Tag Archives: USA

Electric Boat Puts Forward Strong Outlook With Plans To Continue Hiring

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GROTON — Electric Boat, southeastern Connecticut’s giant naval business that employs thousands in the state, ended the year with an expanded payroll and revenues holding firm at around $4 billion.

Kevin Poitras, the president of Electric Boat, a division of General Dynamics, spoke confidently about the future of sub-making, even as one round of defense cuts have already hit the Pentagon earlier in 2012 and another waits on the horizon.

“There is much uncertainty in federal spending,” Poitras told a conference room full of company executives and legislators at the Mystic Marriot on Thursday. “Many people believe that the overall defense budget will trend down in the next several years.”

That being said, he expects budgets for submarine programs to increase inasmuch as they have been identified as vital to the future national defense strategy. And in short-term, Electric Boat’s contracts are coming through. In December, Congress approved spending to continue the usual work on two Virginia-class submarines as well as design work on the Ohio-class replacement submarine.

If the across-the-board defense cuts that Congress delayed until March go into effect, it wouldn’t necessarily mean layoffs at Electric Boat, Poitras said. The company could possibly manage cost-savings by simply not filling positions emptied through attrition.

The company ended the year with 11,926 employees. Poitras, who took over Electric Boat in May, said that this was the first time in four years that the company has hired in all its divisions, with expectations to hire 300 more tradespeople in Groton to supplement repair work, like the fire-damaged USS Miami. The company also plans to hire about 500 to balance employees lost through attrition.

New hires more than compensated for the company’s 2012 layoffs, pushing Electric Boat’s Connecticut employment at the end of the year up by about 500 employees at 8,900 — 6,100 in Groton and 2,800 in New London.

“To fully appreciate the impact submarine production has and will continue to have in our region, you have to look not just at 2012’s excellent workforce numbers, but at the future of submarines in our national security strategy,” Congressman Joe Courtney, who represents eastern Connecticut and serves on the House Armed Services Committee, said in a written statement.

For 2012, about 61 percent of Electric Boat’s revenues came from production of Virginia-class submarines. Design made up about 28 percent of the company’s revenues, which included preliminary work on an Ohio-class replacement. Maintenance and modernization programs made up 8 percent of revenues.

In December, Electric Boat responded to a request for proposals for the fifth block of Virginia-class submarines, which would be built 2014-2023 and generate about $18 billion in future work, Poitras said. These “stretched” versions of the original Virginia-class include an extra 90-foot section for precision-strike, Tomahawk missile capabilities.

The company also landed a $390 million research and development contract for the Ohio-class replacement submarine, a program that aims to build 12 submarines that will be in service until 2080 and carry about 70 percent of the country’s deployed nuclear weapons.

To state and federal legislators, the message was not unlike the type heard throughout the wider business community: take care of deficit issues, continue to stimulate business development, build on education reform and support jobs.

Hank Teskey, Electric Boat’s director of taxes, said that cuts to jobs programs and incentives would have a negative impact on the state and that the company’s future workforce depends on a strong science and math education.

Source – Courant.com

Russia Sails New Nuclear Submarine While U.S. Continues Fleet Delays

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Last week, after long delays, Russia made operational a new ballistic missile submarine (SSBN), or nuclear submarine, for the first time in over 20 years. This marks a significant step forward for the Russian Navy, which has pledged tens of billions of dollars to revitalize its fleet in the near future. The U.S. Navy unfortunately has had trouble both in revitalizing its SSBNs as well as its overall naval fleet.

The Russian navy made the announcement that the Yury Dolgoruky (Project 955)—the first-in-class of the new Borey-class SSBN—made operational status as it prepares for one of its largest naval exercises since the end of the Cold War. In fact, Russia’s commitment to increasing naval strength has been a central theme during Russian President Vladimir Putin’s tenure as president—despite Russia’s historically meager performance as a naval power. The Borey-class subs were first designed in the 1980s and the Yury Dolgoruky construction was launched in 1996.

Meanwhile, the U.S. navy has shrunk significantly since the Reagan years. The days of the 600-ship fleet have long since ended, and now U.S. naval leaders are struggling to find ways to meet a new requirement of around 300 ships. Currently around 285, the fleet will shrink further if more investment isn’t made in naval modernization.

The U.S. fleet was eroding long before the Budget Control Act and sequestration became part of the equation. In 2010, the Congressional Budget Office (CBO) reported that actual funding levels for 2005–2010 fell below the CBO’s and the Navy’s estimates to achieve fleet goals. Predictions show current funding levels would reduce the fleet to 263 ships. While the sequestration cuts to defense have been temporarily delayed as part of the fiscal cliff deal, they are still a looming possibility and would shrink the fleet to its lowest level since 1915.

While Russia has shown improvements in its strategic SSBN fleet (two more Borey-class subs are under construction), the U.S. has fallen behind its own standards. The legal minimum for the U.S. Navy’s SSBN fleet is 12 boats. Given this fleet’s status as the most survivable leg of the U.S. nuclear triad, the requirement should not be taken lightly. However, the Obama Administration delayed the development of an Ohio-class SSBN replacement for two years, which will in turn cause the fleet to fall below 12 boats for a 14-year period. As rogue states such as Iran and North Korea get closer to having nuclear weapons and increasing ballistic missile technology, the significance of this fleet is certainly not shrinking.

The President has downplayed the size of the fleet by making oversimplified arguments that each ship’s capability makes strength in numbers less significant. Yet with Russia aggressively growing its naval capability, resulting in a greater presence on the high seas, as well as China paying increased attention to naval capability, the U.S. must continue to uphold its status as the dominant global naval power. The fiscal year 2013 National Defense Authorization Act states that “the continuous at-sea deterrence provided by a robust and modern fleet of nuclear-powered ballistic missile submarines is critical to maintaining nuclear deterrence and assurance and therefore is a central pillar of the national security of the United States.”

Both Congress and the President need to keep this support up to maintain America’s robust naval

Source – The Foundry