Navigating The Perfect Storm Perspectives on Prospects for Shipbuilding

Navigating Navigating

The Perfect StormThe Perfect StormPerspectives onPerspectives on

Prospects for ShipbuildingProspects for ShipbuildingAdam B. SiegelAdam B. Siegel

Northrop Grumman Analysis Northrop Grumman Analysis CenterCenter

IDGA, November 2005IDGA, November 2005The views expressed in this briefing are those of the author and not necessarily those of the Northrop Grumman Corporation.

CaveatCaveat

Briefing does Briefing does notnot

(necessarily)(necessarily)

represent the views of the represent the views of the

Northrop Grumman Northrop Grumman Corporation.Corporation.

Steaming a course rocked by

• Strategic change– From the Soviet Union to al Qaeda … and beyond

• Developing doctrinal concepts– E.g., translating “Sea Basing” to programs– Navy “Riverine” force, “1000 ship fleet” …

• Management change– Capability Based planning (for example)

• Uncertainty over future U.S. Navy fleet size– E.g., no existing defined Navy force structure

• Significant fiscal pressure – Iraq, Deficits, Katrina, Baby Boomers, …– DOD Budget growth peaking

Shipbuilding faces a Perfect Shipbuilding faces a Perfect StormStorm

Leadership TransitionLeadership Transition• Chief of Naval OperationsChief of Naval Operations

– Admiral ClarkAdmiral Clark•Readiness as priorityReadiness as priority•WarfightingWarfighting•Savings to procurement – not fully realizeSavings to procurement – not fully realize

– Admiral MullenAdmiral Mullen•Seeking to establish clear force structure Seeking to establish clear force structure

goalsgoals•Directives for shipbuilding stabilityDirectives for shipbuilding stability•Striving to identify additional fundingStriving to identify additional funding

• Civilian leadership in transition as wellCivilian leadership in transition as well

Balancing the “Three Rs”Balancing the “Three Rs”

The3 Rs

Requirements

Resources Risk

“Risk is inherent in everything we do. Managing it should be a continuous process that permeates – but does not dominate our daily lives. Every Navy leader should be able to take prudent risks in the conduct of their actions.” CNO Guidance for 2006

The3 Rs

Requirements:Working to Define

Resources: Seeking to

Increase

Risk:Developing

Metrics

Balancing the “Three Rs”Balancing the “Three Rs”

““"What I am anxious to do is present "What I am anxious to do is present some level of stabilitysome level of stability to the industry, and to the industry, and it's my belief that once we get them to it's my belief that once we get them to some level of stability they are charged some level of stability they are charged with cost reduction. But if I change my with cost reduction. But if I change my plan year to year, which has happened plan year to year, which has happened too often, it's very difficult for them to be too often, it's very difficult for them to be able to plan. So able to plan. So getting a numbergetting a number, getting , getting one that they can depend onone that they can depend on, developing , developing capabilities we need, capabilities we need, doing it consistentlydoing it consistently will be a will be a significant step forwardsignificant step forward in my in my belief to stabilizing the shipbuilding belief to stabilizing the shipbuilding world." world."

Admiral Michael Mullen, U.S. NavyAdmiral Michael Mullen, U.S. NavyChief of Naval OperationsChief of Naval Operations

Quoted in: Geoff Fein, Quoted in: Geoff Fein, “CNO Wants A Stable Shipbuilding Industrial Base, “CNO Wants A Stable Shipbuilding Industrial Base,

Rapid ASW Prototyping,”Rapid ASW Prototyping,” Defense DailyDefense Daily, 17 Oct 05, 17 Oct 05

““Alternative Shipbuilding Alternative Shipbuilding Plans”Plans”CNO Tasking Memo, 25 July 05CNO Tasking Memo, 25 July 05"several effects desired of this review":"several effects desired of this review":

A: ""Fencing" a particular amount of TOA on an annual basis to form a A: ""Fencing" a particular amount of TOA on an annual basis to form a steady foundation of funding to stabilize the Industrial Base ..."steady foundation of funding to stabilize the Industrial Base ..."

