Electric Boat, Rival Join Up For Sub Deal

General Dynamics Corp subsidiary Electric Boat Corp and Newport News Shipbuilding in Virginia said they agreed to cooperatively build the US navy's new attack submarine.

They said they formed the agreement at the urging of the navy, which will allow the service to save hundreds of millions of dollars in the joint construction of the first four subs in the new class beginning in fiscal 1998.

Financial details of what is expected to be a multibillion-dollar deal between the two big shipyards were not disclosed.

Newport News will perform final assembly, testing, outfitting and delivery of the second and fourth submarines.

 

For all four vessels, Newport News will construct the sail, crew areas and auxiliary machinery room modules and six other sections.

The teaming agreement will generate significant cost savings. It's an innovative and sensible use of taxpayer dollars, and everyone wins, Electric Boat president John Welch said.

Electric Boat will perform final assembly, testing, outfitting and delivery of the first and third submarines.

For all four submarines, Electric Boat will also construct the engine room modules, command and control modules, and seven other sections of the ship.

It will also continue its role as lead design yard.

The previous construction plan would have had the two companies working independently, with each building two of the four submarines.

The companies said the teaming requires an alteration to existing law, contained in last year's Defence Authorisation Act, which directs independent submarine construction by the two yards.

For Electric Boat and the shareholders of General Dynamics, it provides stability to our submarine business base, Welch said.

For the navy, it will mean superior technologies with a faster climb up the learning curve. The teaming will allow the navy to save hundreds of millions of dollars in near-term ship acquisition costs, said Newport News Shipbuilding chairman William Fricks. The new attack submarine is a multimission-capable vessel that can provide covert sustained presence around the world.

Earlier this month, president Clinton's 1998 defence budget proposed $3 billion for the two traditional rivals to team up to build four nuclear submarines over the next five years, beginning in 1998 and with 2000 a skip year.

Electric Boat said earlier that it anticipated no loss of jobs because of the teaming.

On February 17, it announced layoffs of 539 employees, soon after saying it expected to cut up to 1,500 jobs this year because of a shrinking workload.

In Washington, meanwhile, defence secretary William Cohen announced a study of the construction of Arleigh Burke class destroyers by General Dynamics's Bath Iron Works in Maine and Litton Industries' Ingalls Shipbuilding Inc of Pascagoula, Mississippi.

The two shipyards have already built a total of 18 of the sophisticated destroyers, armed with the Aegis defence system.

An advisory group chaired by vice admiral George Sterner will study where the next 12 will be built.

The study is part of Pentagon's evaluation of the nation's key naval shipbuilding industry and will also consider the ability to build future US surface warships.