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▶ 0:20:49if someone will push that door too please we'll get started the subcommittee will come to order I ask unanimous consent that the chair be authorized to declare a recess at any time without objection so ordered I ask unanimous consent that Mr G Mindy be allowed to participate in today's hearing after all subcommittee members have had an opportunity to ask questions is there an objection
▶ 0:21:19seeing none without objection non subcommittee members will be recognized at the appropriate time for 5 minutes good morning and welcome everyone to the first hearing for the sea power and projection forces subcommittee this Congress we have many familiar faces on the subcommittee as well as some new ones I look forward to working with everyone to address pressing National Security issues within our jurisdiction perhaps the biggest issue is the one we are discussing today which is our struggles with designing and building
▶ 0:21:50ships the United States is a maritime nation and we cannot fulfill our historical role in the maritime domain without our sh surface ship and submarine Fleet unfortunately China and our peer competitors have also studied Mayan's work they show the value of Maritime strength and have made significant leaps in the size of their commercial Fleet as well as their Naval strength if we expect to deter or defeat any peer adversary we must maintain
▶ 0:22:20America's command of the world's oceans we have a requirement for 381 ships based on the most recent Battle Force ship assessment and requirement report 2023 unfortunately the most recent 30-year ship building plan lays on a path where we wouldn't meet that Mark 2050 that plan also makes assumptions on procurement cost and the rate of ship delivery that may no longer be viable the results of last year's 45-day ship building review showed
▶ 0:22:50many programs were significantly behind schedule some of the expected delays are alarming for example delivery of the con olation class frigate is expected to be delayed for 3 years however it is unclear what lessons we have learned from that review and president Trump is right to order another these problems are why I'm so excited about the president's plan to stand up a dedicated ship building office in the White House this is a critical step towards ensuring that ship building remains a national priority
▶ 0:23:21and that we take a whole of government approach to strengthening our industrial base interaction is not an option because our ship building struggles are more than just schedule delays our Witnesses from GAO and CBO have published several reports detailing severe cost overruns and extreme increases in unit costs for many programs if this trend continues we may not be able to recapitalize our flea without sacrificing other budget priorities to address these challenges we need more than just small adjustments
▶ 0:23:51we need a bold and comprom comprehensive commitment to rebuilding our ship building industrial base that is why I introduced the bipartisan ships act in the 118th Congress and I'm working to reintroduce it this Congress investments in modernizing ship yards strengthening Workforce Development and stabilizing Supply chains as outlined in the ships act will be a key to ensuring that we can sustain a modern capable Navy while reducing dependence on foreign suppliers it will also create thousands of good paying
▶ 0:24:21American jobs and strengthen communities to say this plainly we must act now whether through changes to our procurement processes stronger industrial based Investments or cultural shifts within ship building program offices we need to make these decisions sooner rather than later I look forward to having a Frank conversation today and hope that we'll be able to examine our current problem through real transparency thank you to our Witnesses for your participation at the hearing and I look forward to your testimony I now recognize the ranking
▶ 0:24:51member Joe Courtney my friend for an opening statement thank you uh Mr chairman and um uh again to our Witnesses uh you know this is obviously our leadoff um hearing which obviously I think speaks volumes about the priority that the subcommittee uh gives to this issue and actually the armed services committee uh as a whole article one section 8 Clause 13 uh States uh Congress shall provide and maintain a Navy not the president not the Navy um so obviously the um
▶ 0:25:22opportunity and um uh mandate for us to to move forward really rests with uh the article one uh branch of government and again I agree with uh uh Mr Kelly's uh sort of strategic uh description of what we're looking at um in terms of the need for strengthening the sea services and expanding the fleet size um whether it's Indo paycom Europe Northern command Southern command you know Central Command it's you know the the the the combatant
▶ 0:25:52commanders demand for uh Navy ships uh and Coast Guard ships for that matter uh out trips obviously the the size of the fleet and we have to do everything we can to to expand in capacity and accelerate uh production Cadence U to meet the moment that's there I have a statement which I'm not going to read all the way through because again we have lots of testimony to hear and I want to give also members an opportunity but I would just note a couple of things reviewing your testimony which is that this subcommittee has not been a bystander
▶ 0:26:22uh over the last 10 years in terms of real meaningful changes that are happening uh and helping in terms of uh you know cost Effectiveness and efficiency in the ship building process um the national cbas deterrence fund which uh again is on the books um created multi-year authorities for the construction of the Columbia class submarine and again we have the numbers which shows the savings uh that that multi-year process
▶ 0:26:52has actually generated and and again the feedback whether it's from the shipyards or the supply chain um have emphasized over and over again how valuable um that change in terms of the procurement process has has been in terms of you know getting what the Navy describes as the most important acquisition program uh in their portfolio uh recapitalizing our ballistic submarine Fleet um number two the submarine industrial based funding which uh started in 2018
▶ 0:27:22again originated on this subcommittee a recognition uh by a lot of us who represent um shipyards that investing in Workforce supply chain and facility um had to be basically increased outside of just the regular procurement line items uh the first year we did it in 2018 with uh Jim Lan it was a $20 million plus up to the Navy's budget there was actually some resistance within the Navy in terms of doing that but now
▶ 0:27:52we're $6 billion uh into this Enterprise uh which again has extremely strong bipartisan uh results and again I think that whether it's down in Alabama where the Strategic Outsourcing is happening at austel Shipyard uh now Philadelphia Shipyard is going to be um Again part of this uh process in terms of large metal fabrication to again take manh hours out of New England and Virginia I mean it's it's starting to to pay uh real
▶ 0:28:23uh dividends lastly the The Vessel construction manager um at mayad in terms of the U Maritime training ships which again the sea power subcommittee gave the authority uh to mayad to go outside the normal Navy procurement process and I'll provide a private sector model in terms of the contract design and execution uh if anybody goes up there in Mr Norcross is right across the river from it um you'll see that those six huge 600
▶ 0:28:53foot plus ships are uh being delivered on time within that that contract structure um and frankly we need to and then Mr SEL and I had a talk about this in the office the other day you know those are the kind of tools that we need to implement in terms of getting uh as the president said you know faster and bigger um and and and again we can we can sort of be a big partner uh in terms of U uh producing that so my last sort of concern is and
▶ 0:29:24I'm hearing this I had a supply chain event up in Hartford yesterday the Tariff impact in terms of steel prices and other Commodities that go into ship building is being impacted I mean that is just the the rolled steel increase since January is like 26% uh in terms of just what what um vendors are seeing out there and I think frankly you know that's part of this issue which is that when we're talking about cost overruns and the ga report
▶ 0:29:54goes into it in chapter and verse um you know we've got to you know think holistically here in terms of just this is not just an ndaa issue this is there's large um you know policy issues that um that even tariffs are going to impact uh whether or not we can build um steel ships with nickel alloy coming from Canada I mean it's just that's that's just a reality that's there you know we got to everybody's got to
▶ 0:30:24be you know their head on a swivel in terms of really looking around and making sure that we're making good and smart choices again the office of ship building which the White House has set up manned by Ian Bennett Mr Kelly's uh staffer I I think is a very encouraging um sign we're very excited and we're hoping that the saws initiative which faltered um at the end of last the last Administration is something that again people are going to take another fresh look at if we want to accelerate and expand the size of uhu of ship building
▶ 0:30:54that's probably a longer statement than my written statement I apologize to the that are there uh but again it it I think there's a lot of passion and interest in this issue and again U we got a great panel here today to explore that and without a yel back Mr Courtney and I neither one ever talked very long that that highlights the importance of this hearing that we felt the need to talk that long about this very important thing I first recognize for five minutes Dr Brett sadle uh who serves as a principal civilian
▶ 0:31:24Deputy to the assistant Secretary of the Navy for research development and acquisition he is currently acting as the assistant Secretary of the Navy for rdna prior to his service within the department of the Navy he had an extensive private sector career in automotive manufacturing Dr Sidle uh you are recognized for five minutes thank you chairman Kelly ranking member Courtney and distinguished members of this subcommittee good morning thank you for the opportunity to appear before you today to address the state
▶ 0:31:54of US ship building prior to assuming Dy in January as acting assistant Secretary of the Navy for research development and acquisition I spent almost half my career in the private sector running manufacturing organizations before leading change in our Naval research and development establishment for the past 20 years I also spent time leading our nation's public shipyards as the acting executive director of nav co4 I'd also like to welcome my esteemed co-witnesses Dr Eric Labs
