Episode Notes:

Last week, Secretary of the Navy Carlos Del Toro told a house panel that the Navy was experiencing delays in the construction of its Columbia-class and Virginia-class submarines.

Here to discuss this news is Mackenzie Eaglen, a senior fellow at the American Enterprise Institute.

[:38] Why is this happening?

[4:41] How is this being received on the hill

[5:40] Strategic implications

[6:50] Potential solutions

Episode Transcript

Nicholas Danforth: My name is Nicholas Danforth, and I'm an editor at War on the Rocks. You are listening to the WarCast, the members-only podcast for what you need to know — now. Last week, Secretary of the Navy Carlos Del Toro told a House panel that the Navy was experiencing delays in the construction of its Columbia-class and Virginia-class submarines. Here to discuss this news is Mackenzie Eaglen, a senior fellow at the American Enterprise Institute. Welcome to the WarCast. 

Mackenzie Eaglen: Thanks for having me. 

Nicholas Danforth: So how much of a surprise is this? 

Mackenzie Eaglen: A lot of these issues are systemic and enduring, and many of them predate COVID. So they were knowable, and COVID just accelerated and compounded some of the challenges, and now they're even worse. 

Nicholas Danforth: Well then, tell us, I mean, why is this happening? 

Mackenzie Eaglen: I think the Commission on Military Aviation Safety characterized it best. It's a man, machine, and environment, and an environment, of course, is primarily driven by operations tempo, the usage of this stuff, this equipment. And when any of those three are out of whack — and shipbuilding, often they all three are — the whole system is disrupted. Now, this is also a public-private partnership, meaning this is government and industry working together, not just on the construction of ships, but on the maintenance of ships. And the challenges are different and similar, depending on which challenge we're talking about. For example, labor and workforces, diversity of supply chains, access to supply chains, obsolescence of parts, not the limited stockage of any spare parts to begin with, pay raises that aren't keeping pace with Amazon and Starbucks, skilled trades. There's a big missing middle. There's a lot of senior experts, welders and solderers and electricians, and then there's young people. And then, there's a huge gap in what I call the missing middle, sort of the Gen X. I could go on and on. Housing shortages in areas where shipyards are located, which tend to be prime real estate, and more. Let's talk about that ecosystem of man, machine, and environment. The Navy's been shrinking in size for 30 years, and it's maintained the same level of forward presence whether it had 600 ships or 280, give or take. And in fact, just two years ago, the Navy had 130, it's average… So what I mean is, the Navy has averaged 100 ships at sea pretty much every day of the year for three decades. But like I said, the Navy's been twice the size it is today with 100 ships forward. That's a lot easier to maintain. Fast forward to today's Navy — and it's not even just that the Navy's maintaining 100 ships forward. Just two years ago in the budget rollout briefing, the Navy said 130 ships were at sea. And there were no major shooting wars and hot raging conflicts. So when the Navy wants to maintain the same level or more forward presence, that ripple effect backwards, domestically, is profound, because the fleet size is not the Great White Fleet here. It's significantly smaller. And so then what happens is the machines wear out faster. Things that weren't anticipated break sooner. And so when they get into a yard for an availability for maintenance availabilities and they open the hole up, it's, “Oh, we were going to fix these three things and now we have 10 things to fix and it's going to double the time you're here.” The suppliers say, “Well, you said you were only going to fix these three things. We don't have the other six.” You can see where these issues compound. So then, the availabilities get longer, the whole ship ecosystem gets disrupted, and that also impacts new construction, since in some cases there's no overlap in ship-building suppliers. In other cases there is. And new construction sees a lot of these same challenges, where it's a zero-sum output effort. To get Columbia up, you gotta take a little from the Virginia-class submarine line, for example, temporarily. And then, temporarily becomes longer than you expected because of all the same reasons we just talked about. And then, the cycles just get longer, and the fleet keeps shrinking. 

Nicholas Danforth: Now, how is the news of these delays being received on the Hill?

Mackenzie Eaglen: Congress is, I would say it's so far it's been the single biggest issue that's energized both parties and both chambers of Congress. Basically, how can China be on track? Well, they already have the largest blue-water navy in the world, and they've doubled it in the last decade or so, and they're set to triple their size in the next decade. Congress is really curious, obviously, about how the trend lines never seem to, or at least our declining trend lines never arrested and reversed. And everybody feels like they're banging their head against the wall. Congress keeps giving the Navy even more money, ever more money, and the Navy and industry seems stuck in the same vicious cycle of being unable to break out and build more ships per year. 

Nicholas Danforth: And then, what are the strategic implications of these kinds of delays? 

Mackenzie Eaglen: Well, they're significant. There's only so much gap that can be covered by saying we have more capable ships. That only works to a degree, right? And that's of course what administration's, what political appointees at the Pentagon have been saying since the Obama administration, which is, “Well, our ships are more capable and modern. Therefore, it's okay that we just keep shrinking and aging the U.S. Navy's fleet.” At some point, that just doesn't hold up to scrutiny. And I think we're reaching that tipping point. You can't defy physics. One ship and one boat can be in one place at one time. And we are increasingly outmatched when it comes to global presence. And of course, presence matters, because presence influences deterrence and assurance and dissuasion and persuasion and all the other things that you want to accomplish by showing the flag to prevent crises and war. And we are at the tipping point of being unable to prevent problems from becoming full-blown crises. 

Nicholas Danforth: Then finally, on that note, what kind of solutions have been proposed to this? 

Mackenzie Eaglen: There are actually a lot of different solutions. More money, more multi-year contracts, expanding and broadening the defense industrial base, as well as the Navy repair yards. Basically, more strategic outsourcing and federated production. The Navy and industry have got to get access to companies and workers that aren't currently involved in ship building. And lastly, this one doesn't come up as much, but I like to talk about it. I see the Navy and industry in a circular argument for the last half decade, where the Navy foot stomps and says, “Spend more, and we'll build more.” And the industry says, “No, no, you have to spend more first, and then we’ll invest more and build more.” And around and around they go, and the outcome doesn't change. But basically, we've seen this with munitions for the Army and industry responding, the government — meaning the executive and legislative branches — have to forward fund their priorities and the CapEx for these companies with some subsidies from the services, and then industry will respond. Kind of like in World War II, the government had to have front load dollars and prime the pump. It's not fair to demand industry invest when industry doesn't see a long-term clear demand signal. And so this really has to be government-led funding and risk-taking, and then hopefully industry responds accordingly. 

Nicholas Danforth: Thank you so much for joining us on the WarCast. 

Mackenzie Eaglen: It's my pleasure. Thank you.