OF JOHN K. WELCH
Thank you, Mr. Chairman for the opportunity to testify
before the committee on behalf of General Dynamics Marine Systems.
I would like to thank you Mr. Chairman for recognizing
that there is a critical shortfall in the shipbuilding budget and for
taking the lead in raising this issue in the Congress.
Dynamics Marine Systems employs more than 17,000 people at four major
sites around the country. This highly skilled workforce possesses the
broadest range of ship system integration, design, engineering and
production skills in naval shipbuilding.
Dynamics Marine Systems is the leading supplier of naval vessels –
including nuclear submarines, complex surface combatants, and auxiliary
ships; and, operates three of this country's six major new construction
shipyards: Electric Boat, with its manufacturing facility in Quonset
Point, Rhode Island, and its shipyard in Groton, Connecticut; Bath Iron
Works, in Maine; and National Steel and Shipbuilding Company, in San
Diego, California. GD Marine
Systems also manages ready-reserve and prepositioning ships and builds
commercial vessels through our AMSEA and NASSCO subsidiaries respectively.
the shipyards that comprise General Dynamics Marine Systems offer the Navy
over 250 years of collective experience in ship design, engineering,
construction, and fleet support. Today, these shipyards are actively
involved in the design and/or construction of virtually all of the
navy’s major shipbuilding programs. As we look to the future, it is
abundantly clear that the success of General Dynamics Marine Systems is
inextricably linked to the success of the Navy’s shipbuilding program.
challenge confronting the Navy/Industry team today - and in the future -
is sustaining and growing an integrated ship design and construction
capability for the new millennium; An integrated capability that will
achieve the Navy’s force level goals by providing affordable and
technologically superior war-fighting platforms; and, a capability that
will sustain a healthy shipbuilding industrial base.
ship procurement rates are absolutely essential to achieving the Navy’s
force level objectives and achieving the stability so essential to a
healthy industrial base. For
submarines, this means achieving a procurement level of two ships per year
as rapidly as possible; for surface combatants, this means maintaining a
procurement level of no less than 3 ships per year; and, for auxiliaries,
this means achieving a stable procurement rate such that a shipyard, such
as NASSCO, can plan the correct mix of commercial and naval vessels to
it is equally important that the Navy and industry continue to work
together to reduce the cost of future ships by continuing to pursue new
models for ship construction contracts and opportunities to reduce Total
Our response to this challenge is a commitment to provide
the “Best Value” to our customer. We are meeting this commitment by
continuing to provide the Navy with a balanced approach to affordability
and capability. We must build on the twin pillars of business and
technology innovation that has carried us through the transition from the
high ship production rates of the cold war and positioned us to design and
build the ships of the next millennium.
For example, in the Virginia class submarine program, the
Navy utilized a “Block Buy” construction contract for the first four
ships of this new program. This
acquisition strategy, coupled with the innovative teaming approach to
construction developed by Electric Boat and Newport News, was key to
enabling the Navy to afford these four ships, and it provided stability to
the industrial base during an extended period of low rate submarine
production. To date, the
benefits of this Block Buy contract have been validated with both cost and
schedule performance tracking to plan.
A follow-on Block Buy, or Multi-Year procurement, of the
next five ships in this program will help support attack submarine force
levels and ensure industrial base stability for both shipbuilders and key
suppliers – stability that is key to affordability. The benefits of this
approach have been dramatically demonstrated with the ongoing DDG 51
Program. The Navy attributes
$1.4B in savings to the FY98 - FY01 DDG 51 multi-year compared to separate
annual procurements. The Navy can continue to reap further efficiency and
savings by exercising existing legislative authority to apply the DDG
multi-year procurement approach for the next six ships in the program.
As the force is restructured for the twenty-first century,
we must not only consider the capacity of the force but the capability
that is required as well. For
example, the recent Joint Chief’s study on submarine force levels
mentioned not only a force level of 55-68 submarines but also fielding 18
Virginia Class submarines by 2015. The proposed FY 02 and beyond surface
combatant procurement rate will support a surface combatant force of only
70 ships, a significant shortfall to the 1997 QDR minimum force of 116
ships, let alone the projected requirement for a force of 134-138 ships.
Capability is even more important as the force levels have been
considerably downsized resulting in ships and submarines that will be
operated harder and longer. Consequently,
we must field our fleet with the most modern and capable warships
possible, and while being mindful of the need to maintain force levels in
the near term, we must not lose sight of the long-term recapitalization
required to maintain superior capability.
A look at the Virginia class submarine and DD 21 next
generation destroyer illustrate two programs that are clearly focused on
ensuring affordability while delivering maximum capability.
Through acquisition reform, an innovative DD 21
acquisition approach is being employed that preserves competition while
facilitating incorporation of “best practices” to produce a highly
capable and affordable next generation surface combatant.
The two shipyards that will build DD 21 are presently leading
separate industry teams in an intense design competition.