▶ 0:32:25miss Shelby Oakley and Mr Rono roor I am very familiar with your work uh and respect the passion you bring to these Endeavors and the impact your work has on strengthening our great Navy I believe we have much in common as I was not raised in the ship building environment and therefore not saddled with preconceived notions of this is how we've always done it I certainly welcome and form perspectives from those who are passionate about strengthening our Fleet
▶ 0:32:56I am however proud of of our Navy on a myriad of fronts US ship Builders continue to produce the highest quality safest and most advanced warships on the globe I have taken to saying every time I speak publicly in this role that the finest Navy ever assembled in the history of the world is coming to a theater near you and they're bringing their aame and at a time when outstanding performance against adversaries is needed in contested Maritime Commons from the
▶ 0:33:26Red Sea to the Western Pacific that is exactly what our Navy is delivering and I for one am proud to be a part of those efforts however the US ship building industry is challenged to produce the quantity of ships at the rate required for lasting effect sustainable growth in the Battle Force inventory and the naval Navy is challenged in providing consistent direction as the underpinning for their success on Balance cost and scheduled performance remain challenged with deliveries approximately 1
▶ 0:33:56to three years late and cost Rising faster than overall inflation these issues are prevalent across the nuclear and conventional ship building communities with both Navy and Industry sharing responsibility some of our challenges include atrophy of the manufacturing sector depressed investment Workforce shortages diminish proficiency as well as supply chain disruptions historic underinvestment and Industry consolidation following the end of the Cold War have reduced competition
▶ 0:34:26and capacity at at the tier one shipyards and their suppliers leading to Resource constrained scheduling that is behind our targets burdensome acquisition processes preco contracts and shifting Navy requirements also contribute having said the above I firmly believe our Collective challenges can be overcome and this committee has my passionate commitment to collaborate with Congress industry Academia training organizations trade associations as well as all
▶ 0:34:56levels of government in pursuit of improved cost and scheduled performance I intend to look forward to drive change and collaborate with our industry Partners in healthy ways to improve American ship building my most enduring Focus will be on improving trust accountability and credibility with Congress and ship Builders which is critical to Leading the type of improvement necessary for a continued success around the globe our nation and the world needs the strength of our Navy
▶ 0:35:27and my intent is to do everything in my power to deliver on that promise I'm excited to be here today and look forward to answering your questions I now recognize Dr Eric Labs who is a senior analyst for Naval forces and weapons at the Congressional budget office he has published many studies related to today's topic and his work has helped inform much of his sub much of this subcommittee's work Dr Labs you are now recognized for five minutes chairman Kelly representative Courtney members of the subcommittee it's a pleasure to be here here today
▶ 0:35:58to discuss the state of US ship building Mr chairman with your permission I'd like to submit my statement for the record and submit summarize a few key points first costs for Navy ship building programs have grown and are growing cost overruns for 46 ships the Navy has under construction grew three-fold over the past budget Year from 3.4 billion to $10.4 billion the Navy's 2025 ship building program is the most expensive one to date CBL estimates it would cost an average of $40 billion per year every year
▶ 0:36:28between now and 2054 to buy the 364 new ships in the Navy's plan which is 46% more than the average ship building appropriation over the last 5 years in addition by 2054 the Navy's Top Line would need to increase by onethird in real terms to pay for the associated cost of operating a larger Fleet the successful implementation of the Navy's plan depends on the ship building industrial base being able to recover from its current challenges over the next 15 years and those challenges the most severe that
▶ 0:36:58I have seen in the 30 years I have been cbo's Naval analyst one of the reasons naval ship building is challenging was that in the face of the headwinds of covid and the decline of interest in manufacturing jobs in the United States the ship building program progressively increased the demand for Naval tonnage between 2014 and 2024 the amount of Naval tonnage under construction Rose by 80% from 68,000 tons to 123,000 tons annually for combat chips the increase was 65% submarine
▶ 0:37:28tonnage alone increased by 70% that required a substantial increase in Shipyard labor and the yards for a variety of reasons were not able to keep up under the 2025 plan the growth in demand for Naval tonnage would continue between now and 2034 the average amount of tonnage under construction would increase by another 45% for combat ships would grow by another 50% and remain there for through 2054 in particular submarine tonnage construction would increase by
▶ 0:37:58another 70% and would only Abate once the Columbia class was complete those developments have led to lengthened construction times for ships for example aircraft carriers used to take eight years to build now they take 11 in the 2000s ATT tax submarines took six years to build now they take nine destroyers and amphibious assault ships used to take five years to build now they also take nine years to build that then led to substantial cost growth for example attack submarines used to cost about three billion dollar a few years
▶ 0:38:28ago now they cost 4.5 billion and are still growing destroyers used to cost 1.9 billion and now they cost 2 and a half billion and only about a third of that cost growth can be attributed to ship building inflation the result of the ship building delays as a fleet that is much smaller than it otherwise could have been between 2019 and 2040 the Navy lost and will lose 234 ship service years from ships that should have been commissioned but were not in the critical period from 20 20 27 to 2030
▶ 0:38:59the fleet will be smaller by 20 ships mostly a loss of attacked submarines and destroyers so what can be done about it as this committee is well aware CBL cannot by Statute make policy recommendations however one way to think about this problem would be to focus on the key roadblocks to a more efficient and productive ship building and applies in my view nothing is more important than addressing the critical labor shortages that afflict all of the ship building and public maintenance yards for years recruitment at the yards has been hard retention is
▶ 0:39:29even harder especially in the critical trades of welders ship Fitters and pipe fitters many if not all of the Yards report attrition rates in the touch labor force of 20% or more in the critical trades I just mentioned attrition is running at 30% any policy that improves the labor situation is worth considering from substantially increasing wages to improving benefits to helping make housing more affordable to providing tax benefits for doing this critical work to improving the quality of life in the shipyards to increasing the
▶ 0:39:59use of Robotics and Automation in my view without fully addressing the challenge of Labor all other efforts will be marginal a second consideration would be to diversify the Navy ship building portfolio such that other yards could be brought into the production business with the existing yards running a capacity and more diversification of ship Builders is also worth discussing and that would mean considering changes to what the Navy is planning to buy I would like to close on a note of caution it has taken us a long time to get into this situ ituation and is going to take us a long time to get
▶ 0:40:29out of it there is no Silver Bullet no magical solution it is going to take years if not Decades of hard work and a lot of money to if you'll permit the metaphor write the ship thank you Mr chairman and I'm happy to respond to any questions the subcommittee might have thank you I now recognize miss Shelby Oakley miss Shelby Oakley is the director in the government accountability offices Contracting and National Security Acquisitions teams focusing on Navy ship building and nuclear Triad Rec capitalization she's a frequent W
▶ 0:40:59witness before the armed service committee and her team's work is invaluable to our efforts Miss Oakley you are now recognized for 5 minutes chairman Kelly ranking member Courtney and members of the subcommittee thank you for having me here today to talk about the challenges the Navy is facing with ship building and getting critical capabilities out to the fleet I will discuss the persistent outcomes we have seen over the past two decades the causes for the outcomes and what the Navy can do to drive systemic change with the broad support it has
▶ 0:41:29from Congress the reality is we have no more ships today than we did back in 2003 when the Navy released its first 30-year ship building plan calling for a sub substantial increase in Fleet size that's a serious problem especially at a time when our near pair adversaries are rapidly expanding their fleets and Fielding Advanced Technologies that could shift the balance of power away from the United States the Navy's issues aren't new new for the last two decades we've reported
▶ 0:41:59that the Navy ship building approach consistently leads to outcomes like cost overruns scheduled delays and ships that don't provide the capabilities we've also found that the current system isn't setting up the Navy and private industry's talented and hardworking people for Success it's actually making their jobs harder the Navy's poor ship building performance stems from a myriad of issues for instance the Navy's budget and acquisition processes don't use
▶ 0:42:30the successful approaches of commercial companies that our work has found can be thoughtfully applied to Navy ship building programs the frigate program is a prime example the Navy failed to ensure a stable design before starting construction a leading practice in successful successful commercial ship building and as a result the lead ship is now delayed at least 3 years and construction has stalled as the na and ship build or try and figure out if the ship can even be
▶ 0:43:00built further to secure funding the Navy opt often creates optimistic business cases these business cases are frequently approved although they don't always reflect what is achievable with time money technology or capacity available they then subsequently unravel during lead ship construction or even before this requires that the Navy divert resources from other priorities to shore up its existing ship building programs and delays the delivery
