for 10 cvns no rcoh or grow down the road w rcoh. We are already building 2 in the graving dock which was oart of the plan.
I didn't get far down the assay, when I looked at the first chart, into the pea brain popped up BOEING!!!! Boeing was flogging boosting deliveries and then someone forgot to install the door bolts. I want all of our shipbuilder to use Bath Iron Works motto: "We Build Good Ships No Matter What".
"We shall build good ships here. At a profit—if we can. At a loss—if we must. But always good ships.” — Collis P. Huntington of Newport News Shipbuilding
Collis got around: Huntington Beach CA. Huntington Library in San Marino CA. Huntington West Virginia.
Corrected!!!! Here is Bath Iron Works: Bath Built Is Best Built.” Our mission is to design, build and support the highest-quality ships for the United States Navy.
Correct. Investment decision lags demand signal. If demand signal fluctuates investment never happens due to uncertainty. Presidential will over 8 years can help moderate uncertainty. Just like in ship repair.
It’s a great summary of known. This is in fact shipbuilding ( industry) 101, and it is also fleet size vs procurement and policy 101. Same discussions in my Navy and now Commercial non-Navy lifetime through 80s until today. But I think the reason this is a great article is that the Administration has chose to put people in charge that don’t know or understand these truths. Weak leaders. And as Bryan points out, that starts with the President, and poor cabinet choices that advise him. Because there are three budget cycles running at once, constant attention must be paid to following good business rules and insuring best practice procurement in contracts in the near-term cycle to protect steady demand signal tied to to need. Industry will respond if that were the case. Read Adam Smith.
I am a kindergarten student in this discussion, so let me ask a basic question. Isn't the problem that the U.S. has no viable shipbuilding industry that competes commercially? Wouldn't the problem of investing solely for national defense needs be lessened if we did? I would guess that there is a high level of commonality in shipyard facilities. Wouldn't a viable shipbuilding industry lessen the cost and probably reduce the timeframe?
If we are talking about industrial policy, is this a better target, or am I naive?
Re: Commercial Shipbuilding
"Although Europe remains a crucial market for the production of cruise vessels, the East Asian region dominates shipbuilding with China, South Korea, Japan being the largest shipbuilding nations in the world. China alone received 49 percent of all shipbuilding orders in 2021, making it a global shipbuilding powerhouse."
Interesting question, very Mahanian of you. The answer is (or my answer at least) is that the lack of a viable commercial shipbuilding industry is not THE problem, but it is problematic. Here's what I mean. We broke the tie between commercial shipbuilding and military shipbuilding four decades ago. In the interim, we built an amazing array of the world's most capable warships. So my point is, we CAN do it. It is harder, but we showed we could do it. What we CAN'T do is have both no real commercial shipbuilding and INSUFFICIENT naval shipbuilding if you wish to maintain a naval shipbuilding industrial base. That's where we have gotten ourselves, and now when we want to grow naval shipbuilding (or at least this year we want to), the capacity isn't there.
Ron O'Rourke made some recent comments about the encouragement of commercial shipbuilding via subsidies that seem worth considering: https://twitter.com/cpgrabow/status/1774835889270563108
Thanks, Bryan. I'm not sure I understand why we broke the connection, and I'm sure that's a long discussion with pros and cons. I wonder if China has a similar approach. Unfortunately, this lack of capacity for defense isn't just limited to ships.
Commercial shipbuilding as an industrial base would be best. The problem is government has to subsidize because that’s what other governments do. Either way, the taxpayer pays a “subsidy” to shipbuilding. If the government subsidizes commercial shipbuilding to share overhead with military shipbuilding, we pay. If no commercial industrial base, then all overhead is on the military program, we pay for that. But Bryan’s point, you can’t stop doing both with unpredictable or hidden demand signals
A foreign yard would have to be subsidized to the tune of 80 percent of the cost to match our deficiencies. Our labor is actually cheaper than all but China and they're going to get close soon -- our hours and management are worse, as are our processes. The real solution is to bring in more foreign workers, train them up, make them citizens and keep them here. Retraining a guy who wants to work would be better than trying to retrain a workforce used to Navy contracts.
Yeah. Like many people, I struggle with industrial policy. However, we have had a managed economy in times of war. It seems to me that we are already at war.
Bryan,
All terrific points. These problems have been clear for two decades but as CDR Salamander has stated in separate postings, they have been ignored. Maybe it's also time for reform at NAVSEA.
Many thanks.
Nigel
Sal is a national treasure.
Concur. He has helped me in the past with some of my thesis writings. Great person to collaborate with. BTW, really good panel at SAS. I was in the audience.
Just refer to Adam Smith. "The first great exception to the principle of free trade is National Defense." Now how about an American Navigation Act?
There's already a US version of the British Navigation Act — the Jones Act. Problem is that it doesn't work very well.
There it is. Adam Smith. I guess we are forgetting required reading in America.