C: Better management of warship requirements -- and changes to those C: Better management of warship requirements -- and changes to those requirements.requirements.

D: "Identification of statutory or regulatory barriers that impede efficiencies D: "Identification of statutory or regulatory barriers that impede efficiencies in our shipbuilding plan along with recommendations for change."in our shipbuilding plan along with recommendations for change."

E: "... How [to] reduce the overall number of classes of ships and move E: "... How [to] reduce the overall number of classes of ships and move towards more modular and multi-purpose ship designs."towards more modular and multi-purpose ship designs."

F: "Foundation for re-defining the size of the Naval Force in terms of F: "Foundation for re-defining the size of the Naval Force in terms of absolute numbers, as well as annual cash flows to industry and absolute numbers, as well as annual cash flows to industry and capabilities."capabilities."

CNO Guidance for 2006CNO Guidance for 2006• Objective 2Objective 2

""DetermineDetermine and delivers on the and delivers on the Navy's future Navy's future force structure requirementsforce structure requirements by a) by a) definingdefining an an improved force structure and construction planimproved force structure and construction plan and, b) contributing to a and, b) contributing to a stable industrial basestable industrial base.”.”

• Desired Effect 2Desired Effect 2““Navy's long-range Navy's long-range shipbuilding planshipbuilding plan is aligned is aligned with the results of the Quadrennial Defense with the results of the Quadrennial Defense Review (QDR) and Review (QDR) and fiscally supportedfiscally supported within the within the program of record and the budget process.”program of record and the budget process.”

CNO 2006 Guidance (2):CNO 2006 Guidance (2): Tasks to Support Objectives / Tasks to Support Objectives / EffectsEffects

• N8 “Craft a detailed plan (based upon N8 “Craft a detailed plan (based upon cost/capability analysis of shipbuilding cost/capability analysis of shipbuilding programs …) that specifically programs …) that specifically addresses capability, affordability, addresses capability, affordability, stabilization of the Ship Construction stabilization of the Ship Construction Navy (SCN) account, and sustainment Navy (SCN) account, and sustainment of the industrial base.” of the industrial base.”

• N8/CFFC: “Align aircraft acquisition N8/CFFC: “Align aircraft acquisition plans, shipbuilding plans, the Sea plans, shipbuilding plans, the Sea Basing concept, and Joint Operational Basing concept, and Joint Operational concepts.”concepts.”

Statement of Admiral Vern Clark, U.S. Navy, before the Senate Armed Services

Committee, Posture Statement, 10 Feb 2005

Understanding shipbuilding Understanding shipbuilding costscosts• Focus on “Cost Growth” occurs …Focus on “Cost Growth” occurs …

– Comparing ‘apples to oranges’Comparing ‘apples to oranges’– Without full understanding of issuesWithout full understanding of issues– Without placing into context – first in class …Without placing into context – first in class …

• What is “cost”?What is “cost”?– Procurement?Procurement?– Total Ownership / Life-Cycle?Total Ownership / Life-Cycle?

• U.S. Navy ships should cost more U.S. Navy ships should cost more than other navies’ ships than other navies’ ships– Taking Care of Sea WarriorsTaking Care of Sea Warriors– Mission RequirementsMission Requirements– Global PresenceGlobal Presence

A 30% Solution?A 30% Solution?

• Multi-ship buysMulti-ship buys

• Advanced AppropriationsAdvanced Appropriations

• Limit requirements growth / change Limit requirements growth / change ordersorders

• Open-door government oversightOpen-door government oversight

• Full life-cycle contractingFull life-cycle contracting

Dominance In and Dominance In and From the Maritime From the Maritime

CommonsCommonsA call for a robustA call for a robust

2121stst Century Century

National FleetNational Fleet

Challenge: Challenge: Considering Future Fleet Considering Future Fleet RequirementsRequirements

• How to provide these capabilities …How to provide these capabilities …– In face of resource constraints?In face of resource constraints?– To control risks?To control risks?– While creating future opportunities?While creating future opportunities?