▶ 0:43:30of needed capabilities to the fleet and it's not just ships the Navy has struggled to field other critical capabilities needed to maintain Maritime dominance for example the Navy has funded work on robotic autonomous systems for over 30 years yet it has very few fielded assets to show for it the challenges also don't stop with the budgeting and acquisition processes as has been mentioned the Navy has also dealing with private shipyards that are aging and Workforce shortages
▶ 0:44:01that are further contributing to the negative ship building outcomes our work work has shown Private Industry has been reluctant to invest on its own to address these issues the Navy and DOD have invested billions of dollars however the Navy doesn't have a strategy to address these issues or credible measures to ensure that the billions of dollars in government Investments that are supported by the Congress in this industrial base will actually make a difference the bottom line marginal
▶ 0:44:31change will not fix the persistently poor outcomes and more money alone is not the solution if the Navy doesn't look introspectively and make bold systemic changes the consequences are only going to get worse technology is evolving fast and our adversaries are not waiting around for us to catch up our almost 60 open recommendations related to ship building can provide a path forward for the Navy for example the Navy could establish a more agile and
▶ 0:45:01acquisition and budgeting processes so that programs are structured for iteration to deliver capability quickly and add capability as technology advances and threats change they could leverage quality information that includes realistic assessment of risk to inform program cost and schedule estimates they could develop and leverage digital tools to gain information about design feasibility earlier and better incorp incorporate feedback from the fleet
▶ 0:45:31and then use this information to ensure ship designs are stable before making major commitments to buy new ships with the Navy pressing to keep Pace with near-peer adversaries that are growing increasingly capable the cracks and its approach to acquisition are more pronounced than ever if the Navy continues with business as usual we should expect these cracks to create an increasingly Stark divide between the Navy's aspiration for a larger more capable Fleet and reality without change
▶ 0:46:02this reality could manifest as a shrinking less capable Fleet which ultimately is unable to project the superior Force the Navy has at its Disposal today chairman Kelly ranking member Courtney and members of the subcommittee this concludes my statement I'm happy to answer any questions you have thank you I now recognize Mr Ronald oor Mr oror is a naval Affairs analyst for the congression research service he has authored many relevant articles and reports on today's topic and conducted
▶ 0:46:32extensive research on ship building programs Mr oror you are recognized for minutes and chairman Kelly ranking member Courtney distinguished members of the subcommittee thank you for the opportunity to appear before you today the Navy is currently facing challenges in designing ships building ships crewing ships and maintaining it's the most significant combination of challenges for the Navy that I've seen in my 41 years
▶ 0:47:02at CRS the requirements process is Central to Navy ship acquisition but it can cause ship design to grow in size and cost during the conceptual design phase as happened with the Zumwalt Destroyer it can undermine a parent design acquisition strategy as appears to have happened with the constellation class frigate and it can lead to design construction concurrency as happened with the loral combat ship program the projected delays in Navy ship building are
▶ 0:47:32quite significant and industrial-based capacity constraints are present at both shipyards and supplier firms as Dr Labs mentioned Workforce challenges are Central Factor some observers have characterized the situation as a strategic liability for the United States in competing with China my prepared statement presents 15 options for expanding and using ship building capacity many of them relate to the workforce most of them are being pursued
▶ 0:48:03to some degree by the Navy and industry but could be pursued more intensively or at broader scale the Navy's current overall approach to ship acquisition which might be referred to as the current American Naval system includes three elements that ISS are contributing to the Navy's challenges in designing building crewing and maintaining ships first the Navy treats its Force goals for various ship types as more precise and durable than they really are and then chases those
▶ 0:48:33subject to change goals by continually tinkering with ship procurement profiles leading to production inefficiencies and challenges second the Navy is sub optimizing ship design efforts at the individual ship level instead of optimizing them at the fleetwide level in other words the Navy is building a fleet without truly designing a fleet leading to challenges throughout the ship design build crew and maintain life cycle
▶ 0:49:03from trying to manage an assemblage of individually developed bespoke ship designs and third the Navy is developing ship building programs without adequately taking into account the features of the US society that will be called upon to design build crew and maintain those ships a possible alternative approach for the Navy which might be referred to as a potential new American Naval system could include the following five elements first make more comprehensive
▶ 0:49:33use of Federated ship building in which ship modules are built at facilities other than the final assembly yards so as to gain access to Regional labor markets that are not significantly involved in Navy ship building second move the Navy toward a more comprehensive and systematic kit of Parts approach in which standard components uh go into standard systems that are installed on ships with standard internal features third Focus ship design more on reducing the labor
▶ 0:50:03hours needed to build the ship following the South Korean approach to design for producibility fourth move toward continuous production which I'll outline in a moment and fifth employ upfront Fleet design meaning the use of a generalized Fleet design framework that incorporates the four things I just mentioned and the vetting of proposed ship building programs in ation to that framework that part about continuous production which I just mentioned could include first using multi-year
▶ 0:50:34Contracting were cost effective second managing changes in ship Force levels not through changes in procurement profiles but instead through end of service life decisions following Japan's approach for its submarine Force third moving to condition-based minimal loss procurement transitions in ship classes and four characterizing the future Fleet in terms of steady procurement rates adopting what can be called a production centered
▶ 0:51:04or rate centered approach to the Future Fleet this would be a new way to think about the future Fleet and how to get there this potential new American Naval system is by no means the only option for addressing the Navy's challenges in designing building crewing and maintaining ships and it wouldn't solve all those challenges as Miss Oakley mentioned mened continuing the Navy's current approach however is likely to lead to a continuation of these challenges chairman Kelly ranking
▶ 0:51:34member Courtney thank you again for the opportunity to appear before you today and I'll be pleased to respond to any questions the subcommittee may have thank all our Witnesses I now recognize myself for five minutes uh Dr Sidle I'm worried about the mix demand signals that we send to Industry with constant fluctuation in our 30-year ship building plans how can we send clear demand signals to Industry so that they are able to invest in their own Workforce and Technical capacity and also
▶ 0:52:04a separate question how is the Department of the Navy working on gao's recommendations as well as improving the culture of procurement thank you chairman Kelly I appreciate the question uh and thanks for the time last week too uh I've had a chance to get down um to your neck of the woods and visit with les and see what they're doing in that Arena and I think it gets to the first question
▶ 0:52:35that is around uh how do we ensure that we keep a constant flow of product through our shipyards I do think it's critical and it's not lost on me that that organization has the ddgs and the amphibs we've done some multi- ship procurements U to make sure that they are staying fed well and as a result there's consistency in approach and and I think certainly in the amphibs it's one of the success stories that we have where ships are being delivered on time and on budget so
▶ 0:53:05uh it it strikes us to think about how we handle that holistically uh for the rest of our ship Builders to make sure that that's happening r large um I think a part of it is being a little more directive in that workload I think we do understand which yards can do which work which platforms are best suited for that and we need to be thoughtful in doing that to keep the the whole Enterprise fed well so that they can manage their Workforce their hiring um and retention issues
▶ 0:53:35so my commitment to you is to to work um with our partners back in the Pentagon to make sure we try to do that well for you to your point about GAO recommendations uh I've had conversations with Miss Oakley before uh I agree with uh much of what she has said I think there's real opportunity space there um and quite frankly I think sometimes we spend a lot of our time uh communicating via reports
▶ 0:54:06uh back and forth to each other as opposed to working closely together to get after it and so my commitment to her and her team is that we'll lean into that and get after some of those recommendations because quite frankly they resonate with me on a lot of different fronts and and just I want to know you know we're the greatest Maritime nation in the history of the world and we are still that and there's no reason we can't continue to be that but it takes doing things not the same old way but it takes taking a hard look at ourselves and getting better Miss Oakley
▶ 0:54:36the GAO has identified several opportunities for the Navy to modernize its practices to support timely and predictable outcomes for the constellation class frigate and other future programs which of your recommendations relating to design and procurement remain outstanding we have several recommendations both specifically directed at the frigate program and then also about the broader design approach that the Navy uses that remain open specifically with regard to the frigate um we recommended that they take a look
