THREE ISSUES OF IMPORTANCE TO THE SUBMARINE FORCE

I am really very pleased to be here tonight to spend a few minutes talking about some subjects we’re all keenly interested in. First: the nation’s defense strategy and the role the Navy plays in executing his strategy. Second. the Navy’s modernization plan and the role Electric Boat plays in implementing this plan. And third. the public debate on these very important issues and the role this roomful of people can play in shaping the debate.

There’s an alternate way to examine these issues-what is the nation requiring of its armed forces; what is the nation providing them to execute their mission; and what can we in industry do to
bridge that gap.

Let me begin with a broad brush assessment of where the United States stands today. As we enter the next century, there’s no question that we are the sole military superpower in the world.

The Cold War is history, and the Western Allies, led by the United States, prevailed over what was truly an evil empire. But as that conflict came to a close, it was replaced by a potentially dangerous mix of instability and volatility. I’m referring to widespread regional unrest and global terrorism, which can erupt at any time to threaten our interests and those of our allies. The threat of a nuclear arms race on the Asian subcontinent-which caught our government by surprise just last week-is a perfect case in point.

To preserve what is nonetheless a period of relative peace, the United States must continue its commitment to remain engaged throughout the world-politically. diplomatically and militarily.

Almost a year ago to this day, the Department of Defense released its Quadrennial ·Defense Review (QDR). The QDR provided a comprehensive review of U.S. defense requirements based on emerging threats over the next two decades, as well as a strategy to maintain our global leadership and military superiority over that time span.

This strategy comprises three main elements. First is the ability to shape the international environment by promoting regional stability. Second is the need to respond quickly to the full spectrum of crises-from conducting concurrent small-scale contingency operations to fighting and winning two major theater wars. And third is the mandate to prepare now to meet the security challenges of an unpredictable future.

The force structure tasked with executing this strategy has undergone some dramatic changes in the post Cold War era. Since 1985, the U.S. defense budget has been cut about 40 percent. As a percentage of the GNP, defense spending is at its lowest level since before World War II. The number of uniformed men and women has dropped by nearly a third, and we have shut down military bases and installations around the world. Most of the ground and air forces based overseas have been returned to the United States.

Despite that, the military is performing more missions in more places than it was during the height of the Cold War. According to one national security expert, the U.S. Navy/Marine Corps team was called upon to respond to an international crisis-response operation every 11 weeks during the Cold War. Since then, the Navy/Marine Corps team has performed a crisis-response mission about once every four weeks.

Fewer bases, fewer personnel-more assignments in more locations. Increasingly, that means our national security depends on the Navy, its global capabilities and its very real forward-deployed presence.

Reflecting the changes in the post-Soviet world, the Navy has refocused its strategy on littoral operations, shifting its emphasis from the open ocean to the world’s littoral regions. Some basic missions have remained unchanged-nuclear deterrence and anti submarine warfare, for example. But even they have been de-emphasized with the shift in focus to conventional operations near and on shore. The evolving Navy is being shaped to dominate the maritime battlespace in littoral waters and to project power into the littoral battlespace ashore.

Now, many of you may be thinking that submarines don’t seem to fit into the picture I have just described. In the past that may have been the case. But today, a growing body of strategists and visionaries believe that undersea forces will have growing importance in the future-especially in littoral warfare. In this future, hostile powers will employ asymmetric responses to U.S. naval power, and will develop potent capabilities to deny non-stealthy naval forces access to their coastal waters. Using space-based surveillance, cruise and ballistic missiles, mines and modern diesel submarines, these nations will try to exact a high price from conventional naval ships approaching their shores-a price that may be much higher than the American people are will to pay.

In the future seen by these thinkers-and I happen to agree with them-stealthy undersea forces will play a very important role in suppressing these hostile anti-Navy capabilities-thereby enabling the conventional U.S. forces to move into the littoral with much less risk.

This will not be an easy task for the U.S. undersea force to carry out, as it will include coastal surveillance and intelligence collection; mine detection and location; anti-submarine warfare against conventional or AIP powered boats in shallow water; employment of Special Forces ashore for reconnaissance, targeting and sabotage; and precision strikes against land targets on a large scale.

To this end, we are working on a very promising concept through the conversion of Trident SSBNs into platforms for precision strike and Special Forces operations. These conversions will add needed firepower and military punch in the near future, and will be ideal platforms for joint force experimentation-that is, testing new ideas and systems for the future.

I was pleased to learn that the Senate Armed Services Committee has just directed the Secretary of Defense to study the conversion of Trident SSBNs to a SSGN configuration. This is an important first step in developing the stealthy forward echelon that future warfare in the littorals will require.