• Bounding the problemBounding the problem– Capabilities much more thanCapabilities much more than

•Counting of specific platformsCounting of specific platforms•Platforms not just shipsPlatforms not just ships•But it is necessity to translate capabilities But it is necessity to translate capabilities

to numbersto numbers– First order choices …First order choices …

•Start with “ships” as core element of fleetStart with “ships” as core element of fleet•Build on others’ work through meta-Build on others’ work through meta-

analysisanalysis

Analyzing the Maritime Analyzing the Maritime FutureFuture•Future Fleet Architecture (FFA) StudiesFuture Fleet Architecture (FFA) Studies

– Center for Naval Analyses (CNA) Center for Naval Analyses (CNA) – Office of Force Transformation (OFT)Office of Force Transformation (OFT)– Center for Strategic and Budgetary Center for Strategic and Budgetary

Assessments (CSBA)Assessments (CSBA)•Other work includingOther work including

– Congressional Research Service (CRS)Congressional Research Service (CRS)– Congressional Budget Office (CBO)Congressional Budget Office (CBO)– RAND Corporation (e.g., on Deepwater reqts)RAND Corporation (e.g., on Deepwater reqts)– Heritage (e.g., on National Fleet)Heritage (e.g., on National Fleet)

•Government documents includingGovernment documents including– Navy “Interim” 30-year Shipbuilding PlanNavy “Interim” 30-year Shipbuilding Plan– Navy 3/1 Strategy (draft)Navy 3/1 Strategy (draft)

Risks and OpportunitiesRisks and Opportunities

• RiskRisk– Operational risksOperational risks – Future challengesFuture challenges risks risks– Force managementForce management risks risks– Institutional risksInstitutional risks 1]1]

• OpportunityOpportunity– ““Protection” of current option spaceProtection” of current option space– ““Creation” of new options for decision-Creation” of new options for decision-

makersmakers

[1] As defined in The National Defense Strategy of the United States of America, Department of Defense, March 2005, page 11.

Office of Force TransformationOffice of Force Transformation• Proposed radical new Fleet concepts/approachesProposed radical new Fleet concepts/approaches

– Based on network-centric, complexity conceptsBased on network-centric, complexity concepts– Argues for speed and numbersArgues for speed and numbers– Suggested multiple new ship classes Suggested multiple new ship classes

with new operational concepts with new operational concepts• E.g., Air Independent Propulsion (AIP) submarines E.g., Air Independent Propulsion (AIP) submarines

carried to theater on another ship carried to theater on another ship

• ““Numbers” of platforms keyNumbers” of platforms key– Large option 810 combatants with 1,368 UxVsLarge option 810 combatants with 1,368 UxVs

• NotesNotes– Minimal mention of Coast GuardMinimal mention of Coast Guard– No transition plan from “today’s” to transformed NavyNo transition plan from “today’s” to transformed Navy– Uncertain metrics re industrial baseUncertain metrics re industrial base

Center for Strategic and Budgetary Center for Strategic and Budgetary AssessmentsAssessments• Study grounded in historyStudy grounded in history

– Robust examination of U.S. naval historyRobust examination of U.S. naval history– Study explicitly “dollar” limited – with $12 billion / Study explicitly “dollar” limited – with $12 billion /

year available for Navy shipbuildingyear available for Navy shipbuilding• Notional new “national battle fleet”Notional new “national battle fleet”

– Suggests new 500 ship battle fleet – Suggests new 500 ship battle fleet – explicitly counts / considers Coast Guard assetsexplicitly counts / considers Coast Guard assets

