Shipbuilding and the Industrial Base: Ready for a Potential Maritime Competition

1
Shipbuilding and the Industrial BaseReady for a
Potential Maritime Competition?

• Robert O. Work
• Center for Strategic and Budgetary Assessments
• April 5, 2006

2
When I Reread This Brief, I Had a Sudden,
Unsettling Vision
Adm Crenshaw
Adm Hamilton
Admiral Mullen
Me
Adm Nathman
3
Therefore, Id Like to Make This Disclaimer

• The views expressed in this brief are Ms.
  Allison Stillers and Mike Toners.
• I agreed to present their views in return for a
  tour of the Exposition and a ball point pen.
• All subsequent questions should be directed to
  them.

4
In 1815, After Britain Defeated Revolutionary
France, It Found Itself in Command of the High
Seas

• Key question how best to sustain maritime
  supremacy with no clear naval challenger in
  sight?
• Had a large fleet of ships designed for the last
  war (first, second, and third rates) which were
  very manpower intensive
• Confronted a serious transnational threat (human
  slavery and piracy)
• Needed to hedge against the rise of a naval peer
  competitor
• Resurgent France?
• Rising Russia, possibly an ally of France?
• Rising democratic America? (potential maritime
  rival with enormous latent economic potential)
• Faced with relatively tight budgets
• The Admiraltys answer
• First, fight the war youre in
• Declare war on human slave trading and piracy and
  fight the war with an expanded fleet of small,
  cheap combatants (frigates, sloops, brigs)
• Adopt a competitive strategy of the second move
  (hold what you've got exploit the Royal Navys
  huge lead)
• Rely on the (commercial) industrial base as
  competitive hedge
• Prepared to make bold moves to quickly advance
  the lead when necessary (1860 and 1906)
• Key supporting goal reduce manpower costs
• Lay up the big warships

5
In 1989, as the Berlin Wall Came Down, the U.S.
Found Itself in Command of the High Seas

• Key question how best to sustain maritime
  supremacy with no clear naval challenger in
  sight?
• Had a large fleet of ships designed for the last
  war (108 guided missile ships and general
  purpose destroyers) that were manpower intensive
• Confronted with myriad global responsibilities,
  but no clear naval threat
• Needed to hedge against the rise of a naval peer
  competitor
• Resurgent Russia?
• Rising China?
• Rising Indiaa potential democratic maritime
  partner or rival?
• Faced with relatively tight budgets
• The Navys initial answer
• Given uncertainty, hold force structure line by
  emphasizing presence over warfighting
• Adopt a holding strategy emphasizing carriers
  large multi-mission combatants
• Exploit blue water dominance and platforms by
  emphasizing littoral strike operations (aviation
  and guided missile strikes)
• Cut submarine force and protection of shipping
  combatants
• Cut amphibious lift requirement
• Get rid of small combatants, transfer riverine
  capabilities to the Marines, transfer PCs to USCG
• Key supporting goal reduce manpower and OM
  costs
• Cut the overall size of the force, civilianize
  the CLF, cut the MLF, move to an all-gas
  turbine combatant fleet

6
These Initial Answers Were Reflected in the 1997
QDR

• The 1997 300-ship navy was roundly criticized
  by Navy leadership spurred the development of
  many alternatives
• Adm Murphys 460-ship fleet
• 360-ship risk reduction fleet
• 375-ship Global ConOps Navy
• JCS SSN Study

Note numbers in red did/do not count in the
official TSBF
7
By 2005, the U.S. Still Commanded the High Seas,
But it Was Confronted by Two Maritime Challenges

• Key question how best to sustain maritime
  supremacy?
• Continued to build toward a large fleet of ships
  designed for the last war (84 AEGIS/VLS
  combatants94 percent of 600-ship Navy
  requirement) that were manpower intensive
• Was tasked with fighting a global war against a
  transnational threat (radical extremism and
  piracy)
• Increasingly concerned over the rise of a
  potential naval peer competitor
• Rising Chinaa potential maritime rival with
  enormous latent economic potential
• Faced with relatively tight budgets
• The Navys answer
• Fight the war youre in really shift to the
  littorals (reluctantly?)
• 1,000-ship Navy, NECC, reconstitute riverine,
  retrieve PCs, new small combatant (LCS),
  increased support for Naval Special Forces
• Adopt a competitive strategy of the first move
  (expand the lead)
• Prepare immediately for war against a naval near
  peer
• Build more capable and more expensive warships,
  with an emphasis
• on surface combatants
• Key supporting strategy reduce manpower costs
• Reduce crew size through automation

8
The Navys Competitive Strategy is Reflected in
the 2006 QDRs 313-Ship Navy

• A 300-ship navy hailed as a great advance
• Actually, the plan has six fewer warships than
  the 1997 QDR!