This design competition is planned to complete by the end of this
year with the Navy scheduled to down select to one design in 2001. By
structuring the DD 21 Program around a series of phased competitions, the
Navy will realize the long term benefits of a state-of-the-art market
design that reflects industry’s best concepts and incorporates the
latest technology to ensure maximum capability within affordability
constraints. After the design
down-select, the shipyards will share “best practices” and collaborate
in detail design to develop a common production plan, thereby ensuring a
highly producible and affordable ship.
Technology advancements will significantly reduce DD 21
acquisition costs, Total Ownership Costs, and increase warfighting
capability. Several examples
illustrate my point. Through
the use of virtual models and simulations during detail design, much of
the expensive validation and verification testing can be accomplished
earlier in the program thus reducing risk and the cost associated with
physical models. Through the
use of non-traditional materials and other
applications of advanced technology, maintenance costs will be
significantly reduced and sailors will be freed from many burdensome tasks
with a commensurate improvement in Quality of Life aboard ship.
These same materials will contribute to reductions in the ship’s
signature thereby reducing the probability of detection.
State-of-the-art shipboard network architecture and automation will
help reduce and optimize crew size – DD 21 will be capable of operating
effectively and safely with a crew of less than 100 as compared to the
present crew of present generation surface combatants which numbers
The DD 21 program will introduce a range of new
technologies that successfully integrate cost and capability.
One such technology is Electric Drive propulsion.
On January 6, 2000, Secretary of the Navy Danzig announced that DD
21 would be powered by Electric Drive.
In his announcement, Secretary Danzig said, " Electric Drive
will reduce the cost, noise and maintenance demand of how our ships are
driven. More importantly,
electric drive, like other propulsion changes, will offer immense
opportunities for redesigning ship architecture, reducing manpower,
improving shipboard life, reducing vulnerability and allocating a great
deal more power to warfighting applications."
The key to this system's affordability will be commonality -- the
use of the same components for multiple platforms.
the Virginia class program, Electric Boat introduced a dramatically new
approach to ship design. A new ship design was developed using engineering
and design personnel teamed with representatives from production,
suppliers, and the customer. This approach is being leveraged on new
shipbuilding programs such as LPD 17, DD 21 and CVNX.
result is a ship design that is captured in a fully integrated electronic
design data base that supports all current and future applications,
including engineering analysis, electronic visualization, design products
to build the ship, and all maintenance, logistics and training
information. This unique team approach facilitated an effective,
streamlined decision making process that incorporated the best ideas from
all program stakeholders. The result is a ship design that is more
producible, and will be easier to maintain over its life cycle.
ensure Virginia Class ships remain technologically advanced, the ships are
designed to accommodate technology insertions and upgrades.
The Virginia Class technology insertion process focuses on three
key attributes: capability, flexibility, and affordability.
This same technology insertion approach will be applied to other
programs such as DDG 51, CVNX and DD 21.
NASSCO, production processes have been revolutionized to make this
shipyard a model in its market segment.
Cycle times have been reduced, quality improved and costs reduced
resulting in early delivery and savings to the Navy.
NASSCO, the only major shipyard remaining on the West Coast, is
dependent on both military and commercial work.
The strategic Sealift program, at NASSCO, is about 50% complete.
NASSCO is also building two RO/RO ships for the commercial market.
The TADC(X) program, the Navy’s new class of auxiliary dry cargo
ships, is an important element to the future stability and maintenance of
critical skills at NASSCO.
but perhaps most importantly, we must sustain a stable and predictable
ship procurement plan. For
the Navy, a stable and predictable plan is essential to meeting their
force level goals. For
industry, a stable business plan is essential to achieving optimum
efficiencies and the confidence to invest for the future.
after years of reducing this country’s shipbuilding workforce from its
cold war peak, we need to attract young workers to sustain the critical
human capabilities and talents for meeting the Navy's requirements. In our
shipyards today we have a workforce with an incredible depth and breadth
of shipbuilding knowledge. But it is an aging workforce, in a physically
demanding profession. If we fail to achieve stability in our industry, we
will seriously impact our ability to recruit our next generation
shipbuilders, and we will fail to capture this unique knowledge.
This element is also key to the overall affordability of our
response to a new global threat environment, the Navy has embarked on a
course to upgrade its fleet that is unprecedented. Five major new ship
design and construction programs – underway at the same time.
The success of these programs is absolutely essential to the
ability of the Navy to carry out its roles and missions in the new global
the end of the Cold War, General Dynamics has stood out in the defense
industry as a leader in repositioning itself to be successful in a new
business environment. A new
environment that would reward innovation and creativity, while demanding
reduced costs in all areas of business.
the success of the Navy’s programs will demand continued innovation,
leadership, and commitment from this nation’s shipbuilding industry.
I can assure you, General Dynamics Marine Systems stands ready to