Interview with RADM Joe Carnevale (ret.), SCA Senior Defense Advisor
08:42 GMT, January 11, 2012 defpro.com The US Navy is sailing towards troubled waters, as tough decisions between strategic requirements, budget necessities, and the sustainment of the industrial base lie ahead during the upcoming years. On the occasion of the Surface Navy Association’s 24th National Symposium, taking place in Washington, D.C. on Jan. 10-12, Nicolas von Kospoth of defpro.com asked Rear Admiral (ret.) Joseph A Carnevale*, Senior Defence Advisor of the Shipbuilders Council of America (SCA), to provide his insight on current issues and trends within the US shipbuilding sector in this challenging environment.
This interview is part of the defpro.focus on "US Shipbuilding Programmes" at .
defpro.com: First, could you please outline the mission and the activities of the Shipbuilders Council of America (SCA) to our readers? How does to SCA promote the shipbuilding industrial base in the defence sector?
Joe Carnevale: SCA is the national trade association representing the US shipyard industry. The SCA members constitute the shipyard industrial base that builds, repairs, maintains and modernises Navy ships and craft, United States Coast Guard vessels of all sizes, as well as vessels for other government agencies. In addition, SCA members build, repair and service America’s fleet of commercial vessels.
The Council represents 50 companies that own and operate over 120 shipyards, with facilities on all three US coasts, the Great Lakes, the inland waterways system, Alaska and Hawaii. SCA also represents 72 affiliate members that provide goods and services to the shipyard industry.
SCA members also directly employ 50,000 American jobs. SCA works with the Congress, the Department of the Navy and the US Coast Guard to promote shipbuilding and ship repair, maintenance and modernisation.
defpro.com: The United States are carefully shifting their attention from current operations in the Middle East and Central Asia to the Pacific. Do you expect that this strategic shift, and a possible reassessment of budget priorities due to changing naval requirements, could benefit the shipbuilding industry?
Carnevale: Recognition of the critical role our Navy has in national defence is important, not just to our industry but to the American people. The Navy’s importance in the Pacific cannot be overstated. However, the Navy’s contribution to ballistic missile defence, strategic deterrence, and promoting stability worldwide is equally important. The Trident strategic ballistic missile defence programme is the Navy’s survivable leg of the nuclear triad and, thus, a key element as well.
One would hope that all of these essential missions would be considered, as budget priorities are reassessed. However, it remains to be seen how this scope of capabilities will be supported in future budgets. I think there is a sentiment that, at some point, the budget pressure becomes so significant that the Department of Defense will have to decide what missions they cut back on. There will be capabilities or options that they will not be able to sustain because they do not have the necessary budget. We rely on that process being a rational one, with sufficient analysis that is built essentially on the important missions the Navy will have to accomplish.
defpro.com: Today, affordability is the determining factor of future shipbuilding programmes. Which efforts must the US naval shipbuilding industry undertake to meet the Navy’s financial options while remaining competitive and sustaining key capabilities of the national industrial base?
Carnevale: Industry must work with its Navy and Coast Guard customers to stabilise programmes, promote efficiencies and resolve issues. It’s got to be team play. Shipbuilding, and especially lead ship building, is a complex, difficult undertaking.
Our shipyards have made significant capital investments to deliver quality products. Continuing, essential efforts have been made to build a trained workforce and provide them the necessary tools and processes needed for efficient production. Those efforts must continue.
defpro.com: While European shipbuilders, in particular submarine manufacturers, can no longer exclusively rely on their domestic markets and make great efforts to expand into important export markets, US shipbuilders appear to avoid looking abroad. What has been the reason for this position?
Carnevale: US shipbuilders have looked abroad on many occasions. Offering ships, craft and systems that are supported by and in operation with the United States Navy is a great selling point. The complexity and sophistication of most of the ships being procured by the US Navy have typically been more than most foreign navies have wanted. There are variants of the sea-based Aegis ballistic missile defence system being fielded by foreign countries. The Littoral Combat Ship (LCS) affords an opportunity for foreign sales that we haven’t seen since the construction of the Oliver Hazard Perry class frigate (FFG-7) concluded.
defpro.com: From an opposite perspective, it appears to be difficult for foreign companies to enter the US defence market. However, Austal has been able to make an impressive entry with the Joint High Speed Vessel (JHSV) and the LCS programme. What is your explanation for this particular success story and what is your assessment of opportunities for other foreign manufacturers, suppliers and service providers on the US market?
Carnevale: Traditionally, there has been a great presence of US manufacturers in Europe. All big US defence companies have had for a long time significant operations in Europe and other places overseas. I would not agree that it has been difficult for foreign companies to enter the US defence market. Quite the contrary! Over the last 10 years we have seen a great influx of European companies into the US market; we have seen Thales, BAE, Fincantieri, Rolls Royce, Alstom and numerous other foreign companies open successful American subsidiaries. Considering that they are manufacturing in the United States, it certainly helps the American industrial base.
Austal’s success, in my opinion, resulted first and foremost from offering a product that met the Navy’s needs then following through in delivering it. Beyond that, they developed a very productive partnership with their local community and the members of government at all levels that represent that community.
I don’t see any significant obstacles to foreign manufacturers, suppliers and service providers but they must realise it is a highly competitive field in a decreasing budget environment. They will need to evaluate their opportunities and measure that against the investment necessary to pursue them.
defpro.com: The replacement of the United States’ Trident ballistic-missile submarines, planned for 2027, is not that far away, when considering the usual time spans for RD and production. The budget for this project can be expected to be very tight. How is the submarine shipbuilding sector positioned to address the Navy’s future requirements under these market conditions?