Note numbers in red did/do not count in the
official TSBF
9
Where Has/Does Industrial Base Planning Fit Into
U.S. Naval Competitive Strategy?

• Essentially, it appears to be an afterthought (or
  at least a very low priority)
• First reflected in the decisions concerning the
  submarine design, build, and supplier industrial
  base in the 1990s
• During the 1990s, did not authorize new submarine
  production for six years
• Will have two yards that will build half a
  submarine a year for ten years
• No new submarine design ongoing with attendant
  problems (personnel, supplier base declining,
  cost of parts increasing)
• By 2005, it was increasingly clear that the Navy
  began to think of the industrial base as just a
  commercial vendor rather than a valued partner in
  pursuing its competitive strategy
• The decision to close a shipyard...is up to
  industry. We dont define the industrial base.
  Its up to the market to arrive at these
  conclusionsits a commercial world, and they
  make commercial decisions.
• Secretary of the Navy Gordon England
• January 2005
• During the last year of Admirals Clarks tenure,
  it seemed that the Navy laid most of blame on the
  Navys shipbuilding woes on industry
• Especially with regard to the escalating costs of
  ships
• However, most objective reports link the high
  cost of ships to Navy design requirements,
  changes to the shipbuilding plan, and ship change
  orders

10
Is The Apparent Lack of Concern Over the U.S.
Shipbuilding Base Wise Policy?

• Assigning blame on the industry and allowing
  commercial decisions to drive the character of an
  industrial base which will have a major that
  impact on U.S. naval competitive strategy do not
  appear to be wise choices, especially if we are
  indeed on the leading edge of a disruptive
  maritime competition with China
• Unlike Britain in 1815, we cannot rely on the
  commercial shipbuilding industry to maintain our
  naval prowess
• Moreover, China is the first potential naval
  competitor weve faced since 1890 with an
  industrial capacity as large as (or potentially
  larger than) our own
• By 2004, China had the fourth largest merchant
  fleet in the world by deadweight tonnage (U.S.
  was sixth)
• Like the Soviet model, some of these ships could
  be dual use
• China is building the worlds largest single
  shipyard
• Navy exhortations to the shipbuilding industry to
  change its Cold War focus seems to be a proxy
  argument directed at Congress
• Two key questions
• Will current shipbuilding plans sustain the US
  competitive advantage in designing and building
  naval warships and battle networks over time?
• If not, what should we do about it?

11
The Answers to The First Question Begins to Form
by Comparing the 1997 and 2006 Plans and Their
Respective Costs

• According to the DoN, the 2007 30-year
  shipbuilding plan will cost an average of 15.4
  billion a year in constant FY 07 dollars
  (including nuclear refueling costs)
• Considerably higher than the average 11 billion
  annual shipbuilding budgets seen since the end of
  the Cold War

Note numbers in red did/do not count in the
official TSBF
12
To Execute the New 30-Year Shipbuilding Plan,
Five Things Must OccurSimultaneously

• The Navys plan prudently assumes a flat
  Departmental topline (no real growth). To
  increase the average shipbuilding procurement
  budget to an average 15.4 billion a year, the
  plan makes the following five assumptions
• RD must go down and stay down
• Is this logical if we are on the verge of a
  concerted maritime challenge?
• No real growth in OM
• 500 million in back maintenance on the FY 07
  Unfunded Deficiency List
• Rising price of oil
• No real growth in personnel
• Navy has a good plan, but its outcome is largely
  out of the Navys hands
• 250 million in unfunded fact of life
  increases in FY 07 Unfunded Deficiency List
• Savings may be diverted to Army and Marines)
• Must hit stretch goal ship cost targets on
  every ship programLCS, SSN-774 and 774I, CVN-21,
  DD(X), CG(X), HSS, JHSV, DDG(X), SSBN(X)with no
  cost growth
• Will fence shipbuilding and take up any
  procurement delta in aviation procurement
  accounts
• Two versions of JSF, MV-22 BAMS, ACS, E/A-18G,
  CH-53K, etc., etc.