– Cost drives many issues / conclusionsCost drives many issues / conclusions• Construction yard specializationConstruction yard specialization• Modification of existing build programs to meet MPF(F) Modification of existing build programs to meet MPF(F)

requirementsrequirements

• NotesNotes– Potentially undervalues PRC / near-peer threatPotentially undervalues PRC / near-peer threat– Industrial base recommendations merit deeper Industrial base recommendations merit deeper

studystudy

A “500+ Ship” Naval Platform A “500+ Ship” Naval Platform ArchitectureArchitecture for the National Total Force Battle for the National Total Force Battle NetworkNetwork

• 12 12 (10?) SSBNs(10?) SSBNs• 6060 nuclear-powered nuclear-powered

submarines, including:submarines, including:– 53 SSNs (dropping slightly 53 SSNs (dropping slightly

over the next 12 years)over the next 12 years)– 6 (8?) SSGNs6 (8?) SSGNs– 1 Special Mission 1 Special Mission

SubmarineSubmarine• 1515 aviation power projection aviation power projection

platforms, platforms, -- 10 J-CVNs10 J-CVNs– 4 J-CVEs4 J-CVEs– 1 J-AFSB1 J-AFSB

• 84 84 (86?) AEGIS/VLS surface (86?) AEGIS/VLS surface combatants, including:combatants, including:– 22 CG-52s22 CG-52s– 34 (36?) DDG-79s34 (36?) DDG-79s– 28 DDG-51s28 DDG-51s

• 8484 LCSs LCSs

• 91+91+ USCG Deepwater Cutters USCG Deepwater Cutters

• 5050 sea-based maneuver sea-based maneuver platforms, platforms, 8 LHD-1s8 LHD-1s 24 LPD-17s24 LPD-17s 16 MPF(E)s16 MPF(E)s 2 upgraded T-AVBs2 upgraded T-AVBs

• 6868 NFAF ships, including: NFAF ships, including:– 8 T-AOE/T-AOE(X)s8 T-AOE/T-AOE(X)s– 11 T-AKEs11 T-AKEs– 17 T-AOs17 T-AOs– 8 (?) T-LKAs8 (?) T-LKAs– 2 T-AHs2 T-AHs– 4 JCCXs4 JCCXs– 5 Fleet Support Tenders5 Fleet Support Tenders– 4 Salvage Ships4 Salvage Ships– 5 Fleet Tugs5 Fleet Tugs– 4 Ocean Surveillance Ships4 Ocean Surveillance Ships

• 3535 Prepositioning and surge Prepositioning and surge shipsships

Center for Naval Analyses Center for Naval Analyses • Closely engaged with U.S. Navy analysisClosely engaged with U.S. Navy analysis

– Near surrogate for Navy concepts / plan of 2004Near surrogate for Navy concepts / plan of 2004• Heavily reliant on new deployment Heavily reliant on new deployment

approachesapproaches– Forward basingForward basing– Crew SwapCrew Swap

• Deploying ships / rotating crewsDeploying ships / rotating crews

• Provided for a range of fleet sizes Provided for a range of fleet sizes – Differentiation principally success of alternative Differentiation principally success of alternative

deployment approachesdeployment approaches• Low fleet size: 265 hullsLow fleet size: 265 hulls• High fleet size: 380 shipsHigh fleet size: 380 ships

• NoteNote– No mention of U.S. Coast GuardNo mention of U.S. Coast Guard– No industrial base discussion of noteNo industrial base discussion of note

Admiral Clark’s PlanAdmiral Clark’s Plan

Statement of Admiral Vern Clark, U.S. Navy, before the Senate Armed Services Committee, Posture Statement, 10 Feb 2005

Themes related to future fleet Themes related to future fleet architecturesarchitectures

• Navy / Maritime forces at a crossroadsNavy / Maritime forces at a crossroads– New operational concepts developing forNew operational concepts developing for– New operational environment amidNew operational environment amid– Significant fiscal constraints and Significant fiscal constraints and – Uncertainty over future platforms and platform numbersUncertainty over future platforms and platform numbers

• Controlling risk is multi-facetedControlling risk is multi-faceted– Fiscal, Operational, FutureFiscal, Operational, Future

• Basic questionsBasic questions– What are the maritime missions?What are the maritime missions?

