The question of if the U.S. Navy will achieve its goal of building a 355-ship fleet will largely rest on if the U.S. Congress can repeal the Budget Control Act of 2011. Moreover, that goal might only be achieved if the Pentagon is able to move funding for the Columbia-class ballistic missile submarine out of the Navy’s ship construction accounts.
“Looming over all of this is the Budget Control Act, which remains a lot of land as well as the need to determine how Columbia-class submarines will be funded without impacting other critically important shipbuilding priorities,” Mike Petters, president and chief executive officer of Huntington Ingalls Industries (HII) told investors .
Without addressing the automatic sequestration budget cuts, the goal of a 355-ship Navy is impossible.
“I think if you buy into the 355 ship Navy, you can talk yourself into a pretty aggressive growth profile,” Petters said.
“We’re at the place where we’re saying until sequestration is taken care of and we’ve its a kind of show us the money sort of perspective. And without that and without that getting sorted out, we are going to stick to our guns and say the history of SCN account that it’s reasonably flat.”
The shipbuilding accounts could also grow if the Navy found another way to pay for the Columbia-class ballistic missile submarine . The 12 boomers will be sucking up a lot of the Navy’s budget over the next decade.
“My concern is that if you find another way to pay for the Columbia-class, then it won’t be flat. Then there will be growth in the profile,” Petters said.
However, if the money for the Columbia-class ballistic missile submarines comes out of the shipbuilding accounts, then the Navy will have to cut planned ship purchases to pay for those boats.
“If you don’t find a way to pay for the Columbia-class, you’re going to take it out of hide and you are going to take it out of other ships,” Petters said.
“So our view is that we’re making pretty significant capital investment in our business and we’ve talked about how generational that is. That capital investment is to support the flat plan.”
One of the programs that would suffer is the LXR amphibious assault ship. That vessel might never be built unless the Navy sorts out funding for the Columbia-class.
“I think unfortunately, I think LXR becomes one of those things that could be affected by the failure to figure out how to fund Columbia,” Petters said.
“You can’t just go and throw all these programs out there. They’re going to start bumping into each other unless you figure out how to get through sequestration.”
Dave Majumdar is the defense editor for The National Interest . You can follow him on Twitter: @Davemajumdar.