A coalition of aircraft carrier industrial base companies is meeting with members of Congress this week to lobby for continued block buys of aircraft carriers and consistent funding for carriers' refueling and complex overhauls.
Rick Giannini, the chairman of the Aircraft Carrier Industrial Base Coalition and CEO of Milwaukee Valve Co., said in an interview with Inside Defense that suppliers need stable and predictable funding.
"Most of us are highly dependent on receiving contracts and orders from the Navy," he said. "The two-ship buy, and the continual stable consistent funding for overhaul programs, are critical to our survival, and the ability to not have more companies fall out of the industrial base."
The Navy awarded Newport News Shipbuilding a $14.9 billion contract in 2019 for the third and fourth Ford-class carriers, which the service estimated will cost a total of $24 billion, compared to $28 billion for the two ships if they were procured separately.
The coalition represents over 2,000 companies that employ more than 92,000 people across 46 states. Giannini said the organization wants Congress to continue providing advanced procurement funding for refueling and complex overhauls.
"When you are talking about an RCOH, you know somewhat what to expect when you open up that ship, but there's a quick turnaround on that," he said. "Having the funds available so they can go out and buy that material as soon as they recognize a need is critical."
While the industrial base is now in better shape than it once was, it has lost suppliers over the last 20 years, Giannini said.
“That’s because of the ups and downs, and lack of consistency, predictability and stability,” he said.
Giannini said 61% of ACIBC companies contend that Navy shipbuilding contracts allowed them to preserve jobs during the COVID-19 pandemic. The Navy accelerated shipbuilding contracts as part of its effort to mitigate the pandemic’s effects.
“They were awarding some of those Navy contracts ahead of time when they saw what was happening to the economy, and that kept a lot of businesses afloat,” he said.
Giannini said the block buy of the two Ford-class carriers was critical in helping the industrial base survive the pandemic.
“The two-ship buy was critical to their health and safety,” he said. “I’m in the same boat for both of them, we have those contracts, and they were super important to us."
Milwaukee Valve Co.'s Navy contracts helped the company avoid layoffs during the pandemic, Giannini said. With 70% of the company’s business in the commercial and industrial markets, business was down 18% from April to August, he said.
The company’s Navy’s backlog helped it through that decrease, Giannini said.
“That got us through, and now we are back, running on track,” he said. “In fact, business is quite good."
Rep. Elaine Luria (D-VA), a seapower and projection forces subcommittee member and former Navy surface warfare officer, said in March there is growing speculation that the Navy may again seek to retire the aircraft carrier Harry Truman (CVN-75) before its upcoming mid-life refueling and complex overhaul.
In 2019, the Navy proposed retiring the carrier before its refueling to redirect that funding to new technologies, but reversed that decision following congressional pushback.
Giannini said cancelling the refueling would destabilize the industrial base.
“We just know that if it's not there, people can’t count on the contracts, they can’t count on what to put through the shop,” he said. “A lot of these folks have a high percentage of their business associated with defense contracts. Some have more of a balance, but a lot of them are highly dependent on that to keep their business going."
Rear Adm. Gregory Harris, the director of air warfare, said late last month that the Navy would be conducting an analysis of alternatives for a light carrier concept in 2022, though Harris said he did not think a light carrier is necessary.
The Navy’s most recent shipbuilding plan, released in the final days of the Trump administration, states that further study of light aircraft carriers is needed, and the Navy could have up to six light aircraft carriers by fiscal year 2045.
Giannini said the larger carriers provide the sizable runways needed for big planes, something the small carriers could not do.
“There is no substitute for getting the number of planes on and off those ships in the areas that our nation needs in the time they need them on a smaller platform,” he said. “You are going to compromise the defense of our country."
The shipbuilding plan calls on the number of carriers to remain steady at 11 through FY-45.
“We need at least 11, no less than 11, and we can make a strong case for 12 because there’s a global demand on our Navy defense that exceeds the 11,” Giannini said. “But we’ll start with 11, keep them fully funded, and build them two at a time."