▶ 0:55:06at developing the basic and functional design of the ship before beginning construction at least of the second um ship since the first ship is already underway um that remains open and we know that the Navy and the Builder are doing significant work now to really mature that design and it's that key that um commercial ship Builders follow in maturing that design so that what they know when they start bending metal they start construction that they're going to get what they expect to get when they get when
▶ 0:55:36they when when they are going to get it and so those are really some of the key recommendations that we've made to frigate but also RIT large with regard to their design performance the other thing that I would mention is um really leveraging technology um to be able to exercise the design earlier on to understand the impc ation of changes specs requirements that you know creep um and what those implications could be on the design of the ship so that that's all worked out
▶ 0:56:07before you begin construction of the ship and then are in the business of doing rework and having to fix things that you realize can't work thank you and as noted uh I'm yielding back my time and I will hold everyone I will adhere to the fem minute road today so Mr Courtney you're recognized for five minutes thank you Mr chairman um Mr Labs I really want to thank you for focusing on Workforce in terms of um you know the moment that we're in right now because uh there's just no question that um
▶ 0:56:37if you Matt um Surman over at the Navy uh points to a fact that at the end of the Cold War 45 sorry uh 35% of the American Workforce was in manufacturing you know you fast forward to 2025 it's less than 15% so you know when you you sort of look back at how we built 5,000 ships in World War II and we're able to turn on the industrial base so quickly I mean again you actually had a Workforce that was primed whether it was commercial ship
▶ 0:57:07building or auto manufacturing to to basically um you know shift into into that type of production um so you know clearly with a 15% uh Workforce we're a bigger country but still you know that's that's a a hill that we have to climb in terms of making um metal trades more attractive again uh uh in graten in 2020 uh 3 we they hired 5,300 workers between Gren and quanta point that's bigger
▶ 0:57:37than World War II numbers uh if you if you go historically you know as part of that process uh there was a metal trades collective bargaining agreement that was negotiated that actually gave a boost to to wages um over the lifetime was about 25 30% increase in pay and protected uh benefits as well um they they have over 80% retention um it's uh you know again sort of defies all the conventional wisdom about
▶ 0:58:07the fact that you know people are flushing out after they're getting hired we we passed wage Improvement language in the submarine supplemental in December uh when we again gave a boost to the to the submarine account that's there um the Saw's uh proposal the and again for some of the new members it's the shipyard accountability and work force Supply uh proposal Navy's developed would actually turbocharge that wage Improvement opportunity and I know
▶ 0:58:37that's something the White House is looking at in terms of their um executive order we've got to make the differential between working in a shipyard in the metal trades better significantly better than working in retail which is what it which existed during the Cold War so maybe you could just sort of comment on that in terms of just how you incentivize people to to uh to go into the trades um thank thank you uh Mr Courtney for that question and and I quite agree with pretty much everything that you have said I I am not an economist by training but I work in an organization chocked
▶ 0:59:08full of economists and every time I have this conversation with you know people at my place they said well why don't we just pay these workers more and I think that is the ultimately that is going to be a key part of the answer here and you're absolutely right and I've been fortunate enough to visit various shipyards and you could see the differential that was not that great you could drive by a Subway that would advertise $18 an hour at Plus benefits and the shipyards were paying 20 or $21 an hour but Shipyard work is hot it's cold it's dirty it's unpleasant so in my view the differential between
▶ 0:59:38retail or even other manufacturing uh sectors in in the areas that surround the shipyard has got to be much much greater than it currently is and and it's not just wages so I think wages is important especially for the entry level workers but it's other things improving the quality of life to doing what you can to sort of make that processing The Yards easier for them improving benefits um uh of of various kinds um affordability of housing has become a big challenge in some of these yards one of the things that effects of Co was that a lot
▶ 1:00:08of people in cities went to sort of buy waterfront property which is where shipyards are and because they could work remotely from there so you have places like bath main which is expensive properties as expensive it is in Northern Virginia a fact that when I learned up there sort of shocked me so anything that sort of goes this down the path of increasing um the the the wages for the for the for the skilled laborers that we have in these shipyards I think is something worth considering and And discussing saws is one mechanism to do it it is not the only mechanism that can be done but it
▶ 1:00:38is certainly I think we're on the right path because to me when I look at well where were we in the in those earlier years when we were producing ships faster and where are we now the big issue to me is is labor and Dr sadel really quick I mean obviously we've got to make this Workforce um you know actually be do better um and there's good news I mean they handle Virtual Technology and digital technology which is no know hopefully going to help um improve things but again the job training um we got to get that right mixture not too
▶ 1:01:08hot not too cold in terms of the immersion into the the metal trades welding electricians and I know the Navy is definitely pushing to get that um that type of model through I I apologize I guess I'm about to run out of time so I yield back but maybe we can get an answer for the record later if you can get us an answer for the record maybe it'll come up uh dear another I now recognize Mr Whitman well thank you Mr chair I'd like to thank our Witnesses Miss Oakley you uh brought it uh out I think very succinctly and clearly uh the names have changed
▶ 1:01:38but The Song Remains the Same it has been the same for the last two decades we know what we need to do we just can't seem to find a way to get it done we see issues with Workforce that's a continuing theme we see an issue with design maturity design completely complete uh completeness we see issue with maintaining the ships that we allegedly are supposed to be building and we look at as subo operational availability to go down I mean all these things are mind-bogglingly simple yet it can't we can't seem to get to a
▶ 1:02:08place to address him and Dr cidel and and Mr oor and Miss Oakley I want to begin with you give me your perspective you spoke a little bit about this you know we talk about Workforce yet we have a maintenance industry that has roller coaster rides where lots of ships in the yard and then the ships disappear We Lay people off with the same skills that we need in the build yards and yet we don't seem to want to integrate those two Enterprises which use the same skill sets we also too look at uh how do we make sure that we are
▶ 1:02:39are getting designs complete we know when we go to the art like constellation class it was going to be 85% complete certain uncertainty goes out the door and yet we Chang that and now it's only 15% complete in design I mean we know what it takes to successfully entertain and execute these Enterprises yet we keep going back to the same place tell me tell me how do we make meaningful changes that will last and that will be transformational to what needs to happen both in the ship
▶ 1:03:09building and ship maintenance industry because you can't separate the two they both have to happen the same way Dr C will begin with you then go to miss Oakley and then Mr oor thank you for that question sir um and appreciate being here today to talk about this listen I think um first importantly the work that this committee has done supporting us with the maritime industrial based funds previously the submarine industrial based funds is a big
▶ 1:03:39part of what we're doing we stood up the direct reporting program manager Office for the maritime industrial base the derpa MIB last September uh this this body has given us over4 billion dollar just in the last two years that gets at these issues we are putting that money on the workforce hiring and retention issues we're putting it on supply chain network issues we're modernization uh and advanced manufacturing into the yards you know I I will say this
▶ 1:04:09Workforce piece this uh atrophy of that sector in my opinion is fundamental to everything that we're talking about we really have to find a way I I often say back when I worked in the private sector uh we were paying 330 it was 33 35 minimum wage and uh we were paying $13 an hour for manufacturing labor three or 4X today it's 1.2 1.3x uh we're trying to get after that um and I think you know I'll be quick here because I
▶ 1:04:39know we we want other folks to be able to talk but just in the workforce piece we stood up builds submarines decom we've had over three million hits on that since its Inception led to 2.5 million applications 9700 employees hired for the submarine industrial base in 23 a 40% Improvement another 10K in 24 real metrics real progress we're going to see that play out on the back into this to drive production but uh there's goodness happen I want to make sure I get to miss Oakley Mr Miss Oakley I'll be
▶ 1:05:09real quick you hit the nail on the head with regard to the overlap between the repair and ship building workforces in the industrial base and that's why our recent report on the ship building and Ship Repair industrial base recommended that the Navy put forth a strategy for how they're going to invest in both of these Industrial bases to ensure that they're both going to be positioned to not only deliver the ships that we need but also maintain and sustain those ships for our Fleet and then secondly I think one important thing to note about design is that the Navy's own design Workforce
▶ 1:05:40inhouse has significantly atrophied as well and I think that that's part of the problem that you're seeing with regard to reviewing the design progress and really understanding how how uh much uh how mature these designs are before we're making these critical decisions ISS and I know they're focused on improving that as well and I think that's a good approach thank you Mr Alo I'll make four quick points uh first of the various options in my testimony uh the one that has the most promise for
