Defense secretary suggests reduction in Austal’s LCS program

Though details are still being ironed out, it appears U.S. Secretary of Defense Ash Carter and Navy Secretary Ray Mabus are not on the same page about the use of the Littoral Combat Ship, one of two naval ships built by Austal USA in Mobile.

Carter was confirmed as a member of President Barack Obama’s cabinet in February.

According a national defense publication, he has asked the Navy to reduce its “planned LCS procurement from 52 to 40” in the executive branch’s first preview of a 2016 defense budget.

Also affecting Mobile, the memo from Carter suggested the Navy move toward using a single supplier of the ship by 2019. Currently, Austal is one of two suppliers used, the other being a Lockheed Martin facility in Wisconsin.

At full capacity, Austal employs around 4,000 people in the Mobile Bay area, but federal officials from Alabama said concerns for those jobs were second to national security, adding Navy officials themselves are opposed to the reduction.

U.S. Sen. Jeff Sessions released a joint statement with Congressman Bradley Byrne and Sen. Richard Shelby saying the “LCS has been a top priority for the Navy for almost 20 years” and has bipartisan support.

So far, Mabus has yet to release an official statement, but for years the Navy maintained a desire to reach 308 vessels in its long-term shipbuilding plan, with LCS a significant part of that.

“We are currently at only 282 ships,” Sessions wrote. “Cutting LCS procurement to just 40 ships will make the Navy’s 308-ship goal impossible to achieve, as the only alternatives to LCS are far more expensive to produce and maintain.”

So far, Austal has not released a statement on the suggested reduction, but In 2014, the shipbuilder said the cost of producing a single LCS is approximately $350 million, which is down significantly from the original cost of $750 million.

On Thursday, Byrne spoke to Lagniappe from Washington and said he and members of the House Armed Services Committee are committed to sticking with the Navy’s plan to reach 308 ships.

“The [Obama Administration] can propose all they want, but Congress has the final say on this. We went through something similar two years ago, but ultimately it got turned around,” Byrne said. “It was a long-fought battle, but we won it, and I anticipate we’ll win this one too.”

Byrne said said the House will take up that battle in April or May when the Armed Services Committee prepares its version of the National Defense Authorization Act. Despite the competing locations for ship production, Byrne said legislators here and in Wisconsin — including Speaker of the House Paul Ryan — believe the current system remains the best option.

On Thursday afternoon, Austal USA President Craig Perciavalle released a statement calling Carter’s recommendation “a single step in a lengthy budget process.”

“We’re very encouraged by the steadfast support the program continues to receive from the Navy, as well as our congressional delegations,” Perciavalle wrote. “Senator Shelby, Senator Sessions and Congressman Byrne, as well as our other elected officials across the state, and quite frankly across the nation, continue to provide incredible support for this program that will be very important going forward.”

Though Austal USA also holds a federal contract to build the Expeditionary Fast Transport ships for the Navy, a cut in the production of the LCS Independence variant could have significant impacts on the facility in Mobile. Even though the proposed reduction is only 12 ships, Byrne said that’s “a big number” to both shipbuilding operations that construct the vessels.

“Neither shipyard can live on one ship a year. These were both built and designed with a lot investment for the 52-ship buy,” he said. “When you go down below that, you’re eating into operational costs and efficiency of the yard. So that number does make a difference.”

Byrne also said the Navy has been pleased with using two shipbuilders, something he said has driven down the cost and resulted in better ships in both variants.

Still, despite the business concerns and local jobs involved, Byrne again said his support for continuing the LCS program as planned is based on the needs of the Navy, which as recently as May reaffirmed its commitment to the LCS as the “ship of the future” because of its versatility and low cost.

“I don’t think I could justify a program like this based on jobs in my district. If this wasn’t a real need for the Navy and its mission to defend America, I don’t think I’d have a leg to stand on, and I wouldn’t pretend to,” Byrne added. “The Navy wants and needs these ships to maintain its fleet at an operational level. Right now, there are 282 ships, and that’s the lowest level since before World War II.”