Daily Archives: January 7, 2013

General Dynamics Gets Trio of Submarine Contracts

Electric Boat, a wholly owned subsidiary of General Dynamics Corporation (GD – Analyst Report), procured three contracts worth $4.6 billion from the U.S Navy for designing and development of the next-generation strategic deterrent submarine. The contracts also included the task of construction and purchasing of materials for Virginia-class attack submarines.

Per the first contract worth $1.85 billion with a span period of five years, the company will perform research and development work for the next-generation strategic deterrent submarine under the Ohio Replacement Program. The construction for this new class of ballistic-missile submarine is expected to begin in 2021. Simultaneously, the company will continue to develop Common Missile Compartment for Ohio Replacement submarines and the UK Successor-class ballistic-missile submarine. Common Missile Compartment is jointly owned by the U.S. Navy and Royal Navy.

The company also received a contract to build two Virginia-class submarines, South Dakota (SSN-790) and Delaware (SSN-791). These two ships are the 17th and 18th ships of the class. The contract worth $2.5 billion will be performed jointly by Electric Boat and its team mate Newport News Shipbuilding, a division of Huntington Ingalls Industries, Inc. (HII).

Per the third contract worth $308 million, the company will purchase long lead-time materials for SSN-792, SSN-793 and SSN-794. Till date, these Virginia-class submarines have not been named.

Electric Boat has specialty in performing tasks for Virginia-class submarines. Of late in November 2012, Electric Boat had also received a contract modification to provide research and development and lead-yard services for Virginia-class nuclear-powered attack submarines.

The company believes that these contracts will bring in stability to the submarine industrial base, thereby helping it to accomplish greater cost reduction through improved efficiencies. Moreover, these contracts also demonstrate the Navy’s confidence in the ability of General Dynamics.

General Dynamics is well equipped to build nuclear-powered submarines in the U.S. Also, some acquisitions make the company more capable to perform its tasks well. In December 2012, General Dynamics had acquired Applied Physical Sciences Corporation that became a part of General Dynamics Electric Boat. This acquisition will allow the company to provide more competent submarines that will help in maintaining global undersea dominance.

Based in Falls Church, Virginia, General Dynamics engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. General Dynamics’ revenue exposure is spread over a broad portfolio of products that allows to keep the overall growth momentum steady.

Source – Zacks

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India’s nuclear subs – The Curse Continues

January 5, 2013: The Indian Navy made public its efforts to get critical (but unnamed) replacement parts for the nuclear submarine (INS Chakra) it received from Russia last January. India has often had problems getting parts or other forms of service for Russian weapons. The Indians are no longer inclined to play nice with the Russians on these matters. President Putin of Russia promised to sort this out quickly.

INS Chakra was formally the Nerpa, a Russian Akula II class submarine that was supposed to be turned over to India (which is leasing it) three years ago. The main reason for the delay was a safety issue. Four years ago, during sea trials, there was an equipment failure that killed 20 sailors and shipyard workers aboard the Nerpa. This delayed sea trials for many months and the Russians found more items that needed attention. These additional inspections and repairs continued until quite recently. India is paying $90 million a year for ten years to lease the Nerpa, an 8,100 ton Russian sub that was then renamed INS Chakra (the same name used by the Charlie class Russian sub India leased from 1988-91) by the Indians.

There have been many reasons for getting this sub from Russia. Back in 2010 the Indian crew, after more than a year of training, found that they were not fully prepared to take over the sub. The crew required another six months of training. The Russians were being blamed, partly because they were in charge of the training and partly because they recently made a lot of internal changes to the Nerpa. But Indians also admit that all their veteran nuclear submarine sailors (who manned a leased Russian nuclear sub from 1988-91) were retired and the difficulties of learning how to run a nuclear boat were underestimated.

The Nerpa was built for this Indian deal and finally completed its sea trials and was accepted into Russian service in late 2009. India was supposed to take possession in May 2010, but there were more delays, mainly because of the accidental activation of the fire extinguisher system and death of twenty on board. There were 208 people aboard the sub at the time, most of them navy and shipyard personnel there to closely monitor all aspects of the sub as it made its first dives and other maneuvers. The source of the fatal accident was poor design and construction of the safety systems. This accident led to sailors and shipyard technicians being fearful of going to sea on the boat. So the sea trials were delayed, even after repairs were made.

The post-accident modifications on the Nerpa cost $65 million. The lease arrangement has India paying $178,000 a day, for ten years, for use of the sub. The 7,000 ton Akula II requires a crew of 73 highly trained sailors. Over a hundred Indian sailors have undergone training to run the boat.

It was Indian money that enabled Russia to complete construction on at least two Akulas. These boats were less than half finished at the end of the Cold War. This was another aftereffect of the collapse of the Soviet Union. Several major shipbuilding projects were basically put on hold (which still cost a lot of money), in the hopes that something would turn up. In this case, it was Indians with lots of cash.

Traditionally, when a new ship loses a lot of people during sea trials it is regarded as “cursed” and unlucky. Sailors can be superstitious, especially when there are dead bodies involved. It’s not known if India will have any problems with this.

India has designed and built its own nuclear sub but the first one is basically a development craft, and mass production of Indian designed nuclear subs is still 5-10 years away. The unlucky Russian sub will enable India to train more nuclear sub sailors in the meantime.

Source – Strategy Page