• ““Warfighting”Warfighting”

• Maintaining order in and from the maritime commonsMaintaining order in and from the maritime commons

– Architecture for what fleet?Architecture for what fleet?• OFT / CNA: U.S. NavyOFT / CNA: U.S. Navy

• CSBA: U.S. Navy and U.S. Coast GuardCSBA: U.S. Navy and U.S. Coast Guard

Forging the Future FleetForging the Future Fleet• RealitiesRealities

– Fleets take a long time to build … and changeFleets take a long time to build … and change– Rapid rudder orders can create risk and costRapid rudder orders can create risk and cost

• Analysis suggests that the NationAnalysis suggests that the Nation– Exploit – where possible – existing production to Exploit – where possible – existing production to

meet future capability requirementsmeet future capability requirements– Manage America’s maritime forces as a wholeManage America’s maritime forces as a whole– Focus the U.S. Navy on shaping strategic choicesFocus the U.S. Navy on shaping strategic choices– Create an aggressive Maritime research and Create an aggressive Maritime research and

experimentation program for potential breakthrough experimentation program for potential breakthrough technologies and capabilitiestechnologies and capabilities

A Robust, Capable Navy with a true National Fleet to achieve Navy-Coast Guard synergies to provide maritime capabilities through the full spectrum of QDR and national security challenges.

Outlining the “fleet”Outlining the “fleet”• National FleetNational Fleet

– Joint/Interagency forceJoint/Interagency force– Navy, Coast Guard, other services’ shipsNavy, Coast Guard, other services’ ships

• Issues meriting future examinationIssues meriting future examination– Balance in numbers, roles, capabilities between USCG cutters Balance in numbers, roles, capabilities between USCG cutters

and U.S. Navy littoral combat shipsand U.S. Navy littoral combat ships– ““Marginal” investments to enable full-spectrum engagement Marginal” investments to enable full-spectrum engagement

capacities across the entire fleetcapacities across the entire fleet– Determining “presence” requirements in the coming decadesDetermining “presence” requirements in the coming decades

• Presence often drives ship requirementsPresence often drives ship requirements– e.g., One ship can’t be two places at once …e.g., One ship can’t be two places at once …

Presence requirementsPresence requirements• 8+ “Constabulary” hubs 8+ “Constabulary” hubs

Require various levels of constant presenceRequire various levels of constant presence– East / West coasts of AfricaEast / West coasts of Africa– Persian Gulf Persian Gulf – South East Asia / OceaniaSouth East Asia / Oceania– CaribbeanCaribbean– U.S. Coastal Areas (Atlantic, Gulf of Mexico, Pacific, U.S. Coastal Areas (Atlantic, Gulf of Mexico, Pacific,

Alaska/Hawaii/Guam)Alaska/Hawaii/Guam)

• 2+ “Warfighting” hubs2+ “Warfighting” hubsRequire some level of presence with tethered Require some level of presence with tethered

responsiveness for crisis / warresponsiveness for crisis / war– East Asia / North East AsiaEast Asia / North East Asia– Arabian GulfArabian Gulf

Determining “presence” Determining “presence” requirements in GWOT requirements in GWOT theatertheater

Determining Force Structure Determining Force Structure RequirementsRequirements -- West Coast of Africa Example -- West Coast of Africa Example

Gulf of Guinea “Hub”

• 2.5 constabulary presence

• Assume 4 month USCG deployment

• 5.25 CG / year for 1.0 presence

• Assume 6 month USN deployment

• 4.0 USN / year for 1.0 presence

• Roughly: 10 USCG / 2.5 USN total reqt

• .25 Expeditionary Strike Group presence

• Historically based requirement (NEOs)

• 4.0 USN / year for 1.0 presence

• Minimum: 2 L-ships

• Roughly 2 L-ships for total reqt

Factors driving force Factors driving force structurestructure• Defining requirementsDefining requirements

