U.S. MARITIME ASSETS AND NATIONAL SECURITY

David H. Klinges, Vice President Marine Construction, Bethlehem Steel Corporation

A MESSAGE FROM THE CHAIRMAN OF THE SHIPBUILDERS COUNCIL OF AMERICA In my message in the 1983 Annual Report of the Shipbuilders Council, I discussed as a major problem the growing divergence between available maritime assets and those required to meet national security demands.

The discussion included consideration of both the number and types of commercial vessels and shipbuilding capacity and capability.

No solution of the problem was identified or implemented during 1984.

The government's most significant action during the year in relation to the issue was the conclusion that a military deployment under Defense Guidance now requires that the size of the Ready Reserve Force must be sharply increased. A year earlier it had been planned to increase the fleet to 77 vessels by 1988. The revised plan envisions that well over 100 vessels will be required to be on 5 to 10 day readiness basis to meet surge deployment demands for dry cargo. The fact that the plan was required to be changed so soon after the original plan was developed indicates that the count and capacity of useful vessels in the privately owned U.S.-flag merchant fleet is changing very rapidly.

And, this change is not in a positive direction. This is in agreement with our predictions and analyses.

A further major increase in the number of product tankers that must be added to the 16 tanker vessels planned to be in the reserve force is predictable when the shortfall in tanker tonnage required to meet wartime demands is factored into strategic planning. In the development of strategic plans, it is readily apparent that the focus of concern has been directed only toward the availability of shipping capacity.

The loss of shipyard capacity has not yet been dealt with, in our judgment.

In spite of assertions and promises given to the Congress in the summer of 1984, that shipbuilding programs would be proposed by early November, the Administration remained silent about the matter throughout the presidential political campaign.

Recently, a maritime spokesman stated that the previous general policy would continue without a shipbuilding program. The policy is paraphrased as follows: • Naval shipbuilding and shiprepair programs provide ample support to the private industry; • The Jones Act, held sacrosanct, will provide some work for the industry; • Present cargo reservations programs will be continued but not extended; • No programs that involve spending beyond the defense programs will be considered; and • Other than Jones Act vessels, U.S.-flag ships must be acquired abroad.

Thus, the shipbuilding industry must be content with being essentially a captive supplier to the Navy, dependent on only the naval and the predicted small Jones Act markets.

The assertions of our industry that a balanced maritime program, providing support for shipbuilding consistent with the demands of the national security, has again been rejected without adequate consideration of the consequences.

A tenet of present maritime policy is that offshore procurement of all foreign-trading vessels is essential to the national welfare. It follows, therefore, that shipbuilders are expected to desist in arguments for a balanced maritime program, drop opposition to foreign building for ship operators, and accept the fate that results as a consequence.

The owners of the nation's shipbuilding and repair companies expect more from the managers to whom they have entrusted their investments than this policy would provide. Surely, the nation's citizens expect more than silent acceptance of national policy that we sincerely hold as incorrect. Our international allies should, and do, expect more, as their own security depends upon our nation's ability to perform in accord with our claims of military capability.

The shipyards of the nation have made great strides in the past few years to increase capability and efficiency.

The government has been the principal beneficiary of these improvements. Major cost reduction in the procurement of naval ships has occurred. However, we cannot perform miracles. We cannot become internationally competitive in the commercial shipbuilding arena for a number of reasons, of which not the least is the magnitude of government support our competitors receive. The U.S. government by its choice has become our principal customer. Its decisions as to the extent it will support our industry will determine the reality of our defense capabilities.

Maritime Reporter Magazine, page 48, Jun 1985

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