Carnevale: I think the submarine shipbuilding sector is very well positioned for the replacement of the United States’ Trident ballistic-missile submarines. The success of the Virginia class submarine construction programme is a testimony to the solid base they have built. There are many lessons learned, systems and processes that will roll over from Virginia class to the Trident replacement. One thing is certain; they must get it right the first time. This programme must be provided the resources to ensure success.
defpro.com: Which key lessons learned from the Virginia class submarines programme would you highlight with regard to the development and production of future submarines for the US Navy?
Carnevale: The essential lessons learned from the Virginia class programme are, first, that evolutionary development is of great importance. The evolution from Los Angeles/688 to Seawolf to Virginia was to a great extent leveraged by the submarine community. This evolutionary approach paid significant dividends.
Further, the Navy’s ability to fix the requirements before the involved companies entered the design phase significantly benefitted them. They also completed a substantial portion of the design before they went into production.
Finally, the programme recognised the need to get onto a learning curve. That was challenging at first, with procurement of only one submarine a year and two shipbuilders building the submarines. Each shipbuilder builds all of a specific submarine section. One half is kept and assembled there and the other half is shipped to the other builder for assembly. Manufacturing two submarines a year, as considered in the Navy’s 2012 shipbuilding plans, will enhance the learning curve. Some of the pricing associated with this rate of production reflects that.
defpro.com: With the landing platform dock (LPD), the JHSV, the LCS and the DDG 1000 Zumwalt class, the US is executing important programmes to shape the future of its fleet of surface combatants. Will these programmes provide a sufficient basis for US shipyards to adequately sustain their capabilities and workforce during the next decade?
Carnevale: The 2012 shipbuilding plans presented by the Navy, while not necessarily robust, did have carriers on five year centres, two submarines a year, amphibious ships, DDG 51 restart, LCS, TAO-X pull ahead and other positive features. However, even with all the positive aspects, it did not meet the Navy’s own goals for the size of the fleet.
We are very concerned that the budget cuts being faced will fall heavily on the procurement accounts in general, and for us, the Navy’s Shipbuilding and Conversion (SCN) account in particular putting the fleet at risk of even fewer ships. There will be a collateral effect on the industrial base.
defpro.com: What are the prospects of small- and medium-sized businesses in the supplier community? Which trends can be observed in terms of market structures as well as business opportunities with prime contractors within this increasingly competitive market?
Carnevale: Given the potentially dire effects future budget cuts may have on the industrial base, small and medium sized businesses face some level of risk. While we haven’t seen many go out of business yet, we do continue to see consolidation in the industry.
It is in the small- and medium-sized area in which we will see the most change. That is a trend that we have observed for quite a while now, but it ebbs and flows. I do not perceive any probable mergers among the giants of the shipbuilding industry. Mergers and procurements will mostly remain in the small- and medium-sized sector.
defpro.com: Constantly increasing energy prices, in particular that of oil, are becoming a serious issue for both the Navy and industry. How do you assess the impact of energy prices on the fleet’s future energy alignment and, in consequence, on the shipbuilding industry?
Carnevale: I see energy prices having only a secondary impact on the shipbuilding industry. If prices go up significantly, then fewer funds will be available for construction, maintenance and modernisation. For some there will be opportunities to present energy efficient systems.
defpro.com: As our last question, could you please share with our readers your personal outlook onto and your wishes for the future of US naval shipbuilding?
Carnevale: All of us at Shipbuilders Council of America strive for a healthy shipbuilding and ship repair industrial base. It is absolutely essential to the national security of our maritime nation. I hope that the American people come to understand how dependant they are as individuals on their Navy, their Coast Guard, their Merchant Marine, and all the ships that fly the American flag.
defpro.com: Thank you very much, Mr Carnevale.
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* Rear Admiral (retired) Joe Carnevale represents Shipbuilders Council of America before Congress, the US Navy, US Coast Guard and other Federal agencies, applying over thirty years of experience to defence acquisition issues. He focuses on ship maintenance and construction.
Prior to joining SCA in June of 2005, Mr. Carnevale led the professional services division of one of the fastest growing Fortune 500 companies. He served as Director of Fleet Maintenance for the Commander, Fleet Forces Command where he addressed the complete range of fleet maintenance issues as well as the recovery operation for USS Cole (DDG 67). As Program Executive Officer (DD 21) for the Assistant Secretary of the Navy (Research, Development Acquisition) he led the development of the next generation of US Navy surface combatant. He has directly participated in the construction of six different ship classes.
After graduating from the University of Massachusetts, (B.S. Chemical Engineering, 1971), Mr. Carnevale joined the Navy, participating in combat operations in Vietnam. He attended Massachusetts Institute of Technology earning two postgraduate degrees, (M.S. Naval Architecture Marine Engineering, Ocean Engineer’s Degree, 1980). He was promoted to the rank of Rear Admiral (lower half) in 1998.
Other Navy assignments included Executive Assistant to ASN(RDA), Supervisor of Shipbuilding, Pascagoula, DASN(SHIPS) Director for Surface Combatants, AEGIS Area Commander, Pascagoula and Test Trials Officer for FFG 7 Class Ship Construction.
(Photo: U.S. Navy, Corey Truax)
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