▶ 1:06:10achieving results the soon is is the one that Dr Labs has focused on which is wages um second uh the design issue on the uh the frigate program is another Workforce issue because um once you abandoned the parent design strategy you threw that into the hands of the ship design Community to redesign the ship well we have a shortage of ship designers in this country Naval Architects and marine engineers so that's another Workforce issue and again
▶ 1:06:40that's a wages issue because these are Engineers that could take engineering jobs in other parts of the economy Mr I'm I'm I'm in in deference to the chairman I listen I want to take your your additional two suggestions for the record Mr chairman are you please if you will provide do I now recognize the gentleman from New Jersey Mr Norcross thank you chairman and the witnesses for being here today I'm maning my second decade on this subcommittee and as Mr Whitman just said reoccurring
▶ 1:07:10issues I Death By A Thousand Cuts we are not talking about anything new today maybe outside of the labor issue that we weren't talking about 10 years ago it's all there uh in most major yards you have commercial military some are combined some aren't we have large and small ones which we see here and then you build and repair going after what Rob Whitman talked about the idea that we have lost our industrial
▶ 1:07:41base comes down to one issue we offshor it the commercial side is gone if it wasn't for the Jones act Jones act said we have to have that industrial base but it has not been enough uh in the Philadelphia yard right across Ross the River from my district we've seen where Hanway has come in looking to immediately look to double what they're doing because they're doing very different than the old Acres yard and then what they're doing is looking across the river quite frankly in my district
▶ 1:08:11to look at the newest and heaviest roll on rolloff port with plenty of room to build what they're talking about but it still comes down to each of you said labor the idea that we can't attract that next generation is a relatively simple thing to fix I Come From The Building Trades we don't have any problem hiring electricians you know why because we pay them well you talked about what you used to pay them and what you pay them
▶ 1:08:41now and then you look at the leadership of those yards what they were paid years ago they went different ways this is a simplest thing to fix give the workers value that we care about what they do and pay them the right amount of money it really is that simple you can get the people if you treat them well and you pay them well and diversify that Workforce so let me go down the line here starting with you Dr sidel
▶ 1:09:12labor issues do you agree with the wage issue as being number one if not please tell me what the number one issue with labor is no thank you sir I no I absolutely believe that the labor issue is the number one and if you just think about what it means if you took the extreme case and we were paying three or 4X people would absolutely show up in droves to work in this environment it's a very purpose-driven life supporting the Navy they'd be all about it thank you Dr laad uh Mr Norcross as my opening statement indicated I completely agree that is
▶ 1:09:42why I focused on it missley I completely agree and want to let you know that we have ongoing work looking at the ship Building Trades Workforce where we're hopefully going to get into more details on what can be done Mr our work I see wages as one of the Two Chief issues and the other's geographic distribution of the work Federated ship building can allow us to tap into Regional labor markets across the country that are not already tapped out for their potential to generate people who would be interested
▶ 1:10:12in ship building so wages and geographic distribution so Mr chairman all four agree all four agree pay the people what they're worth and you can get them done on time I you back Mr Norcross if it was up to me I would pay him uh it's up to you yeah I I now recognize for five minutes Dr dearl of Tennessee thank you chairman Miss Oakley uh last September GAO issued a report outlining the challenges facing
▶ 1:10:42the Columbia class submarine program as you know the timely delivery of the submarines is critical for the nation's nuclear deter posture yet the first submarine is projected to be delivered over a year late and hundreds of millions of dollars over budget can you provide a brief overview of the most pressing challenges affecting this platform and your your report includes recommendation for immediate reforms that the Navy should undertake but is there any specific action that you believe Congress should take as well thanks for that question yeah we've been looking at the
▶ 1:11:13Columbia class program since 2017 and we've been identifying issues that were going to be challenges and risks for this program all along uh specifically right now the biggest challenges that they're facing are with material availability and Workforce shortages and not just Workforce shortages also Workforce capacity so when you're trying to build up a Workforce so significantly to be able to do the work that you need done you experience the issue called Green labor where um it just takes a lot longer uh for those
▶ 1:11:43folks to do things and it also requires a lot more detailed information to be provided to to them and I think that's been one of the biggest struggles that that program has dealt with at this at this point in time I think the one thing that I would also say is is that we've made various recommendations to the Columbia class program over the years to really do a critical assessment of the risks that are facing that program to ensure that everybody has a good understanding of what it's actually going to cost and how long it's actually going to
▶ 1:12:13take and I think some of those risks are coming to roost now that they haven't critically assessed one final thing I'll mention is that Colombia class and Virginia class are so interrelated um in any issues on Columbia class are going to rightly affect Virginia class because of the shared Builders and the shared industrial base we've been recommending 2022 that the Navy get the uh Builders to update their integrated Enterprise plan which would identify the resources needed across the programs to be able to execute these
▶ 1:12:43programs at that two plus1 rate and they have yet to update it since 2019 so I think that's one clear recommendation that I would call to your attention yeah thank you your report also noted that the Navy has received billions Supply or development funding yet there's little evidence that these Investments have led to measurable improvements what information should the Navy be collecting to assess the effectiveness of these programs yeah absolutely I want to be clear that it is going to take time to see results right you know this is a long-term effort that's going to uh be required but the
▶ 1:13:13problem is it's a short-term challenge we're facing near peer threats like we haven't faced before and so what our concern is is that the Navy hasn't positioned itself to know whether or not the Investments that it's making in the submarine industrial base are indeed paying off they can tell you if a piece of equipment was bought or if Workforce was hired or you know whatever the case but really understanding is that moving Us in the right direction in terms of the outputs that we need to be able to meet our
▶ 1:13:43goals that's where we're pushing the Navy to develop those outcome based metrics that they're going to be tracking and we hope they do it because honestly we can't get 5 years down the road dumping billions of dollars into this and realize that our investments didn't pay off they have to be successful would it be helpful if this committee considered introducing uh reporting requirements on supplier investment Effectiveness to improve transparency and accountability I think any support that this committee can give to the Navy's action in this regard would be important
▶ 1:14:14okay are are there any specific supplyer component types that have consistently caused problems and if so what uh steps should be taken to strengthen the supp supplier base as a whole I it it changes you know there's a number of issues forging is one of the biggest challenges and you know the Navy is really doing a good job of trying to Target what those key issues are in terms of the the bottlenecks um by identifying critical suppliers um and also I would like to call out that the Navy is taking some steps to try and address
▶ 1:14:44some of these supplier based issues through the use of technology and additive manufacturing and I think that those are very promising approaches that if the committee were to um Provide support in in terms of um of of you know encouraging the Navy to continue down that path to address some of these challenges it would be a good thing okay thank you all for your testimony today Mr chairman I yield my time and Mr back I now recognize a gentleman from Maine uh an important member of this
▶ 1:15:14subcommittee Mr golden thank you sir Mr aror in your testimony or written testimony anyway you talked about a ship building lessons learn process at GD BW one and two yards building destroyers so up in BIW for years a lot of the workers carried around their own version of Lessons Learned in a little notebook uh that they use out on the job so I'm I'm curious if you could elaborate on how you envision these Lessons Learned centers
▶ 1:15:45operating is this a place where ship Builders can go to learn the lessons from the perspective of the Navy or is it the other way around is it both and if I could just you know tip my hat a little bit in One Direction what other ways could the Navy not just utilize the skills of ship Builders but also their wisdom and knowledge of how to go about it yeah as I indicated in my statement although the term that is often used as Lessons
▶ 1:16:15Learned I've uh observed many occasions over the years where the Navy appears to not really have learned the lesson but simply note it and then eventually forget it only to have it be rediscovered the hard way Years Later by um uh practitioners that uh come after them uh and so as a consequence of making that observation uh one option that can arise would be to create a Navy ship building
▶ 1:16:45lessons learn Center and I first uh presented that option before uh this committee 10 or 11 years ago in testimony so this is nothing new that Lessons Learned Center can be as simple as a physical meaning a shelf collection of past experiences that have been written down from prior programs or it could be the electronic version of that sort of thing today computer files it could be both it can be made available to practitioners within the Navy it
▶ 1:17:15could be made available to people within the industry I don't see why you couldn't make it available to anybody or everybody who might stand to benefit from it I don't see the option as being that complicated it's just a matter of deciding that you want to do that we have Lessons Learned centers for Battlefield lessons and how to fight Wars this would be an analog within the production sphere thank you uh shifting gears a little bit Miss Oakley the Marine Corps is unable to maintain their USC title 10 requirements