13
These Assumptions Have No Historical Precedent

• For example
• RD and procurement generally follow similar
  trend lines would be most unusual for RD to go
  down while procurement goes up
• OM costs generally have not been contained
• Personnel costs have risen substantially since
  1973, and particularly since 1999
• Statistically speaking, assuming there is a 90
  percent probability each assumption is true, the
  likelihood they will all come true is 60 percent
• .9 x .9 x .9 x .9 x .9 approximately 60
  percent
• If the probability that each assumption falls to
  87 percent, the likelihood that the five
  assumptions all hold true falls below 50-50
• Recipe for instability?

14
Setting Aside the Assumptions, Given the Similar
Numbers Between the 1997 and 2006 Plans, What
Accounts for the Dramatic Planned Cost Increases?

• The majority of the cost increase, at least
  between now and the 2020s, can be explained by
  noting the differences in the composition of
  ships in the surface combatant/mine warfare
  category, and their increased costs

Note numbers in red did/do not count in the
official TSBF
15
A First-Order Reaction the New Plan Will Put
Enormous Pressure on the Two Remaining Large
Surface Combatant Yards Already Under
Considerable Strain

• Went from a plan that called for 116 large
  combatants to one that built 88 (all 55 LCSs are
  to be built in Tier II yards)
• 116 surface combatants / 35 year ESL an implied
  sustained shipbuilding rate of 3.31 ships per
  year (10 ships every three years)
• 88 surface combatants / 35 year ESL an implied
  sustained shipbuilding rate of 2.51 ships per
  year (10 ships every four years)
• But high cost of the ship design (DD(X)) means
  will build only 13 ships between FY 07 and 15, at
  a rate of 1.44 ships per year (10 ships every
  seven years)
• After that, the sustained shipbuilding rate
  settles at 2 ships per year (ten ships every five
  years)
• Similar calculations can be made for the
  submarine fleet
• 48 SSNs / 33 year ESL an implied sustained
  shipbuilding rate of 1.45 subs per year
• This explains Navys clear desire to go to one
  combatant yard, and the logic behind calls to
  move to one submarine yard
• Makes sense in terms of efficiency what about in
  terms of competitive strategy?
• In any event, seems clear Congress wants two
  yards for both warships and subs

16
But the Impact of the New Surface Combatant Plan
Will Ripple Far Beyond the Two Surface Combatant
Yards

• In 1997, the plan was to
• Build the last of the DDG-51s in 2004
• Authorize the first DD-21 in 2004
• Build 3 DD-21s per year between FY 06 and 15,
  then one (the 32nd ship) in FY16 target cost for
  the fifth ship of the class was for 1.06 billion
  in FY 07 dollars (objective)
• Modernize the CG-47s and extend their expected
  service lives (ESLs) to 40 years first would
  retire in 2023
• Build first CG-21 in 2016 skip a year and then
  build at a rate of 2-3 per year. For this
  exercise, I assume first ship cost of
  approximately 3.0 billion in FY 07 dollars
• In other words, after building 57 DDG-51s, the
  1997 QDR plan was to spend 37 billion between
  FY04 and FY 16 on surface combatants thereafter
  continue a high sustained ship rate to replace
  the Ticos and Burkes as they reached the end of
  their ESLs
• Average of 2.84 billion per year
• Approximate aggregate crew size for 32 DD-21s and
  one CG-21 (assuming a crew size of 145 per ship)
  would be approximately 4,785 officers and Sailors

17
Compare These Figures With Those Found in the New
30-Year Shipbuilding Plan

• In contrast, the new plan (using Navy planning
  figures)
• Built two more DDGs in FY 04 and three in FY 05
  average cost of approximately 1.4 billion
  apiece
• Builds 55 LCS between FY 05 and FY 2016 average
  cost for the sea frames is estimated to be 296
  million in FY 07 dollars average cost for two
  modules per hull is estimated to be 140 million,
  for a total of 436 million per ship
• Builds seven DD(X)s between FY 07 and FY 13, at
  average cost of 2.8 billion per ship
• Builds six CG(X)s between FY 11 and FY 16, at
  projected average costs of 2.7 billion per ship
• Modernizes the CG-52 class but does not extend
  its 35-year ESL
• This plan costs 67 billion between FY04 and FY
  16
• Average of 5.13 billion per year on surface
  combatants
• Requires an aggregate crew size of approximately
  10,240 officers and Sailors (over 5,000 more than
  the 1997 QDR plan)
• When you have had average shipbuilding budgets of
  11 billion since 1989, such a dramatic jump has
  a disproportionate impact on the entire
  shipbuilding plan
• The resource planning allocation for surface
  warships jumps from 26 to 47
  percent of the baseline budget

