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Admiral Mies, thank you for that introduction. Admiral Smith and the Submarine League’s Board of Directors-it is a pleasure to see you all here tonight. To the Corporate Benefactors, thank you for your continued support of the Naval Submarine League and the Submarine Force. I am honored to be invited back to speak again this year.

Last year, one of the issues we discussed was the Navy’s plan for a 313 ship fleet and how our shipbuilding industry was responding. Since then, we have had a pretty good year in that business.

  • USS VIRGINIA (SSN 774) redelivered on 1 March and achieved Initial Operational Capability. She is scheduled to go on her maiden six month deployment during the summer of 2009.
  • USS TEXAS (SSN 775) is completing her Post Shake-down Availability and will redeliver to the Fleet next month.
  • USS HA WAII (SSN 776) was commissioned on 5 May. She will deploy later this year, and then in the fall of2009, she will complete a homeport shift to Pearl Harbor, Hawaii.

PCU NORTH CAROLINA (SSN 777) was christened last April by Mrs. Linda Bowman (with Mr. Linda Bowman in attendance)-and I must say, she had a truly impressive swing when she smashed the bottle of sparkling wine on the ship’s bow! The ship subsequently launched on May 5th and successfully completed initial Sea Trials in December. There will be a rousing commissioning ceremony in the Tarheel State in May and another great ship will join the Fleet.

Six more VIRGINIA-class submarines are under construction and progressing on budget, on schedule, and on the glideslope toward the $2B a copy goal we set for ourselves in 2005.

  • PCU NEW HAMPSHIRE (SSN 778) is approximately 81 % complete. She is scheduled to deliver in August 2008.
  • PCU NEW MEXICO (SSN 779), approximately 72% complete, is scheduled to deliver in August 2009.

Construction of SSNs 780 thru 783 continues to progress. The Secretary of the Navy just announced last week the names of the next three submarines. SSN 780 will be USS MISSOURI, SSN 781 will be USS CALIFORNIA, and SSN 782 will be USS MISSISSIPPI.

Four OHIO-class submarines have been converted to SSGNs, and the first three have returned to the Fleet. The last, USS GEORGIA, completed her conversion in December and will formally return to service in March. Initial Operational Capability for the SSGN Program was achieved by USS OHIO on I November 2007 – on time per the original schedule. USS OHIO is on deployment right now in the western Pacific, marking the maiden deployment for the SSGN class. She’s completed our first remote site crew turnover for a nuclear-powered submarine. She also completed a maintenance availability in Guam, flexing our forward deployed maintenance capabilities with a detachment of craftsmen from Puget Sound Naval Shipyard.

In addition to the progress in the Submarine Force, there has been great progress in the construction of our aircraft carriers.

PCU GEORGE H. W. BUSH (CVN 77) – the tenth and final NIMITZ-class aircraft carrier is approximately 86% complete, with primary ship structure completed. We have commenced the testing program and compartment turnover is in progress. Current ship construction and testing progress supports a December 2008 delivery and January 2009 commissioning.

PCU GERALD R. FORD (CVN 78) – the first of the next generation of aircraft carriers. You’ve all heard the bumper stickers on the improved capability and cost effectiveness of this new design. Well, I am here to tell you that in the propulsion plant, the bumper stickers are actually real construction drawings and in fact, bent steel, completed reactor plant components, and assembled bulkheads. While the actual construction contract is being negotiated, don’t let that fool you- the ship’s construction is and has been in progress. The first steel was cut in April 2005, and when the construction contract is awarded later this year, over 25% of the ship’s structure will already be built!

And lest we forget our operational arm, our OHIO-class ballistic missile submarines are our Nation’s most survivable strategic deterrent. These submarines carry over 50% of our Nation’s strategic deterrent, while using only about 2% of our naval personnel. Our attack submarines are in demand on point supporting the Combatant Commanders.

Beyond shipbuilding and fleet operations, it has been a year of transition and achievement in other very important fronts. We are in the final stages of closing a long chapter of our history with the official ending of our presence in La Maddalena that began back in 1973. While I remain concerned over the long term consequences of the continued decline in deployed naval repair capability, the inactivation was handled in a professional manner characterized by technical competence and facilitated by the long history of both environmental and radiological stewardship.

We are continuing a chapter in a 50 year old relationship with our allies in the United Kingdom in matters pertaining to nuclear power. Both of our countries are reaping significant benefits from close collaboration on submarine design, engineering, construction, and operation. We applaud the Royal Navy’s achievement in June last
year-christening HMS ASTUTE, the first ship in their newest class of attack submarines. We continue to explore opportunities for close collaboration with the Royal Navy in recapitalizing their strategic ballistic missile Submarine Force.