▶ 1:17:45because of the mhib ship availability which isn't at full capacity mostly due to maintenance restraints I say this because you've talked about this quite a bit in recent months on a p podcast and your reports and in written testimonies so how do we go about fixing this issue or is the problem simply that 31 minimum amphib ships isn't going to be enough yeah I think you know our report on the amphibia ships really highlights a key challenge in some of these major modernization and maintenance periods that go on
▶ 1:18:15that do directly affect the availability and Readiness of the fleet and the amphibs are no no difference with half of the amphib fleet being in unsatisfactory condition it makes it very difficult to imagine that the Marine corps's requirements are going to be able to be met in the coming years because it also relies on increasing the pace of acquisition of the amphibs which given the challenges that we're talking about today with regard to the industrial base and and being able to support that I'm not certain is very
▶ 1:18:45realistic thank you uh I think I want to point out too that for years the uh the signal from the Navy to Destroyer yards was get to three ships per year um then they suddenly came out with just a 9 plus one multi-year procurement I think we're kind of on Pace maybe to go beyond that which will drive up costs um what do you have to say about that Mr oror and and what other um platforms might benefit from a multi-year procurement that currently doesn't have one
▶ 1:19:15yeah the Navies used multi-year procurement U with the Destroyers um since the mid 90s if I recall right and um almost all all of the Virginia class submarines all but three of them have been done under uh multi-year Contracting of one form uh or another it is an optional element of what I refer to in my testimony as the broader effort toward continuous production it's the one that is most well recognized people are most familiar with because we have been uh doing it for
▶ 1:19:46such a long time um and uh it is something that can be applied to other ship building programs uh if policy makers agree that that would be cost effective this committee and the Congress as a whole has a long history of providing approvals for various ship building programs to use these Contracting forms uh over the years it is a way of providing stability and continuity to the industry and uh uh as such as I mentioned a moment ago
▶ 1:20:16it can form a part of the broader uh option that I discussed that I referred to as continuous production great thank you Mr chair I now recognize the member from the Commonwealth of Virginia who has such great vision and brings such strategic Vision to this committee Miss kiggins thank you very much Mr chair and thank you to our panelists for being here I have the privilege of representing Virginia's second congressional district so Hampton Roads home to hunting Huntington Engles just outside my district and most importantly so much Ship Repair uh
▶ 1:20:46and ship building people so so listening to you all uh it's a lot it's a lot it's I wish it was a little more positive direction but I think there's some important lesson for Congress to learn we can't keep doing what we're doing I think is the bottom line and it is encouraging to have the president of United States stand up to State of the Union and talk about prioritizing ship building the fact that we have now a new office of ship building these are all steps in the right direction but I think we're going to need to see some some big overarching changes and what does that look like I mean the ideas you've talked about today between
▶ 1:21:16the technology we we can build unman aircraft using robotics why can't we do better with especially ship components I mean the design aspect I have a a son who studied Naval architecture at the Naval Academy I know it was one of the few schools that they actually have that that degree so what can we do you know to to incentivize kids just to go to the design piece the labor challenges it's hard for me to listen to you all talk about I sat on the recruitment retention quality of life task force that we did from this committee last year where we looked at all of those things for our active duty side we improved
▶ 1:21:46the paying compensation we improved the housing we improve Child Care the health care the spouse employment it's the same issues that you all are talking about we took 29 amendments that came out in the Senate to the tune of5 billion dollar that we're making sure in this year's continuing resolution that we're passing that we're going to hopefully pass today because it's so meaningful to us that work that we did because we cannot keep this all volunteer Force without those those quality of life changes for our active duty but the same can be said not just for ship building ship repair but for our MSC
▶ 1:22:17task as well and we know that with our Navy we can't do the job that we need to do without our military sea lift command which is also important to my district and we've had the opportunity to visit but but we can incorporate these changes across the board um you know it's it's interesting that the geographic issue you know that living along the coastline is historically expensive I can speak you know speak to that from Hampton Roads area but can we build components in places like the Midwest I know we're doing it in Virginia and Danville we've got a great Center but when we take people out of Danville
▶ 1:22:47where they're from and move them you know to other parts where there may be ship building it's a harder transition so what what is that modular component look like and that that build I think there's ways that we can we can do things but I want to talk specifically and we we printed this poster about the military he of command and and there are so many ships that that we can be building that are not warships I understand you know building the warships domestically and what that looks like in our challenges that we're going to work through but on the MSC side like for example we used to have eight AOE we're down to two
▶ 1:23:17we're down to two these oil these are if we don't ships and food and supplies we can't keep the fleet at Seas so so I'm I'm really focus and I think we're not we're leaving these guys kind of out of the equation sometimes but how can we how can we do better on this side of the house is it something I know a few of you have spoken about the south Koreans specifically uh and involving some of our Allied Partners but what does that look like what is the is it is it a St is a place we need to pursue that we need to use think outside the box and be using our Allied Partners especially when it comes
▶ 1:23:47to this msse type fleeter I can't do it all domestically so what can I do because I I want them as soon as I can get them but but are there any of you you can speak to just especially the use of Allied partners for things like military SE if command um if it's all right I'll I'll answer take and answer that question um again you I'm not in the business of making recommendations but I would sort of answer this question this way is that if you believe you need a larger Fleet and you need to recapitalize both
▶ 1:24:18the warship fleets as well as the military sea lift command that I think that and given that the the capacity of current ship building yards is you know is is full looking at the question of our allies being able to supply some of these types of ships is something that is worth considering um there's all kinds of advantages and disadvantages of bringing the the allies and and partners into the ship building portfolio whether domestic or overseas but you know in December president Trump he made a suggestion along those lines in an interview with the press and it seems
▶ 1:24:48like the the public would would would benefit from that the Japanese and the Koreans in particular are are you know build out standing ships that fall into the military sea lift command portfolio if you're talking about roro ships and cargo ships and things like that some of the more specialized ships under the military sea lift command might still be better built in American Yards but it is at least worth having that public debate and having that conversation about whether um you know others need to be brought into it not only for Navy but also Coast Guard and and icebreakers that would be another place to sort of had that conversation as well
▶ 1:25:18agree do any of any you others have thoughts on on that well in my eight seconds I'll just say committed to working with marad and and and ensuring that we prioritize up military sea lift command and the build of those ships I think uh you know Rising tide raises all boats and certainly the commercial sector getting stronger is going to help us too and what we're doing in the defense sector so all committed thank you I think it's a
▶ 1:25:48warrant of further discussion but thank you so much for your opinion I yield back I now recognize the G from the up Mr Bergman thank you Mr chairman um being a marine you I'm not going to waste your time our time or anybody else's time um so any one of you can or all of you can offer the comment if you choose does the Navy currently have the capability to put pun intended the necessary Rudder into
▶ 1:26:19this big ship called ship building ship repair ship design does the na is the Navy currently structured to actually be able to do that yes or no you don't have to give me why they're not just yes or no no no okay anybody else did anybody anybody going to offer yes okay so let's move on from that then
▶ 1:26:49um somebody said commercial ship building still exists because of the Jones Act I heard that within the last 24 hours anybody want to comment on that um as as you well know Congressman there is very little um commercial ship building done in in American shipyards today to the extent that there is some commercial ship building that does occur it does seem to me that they it is mostly Jones
▶ 1:27:19act ships which is building ships for intra uh intra United States uh trade between you know one Us Port and another Us Port so um that is simply the current description of of where we are today okay uh thank you uh Mr oror you you cited the South Korean model and we just talked about it in in the last questioning um could you name one or two things that the South Korean model
▶ 1:27:50exhibits utilizes that maybe you think we should ad ADT I think the Navy certainly has the opportunity to adopt uh those practices that the South Koreans follow that uh I mentioned in my testimony in fact I became aware of them uh via a conference um of uh two professional societies that relate to marine engineers and they were speaking mostly to Navy people and it was their view that