18
The Dramatically Higher Cost of the 2006 Surface
Combatant Fleet Shapes the Outline of the Entire
30-Year Shipbuilding Plan

• It helps to explain both the high cost of the
  shipbuilding program as well as its basic
  outline, which is to
• Build cheap seabasing, auxiliary, and amphibious
  ships up front, and then stop building themfor
  periods between seven to ten years
• Rapidly build 55 LCSs by 2016, then stop building
  small combatants until 2030
• Start building the expensive DD(X)s/CG(X)s well
  over a decade before the first the
  Ticonderoga-class CGs are scheduled to retire,
  and slowly move toward a steady-state build rate
  of only two large surface combatants a year
  (reached in 2017)
• There will be seven DD(X)s and three CG(Xs) in
  the fleet before the first Tico retires, causing
  the battle line to drive to 95 ships (seven over
  requirement)
• Then, in the later 2020s/early 2030s, try to
  simultaneously recapitalize the amphibious,
  combat logistics force, support vessels, SSGNs,
  SSBNs, DDGs and LCSs (which have a 25-year design
  life and must be replaced)
• The result is that a graph charting the number of
  ships in the TSBF looks like a roller
  coaster, going from 281 today to 329 in 2019 to
  292 in 2031 steady-state is 293
  ships (-18 combatants and 4 SSGNs)

19
Hard to See Any Industrial Base Stability in This
Plan (Unless Stability is Defined as Developing
a Number and Sticking to It)

• How do you size the plant and workforce when
• Dont get to two submarines per year until FY 12
  (if then)
• No auxiliaries authorized from FY12 though FY 16
• No medium size amphibious ships authorized from
  FY11 through FY 17
• If we build the tenth LPD-17 if not, add two
  years
• No large deck amphibious ships authorized from FY
  13 through FY 23
• Build large surface combatants at a rate of 1.44
  ships for the next ten years, then jump to 2
  per year
• How will we retain the industrial plant and
  workforce required to build the large fleet
  numbers in 2020, much less respond to a concerted
  maritime challenge from China?
• Clear that further consolidation will be
  required how far do we go?
• Where is Congress in the debate?

20
Moreover, How Do We Retain Our Design Teams?

• Consider the British experience with the Astute
  SSN
• We must not become fully pre-occupied by the
  industrial base at the expense of our
  intellectual capital in submarine design. One
  only has to look at the UKs automotive and
  aerospace industries to see that it is the
  high-value design and intellectual capabilities
  that have been retained while most manufacture
  has gone overseas. And while the UK is likely to
  want to retain an indigenous submarine
  manufacture capability, we must protect the
  design resource that ultimately underpins the
  industrial activity. (emphasis added).
• Given our huge maritime lead, but lack of a
  robust commercial shipbuilding industrial base,
  is pursuing prototypes and having design
  competitions aimed at changing the rules of the
  game more important than shifting to a new large
  surface combatant now?
• The U.S. submarine design base is already at
  risk
• We are locking in on a surface combatant design
  long before the outlines of any maritime
  challenge is clear
• What about the design teams for auxiliaries and
  amphibs?

21
Finally, If RD Goes Down and Stays Down, Will We
Be Prepared to Respond to New Challenges?
Future Seabasing Operation
22

• Perhaps We Need to Rethink Our Basic Assumptions
  and Plans Before Take-off

Industrial Base
Navy Plan

• If we are indeed on the verge of a disruptive
  maritime competition with China, perhaps we
  should consider a strategy of the second move
  less emphasis on expensive new designs that
  extend an already huge lead and more emphasis on
• Strong RD
• Maintain industrial base using proven designs
  (i.e., the DDG-79 and LPD-17)
• Maintain design teams with prototypes
• Change the rules of the game!

23

• I am now going to pick up my ball point.
• If you have any questions whatsoever, please
  direct them to Allison and Mike.
• I will be out of my office until 2020.