Complicating this view of the future, however, are the realities of the late 20 111 century domestic environment. Chief among these realities is the bipartisan consensus in this country to balance the federal budget by 2002. This will help to ensure the health of the American economy, which is really the cornerstone of our national strength and security. But it also will impose some serious fiscal constraints upon the nation’s ability to implement its defense strategy.

In a way, we’ve got a good news, bad news situation. The good news is that our defense strategy has a rock solid requirement for the Navy-and by extension, its industrial base. The bad news is that the defense budget-as it’s currently configured-doesn’t support required force levels.

In fact, the Navy today is roughly the same size as the Navy just before World War I. And we’re building fewer ships than we were in 1932, at the depth of the Great Depression.

The bottom line is that if our nation doesn’t maintain a production rate of at least 10 ships per year, the Navy will be unable to sustain a force level of 300 warships beyond 2010. Even more worrisome is the fact that if the current build rate of five ships per year continues, our fleet will shrink to 200 ships or less. I know the notion of this nation fielding yet another hollow force is extremely unsettling to everyone in this room. And the notion of a correspondingly gutted industrial base is just as troubling.

So, given the disconnect between our strategy and the forces it requires, and the funding the nation is willing to provide, what do we do?

One obvious answer is for the DoD to get more for its money-to wring out every last bit of value out of every procurement dollar. It’s easier said than done, but it is doable.

The process is acquisition reform-the effort to streamline and reduce the cost of research, development and procurement. It’s encouraging to note that a great deal of progress has already been made in this area through the combined efforts of the DoD, the Navy and industry.

As a matter of fact, the DoD earlier this month honored five programs with the David Packard award for their contributions to acquisition reform. One of them-I’m very pleased to say-was the New Attack Submarine program, which was selected as the first major program to implement the integrated product and process development approach for the design and development of a complex warship.

As the first major acquisition program in the post Cold War era, the NSSN program serves as an example of how the customer-the Navy in our case-and industry can work as teammates to design and build ships that are both capable and affordable.

There are several aspects of the NSSN program that can illustrate this point, but I’ll focus on just one-modernization.

The submarines we’re designing will operate in the fleet for 30 years, perhaps longer. When you juxtapose that lifespan against an ever shrinking half life of technology, it becomes very clear, very quickly that the traditional approaches used to modernize ships are far too complex and far too expensive.

At Electric Boat, we have pioneered in designing our submarines for modular construction. Today, we’re also designing them for modular modernization and technology insertion. In the same way that our ships are designed with weight margins, they must be designed to accommodate technology insertion routinely and affordably.

That’s precisely what we’re doing with the New Attack Submarine combat system, which is being optimized to take full advantage of the capabilities and savings available through the use of commercial electronics.

I’d like to spend just a moment on this because it really is an excellent way to illustrate how acquisition reform-related initiatives can provide improvements in both cost and performance.

Here’s how it will work. First, the entire command and control system will be assembled and tested off-hull in a modular isolated deck structure. Within the deck structure itself. commercial-off- the-shelf equipment will be installed into standard electronic packaging racks. The fully outfitted module will then be loaded into the hull. With this approach, commercial components can be used while the required shock and acoustic isolation requirements are met. And in the future, this open architecture system can be efficiently upgraded. To top this off, the combat system of the first New Attack Submarine will go to sea with more signal processing horsepower than all the Los Angeles and Seawolf class submarines put together. And at a small faction of the development and acquisition costs of the previous classes.

That’s just one great example of how the Navy/industry NSSN partnership can advance the cause of acquisition reform by developing innovative approaches that provide better ships at
affordable prices.

There’s another pretty exciting element to all this. Because it is the first major procurement program to define and implement the principles of acquisition reform, the New Attack Submarine program is leading the way for some of the Navy’s other high priority programs-LPD-17, the Advanced Amphibious Assault Vehicle and the DD-21, the next generation destroyer that is being designed for land-attack missions. In a very real way, we are now establishing a benchmark for military procurement programs in the next century.

Let me emphasize the importance of affordability. If we in industry can’t deliver new submarines at a price that fits within the Navy’s fixed budget, the Navy will be unable to acquire the submarines required for the future-that is 10 or 20 years from now when the SSN 688 ships go out of service in large numbers.

As I have mentioned, we are committed to making the New Attack Submarine both capable and affordable. And I believe we have done well, especially at the low rates of production we are faced with. More needs to be done but we can’t do it by ourselves.

A major element of affordability is stability, that is, a stable and predictable production rate. We proved that with the Trident program, where the 18 111 and last ship was built with 50 percent of the labor hours required for the first ship of the class. We need that kind of stability if we’re going to drive more costs out of the New Attack Submarine program, and build the number of ships that the Navy needs.