And a new chapter opens this fall when USS GEORGE WASHINGTON replaces USS KJTTY HA WK as the forward deployed carrier in Japan- marking the first time a nuclear-powered warship has been forward deployed. As you can imagine, a tremendous amount of hard work has gone into making this a reality. The maintenance and repair of the ship will be coordinated between the Ship Repair Facility, Yokosuka and a detachment from Puget Sound Naval Shipyard. Puget Sound will complete all the required maintenance and repair work in the propulsion plant spaces. There will be up to 550 craftsmen from the shipyard deployed to Japan on TAD assignments up to 7 months long to complete the scheduled maintenance availabilities. A smaller permanent detachment of approximately 35 shipyard workers will provide year-round support, coordination, and planning. In addition to the planning efforts, facility improvements are currently underway to prepare for the G W’s arrival: upgrading shore power, dredging the Yokosuka harbor – a $65 million Government of Japan project, construction of a high-quality water facility, and other upgrades to the berth and surrounding area. And to ensure everything is done to our standards, I stood up the first forward deployed Naval Reactors Representative Office in July 2007- sending over Joe Gist whom many of you remember was the 08J section head for many years. This would not have been possible without our legacy of safe reactor operations. We have hosted Japanese delegations at Puget Sound Shipyard, San Diego Naval Base, and Norfolk Naval Base. It was a great testament to the reputation of our Program when, during a tour of USS STENNIS in San Diego, the mayors of Coronado and San Diego stood on the ship’s bridge and explained to the Japanese officials that it was our great safety record that made them feel safe about the Navy operating nuclear reactors right next to their cities. Additionally, we conducted a coordinated response drill in Yokosuka with the Japanese government officials. We are looking forward to the successful homeport shift- validating all the work and effort by so many people both here and in Japan.

The Congress has duly noted the successes we continue to achieve in our nuclear shipbuilding programs and the importance of submarines to the Navy and the Nation. Congress provided the Navy with an additional $588 million dollars of advanced funding to procure an additional VIRGINIA-class shipset of nuclear and non-nuclear government furnished components. As a result of this additional funding, we are a step closer to our stated goal of 2 Virginia-class submarines per year.

Indulge me for a moment as I recap how WE got here. WE- the nuclear Navy, the Navy leadership, the shipbuilding industrial base, the nuclear vendor base and certainly all of you in this room. It wasn’t that long ago that WE were in choppy waters in shipbuilding, and, in fact, in a broader sense, in the perceived value of the Submarine Force. The Cold War ended and the Seawolf program was cancelled. There was significant resistance to a force structure recapitalization plan that included construction of JIMMY CARTER and the design of VIRGINIA. And I’ve lost track of how many times Naval Submarine Base Groton has been on the BRAC list. The thing I am most proud of through all of that is how our leadership took the long view, even under the tremendous pressure of a climate in this town that demands short term show at the expense of long term go. Our leaders encouraged the spirited debate inside the Force to develop sound concepts and strategies. They demanded technical rigor in parallel with an innovative, flexible, and responsive approach to problem-solving. And in the end, when the key decisions were made, the community (and I include all in this room in that phrase) rallied under the flag with a single voice and with purpose to carry the vision to reality. Those successes I mentioned above simply would not have happened without the strong leadership that was our blessing and the cohesiveness of the community- You!

Now I suppose some of you are wary at the idea of getting such praise from, of all places, Naval Reactors. Your suspicions are well founded- nothing is free. We have more work to do and we, the community leadership, need your help.

First, we still have work to do before we achieve our goal of reducing the per-ship cost of a Virginia class submarine to 2 billion dollars. And we’ve got aircraft carriers to build and deliver. Since increasing the acquisition profile to two submarines per year is predicated on meeting the 2 billion dollar goal, we must continue to find innovative ways to drive costs down, while maintaining-or even increasing-capability and not yielding a millimeter in construction quality. Some of you have heard me talk about cost control during my visits to our contractors and vendors, and the message is simple- high quality and being good stewards of the public trust are not mutually exclusive. We are not interested in cheap-we demand value for our dollar. Some of our industry partners are further along than others in improving our value/dollar profile, but my sense is everyone gets it.

We are, however, not immune, like any other successful organization, to institutional hubris that can lead to a decline in vigilance and lack of wariness as to the stringent technical and operational demands of operating nuclear power plants at sea on submarines and aircraft carriers. Last year I discussed the disturbing string of operational incidents that had cost us dearly in lives of our shipmates, in dollars, and in our professional reputations. I applaud the efforts of our Force, from VADM Donnelly and RADM Walsh as they drive the message from the top down to our deck plate leaders, to refocus the Force and get heads back in the game. However, one only has to look at the integrity issue on USS HAMPTON and the welding quality issue that has recently impacted Virginia class construction to realize that none of us have justification for overconfidence. We must always remember to maintain our vigilance and respect for the complex technology that we work with as a part of our daily lives.