24

• Backups

25
The Programmed Surface Battle Line Will Be,
Without Doubt, the Most Powerful in the World, if
Not in History

• These 84 combatants will carry among them
• 8,468 strike-length VLS missile cells plus 400
  Harpoon ASCMs
• Each individual cell is capable of carrying four
  10-inch diameter local air defense/terminal
  missiles or one 13-inch diameter area air
  defense/ATBM missile or anti-submarine rocket or
  one 21-inch land attack missile or ballistic
  missile interceptor
• This is a larger missile load than that found on
  366 surface combatants in the next 17 largest
  navies (15 of which are either allies or
  strategic partners)
• 106 5-inch naval guns
• 112 helicopter hangers capable of handling a
  MH-60R/S
• Moreover, they will be joined by an increasingly
  capable allied AEGIS/VLS fleet
• JMSDF minimum of six Kongous, with 552 VLS cells
• South Korean Navy three KDX-IIIs with 216 VLS
  cells (?)
• Australian Navy three AWDs with 216 VLS cells
  (?)
• Spanish Navy six F-100s with 288 VLS cells
• Norwegian Navy five Nansen-class with 40 VLS
  cells (space for 80)
• These 23 AEGIS/VLS combatants will be joined by
  dozens more allied combatants armed with hundreds
  more Mk-41 VLS cells

26
Moreover, the Combatants Will Be Quite Modern,
With Decades of Service Life Left

• The oldest Ticonderoga-class CG in the battle
  line, the USS Bunker Hill (CG-52), was
  commissioned in 1986, and is scheduled to retire
  in 2021 after 35 years of service
• The last Tico is scheduled to retire in 2029
• The oldest Burke-class DDG in the battle line,
  the USS Arleigh Burke (DDG-51), was commission in
  1991, and will retire in 2026 after 35 years of
  service
• The last Burke should retire around 2046
• As far as the overall fleet, these 84 ships will
  have been commissioned over a period of 25 years
  (1986-2011) at an average rate of 3.36 ships per
  year (ten ships every three years)
• The average age of the fleet will only be 12.5
  -13 years oldless than the average age of the
  DoNs aircraft fleet!
• By the end of 2026, there will be 11 Ticos and 62
  Burkes remaining in the fleet
• By the end of 2031, there will be 44 Burkes
  remaining

27
From a Standpoint of Competitive Strategy,
Improving the 84 AEGIS/VLS Ships is Far More
Important to the Navys Future Than Building
Seven DD(X)s

• Seven DD(X)s represent 245 years of future battle
  force service 84 AEGIS/VLS combatants represent
  2000 years of future battle force service
• The technologies pioneered by the DD(X) program
  are not unique, and can be transferred
• According to the Navy, the AEGIS/VLS ships can
  hold their own against the DD(X). For example,
  Navy officials say
• A DDG is more capable than a DD(X) in blue water
  area air defense
• The DD(X) is more capable than the DDG in
  littoral air defense
• The ships are equally capable in ASW and blue
  water counter-cruise missile missions (depends a
  lot on the scenario and threat)
• Moreover, the advantages of the DD(X) will
  largely disappear in a fully networked setting
• For example, adding the SPQ-9B and the Advanced
  Hawkeye to the mix helps to close some of the
  gaps filled by DD(X)
• A battery of 106, 5/62s capable of firing
  ERGM/BTERM spread across 84 platforms is more
  flexible than and a battery of 14, 6 AGSs on
  seven platforms
• Given the lower cost of the DDG (can buy two for
  the price of one DD(X)) and the fact that it is a
  better bet should China mount an open-ocean
  maritime challenge, it is important
  that the DD(X) not rob money from the DDG/CG
  modernization programs

28
The Current CG/DDG Modernization Plan Focuses on
Improving the Capability of the Surface Battle
Network and Reducing Fleet OS Costs

• Includes a HME and SMARTSHIP phase
• All electric auxiliaries
• Structural modifications
• Habitability/quality of life upgrades
• Integrated Bridge Systems
• Shipboard LANs and fiber optic networks
• Saves 24 enlisted billets per CG, 40 billets per
  DDG (Savings of 3,000 total billets
• Includes combat system upgrade phase
• Common Cat-3 compliant hardware/software
• AEGIS Open Architecture (AOA)
• VLS Open Architecture
• Common configuration replaces multiple baseline
  configurations
• Common Mk-160 gun computing system
• May result in even more manpower savings (up to
  30 per DDG)
• Will improve total force networking and enable
  more rapid force improvements

29
The CG Modernization Plan is Further Along Than
the DDG Modernization

• Current plans call for spending 228 million per
  CG
• Allows for robust combat capability improvements
• Surface Grid Lock System Auto Correlation and
  Common Data Link Management System (AAW)
• SQQ-89A(V) 15 (ASW)
• Provides several important self-defense
  improvements
• SPQ-9B and ESSM
• CIWS Blk 1B
• Non-cooperative ID systems
• DDG Modernization Program is in the early stages,
  but current planning figures are relatively
  modest
• Currently funded for only 78 million per ship
• Allows far less in the way of combat capability
  upgrades. For example
• CEC is not included, nor are SPY-1D improvements
• SPQ-9B and ESSM are not included
• SQQ-89A(V)15 is not included
• The relatively low projected costs for the DDG
  modernization is troubling, given that a key
  assumption of the current shipbuilding plan is
  that OS costs will remain flat
• Will there be the flexibility to expand the scope
  of the effort?

