Carter, Making Waves

Pentagon acquisition chief Ashton Carter reiterated today the shipbuilding sector has excess capacity that ought to be eliminated. Industry should look to close "excess facilities," he told reporters -- without naming specific shipyards.

"Capitalization in general is very much an example where there is excess -- there are excess facilities and a larger plant for floor space or number of facilities is being used to conduct a given activity then is necessary to do it," he said. "And there are examples like that. Shipbuilding is one -- that's clearly an example where savings can be had and productivity can be increased."

As Inside the Pentagon reported June 17, Carter complained of “gross over capitalization” in the shipbuilding industry in remarks at National Defense University.

A recent report from the Pentagon’s industrial policy shop warns the six major U.S. shipyards may not all have enough work in the future to continue operating. “Fewer healthy shipyards capable of attracting talent and capital investment will be able to provide a price and quality than more shipyards that are operating with excess capacity,” states the department's annual report on industrial capabilities.