▶ 1:28:20those practices should be imported into the Navy's own practices so right from the outset the whole reason for my awareness of South Korea's practices in that regard came from professional conferences where people working in the field were telling that to the Navy okay so my understanding of what you said was um some professionals who were attending a conference referenced the South Korean model as a positive okay are there are there any other countries
▶ 1:28:51that would come close to to the South Korean model or something else that you know that we could learn from or partner with or however you want to call it yes the other country you could learn from is Japan Japan and South Korea are often mentioned almost side by side when people talk about um best practices uh on a world standard in ship building and there are two things that uh you could learn from uh the Japanese one which you can also learn from the South Korean is how
▶ 1:29:21to manage Shipyard operations more efficiently in terms of training new workers and staying on top of and managing the material flow through the shipyard and secondly you could learn from Japan the model of keeping the procurement rate steady even as Force siiz changes by managing it at the back end through endof life decisions not through upfront procurement uh rate tinkering okay uh are there any other countries uh uh
▶ 1:29:51just are there any other countries anywhere else in the world any part of the world that I mean right now we're focused kind of on one part of the world here South Korea and Japan are there any other parts of the world that may not be as quite the top tier but definitely would be you you could look at the European yards as well Japan and South Korea are in competition with China so they are trying to hold on to their market share against the Chinese uh ship building and so
▶ 1:30:21they are laser focused on making their own operations so there the not use the example that's the a long time ago there was Ford GM and Chrysler all in Detroit area competing for the future of this is a different example of that it it is because right now those three countries China South Korea and Japan account for more than 90% of the world uh commercial ship building Market China's like 40 to 50% and then South Korea
▶ 1:30:5130 more or less and Japan 20 okay I want to give Dr I want to give Dr just a second I know my can Dr Sidle give me a quick answer 10 seconds okay yeah hey I just wanted to say you move fast on that first question about are we structured to do the right thing in my opinion we we can and are and there's improvements that can be made right so I think it can happen thank you Mr chairman I you back thank you I now recognize the gentleman from Texas Dr Jackson thank you Mr chairman uh most of my questions actually been
▶ 1:31:21addressed I'm just going to ask you one real quick question I apolog apologize if this was already addressed before I came into the room but uh I just wanted wondering uh with regards to some of the Innovative technology that's out there nowadays uh production line automation artificial intelligence robotics um you know could this deliver additional capacity I mean I know it can and efficiency in ship building is how how aggressive are we being on this front and I had another question and and I'm not saying that this is the primary reason by any means because my colleagues on the left have
▶ 1:31:51pointed this out a few times to me when I brought this up but what role does organized labor play in this as well because it seems like when you have a lot of these uh you know uh these hardworking Blue Collar jobs like ship building uh there's organized labor has a big part in this and they really push back sometimes on Automation and I think what's been mentioned is like look if we can make things more efficient we can expand the production and you know there's more work for and you can you can keep the same number of people just employ them in different areas but it seems like there's a lot of push back I mean you know sometimes organized
▶ 1:32:22labor doesn't believe that they don't buy that ARG and when it comes to things like automating the you know the gate at the entrance to the shipyard they don't want to automate that because that's someone's job so are we overcoming that are we are you know is is this is this the future of ship building is is is some of the stuff I mentioned and are we working with organized labor to come up with ways to do that and still employ people yeah so I'll take that question uh listen we we are spending a lot of effort on modernization of the Yards trying to drive
▶ 1:32:52in uh Advan manufacturing techniques uh we're also working with our supply chain Network the MB monies that we talked about are are going toward those efforts we have right now quickly over 700 projects with 300 uh different suppliers across 33 St States and there's 11% Improvement in performance for them that that are undertaking those from an advanced manufacturing technology perspective especially an additive uh we'll do an ssgn availability
▶ 1:33:22here shortly that'll have 33 additively manufactured parts and would have never couldn't have been sourced any other way and some of them will be subsafe so I think we are driving that kind of uh those kind of capabilities into our yards and our supply chain Network haven't heard that the organized labor piece uh is a problem at this at this point and and I honestly don't expect it will be even though I respect what you said as a guy who used to work with UAW a
▶ 1:33:52lot too I've watched us automate yards in the automotive sector or automate plants and uh and and there's always some work and some initial push back but we typically get through that and I expect we can as well in the in the maritime industrial base okay I appreciate that and before I just have two minutes left I was going to give you guys the opportunity the ones that didn't get to answer uh M Miss kin's question while IO because one of my questions also was about our ability to allow some of our some of our allies to help us not only ship building with the maintenance
▶ 1:34:22and stuff I know when I was over in Australia recently talking about AAS uh there were plans to to uh to build some shipyards and stuff over there and you know so that it could you know basically help us I know that I would prefer that we do everything here in the United States you know obviously but uh I I you know we can all see the writing on the wall that that's a long time coming before we get to where we need to be is this a way to help us get there faster they would provide inter intermediate maintenance capability things of that nature if we're fighting over in the indopacific we you know I think it you know it's it's a national security asset as
▶ 1:34:52well listen the Aus partnership obviously very important to us and uh we're doing everything in our power uh to support the OnePlus Two and OnePlus 2.33 to get there I think it does help us and and having strong relationships um in that trilateral agreement certainly very critical I'll yield so other folks can have a chance I would just make one comment that that there's kind of
▶ 1:35:23a a balance that has to happen with the industrial base in terms of keeping the yards that you have existing healthy um and inserting new yards into the industrial base it becomes a little bit of a of a balance that has to be made because um of the fluctuations in the flow through of of ship programs through these yards you know any one bad year could result in laying off employees in some of our existing yards and so I think a real holistic look at what the solutions are to
▶ 1:35:53be able to shore up that industrial base and ensure we have a vibrant commercial ship building industry that then supplements and augments um our naval ship building industry is I think a key um area should be a key area of focus going forward thank you ma'am and it looks like I'm out of time so uh I'll just leave it there and I'll yield back thank you Mr chairman now recognize the gentleman from Louisiana Mr Higgins thank you Mr chairman Mr chairman my colleagues I I think we recognize
▶ 1:36:23this significance of of today's hearing we have to tackle this thing the United States ship building industry has the capacity to meet um our nation's Maritime needs yet we've seen in in modern history we've seen a disturbing trend of inconsistent Government Contracting excessive program engineering design changes that are endless uh lack of long-term commitment
▶ 1:36:55that when all combined that that prevents ship Builders especially smaller ship Builders which have historically carried a great burden of our our requirements of our nation to float of Navy that's indomitable around the world we need our our smaller ship Builders across the country to be vibrant and successful but we we have baked in a formula that makes it quite difficult for them to perform
▶ 1:37:25and investments in like Workforce expansion and infrastructure for the smaller shipyards requires a a a solid long-term commitment with their government Partners when they're building vessels so that they can be healthy and and vibrant and have the strong Workforce with time on the job and the appropriate infrastructure and modernization to perform on the next contract so the revitalization of our ship
▶ 1:37:55building industry could very well determine the outcome of our next conflict so we have a heavy responsibility here to pay attention to it and i' would like to to direct my first question more if I have time but Oakley um given the Strategic importance of strengthen in our domestic ship building base which is a common theme today um what what
▶ 1:38:25do you see as the the primary obstacle regarding what I refer to as the baked into the formula coming from from the Navy and DOD regarding constant design changes and uh and a moving Target for for our ship building industry could you address that please yeah I think there's a couple of things um in my opening I mentioned that the Navy often puts forward optimistic business cases right so
▶ 1:38:56the best case scenario in terms of the cost and schedule estimates given the risks that are apparent on these programs everyone knew that this was going to be a challenge to build up for example for the Columbia class program the Virginia class um maintaining both of those at the same time but we didn't act on that information soon enough to be able to respond and so I think that really critically examining you said soon enough but but you're describing years yeah past correct yeah just ma'am please continue um so I think one of
▶ 1:39:26the biggest challenges with regard to what we've seen in Navy ship building over the years in in in respects to design is is that not enough work is done UPF front to be able to know what we're signing on the dotted line for agreed and how would if I can shift because I I'm respectful of your time and the and and the ticking clock here um regarding American yards and and ship building and how the how the Jones act plugs in