30
A Different Competitive Approach Would be to
Focus in the Near Term on CG/DDG Modernization
and to Simultaneously Position the Navy to
Respond to a Maritime Challenge

• Build two DD(X) technology demonstrators, and
  shift money toward CG/DDG Modernization Program
• Start new design effort for CG(X)
• Maintains design teams keeps DD(X) RD stream
  intact
• First step expand the scope of the CG/DDG
  Modernization Program to outfit all 84 AEGIS/VLS
  ships with
• AEGIS OA, VLS OA, CEC, common system signal
  processors
• Mk160 Mod X GCS, 5/62s, and magazine mods to
  handle ERGM/BTERM
• SPQ-9B and ESSM
• CIWS 1B with full sensor integration
• A common non-cooperative ID systems
• A common, upgraded ESM system
• SQQ-89A(V)15
• Would make 84 compatible and interchangeable
  nodes in a vast mobile missile field that can be
  tailored to any current threat, and rapidly
  modernized to meet emerging threat

31
Second Step Would Be To Expand the Combat System
Upgrades to Enable the Fleet to Meet the Pacing
Threats

• Pacing threat one ballistic missiles and MaRVs
• Make every ship in the battle line capable of
  making mid-course and terminal intercepts of
  ballistic missiles
• Currently, 18 of the 84 ships (21 percent) are
  receiving upgrades to the combat systems to
  tackle this threat in a cooperative program with
  MDA
• Radar improvements, BSP, SM-3 interceptor
• Why not expand program for all 84 ships?
• Simultaneously pursue a terminal interceptor
  (either PAC-3 SME or SM-6?)
• Pacing threat two SSN-27 Sizzler
• Three-stage missile sea skimmer to 20 kilometers
  from target pops up for final target
  acquisition launches a final supersonic combat
  stage
• CEC Advanced Hawkeye F/A-18F Block II Navy
  Integrated Fire Control Counter-air (NIFCA)
  SM-6 ERAM SPQ-9B/ESSM
• Other improvements?
• Pacing threat three silent diesel submarines
• SQQ-89A(V)15 with MFTA
• Full MH-60R integration
• UUVs

32
Third Step Would Be Setting Aside Money For a
Competitive Fleet-wide Improvement Program

• The Navy would promulgate desired combat
  capabilities vendors would nominate systems
  highest payoff systems would be pursued out of a
  management reserve
• C4I Improvements
• i.e., Common Radio Room
• Force Protection Improvements
• i.e., Typhoon remote cannon mounts
• AAW Combat System Upgrades
• i.e., Radar transmitter upgrades
• ASW Combat System Upgrades
• i.e., Mk 54 torpedo integration

33
Optional and Most Ambitious Step Would Be to
Pursue Major System/Hull Rebuilds

• Primary goal provide shipyards with additional
  work during a period of depressed construction
• i.e., Provide all Flight I/II Burkes with an
  ability to hanger and operate UAVs or
  helicopters
• i.e., Introduce major radar improvements
• i.e., Transfer DD(X) technologies (autonomic fire
  suppression system?)
• Could be complemented by a low-rate production
  program of one DDG-79 per year, building to
  the 88 ship requirement, and then replacing the
  oldest DDG-51s on a one-for-one basis

34
Know When To Hold Em

• Play the hand youve got!
• The 84 AEGIS/VLS combatants soon to be in the
  fleet will constitute the most capable battle
  line in the world by a wide margin
• As important as the DD(X) may be, keeping the 84
  AEGIS/VLS ships in service for 35 years will be
  far more so
• This will require sustained maintenance HME
  upgrades and combat systems upgrades designed to
  tackle the pacing threats
• If paying for the DD(X) and CG(X) starts to rob
  or divert money from the CG/DDG modernization
  effort, plans for a 313-ship Navy will be put at
  grave risk
• Best case, the Navy builds to 70 large
  combatants18 below requirement
• If DD(X)s and CG(X)s retire earlyor provide no
  useful combat capability to the battle forcethe
  number will fall much lower