With that in mind, let me outline a couple of more challenges for the year ahead: First and foremost- Sea Based Strategic Deterrent (SBSD). The analytical work is well underway to support the construction start date defined in our shipbuilding plan. Both the STRA TCOM-directed capabilities based assessment and the Secretary of the Navy’s undersea launched missile system study arc progressing to support initial acquisition decisions this summer. And
we are synchronizing our work with that of the Royal Navy as they bring their VANGUARD successor program requirements to maturity.

Upcoming decisions include:

1. Agreement on key capability attributes (matching the platform and weapons system to the missions) while
addressing potential threats through a threat and physics based assessment.
2. Platform – submarine or surface ship
3. Missile – warhead characteristics
4. Tube size and number
5. Hull size
6. Quieting goals
7. Speed
8. Propulsion

As we narrow our options, the research and development plan and program are starting to take shape with POM I 0 being the focus for laying in the funding we need. This is particularly important, not only to the SBSD, but also to support for continued innovation across the spectrum of platforms and warfighting capabilities. We will be including action to shape the design and engineering workforce such that we will have the skills and bench strength we will need as we build this ship over the next 15 plus years. Obviously a lot of work remains to be done; hard work, but I remind you of how we have been successful in the past:

1. Doing the hard work up front.
2. Staying loyal to the truth – analytical rigor and technical discipline.
3. Pressing the bounds of technology and innovation but doing so with a proper dose of technical reality.
4. One message – many voices.
5. Perseverance in the face of adversity.

Next challenge: CG(X). The Navy is still coming through decisions on mission, capabilities, and technology with respect to the radar and missile systems. Until that work is complete, we are on hold for a decision on hull type/size and propulsion. I am satisfied with the rigor that has gone into propulsion aspects of the Analysis of Alternatives. We are ready to support the final decision-making process with a fact based, technically grounded argument. Where I can use your help is in a couple of areas:

1. ( 1) Keeping the facts straight. As you can imagine, we can tend to attract “antibodies” when we get involved in a project that is outside of our normal line of business. Such is the case here where well-meaning folks with the best interest of Navy at heart offer opinions that are simply incorrect when it comes to nuclear propulsion. I am not asking nor do r want you on a crusade to set the record straight every time one of these opinions surfaces, but if you do hear these things and feel a response to set the record straight is necessary, let us know.
2. One message – many voices (again). This is going to be a real challenge for the Navy to come through and there will be a lot of attention inside and outside the Navy. Be very careful as you discuss this topic to ensure you have your facts straight and that you aren’t getting in front of the Navy leadership. Again, fact based, technically rigorous and disciplined, one message.

One more challenge- and I saved the most important one for last our people. Let’s face it- we have really good people in our business (Sailors, government civilians, and industry partners). It is both our blessing and our curse. Multiple forces arc driving us into a more competitive environment- this can be seen from several
precursors: declining retention in the Navy, industry dealing with aging demographics, and a rising demand throughout the Nation and internationally for smart, young engineers.

In the Navy, we arc taking a multi-pronged approach to this problem. We have come through a period of downsizing, coupled with a period of increased propensity for young people to join the Service in the post 9/ 11 environment. Times have changed. We are reinvigorating our recruiting efforts to attract the most qualified young people. The Force leadership is renewing its focus on improving retention and limiting attrition of our talented Sailors. We are making adjustments to bonuses and special pays to ensure our compensation remains competitive. We are improving our collaboration with the groups who are drawing from the same talent pool the NRC, NEI, etc. And, we are redoubling our efforts in collaboration with industry partners to increase interest in technical studies in our high school and college students across the Nation.

We need similar multi-pronged approaches in the industry if we are to solve this problem. As I visit your facilities and we discuss people, I see similar demographics throughout industry- a large bow wave of older folks nearing retirement eligibility, a gap in the mid year experience levels, and a good crop of young people recently
hired. Accordingly, it is critically important to ensure the older, experienced workers transfer their knowledge and experience to the smart, eager, younger workers.

There have been many successes over the past year. The challenge I lay before you tonight is to seize the momentum offered by our past successes and use it to overcome our present challenges and ready our forces for the future security threats. We must continue to work together as a TEAM, with ONE CONSISTENT MESSAGE, because- as we have seen- when we do, great things happen. I would like to thank the Naval Submarine League and everyone in this room for their steadfast support of the Submarine Force and the U.S. Navy. Thank you again for allowing me to speak here tonight. I will be happy to take a few of your questions.

Naval Submarine League

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