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Fiscal impasse threatens engineering jobs at EB

By Jennifer McDermott

Publication: theday.com

Published October 24. 2013 3:00PM   Updated October 24. 2013 10:24PM

Falls Church, Va. — Engineers at Electric Boat will be laid off if Congress does not pass a budget this year, Rear Adm. David C. Johnson said Thursday.

Johnson, the program executive officer for submarines, said the engineering and design work at EB for a new class of ballistic-missile submarines is supposed to "ramp up" in 2014, but the continuing resolution Congress passed instead of a new federal budget keeps government spending at current levels. Congress also has not ended the automatic budget cuts known as sequestration.

If Congress passes a continuing resolution for the full year, Johnson said, the Ohio-class replacement program would receive only about half the funding needed, which would result in layoffs at EB and a delay of two years or more in delivering the first submarine.

If sequestration continues, $153 million will be cut from the program, which likely would cause a one-year delay and could stop EB from hiring more engineers, he said.

Johnson spoke at the Naval Submarine League's 31st annual symposium Thursday. He said after his address that the Navy needs more than $1.08 billion in 2014 to keep the work on track, so the lead ship can be delivered in 2021.

The program also has to be protected from continuing resolutions and sequestration for the next seven years, he added. Johnson said he believes the chances of that happening are "pretty good," but it will be "a year-by-year fight, every year."

The Navy could reallocate some of its research and development funding for the ballistic-missile submarines, but Johnson said that could be difficult.

EB has issued layoff notices to more than 200 workers in the trades since July after the loss of two major repair contracts. The company told the union that represents designers that there will be some staffing adjustments as major design projects finish. Three hundred designers could lose their jobs.

Johnson said he has never seen such a "persistently unstable budget environment." He said the Navy is also facing a cut of more than $700 million in the Virginia-class program and has reduced funding for modernization, and "on and on." He said he worries submarines will be delivered to the Navy late and over budget, like they were in "the old days."

The USS Ohio was delivered to the Navy 30 months late in 1981 and 64 percent over budget; the USS Seawolf was delivered 26 months late in 1996 and 80 percent over budget; and the USS Virginia was delivered three months late in 2004 and 31 percent over budget, Johnson said.

The Ohio-class replacement "must be on cost and on time," he said. He said the Navy and EB are working together to reduce the average cost of each submarine by $700 million in fiscal 2010 dollars, in part by leveraging many of the advancements from Virginia-class submarines.

The nearly $2 billion research and development contract the Navy awarded EB also offers incentives for meeting affordability targets. The target cost for the lead ship is $6.8 billion in 2010 dollars and an average of $4.9 billion each for ships two through 12.

"We have a standard. We deliver what we say we're going to deliver, when we say we're going to deliver it, for what we said it would cost," Johnson said. "That is getting pretty tough."

j.mcdermott@theday.com

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