With long term savings in mind, we are recommending that the Navy follow the contract for the first four New Attack Submarine with a multi-year procurement of five submarines over the four year period of fiscal years 2003 though 2006.

The purchasing and construction economies of this multi-year would give the Navy five ships for the price of four and a half or less-that’s not small change.

I’m hopeful that the Navy, and ultimately Congress, will take advantage of the savings offered by a stable, multi-year acquisition of New Attack Submarines. With advanced procurement starting just two budget years from now, it’s not too early to consider this approach. And it’s in block purchasing that the really big savings are achieved.

Acquisition reform is obviously key to the effort to provide the armed services with the most effective equipment we can field. But there is another critical factor in this equation. And that concerns how the DoD spends the money it has.

While military spending has fallen for the last 12 years, the fact remains that the nation still spends a quarter trillion dollars for defense. That really should be enough to meet our worldwide responsibilities during a period of generally diminished international tensions.

The problem is this: only about one dollar is six is spent on modernization. One defense analyst claims that Americans actually spend more each year on beer and cigarettes than they do on equipping the military for the next century.

That brings us face to face with a remarkable paradox-an organization with a budget of a quarter trillion dollars that struggles to provide its employees with the latest tools they need to do their jobs. It’s worth underscoring the fact that the jobs our servicemen and women perform entail risk to life and limb in the defense of our nation.

Right now, the DoD is spending substantial sums of money to perform health care, maintenance, data processing and many other functions that could be purchased less expensively from the private sector.

Top corporations-I’ll include General Dynamics among them-have realized savings of up to 30 percent when they outsource non-core functions.

If the DoD realized similar savings on just half of the internal services it performs, it could free up more than $10 billion-enough to offset current funding shortfalls for weapons modernization.

There’s another-much more politically volatil avenue to talce. That involves base closures.

Despite four rounds of base closings, the downsizing of the Defense infrastructure has not kept pace with the downsizing of the force structure. While force structure has come down by about a third, domestic infrastructure has decreased by only 21 percent. If our military is progressing toward the next century, their supporting infrastructure remains rooted in the past.

But base closure is a very tough political issue, particularly in an election year. Just a couple of weeks ago, after Defense Secretary Cohen described base closure as the only way to free up money for modernization, the Senate Armed Service Committee voted against two rounds of BRAC in 2001 and 2005. It’s pretty clear that Congress has no taste for that kind of action-at least not
this year.

There’s another side to the base closure issue and that is to prevent the process from diminishing capabilities and resources that are essential national security. Believe me, I’m not saying that for parochial reasons.

I’m thinking specifically of the Northeast region, which really is the undisputed seat of submarine technology for the nation. Within a fairly compact geographical area is the Portsmouth Naval Shipyard, the Naval Undersea Warfare Center, the Sub Base and Electric Boat. The capabilities represented by these organizations pretty much cover the full spectrum of the nuclear submarine world.

As these organizations have grown independently, however, they have not realized the level of synergy that can be attained among themselves.

we’ve got to start right now-not when additional base closings are authorized-to define bow we can best leverage our strengths to provide a coordinated regional center for submarine research, engineering, construction, maintenance and refueling.

We’ve got to take advantage of the tremendous pool of talent we have available and creatively apply it to keep this long tradition of submarine excellence alive. A small but significant example of this kind of approach is in the use of Electric Boat employees to perform surge maintenance work at the Sub Base, and planning work at the Portsmouth Yard.

Both the public and private sides of the submarine community are under enormous pressure. At Electric Boat, we’re four years into an extremely intensive re-engineering program, working relentlessly to keep the business going at an absolute minimal level of work. If you want to know just how low that level is, consider this-there are right now fewer than 2500 people in the United States engaged in submarine construction.

At the beginning of my remarks, I said I would describe what you can do to support the Navy’s piece of the nation’s defense strategy, its modernization plan, and industry’s role in implementing that plan.

More than anything else, I would urge you to help shape the debate by avoiding complacency, by emphasizing the relevance and utility of submarines in the current defense environment, by understanding just how fragile the submarine industry is today. When the Navy and its Submarine Force are needed to deter an aggressor or win future battles, ships and sailors must be on scene
and ready to fight. A capable Navy can’t be built on ajust in time basis. And if the 21″ century should bring widespread peace and tranquility, the defense insurance our armed forces provide will have been worth the cost.

The Navy and the submarine community are telling their story better than ever-but it’s got to be told better still. So I urge you to get out and bend a few ears. If ever a cause was worth the effort, this is it.