» Aircraft carriers:
Milwaukee Valve president urges change
A national group led by Milwaukee Valve Co. President Rick Giannini says the U.S. Navy would save billions of dollars in building aircraft carriers, the world’s largest warships, if the supply chain tackled more than one ship at a time.
A national group led by Milwaukee Valve Co. President Rick Giannini says the U.S. Navy would save billions of dollars in building aircraft carriers, the world’s largest warships, if the supply chain tackled more than one ship at a time.
About 1,300 Wisconsin jobs are supported by the Navy’s aircraft carrier supply chain, which had a $128 million economic impact in the state between 2012 and 2016, according to the Aircraft Carrier Industrial Base Coalition, a national business group chaired by Giannini.
Milwaukee Valve, in New Berlin, is one of about 20 companies in Wisconsin and 1,100 firms in 46 states supplying parts and services for the world’s most technologically advanced ships.
A new Gerald R. Ford-class carrier has more than 12,000 Milwaukee Valve Co. valves on it, used for things such as controlling the flow of hydraulic fluid in ship components. Other Wisconsin companies, including Rockwell Automation and DRS Technologies, supply electronics, pumps and controls for the behemoth warships.
It costs about $11 billion and can take 10 years to build one of the carriers. But money could be saved, and the time shortened, if Congress allowed for more advance purchase of materials for ships, according to the supply coalition.
Suppliers aren’t asking for money that is not budgeted. Rather, they want money early enough in the procurement process to allow them to buy materials in bulk for several ships at a time. It would make scheduling the work a lot easier, too.
“Having sudden bursts of activity, and then waiting two or three years, is very difficult for continuity. It’s difficult to keep people trained, to keep inventories current and to not have all of your company’s resources suddenly diverted,” said Kim Lovejoy, president of Lovejoy Controls Corp. of Waukesha, which is doing work on the Nimitz-class of carriers.
“It’s like a boom and bust for the shipyards. They get all of this work and then all of a sudden there’s nothing going on,” Lovejoy said.
The Navy seems to agree. In May, Chief of Naval Operations Adm. John Richardson released a paper that called for expanding the size of the fleet at a faster pace, partly to keep up with China and Russia.
“Buying aircraft carriers at the economically-optimal rate
— three or four years apart instead of the current five or more years — will not only get us a more powerful fleet faster, but also will save considerable money,” Richardson wrote.
Giannini’s coalition has urged Congress to support a multiship procurement strategy for the next three Gerald R. Ford-class carriers, Enterprise and two others yet to be named. Specifically, the group wants an additional $520 million in advance procurement in the fiscal year 2018 authorization and appropriations process.
“This funding will send a strong signal to the aircraft carrier industrial base to prepare for additional work volume,” the coalition wrote in a letter this week to Wisconsin’s congressional delegation.
A multiship approach would save taxpayers $500 million per vessel in areas such as lower material costs and labor savings, according to the coalition.
Locking in money for three ships could give suppliers years of work they could count on, Giannini said.
“It’s a great thing to know what your workflow is going to look like,” he added.
Cost overruns have been a concern for the new class of aircraft carriers.
The Navy will likely exceed its $11.4 billion budget for the second Gerald R. Ford-class carrier, now under construction in Newport News, Va., partly because it’s counting on unrealistic cost savings, according to a new Government Accountability Office report.
“The cost estimate … is not reliable and does not address lessons learned from the performance of the lead ship,” the GAO report said.
The Navy is counting on savings that haven’t been achieved in 50 years of aircraft carrier construction, according to the report.
Other GAO studies have criticized the Navy’s littoral combat ships, built in Marinette and in Mobile, Ala., for cost overruns, design and ship performance problems.
But with any new class of ship, the build process improves over time, Giannini said.
A carrier has an expected lifespan of 50 years, but equipment has to be updated and overhauled before then.
Milwaukee Valve Co. products have been on every U.S. Navy ship since the early 1960s. The Navy represents about 25% of the company’s business, and the largest piece of that comes from aircraft carriers.
“One hundred percent of what we do for the Navy is made here in Wisconsin,” Giannini said.