– ““Presence” requirements combined with Presence” requirements combined with – Major Combat Operations war-fighting capacities with Major Combat Operations war-fighting capacities with – Reinforcing / swing capacitiesReinforcing / swing capacities

• ReflectingReflecting– Resource constraints Resource constraints – Potential alternative operational conceptsPotential alternative operational concepts– Controlling risk Controlling risk

• Suggests a potential 202x National Fleet Suggests a potential 202x National Fleet composition along the following lines …composition along the following lines …

The 21The 21stst Century 600 Ship National Century 600 Ship National FleetFleet

• 12 SSBNs12 SSBNs• 56 SSNs / SSGNs56 SSNs / SSGNs• 15 aviation power 15 aviation power

projection platformsprojection platforms– 10 J-CVNs10 J-CVNs– 4 J-CVEs4 J-CVEs– 1 J-AFSB1 J-AFSB

• 96 VLS Surface Ships96 VLS Surface Ships– 22 CG-52s (22 CG-52s ( CG(X)) CG(X))– 62 DDG-51s62 DDG-51s– 12 DD(X) / land-attack12 DD(X) / land-attack

• 200-240 USN LCS / 200-240 USN LCS / USCG Deepwater cuttersUSCG Deepwater cutters

• 56 Sea-based Maneuver 56 Sea-based Maneuver PlatformsPlatforms– 10 LHDs / LHA(R)s 10 LHDs / LHA(R)s – 28 LPD-17s28 LPD-17s– 16 MPF(E)16 MPF(E)– 2 T-AVBs2 T-AVBs

• 68 Auxiliaries68 Auxiliaries• 90+ Prepositioning / 90+ Prepositioning /

Surge / Research shipsSurge / Research ships– Including 44 Joint High Including 44 Joint High

Speed Vessels (J-HSV) / Speed Vessels (J-HSV) / Theater Support Vessels Theater Support Vessels (TSVs)(TSVs)

– Including 11 NOAA research Including 11 NOAA research ships above 1000 tonsships above 1000 tons

Note: National Fleet expanding beyond USN / USCG conceptually to include all U.S. Government maritime assets with a global role, including USA/USAF prepositioning ships and NOAA ships.Note: Displayed notional fleet composition is 593 to 633 ships.

ConclusionConclusion

• Shipbuilding facing a perfect storm Shipbuilding facing a perfect storm

• Leadership dedicated to charting and Leadership dedicated to charting and navigating a course through this navigating a course through this stormstorm

• Real options exist to improve the Real options exist to improve the nation’s, the Navy’s, and industry’s nation’s, the Navy’s, and industry’s ability to navigate the stormability to navigate the storm

BACKUPSBACKUPS

The GWOT “Central Theater” The GWOT “Central Theater” Defines an Operational Battlespace Defines an Operational Battlespace Different Than Those Found in Past Different Than Those Found in Past US WarsUS Wars

Note: the map outline shows the Islamic Caliphate at its height

Determining Force Structure Determining Force Structure RequirementsRequirements -- Northeast Asia Example -- Northeast Asia Example“Warfighting” Dominance Force

• 2.0 Ballistic Missile Defense

• 3.0 USN / year from Japan to make 1.0 presence

• 5.5 from Hawaii / CONUS to make 1.0 presence

• 8.5 ship requirement

• .75 CSG / .75 ESG based in Japan

• 2.0 SSN / SSGN @ 4.5 to make 1.0 = 9.0 requirement

• Reinforcing forces <= 14 days

• Two CSGs

• ESG + MPF(F)

• 8 SSNs / SSGNs

Constabulary capabilities @ 1.5 constabulary presence

• Assume 4 month USCG deployment @ 6.25 CG / year for 1.0

• USN (LCS) from Japan @ 2.5 USN / year for 1.0 presence

• Roughly: 6.25 USCG / 2.5 USN total requirement