▶ 1:39:56there uh and would you address the the consequences of overdependence from an American perspective and a national security and indeed a world security perspective for America's uh the danger of overdependence on foreign shipyards and how that plugs into the Jones act for instance in the Icebreaker realm um I I think the ships should be made in America would you address that that topic please miss
▶ 1:40:28Oakley I think there's always a challenge with regard to um leveraging our allies and leveraging foreign shipyards for things that are critical to our own War fighting efforts and I think there has to be a a real understanding of what the impacts of that are when making those decisions um also balanced with what can our industrial base realistically provide us and I think that that's part of the problem right now is is that we're hoping that this industrial
▶ 1:40:59base can be mobilized to be able to meet our needs and grow our Fleet to 381 would you agree that on if to identify a c a category of vessels as say crucial vessels would you agree generally that uh that American Treasures should be should be invested in American shipyards in the building of crucial vessels I mean I would say that the Navy would agree with you I don't know that I necessarily have a position on that thank you madam for an honest answer Mr chairman I yield
▶ 1:41:29I now recognize the gentleman from Guam who is such an important member of this subcommittee and also has a very strategic region of the world which he represents Mr Morland thank you Mr Mr chairman and uh for holding this hearing today to discuss as you mentioned this critical ship building need and Guam is a key asset in the indopacific and playing a crucial role in defending our nation its location makes it an important logistical hub for moving personnel and supplies to support
▶ 1:41:59our presence in the region our nation faces challenges across the defense industry base particularly with shipyards and ship building the ship repair facility in Guam was closed in 1997 during the Brack process but the equipment was left behind and still there today with the increasing threats and indopacific we must focus on improving our Readiness this means having the right infrastructure
▶ 1:42:29to support our Navy ships and submarines which are essential for deterrence and protection in the region as we prepare for a future conflicts it's vital to maximize all available resource to enhance ship maintenance and repair capabilities we cannot Overlook guan's potential to provide the support needed to keep our military assets ready and operational in this key region so my question uh for Mr
▶ 1:42:59RoR you mentioned that poor planning scheduling and funding are the main challenges affecting the timely completion of ship maintenance and repairs do you believe having having Ship Repair capabilities in Guam could help mitigate the scheduling issues by cutting down the return time from Hawaii to the mainland I know that the Navy is interested in improving its ability to perform
▶ 1:43:30ship maintenance in the uh indopacific region and that extends even to a Navy interest in wanting to understand what foreign shipyards can do in terms of battle damage repair during time of conflict if the Navy's interested in that then uh it would uh makes sense for the Navy to be interested in making sure that they are taking uh uh advantage of the that Guam presents for Ship Repair both on a day-to-day basis and again for battle damage repair during time of conflict
▶ 1:44:00uh thank you and as my colleague mentioned Guam is USA we can trust us soil our ship repair folks over there as well so thank thank you for your answer this question is for Dr Shadel uh your testimony highlighted the importance of expanding and modernizing key production and repair facilities for our nation's security given Guam strategic location what efforts are being made to reauthorize the lease for the Guam ship yard repair facility to enhance capabilities
▶ 1:44:31in the Indo Pacific sir thank you obviously a very critical spot for us because of everything going on in that region we are having those discussions right now around where we are trying to do our ship repair and ship maintenance I concur with everything Mr oror said also and I my commitment to you is to continue to have that discussion uh to try and get to a a good solution that helps all of us uh and improves
▶ 1:45:02our tactical Advantage there I appreciate that and also along with your constant fight to let them know that we're there we're ready to serve and go as USA so let's let's help out one another so sir I appreciate that a lot I mean it appreciate it and one more question for you please how can the federal government leverage partnership with local Workforce develop programs to address the shortage of skilled workers in the defense industry based to meet demands yeah I think
▶ 1:45:32uh we are doing a lot of those things both local regions and nationally we stood up the accelerated uh training facility for defense Manufacturing in Danville we have uh six Regional pipelines and one National pipeline all part of the CB and MB monies that that you have also graciously funded us for so we're putting that to good use to get after uh trades and labor for The Yards um and think we're we're going we're having
▶ 1:46:02good effect there I think it still then goes back to the attrition issues and what are we doing with wages to make sure that our retention once we get them uh allows us to keep them so that we we make the inroads that we need but but we're after that I appreciate that we have a lot of young kids anxious to help our nation and get that good education so with your support we can help fund that so I appreciate it thank you to the panels thank you Mr chairman and Y back thank you I now uh recognize a little bit out of order my good friend the ranking member Mr
▶ 1:46:33Courtney for five minutes of questions upon which I'll close after right thank you uh Mr chairman and um Miss Oakley I just wanted to go back to your comments regarding uh requirements and design uh completion before construction which I could not agree with you more um but I in terms of the Columbia program because it was sort of that was sort of in your in the mix there um when Colombia cut its first steel it was 87% design complete um which and I'm old enough to remember
▶ 1:47:03the Ohio class submarine program which it's replacing um it was less than 20% at that time a lot of landbased testing has been done for you know the propulsors uh you know before it even got near the submarine for um assembly U that's there and I think again that reduced a lot of risk uh during the process it's late right now no question about it there are two reasons number one two primary reasons the power turbine generator is late coming from Sunnydale
▶ 1:47:33uh north of Grumman is it's a it's a new technology first in of its time I mean it's going to take a while to to to but they can't sort of um build the rest of the submarine and then have to cut it open to insert that they have to wait for it and the bow is late from from Newport News again there's a tiger team that's down there working in terms of trying to get that but in terms of you know really um a a program where the requirements in design was done upfront I mean honestly Admiral papano
▶ 1:48:03I think did an outstanding job in terms of just relentlessly pushing um that sort of sequence uh as as that program uh was going into place Dr sidel in terms of the requirements issue again GAO is right about the fact that you know this has been whether frigate and some of the other LCS just that was changing you know it seemed like every hearing SE power held during the over the years um the the vessel contract manager that I mentioned in opening remarks where
▶ 1:48:33uh we used a you know commercial model for for the maritime training ships which can be converted into a you know sea lift vessel at time of emergency I mean it worked and it just it seems like we've had Navy personnel come visit the Philly Shipyard to to see it for themselves again it just feels like you know we we've got to go more with the Navy in terms of just getting them to let go maybe even you know some of the less Exquisite vessels to just sort of you know follow what the the commercial industry
▶ 1:49:04is doing so that we can speed things up I mean I was wonder if you could comment on that yeah two things one you know to the point about design and we've had a lot of discussion about that today I feel like for success in this Arena it's rigor and discipline and requirements then design and production because if you're rigorous about all three then things flow you don't get out of sequence material you don't have those kind of issues I think we have an insatiable demand appetite for capabilities at times
▶ 1:49:34for good reason uh we are the finest Navy ever assembled because we have capabilities that outpace our adversaries and so um when we come to those Crossroads we always struggle to say stop um we've already snapped a chalk line we need to stay with the design we have so that it's more produc for our industry Partners so so I think I we know what to do to make that better we've got to be rigorous and disciplined in doing it to your point about marad and the vessel construction
▶ 1:50:04manager I've taken several briefs on that now I concur with you it looks like they've been very successful um control some of the little r requirements compared to the Big R requirements and and and have led to some decreased costs there that I think looks good so I intend to go meet with them and have some real discussion I think there's some opportunity uh in our space to take that model and use it for some of the work that we're doing and and my commitment is to lean in and work to try to do that I mean that's great to hear and anything we can do to to push that
▶ 1:50:34along um appreciate it for sure um Miss Oakley again I'm was glad to hear that you now are going to be focusing on Workforce training as part of a project that s i really encourage you to come up to gron and see the manufacturing pipeline again that reason why they hit that 5300 higher number it was was 4,000 last year and having such great retention is because of the design of the curriculum okay and and it's it's um it's something now that I think other regions uh are starting to emulate because
▶ 1:51:05you know if it's too short then you're people are going to flush out once they see the reality of a shipyard if it's too long it's just too long we we need it faster so again I hope you'll take up my invitation we have definitely been there and we will be back great thank you I yield back well I can't let him do that you need to come to Pas Gula and see how it's really done and how it's done right deal and has been for a long long time uh but with that being said I thank all of you Witnesses so much for being here today you've added a great contribution
▶ 1:51:35this was a great hearing and it's a great hearing because of the great Witnesses we have thank you and with that this hearing is a journ I couldn't remember I was
▶ 1:52:21oh e