Union Tribune

February 6, 2003

NASSCO's Navy ships might be cut by one

By OTTO KREISHER
COPLEY NEWS SERVICE

WASHINGTON The Navy wants to cut at least one ship from its planned purchase of supply ships being built by National Steel and Shipbuilding Co.

Although the Navy intends to start a line of support vessels that NASSCO likely would build, the change of plans could mean a temporary dip in work at the San Diego yard in several years.

Navy budget documents show the Lewis and Clark line of dry-cargo supply ships being terminated in fiscal 2007. That would mean NASSCO would build 11 rather than 12 of the 41,000-ton ships, said Kendell Pease, chief spokesman for General Dynamics, NASSCO's parent.

NASSCO has contracts to build three of the ships and is expecting a contract for a one funded at $388 million in the current defense bill.

The Navy's long-range budget released Monday shows two supply ships a year for the next three years, then one in fiscal 2007.

Despite the Navy's decision to trim the program, NASSCO is pleased that next year's budget will fund two ships.

"The funding for those ships was our top priority," said NASSCO spokesman Steve Clarey. "Having stability in funding is very important to our performance in terms of maximizing our efficiency, ordering material in time to get economic buys and meeting our production schedule without gaps."

The Navy plans to seek funding two years later for two ships in a new class of fast combat support ships, designated AOEs.

NASSCO built the last line of AOEs and would be a prime candidate to build the new class of ships.

There normally is a delay between the authorization of a new ship and start of construction, which could mean work would be finished on the final Lewis and Clark-type ship before work on the first of the new AOEs begins.

A NASSCO official said about 800 production employees are working on the Navy ships.

Pease said NASSCO has contracts to build commercial tankers and cargo ships that could keep its work force occupied between the Navy contracts.