- The Washington Times - Tuesday, September 26, 2000

Pentagon officials have drafted a proposal to reverse current policy and allow the Navy to buy combat support ships from foreign shipyards, according to internal documents.

The American shipbuilding industry protested the change in a Sept. 20 letter to Defense Secretary William S. Cohen.

And unions that represent more than 50,000 defense shipyard workers are also mounting opposition, a development that could thrust the issue of foreign vs. domestic Navy ships into the presidential campaign.

"We hate it. I asked the Pentagon, 'Whose government do they really work for?' " said Ande Abbott, director of legislative programs for the International Boilermakers Union. It represents 22,000 shipyard and shipyard-related workers.

"The American worker has always been shoved aside in a lot of these types of things," Mr. Abbott said. "I understand the Pentagon getting the lowest costs, but they just haven't found any American jobs they aren't willing to send overseas, and we just detest this."

The industry says opening defense shipbuilding contracts to foreign companies will further jeopardize a shrinking American industry. A once robust network of 21 shipbuilders has shrunk to six, as the number of new Navy ship orders decreased from 19 annually in the 1980s to six today.

A Pentagon spokeswoman said yesterday that the idea is not official Pentagon policy, and that any legislative proposal must first survive an extensive review process.

An unsigned Pentagon memo circulated in August says changing current law, which requires U.S. producers for all Navy ships, will promote cooperation with Washington's allies.

"The proposed legislation would allow the [Defense Department] to waive most statutory domestic source requirements or domestic content requirements when specified conditions exist," says the memo from the department's Office of Acquisition, Technology and Logistics. The office is overseen by Pentagon acquisition chief Jacques Gansler.

"This proposal will promote the interoperability and standardization of conventional defense equipment with major allies of the U.S.," says the memo, a copy of which was obtained by The Washington Times.

Cynthia Brown, president of the American Shipbuilding Association, worries about the health of her association's six remaining defense shipyards.

She said the plan would especially jeopardize the two yards that construct most Navy support ships: Avondale Industries in New Orleans and National Steel and Shipbuilding Co. in San Diego.

She said the nation's other four defense shipyards would also be hurt financially because they now can win subcontracting jobs from National and Avondale.

"If our government proposes that we procure naval vessels from outside sources, two of my yards are going to close at a minimum and others are going to be weakened with a downturn in production," Miss Brown said in an interview. "In times of contraction, you can't afford for any ship to be built offshore if we're going to have the industrial base when times for greater demands for naval ships increases."

The draft Pentagon proposal has not yet been sent to the White House for approval. Congress would have to change current law. Miss Brown predicted stiff congressional objections if the change gets to Capitol Hill.

Cheryl Irwin, a Pentagon spokeswoman, issued a statement yesterday to The Times.

"There's no legislative proposal that has been through any kind of Defense Department review or approval process. This paper … does not represent any official department policy. We don't know why it's been circulated around, but we are looking into it. Any legislative proposal has to go through a review process, get Dr. Gansler's approval and also go through other review processes before being sent to [the White House] before it has been sent to the Hill. We are very, very early in our various proposal processes and anything that appears to be a legislative proposal is in actuality at this point just an idea."

Miss Brown said a Pentagon official pitched the idea to defense contractors at a meeting in Washington Sept. 6.

"My representative made it clear we will fall on our sword to stop it," she said.

The proposal would not change the current ban on buying any combat ship, such as aircraft carriers, destroyers and submarines, from a foreign producer. It would, however, give the defense secretary power to waive the law concerning support vessels such as ships that resupply the fleet, carry troops and heavy equipment, and hold prepositioned weapons at foreign ports. The Pentagon would also be able to pick overseas builders for research and Coast Guard ships.

The stakes are high. The Pentagon plans to buy two classes of auxiliary ships later this decade. The first: 12 resupply ships the ADCX at $340 million per vessel. Later, the Marine Corps will need to replace 13 maritime prepositioning ships. The design and estimated costs are not yet available.

Miss Brown sent a letter to Mr. Cohen on Sept. 20 urging him to "please stand with our country's defense shipbuilding industrial base and stop all consideration of such legislation."

"This provision could result in hundreds of military ships being built in foreign shipyards with the subsequent closure of naval ship construction yards in the U.S.," the letter says.

Mr. Abbott added, "You're talking billions and billions and billions of dollars worth of ships being sent out of the country."

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