Chief of Naval Operations: Sequestration will not affect Austal’s existing LCS and JHSV contracts


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Austal USA President Craig Perciavalle (L) and Chief of Naval Operations Admiral Johnathan Greenert, discuss sequestration and how it will affect Austal’s Mobile shipyard, Feb. 22, 2013 in Mobile, Ala. (al.com/ Ellen Mitchell)


 

MOBILE, Alabama — Sequestration cuts will not affect Austal USA’s 10-ship, $1.6 billion joint high-speed vessel contract with the U.S. Navy, nor will it affect its contract to build five 127-meter littoral combat ships, according to Chief of Naval Operations Admiral Johnathan Greenert.

During a tour of the Austal USA shipyard in Mobile today, Greenert said sequestration cuts will not affect projects that are already under contract, including Austal’s JHSV and LCS Navy deals.

“Sequestration will impact every single program; it requires a cut in every budget line,” Greenert said. “However, all those ships here that are under contract will not be affected, but we’ll have to move some money within the program line.”

Austal USA President Craig Perciavalle said Austal is optimistic that it’s providing a low cost
solution to the Navy, and does not expect any job cuts from
sequestration in regards to Austal’s existing Navy contracts.

“All
of our focus right now is delivering a great quality product to our
customer and that’s what we can control,” he said. “We’re confident,
based on the feedback that we’re getting from our customer, that we’re
stable on the contracts we have going forward.”

Standing alongside Perciavalle, Greenert addressed sequestration concerns, recent LCS criticisms and the future of the Navy’s partnership with Austal.

In a Bloomberg article released this week, critics inside the Navy referred to the LCS as the “Little Crappy Ship.” The article also discussed the debate over how vulnerable the LCS may be to attack, and cited numerous problems with the newly built vessels, including a six-inch crack in the hull of Lockheed Martin Corp.’s USS Freedom that had to be repaired, and “aggressive” corrosion in the propulsion area of Austal’s USS Independence.

Greenert said despite the LCS coming under fire recently for its design and cost, he’s looking forward to the Navy’s use of the ship.

“The Freedom and the Independence have proven their worth for the design of the ship,” he said. “Some folks felt that the ship should be used for missions or for capabilities which it frankly will not do. Some folks will put it in a situation and say ‘it’s not made for this, it won’t do well in this.’ I would acknowledge that.”

Greenert went on to say that the Navy has intentions to operate the ship in conjunction with other, larger ships, so he’s very optimistic that the ship will do well.

Lockheed Martin Corp., based in Bethesda, Maryland and Austal Ltd., based in Henderson, Australia, build two separate versions of the LCS. The dual sets of ships were meant to get them built faster, at a rate of four a year rather than two a year.

Lockheed makes a steel-bodied version in partnership with Marinette Marine Corp., at Marinette’s yard in Marinette, Wis., while Austal makes an aluminum version in partnership with Falls Church, Va.-based General Dynamics Corp. under a 10-ship, $3.5 billion contract. The estimated price to build each LCS is $440 million.

The LCS is intended to perform missions such as destroying mines, hunting submarines, interdicting drugs and providing humanitarian relief.

“As a customer, I’m here to check out the wares that we buy,” Greenert said of his shipyard tour. “I’m very impressed with what I’ve seen. Perhaps more importantly, they’ve got a lot of capacity for future building.”

Article source: http://blog.al.com/press-register-business/2013/02/chief_of_naval_operations_sequ.html