Like
the people they employ and the products they produce, industries have a
life-cycle. They are born amidst hope and uncertainty; they grow
explosively in adolescence; with luck they reach stable maturity; and
eventually they decline. There comes a time in the decline of every
industry when even the brightest survivors run out of ideas. For U.S.
naval shipbuilders, that time is now.
Although it is the world's leading maritime power, the U.S. has
struggled to maintain a healthy shipbuilding sector. High wage rates,
heavy regulatory burdens, and an unwillingness to match the subsidies
of foreign nations have combined to undercut sales prospects outside
the protected domestic market. When the Reagan Administration decided
during its first year in office to unilaterally eliminate construction
subsidies for oceangoing commercial vessels, it wiped out domestic
production.
Shipbuilders barely noticed at first, because the Reagan defense
buildup produced a bonanza in naval construction. But when the Cold War
ended, the industry had no commercial market to fall back on. It's been
downhill ever since. Orders for combat ships fell from 13 in 1990 to 10
in 1991, 8 in 1992, 7 in 1993, 5 in 1994 and 4 in 1995. The
shipbuilding plan Navy Secretary Gordon England inherited from the
Clinton Administration envisions building six vessels per year through
2010 -- a rate that eventually would yield a fleet of 180 warships,
assuming a service life of 30 years per boat.
And now the Navy is having second thoughts about its
next-generation DD-21 destroyer, which was supposed to take the place
of Arleigh Burke (DDG-51) class destroyers in shipyards when
construction of the latter vessel ends in 2004. A break in construction
could mean quick death for two of the nation's six major shipyards. The
Navy must develop quickly a plan to explain what it's going to do,
otherwise Congress will intervene.
The Navy doesn't need another debacle like the cancellation of the
Arsenal Ship, and the Pentagon doesn't need even more congressional
micromanagement. The technologies being developed for DD-21 should be
expeditiously wrapped into a "Flight III" variant of the Arleigh Burke
with reduced crew-size, enhanced survivability and more relevance to
emerging missions like missile defense. If destroyer production lapses,
what's left of the shipbuilding industry will be devastated.
Loren B. Thompson, Ph.D. is Chief Operating Officer of the
Lexington Institute in Arlington, Virginia, and teaches military topics
at Georgetown University.
