Fiscal uncertainty threatens US naval shipbuilding sector

Looming budget cuts to defence spending are threatening the US Navy's shipbuilding plans and would undermine efforts to stabilise cost growth and workflow at shipyards, a senior official told a Congressional hearing on 11 September.

Unless the US Congress acts to stop it, there will be cuts totalling USD500 billion to the Department of Defense budget beginning in January 2013.

The navy has been studying the impact of the so-called 'sequestration' on its Fiscal Year 2013 (FY13) budget of USD155.9 billion, and officials anticipate a 10 per cent reduction across the service.

Sean Stackley, assistant secretary of the navy, told the oversight and investigations subcommittee of the House Armed Services Committee: "The challenge is, if we take a 10 per cent hit, what can you deliver with the main budget and then how do we backfill, either through reprogramming action or through FY13 budget requirements, so that we don't lose what we've got in terms of efficiency?"

Lawmakers pressed Stackley for more clarity on how specific shipbuilding programmes would be affected by sequestration. As it stands, the navy plans to fund 10 ships in FY13: one Gerald R Ford-class aircraft carrier, two Virginia-class attack submarines, two Arleigh Burke-class destroyers, four Littoral Combat Ships and a Joint High Speed Vessel.